Final review 1, Why innovate? • Traditional edge in competition in products/services: Either through low price Through differentiation Many times there is no problem but everyone else is competing on low price and differentiation too If you want to increase the cake and not fight for a piece of the existing one, you need to create new cake Create new cake wealth through innovation 2, Source of innovation Internally: The unexpected success, failute, outside events The incongruity between reality as it actually is and how it is assumded to be Process needs Changes in the industry and market structure that catches everyone unware External: Demographics ( population changes) Changes in perceptions, mood and meanings New knowledge, both scientific and non- scientific 3, What is innovation? The commercialization of new elements on a combination of old elements in industrial organization orterms of new material, processes, maket or organization forms, driven mostly by the entrepreneur 4, Compare between innovation and invention Separated invention from innovation as long as inventions are not carried to practice they are economically • • • Invention is individualis made possible by individual, entrepreneurial skill and capabilities Just new, 100% different Processes learning and discovery about new products, processes Innovention is collective made possible by the common work of many individuals, through by the social network Combine new and old Processes of learning and discovery about new products, processes and organization Conception+ invention+ exploitation= innovation main attributed of innovation Novelty all definitions of innovation involve the new New as inprevisiously unknow Or as monthly to circomyances Utility: in innovation is based on need Co-evolution and flexible Organization Management with inshirt Success: by definition no success- no innovation success in recon fighration of assets • mains characteristic of innovation Success New knowledge: see the new Assimilate the new Apply the new Technology : drive of growth and competitiveness Influemces and enable new business Needs to be socially acceptable Social contruction: business focus on relationship with suppliers, seller, competitor, environment, clients, law Distinguish between a) Incremental/Radical - Incremental is a kind of innovation in which models, processes, organizations and market will be gradually improved - Strategic incentive to invest: incremental if existing products competitive, radical is existing products not competitive - Organizational capabilities: incremental if based on existing capabilities, radical is new capabilities - Joins market and technology knowledge (focus on technology) - Types of innovation and types of firm are linked Established firms use incremental innovation, new firm use radical innovation, strategies b) Discontinuous/Continuous - Discontinuous innovation by their very nature are discontinuous to every customer segment since they comprise new to the world products only New product that change the way we live, totally different from products that already exist Major learning or behavior modification needed +) For instance, mobile phone technology and the interest drastically changed the way people communicate - Continuous innovation: modest, gradational, on going updates or enhancements of existing technologies or products: continuous innovation generally does not fundamentally change the dynamics of an industry, nor does it typically require end users to change behavior +) Example: In the television industry, continuous innovation occurred for years with improvements in pricing, programming for and standard color television c) Closed/Open innovation - A closed innovation is based on the view that innovation are developed by companies themselves From the generation of ideas to development and marketing, the innovation process takes place exclusively within the company know-how, technology, processes and intellectual property accordingly - - Place of innovation = within the company Open innovation means opening up the innovation process beyond company boundaries in order to increase one’s own innovation potential through active strategic use of the environment Own employees, customers, suppliers, EAD User, universities, competitors or companies of other industry can be integrated However, the exchange of knowledge and the networking refers only to collaborative networking Open innovation can therefore involve high costs for the use of license and other intellectual property Place of innovation = inside and outside of the company