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Innovation management: an introduction
Chapter 1
Instructor: Vu Thi Dan Tra (PhD)
Instructor Vu Thi Dan Tra (PhD)
Learning objectives
- Recognize the importance of innovation.
- Explain the meaning and nature of innovation management.
- Provide an introduction to a management approach to innovation.
- Appreciate the complex nature of the management of innovation
within organizations.
- Describe the changing views of innovation over time.
- Recognize the role of key individuals within the process.
- Recognize the need to view innovation as a management process. Instructor Vu Thi Dan Tra (PhD)
Contents
Innovation importance^ The of innovation The study of innovation Defintions of innovation invention and^ Innovation, creation Types and innovations^ patterns of 4Ps of innovation Types of innovation Disruptive innovation Innovation management National level of innovation Instructor Vu Thi Dan Tra (PhD)
"Innovation distinguishes
between a leader and a
follower”
Steve Jobs
Instructor Vu Thi Dan Tra (PhD)
Market leaders in 2015 Industry Market leaders Innovative new products and services Smart phones Samsung; Apple Design and new features Internet-related Google; Facebook New services industries Pharmaceuticals Pfizer; GlaxoSmithKline Impotence; ulcer treatment drug Car design and associated product developments Motorcars Toyota; BMW; Tesla Computer chip technology, computer hardware improvements and software development Intel; IBM and Microsoft; SAP Computers and software development Instructor Vu Thi Dan Tra (PhD)
World’s most innovative companies
Source: https://www.bcg.com/en-gb/publications/2019/most-innovative-companies-innovation.aspx 2019 Company Innovation activity Rank 1 Alphabet/Google Google’s expertise in artificial intelligence (AI) and machine learning (ML). using AI in its retail business, has pioneered voice recognition technology (Alexa) and platform-based services (Amazon Web Services). 2 Amazon pioneer voice recognition software (Siri) and provided a premier virtual workplace for app developers with its iOS platform. 3 Apple 4 Microsoft provider of AI and platform-based services. 5 Samsung Has become the dominant smartphone producer in the world. 6 Netflix World leader in streaming content and production of content. 7 IBM A world leader in cloud technology and open source technology. 8 Facebook Uses its network effects to generate advertising revenue. 9 Tesla Pioneer in electric vehicle technology. 10 Adidas Has become the sports brand of choice across the world and has been able to challenge Nike. Instructor Vu Thi Dan Tra (PhD)
Nineteenth-century economic development
fuelled by technological innovations
Instructor Vu Thi Dan Tra (PhD)
The importance of innovation
Bill Gates confirmed in 2008:
“The share price is not something we control. We control
innovation, sales and profits.”
(Rushe and Waples, 2008)
Instructor Vu Thi Dan Tra (PhD)
What is innovation?
Invention & innovation
Innovation = conception + invention + exploitation
Source: Henry and Walker (1991)
Innovation is not a single action but a total process of interrelated
sub processes. It is not just the conception of a new idea, nor
the invention of a new device, nor the development of a new market.
The process is all these things acting in an integrated fashion....
Myers and Marquis (1969)
Instructor Vu Thi Dan Tra (PhD)
Toyota invests in flying car
Toyota is making its first big bet on the airborne urban mobility
market of the future by investing $394 million in Joby Aviation, a
California-based company that has developed a four-passenger,
battery-electric vertical take-off and landing aircraft.
Will this move help Toyota leapfrog Tesla?
Source: Tovey A (2020) The flying car in front is a Toyota with £300 million finding. Business, p.3, Daily Telegraph, 17 January.` Source: andrey_l/Shutterstock Instructor Vu Thi Dan Tra (PhD)
Pause for thought
- Apple’s iPhone looks set to be as successful as the iPod, but
Apple has experienced similar success before with its Apple
Mac computer and eventually lost out to Microsoft. Will
history repeat itself?
