Creating Competitive Advantage through Technology and Innovation in Technopreneurship

1. Creating Competitive Advantage through Technology and Innovation in Technopreneurship Togar M. Simatupang School of Business and Management Bandung Institute of Technology Presented on “the International Conference on Engineering Management and Industrial Technology” (ICEMIT2015) 10-12 December in Medan, Indonesia

2. Overview • Introduction • Competitive Advantage • Technopreneurship • Innovation Theory • Inclusive Innovation Framework • Concluding Remarks 2

3. Introduction • Key questions answered within the presentation include: – What are the key changes of persistent innovation? – What steps are critical for technopreneurship to bring innovations to the marketplace? – What innovation strategies are valuable for ventures and societies to establish and maintain a competitive advantage? • A framework is proposed for examining the innovation process in technopreneurship, and quickly transition into exploring how to successfully bring innovations to market. 3

4. Competitive Advantage 4

5. • Difficult for competitors to imitate • Commercially exploitable with present capabilities • Provides significant value to customers • Timely 5

6. Knowledge Economy The knowledge economy is the use of knowledge (savoir, savoir-faire, savoir-être) to generate tangible and intangible values. 6

7. Circular Economy 7

8. Need for Innovation • Inovation is critical to economic change • Responses to change in business environment: – “adaptive response” – Incremental Innovation – “Creative response” – Radical Innovation Joseph Schumpeter “The Theory of Economic Development” 8

9. Innovation Driven Economy Incremental Innovation Radical Innovation Imitation Innovation Driven Economy Cross-Border Trade Investment Driven Trade 9

10. Entrepreneurship 10

11. The Nature of Business •Practical Institution •Accountability •Value •Pressure Business 11

12. Value in the marketplace Expose your value Reinforce your value Sell your value Personal Value: • Income • Career • Worksload Business Value: • Revenue • Costs • Services Technical Value: • Processes • Systems • People Capture your value Deliver your value 12

13. The Quadruple Fields of Business Deliberate Structural Specification Management Management Entrepreneurship Entrepreneurship Regulate Administration Administration Stewardship Stewardship Continuum Stage Lifecycle Stage Concern for Purpose 13 Source: Simatupang (2015)

14. Management versus Entrepreneurship Causation Effectuation Effects are Predicted Need to manage the causes Need to manage the effects Causes are given Emergent approach Bottom-up Entrepreneurial logic Control based: to the extent we can control the future, we don’t need to predict it. Planned approach Top-down Managerial logic Predication based: to the extent we can predict the future, we can control it. • For uncertain situations • For predictable situations 14

15. What is Entrepreneurship General • The practice of consistently converting good ideas into profitable commercial ventures. • An entrepreneur searches for change, responds to it, and exploits opportunities. – Peter Drucker Academic • The scholarly examination of how, by whom, and with what effects opportunities to create future goods and services are discovered, evaluated, and exploited. – Shane, S. and Venkataraman, S. (2000), “The promise of entrepreneurship as a field of research”, Academy of Management Review, Vol. 25, No. 1, pp. 212-226. 15

16. Towards ‘Entrepreneurism’ • Y = f(L,C) • Y = f(L,C,K) • Y= f(L,C,K,E)   Capitalism and Socialism  the Knowledge Economy the Entrepreneurial Society? 16

17. Technopreneurship 17

18. Technopreneurship • Technology based business: A set of processes to deliberately identify and undertake activities to acquire new information, test assumptions, and uncover new technological options and organize discovery-driven activities as a project, with beginning and end points in time, specific deliverables, and a work plan to produce those deliverables. 18

19. The connections between technology- based innovation and entrepreneurship Source: http://epicenter.stanford.edu/page/about 19

20. Technology is... • The word technologyu comes from two greek words, translated literally techne and logos – Techne means art, skill, craft, or the way, manner, or means by which aa thing is gained. – Logos means word, the utterrance by which inward throught is expressed, a saying or an expression. • Technology is the making, modification, usage, and knowledge of tools, machines, techniques, crafts, systems, and methods of organization, in order to solve a problem, improve a pre-existing solutions. • It is an applied science. 20

21. What is Technopreneurship? Entrepreneurship Technopreneurship Technology • Business Ideating • Business Planning • Business Modeling • Value proposition • Value chain • Customer target • Product and Service • Process Technology • Enabling Technology Business Model Technology Innovation The use of technology as an integral and key element in the transformation of goods and services. 21

22. Examples of Technopreneurship From Start-ups (organic and early adopters) • Search Engine in Google • Social Network in Facebook • Online Auction in eBay • Sykpe (low end inno for telephone) From Corporations (organic and early majority) • iPhone from apple (harward and OS) • Logistics tracking in UPS • Digital photography in Kodak (high end prof photographer) in Fuji (low end children’s toy) 22

