Innovation ManagementGM0401 6 september Institute for Innovation and Entrepreneurship (IIE) School of Business, Economics and Law University of Gothenburg Johan Brink
This course • Formal: 9.15 to 12 • (Some lectures will be shorter) • Informal: Read before! Q&A and Discussions • Mandatory: Case presentations • 3 Cases (30% final grade) • Groups: write, presentations and discussions • 6 groups: A-F • Exam (70%) • Sat 30 oct, 9.00-14, Viktoriagatan 30
The Structure of MTIHow is this course run? The Book: The Management of Technological Innovation; Dodgeson, Gann and Salter MTI is structured through three dimensions: 1 What are the overall context and forms for the emergence of technological innovation? (Chapters 1-3) 2 How MTI helps create, shape and deliver innovation for firm (chapter 4-9). Approaches, tools & techniques Not Chapter 8, Innovation in Operations and Processes 3 What are the future challenges of MTI? 5 future challenges (Chapters 10)
Additional required readings • Malerba, F. (2002), Sectoral systems of innovation and production, Research Policy 31 247–264 • Olleros, F.-J. (1986) Emerging Industries and the Burnout of Pioneers, Journal of Product innovation management, Vol.1, pp.5-18 • Rosenbloom, R. and M. Cusumano, Technological pioneering and the competitive advantage, California Management Review, 1987, Vol 29:4 51-76 • Pavitt, K. (1984) Sectoral patterns of technical change: Towards a taxonomy and a theory, Research Policy, 13:343-373 • Courtney, H. et all. (1997) Strategy under uncertainty, Harvard Business Review, Nov-Dec, 67-79 • Powell, W et all. (1996) Interorganizational Collaboration and the Locus of Innovation: Networks of Learning invBiotechnology, Administrative Science Quarterly, Vol. 41, No. 1 (Mar), pp. 116-145 • Tushman, M. and C. O´Reilly, (1996) Ambidextrous Organizations, California Management Review, Vol 38:4, 8-30 • Chesbrough, H and D. Teece, (1996), When Is Virtual Virtuous? Harvard Business Review, Jan-Feb, 65-73 • Maidique M. and Zirger (1985) The new product learning cycle, Research Policy, 14, 299-313 • Teece, D (1986)Profiting from technological innovation:Implications for integration, collaboration,licensing and public policy, Research Policy, 15:285-305
What is Innovation? ...and what is invention?
What is Innovation? The creation of a new idea and its reduction to practice and it includes all the activities required in the commercialization of new technologies (Freeman and Soete, 1997) An 'innovation' is the implementation of a new or significantly improved product (good or service), or process, a new marketing method, or a new organisational method in business practices, workplace organisation or external relations. OSLO manual OECD 1997 Something new, as a product of imagination or a device or process originated after experimentation. Webster ...and what is invention?
New to: New to the world New to the industry New to scientific community New to the market(place) New to the firm New to the customer New what: New technology New product line New product benefits/features New product design New process New service New competition New customers New customer need New consumption patterns New uses New improvements/changes New development skills New marketing/sales/distribution skills New managerial skills New learning/experience/knowledge New quality/benefits Innovation in research
New to: New to the world New to the industry New to scientific community New to the market(place) New to the firm New to the customer New what: New technology New product line New product benefits/features New product design New process New service New competition New customers New customer need New consumption patterns New uses New improvements/changes New development skills New marketing/sales/distribution skills New managerial skills New learning/experience/knowledge New quality/benefits Innovation in research OUTCOME & PROCESS!
Definitions TECHNOLOGY ? MANAGEMENT ? THE MANAGEMENT OF TECHNOLOGICAL INNOVATION ?
Definitions TECHNOLOGY A replicable artefact with practical application of knowledge in developing and using it MANAGEMENT The strategic and practical approaches to the construction, development and maintenance of the firm’s sustainable competitiveness THE MANAGEMENT OF TECHNOLOGICAL INNOVATION The construction of adequate flexibility and efficiency needed for conducting the firm’s scientific, technological, organiszational, financial, and business activities in order to introduce and commercialize a new product or process
Why study Innovation Management? • How has the mobilephone changed your life? • What would you do if it didn´t worked? • How has it changed society?
Business – competitivnes Relative: Compared to competitors Absolute: There must be a market for what the firm does Why study Innovation Management?
Changes! Globalization Bigger markets Nisches Shorter product life cycles New products (<5 Years old) account for 30% of the profits of US firms, and in high-performing firms to account for nearly half of sales and profits (Cooper& Edgett, 2007). Finance markets Are more likely to be granted credit and easy access to finance than non-innovators (Czarnitzki & Kraft 2004). Have higher productivity and productivity growth than non-innovators (Criscuolo, Martin & Haskel 2003). ??? ...
Growth? Percentage change in employment, 1994-2000 Share of new products in sales, 1994-1996
Growth of employment and GDP! High-technology industries grew more than two-and-a-half times faster than manufacturing industry as a whole between 1980 and 2003 (NSB, 2006) Trade in hi-technology goods (requiring high level of R&D) doubled in real terms in the OECD countries between 1994 and 2003 (OECD 2005) High-technology industries in the USA increased from 11% of domestic production in 1980 to 13.5 % in 1990, and to 34% in 2003 (NSB, 2006) The return to R&D investment, both social and private , are consistently assessed to be high. Mansfield et. Al (1977) found that the social returns from R&D investment to be 56 %, and private returns to be 25%
Structural change Prosperity & declines! • Innovative countries and regions have higher productivity and income than the less innovative ones (Fargerberg, 2005). • Entire industries, such as the Swiss watch industry, and geography regions, such as Silicon Valley in California, can be invigorated or depressed by technological change (Saxenian 1994; Utterback 1994).
...and new economic theories New Growth Theory Evolutionary economics ”Traditional Neoclasical Economics” consider technology as an ”exogenous” factor GDP=F(Land, Capital, Labour)
Wednesday 8 sep • Read chapter 1-2 • Read Malerba, F. (2002), Sectoral systems of innovation and production, Research Policy 31 247–264 Thank You