Instructor Vu Thi Dan Tra (PhD)
Innovation in action
- A $900 shop
- Looking to build a new office or shop? How about adopting the ultimate in recycling – a building made out of stacked shipping containers?
- It is generally too expensive to ship an empty container back to its point of origin so there are thousands of them sitting in docks around the world. They are strong, stackable and cost as little as $900.
- The Dordoy Bazaar in Bishkek, Kyrgyzstan is one of Asia’s largest markets. It stretches for more than a kilometre and is almost entirely constructed from empty shipping containers stacked two high. Its success has been copied around the world: in 2011 Boxpark Shoreditch – London’s first pop-up shopping mall made completely from shipping containers – opened. Instructor Vu Thi Dan Tra (PhD)
Innovation, invention, creation
Content Definition
Creation is the action or process of bringing something into
existence
Creation
Innovations that add value to new products or services, new
methods, or the development of entirely new things. The common
point is that these products and services are commercialized or
made and create value for money
Innovation
The research and creation of completely new and groundbreaking
products, services or processes, the results of which are often
prototypes and have not yet been commercialized.
Invention
Instructor Vu Thi Dan Tra (PhD)
Innovation, invention, creation
Creation Innovation
Inventi
on
Instructor Vu Thi Dan Tra (PhD)
Innovation, invention
They are commercialized inventions and practical applications Are innovative innovations, breakthroughs developed from old products, or creations that are not protected by IP. These are inventions that have not been put into practice or widely commercialized to the market, and are often the result of scientific research. Instructor Vu Thi Dan Tra (PhD)
Invention and innovation
Invention Innovation
Instructor Vu Thi Dan Tra (PhD)
Innovation, invention and creation
Criteria Creation Invention Innovation
Create new
products/services/methods
Create new things that
have never existed in
the world
Creativity is new ideas
that can be
communicated, useful
and attractive
Is the realization of ideas
into useful products, or the
commercialization of
inventions
Breakthroughs are
clearly shown through
drawings, prototypes
New ideas, Hard to
visualize and clarify
Based on strategic,
marketing, technical,
creative skills.
Based on scientific
research skills
Based on creative thinking
skills
4 Ideas Money -> ideasInstructor Vu Thi Dan Tra (PhD) Ideas -> money
Degrees of innovation
Sustaining innovation:^ Sustaining and disruptive innovation
Builds on existing infrastructure.
Follows the expected path.
Appeals to existing market
segments.
Are market driven.
Disruptive innovation:
Replaces old technology with
new.
Requires new infrastructure.
Creates new markets.
Instructor Vu Thi Dan Tra (PhD)
Degrees of innovation
Incremental and radical innovation
Incremental innovation:
Just above “improvement”.
Still needs to be newsworthy,
have technical height and
industrial application.
Build on short cycles.
Degrees of sustaining innovation.
Radical innovation:
Looks further to the future.
Skips several incremental steps.
Higher risk.
Instructor Vu Thi Dan Tra (PhD)
Degrees of innovation
Exercise!
Sit two-and-two. Consider as many
sustaining and disruptive
innovations as you can.
For sustaining innovations, divide
them into incremental and radical
innovations.
For each response motivate why you
think it belongs to that category.
Timeframe: 15 min. Presentation will be done from spectator position. Instructor Vu Thi Dan Tra (PhD)
Dimensions of
innovation
Incremental - Radical
Component and system
Architectures, platforms and
systems
Instructor Vu Thi Dan Tra (PhD)
Scope for innovation
Instructor Vu Thi Dan Tra (PhD)
Dimension Type of change
Changes in the things (products/services) which an organization offers
‘Product’
Changes in the ways in which these
‘Process’ offerings are created and delivered
Changes in the context into which the
‘Position’ products/services are introduced
Changes in the underlying mental models which frame what the organization does
‘Paradigm’
Dimensions of innovation – what can
we change?