23. Packaging Revolution 23

24. Three Questions in Technopreneurship • What problems in society (consumers) do you want to solve with technology? – Thomas A. Edison wants to bring light to the people with technology (light bulb) and not candles • What makes your invention (product diffrentiation) different from what is already in the market? – Steve Jobs did not create computers, but he brought computers from government and corporation use to the mass people • What is the improvement from the existing technology? – Can your invention (product) be better, faster, more efficient and effective than the previous ones? 24

25. What’s the difference between “old tech” and “new tech”? The idea to sell ready to drink tea in bottle was formulated in 1969 and a bottled tea plant of PT SINAR SOSRO was established in 1970, the first ever of bottled ready-to-drink tea plant in Indonesia and the world. Source: Corporate History at http://www.sosro.com/en/sejarah-perusahaan Carbonated Drink Brewed Tea 25

26. 10 times better • As a good rule of thumb, proprietary technology must be at least 10 times better than its closest substitute in some important dimension to lead to a real monopolistic advantage. • The clearest way to make a 10x improvement is to invent something completely new. • Every great business is built around a secret that’s hidden from the outside. Peter Thiel 26

27. Examples of Disruptive Technologies • Amazon • iTunes • Airbnb • Uber • Gojek  Retail  Music industry  Hotels  Taxis  Motorcycle Taxi 27

28. The seven questions every business must answer 1. The Engineering Question: Can you create breakthrough technology instead of incremental improvements? 2. The Timing Question: Is now the right time to start your particular business? 3. The Monopoly Question: Are you starting with a big share of a small market? 4. The People Question: Do you have the right team? 5. The Distribution Question: Do you have a way to not just create but deliver your product? 6. The Durability Question: Will your market position be defensible 10 and 20 years into the future? 7. The Secret Question: Have you identified a unique opportunity that others don’t see? 28

29. How To Build The Future • 1 to n = horizontal progress (copying things that work) • Go from 0 to 1 Make vertical progress (do new things) 29

30. Technology Management Decision Support Tools Source: http://www.ifm.eng.cam.ac.uk/research/ctm/ctmtools/ 30

31. Innovation Theory 31

32. Innovation is... • Inn-no-va-tion n – A creation (a new device or process) resulting from study and experimentation – The act of introducing something new Innovation is the successful implementation of creative ideas – A new idea, method or device. – The process of making improvements by introducing something new. – the process of translating new ideas into tangible product. – the successful exploitation of new ideas. – A creative idea that is realized. – Change that creates a new dimension of performance. Innovation means creative solutions to real problems result from study and experimentation can actually be implemented • • 32

33. Knowledge to Innovation Determinants Knowledge Innovation • R&D and Technology • Human Capital • Networks • Understanding of facts, information, descriptions, or skills, which is acquired through experience or education by perceiving, discovering, and learning. • Something new or an improvement that allow the firm to obtain an advantage 33

34. Innovation • Two persistent questions: – What produces innovation? • How might we nurture it? – What are the outcome of innovation? • How to predict which will succeed? Innovation as a process Innovation as a product 34

35. The Innovation Process 35

36. How do you innovate? 36

37. 37

38. 38

39. The Ten Types of Innovation Larry Keeley (2013) 39

40. Ten Types of Innovation 40

41. Degrees of Product Innovation 41

42. Degrees of Service Innovation 42

43. Two critical innovation questions How ambitious do we need to be? How can we innovate differently? 43

44. Do you have an innovation ambition? • A novel creation that produces value • Invest along a broad spectrum of risk and reward • Transformation requires you to do things differently • Key management dimensions of a total innovation system: – Talent, integration, funding, pipeline, and metrics 44

45. The Innovation Ambition Matrix Source: “Managing Your Innovation Portfolio” by Bansi Nagji and Geoff Tuff, HBR, May 2012. 45

46. Discover secrets of innovation What important truth do very few people agree with you on? Mysteries Conventions Secrets Easy Hard Impossible Goals that can be satisfied with minimal effort Goals that can be satisfied with serious effort Goals that cannot be satisfied, no matter how much effort one makes • • What valuable company is nobody building? Every correct answer is necessarily a secret: something important and unknown, something hard to do but doable. If there are many secrets left in the world, there are probably many world changing companies yet to be started. • 46

47. The Innovation Matrix Source: Making Innovation Work by Davila, Epstein, Shelton: Wharton School Publishing 2005. 47

48. Inclusive Innovation 48

49. Innovation Strategies for Competitive Advantage • How to get an innovation to market – How to compose the elements of an Innovation Portfolio – How technology transfer fits into an Innovation Portfolio 49

50. Inclusive Innovation 50