Instructor Vu Thi Dan Tra (PhD)
Examples of the 4Ps
model: Product
New to the world software – for example the first speech recognition program Toyota Prius – bringing a new concept
- hybrid engines. Tesla – high performance electric car. LED-based lighting, using completely different and more energy efficient principles Spotify and other music streaming services – changing the pattern from owning your own collection to renting a vast library of music Windows 7 and 8 replacing Vista and XP – essentially improving on existing software idea New versions of established car models – e.g. the VW Golf essentially improving on established car design Improved performance - incandescent light bulbs CDs replacing vinyl records – essentially improving on the storage technology ‘Product’
- what we offer the world Instructor Vu Thi Dan Tra (PhD)
Product vs. Process Innovation
- New processes may enable the production of new products
- A new metallurgical technique enabled the development of the bicycle
chain which in turn enabled the development of multiple-gear bicycles
- New products may enable the development of new processes
- The development of advanced workstations enabled the implementation of
computer-aided-manufacturing processes that increase the speed and
efficiency of production
- What is a product innovation for one organization might be a
process innovation for another
- UPS created a new distribution service (product innovation) that enables its
customers to distribute their goods more widely or more easily (process
innovation)
Instructor Vu Thi Dan Tra (PhD) Types of Innovation
- Radical vs Incremental Innovation
- The radicalness of an innovation is the degree to which it is new and
different from previously existing products and processes.
- Radicalness is also defined in terms of risk
- 3G wireless technology required
» Investment in new networking equipment and infrastructure
» Development of new phones greater display and memeory capabilities as
well as a stronger battery and/or better power utilization
» Degree of user acceptance of the technology was unknown
Instructor Vu Thi Dan Tra (PhD) Types of Innovation
- Radical vs Incremental Innovation
- Incremental innovations may involve only a minor change from (or
adjustment to) existing practices.
- The radicalness of an innovation is relative; it may change over time or with
respect to different observers.
- digital photography a more radical innovation for Kodak (chemical photography
expertise) than for Sony (electronics expertise).
Instructor Vu Thi Dan Tra (PhD) Types of Innovation
- Competence-Enhancing vs Competence-Destroying Innovation
- Competence-enhancing innovations build on the firm’s existing knowledge base
- Intel’s Pentium 4 built on the technology for Pentium III.
- Competence-destroying innovations renders a firm’s existing competencies
obsolete.
- Electronic calculators rendered Keuffel & Esser’s slide rule expertise obsolete.
- HP and TI thrived as they had existing competencies in the electronic
components needed in electronic calculators.
- Whether an innovation is competence enhancing or competence destroying
depends on the perspective of a particular firm.
Instructor Vu Thi Dan Tra (PhD)
Types of Innovation
- Architectural vs Component Innovation
- A component innovation (or modular innovation) entails changes to one or more
components of a product system without significantly affecting the overall design.
- adding gel-filled material to a bicycle seat
- An architectural innovation entails changing the overall design of the system or
the way components interact.
- transition from high-wheel bicycle to safety bicycle.
- In the 1800s, the front wheel of a bicycle has a very large circumference in order to provide speed; gears did not exist yet
- When gears and chains were invented, the bicycle took on a whole new design
- Most architectural innovations require changes in the underlying components
also.
Instructor Vu Thi Dan Tra (PhD)
Ten types of innovation
There are many ways to divide innovations by type, but one of the most well
known ways is the Ten Types of Innovation. In that specific model innovation is
divided into three perspectives:
1. Configuration – The internal process.
2. Offering – The solution the customer is receiving.
3. Experience – The customer’s experience from using the solution.
Instructor Vu Thi Dan Tra (PhD)
Ten types of innovation
1. Profit model. How we make our money.
2. Network. How we collaborate to create value.
3. Structure. How we organize ourselves and our assets.
4. Process. How we use leading methods to conduct our work.
5. Product performance. How we develop extraordinary functionality.
6. Product system. How we create complimentary products and services.
7. Service. How we support and enhance our offering.
8. Channel. How we deliver the offering to our customers.
9. Brand. How we represent our offering and our organization.
10.Customer engagement. How we stimulate continuous interactions.
- The most innovative solutions try to combine more or all of the different types. Instructor Vu Thi Dan Tra (PhD)
Ten types of innovation
Exercise!
1. Sit in small groups of 2-3 people. Think
through the Ten Types of Innovation and
describe an example of one innovation of
each type.
2. Think about and discuss a new
innovation of each type. This is
something YOU come up with. (It does not
have to be realistic.)
3. Consider an innovation that utilizes three or
more types to create a truly unique offering.
Timeframe: 20 min. Only spontaneous presentations. Instructor Vu Thi Dan Tra (PhD)
Why is innovation important?
Today’s situation
- At the same time these results are presented::
More than 50% of firms are dissatisfied with the financial results of their
innovation investments.
Only 23% of the firms have an formalized commercialization process for
innovations.
The biggest obstacles for successful innovation is the lack of internal
coordination.
Instructor Vu Thi Dan Tra (PhD)
Innovation Kondratieff wave
- The Kondratieff wave or long wave cycle is a theoretical long-
term cycle from an economic boom to a recession over a
period of approximately 60 years, and short-term cycles are
superimposed on it.
- Marked by important inventions of the period, and these
inventions created a strong impetus for the economy for
decades.
- Each wave usually lasts 50-60 years (+/- 1 year or more). Instructor Vu Thi Dan Tra (PhD)
Innovation Kondratieff wave
- The first wave: 50 years from 1780 to 1830: The emergence of the steam
engine and industrialization -
- Second Wave: 50 years from 1830 to 1880: The advent of railroads, and
heavy industry
- The third wave: 50 years from 1880 to 1930: The emergence of electricity,
chemistry and the chemical industry
- Fourth wave: 40 years from 1930 to 1970: emergence of automobile
technology, mass production, petrochemical industry
- Fifth Wave: 40 years from 1970 to 2010: the emergence of computers,
information and communication technology
- 6th wave: from 2010 to ?: trends in Nanotechnology, biotechnology and
Health
Instructor Vu Thi Dan Tra (PhD) Instructor Vu Thi Dan Tra (PhD)
Instructor Vu Thi Dan Tra (PhD) Instructor Vu Thi Dan Tra (PhD) Kondratieff waves of growth and their main features Instructor Vu Thi Dan Tra (PhD) Regulation required for e-scooters
Regulation required for e-scooters
At present electric scooters in the UK are not legal in the UK cycle lanes. Whereas in France, Germany and Spain they are legal. E- scooters cost between £300 and £1,500 and they typically have a top speed between 15 and 24mph. Manufacturers are waiting for regulators in the UK to decide on the regulations necessary to make these scooters able to use UK cycle lanes. Across Europe there are concerns about the increasing number of accidents involving e-scooters travelling at high speed and colliding with pedestrians. This is the main reason why UK regulators have been cautious. Source 5 January. OPOLJA/Shutterstock: Robert Watts (2020) E-scooters are the future – they just need to be legal, The Sunday Times, Instructor Vu Thi Dan Tra (PhD)
Debrief
- Time of wave in the past is nearly 50 year. Would it be shorten
by covid-19?
- Economics was changed to adapt with market need. Could
covid-19 affect to customer behavior and market need?
Instructor Vu Thi Dan Tra (PhD)
Refferences
- Roper, S., & Turner, J. (2020). R&D and innovation after COVID-19: What can we expect? A review of prior research and data trends after the great financial crisis. International Small Business Journal, 38(6), 504-514.
- Kurki, S., & Wilenius, M. (2022). The Future of Work in the Sixth Wave. In Digital Innovation and the Future of Work (pp. 17-39). River Publishers.
- Klepka, M. (2020). The theory of innovation cycles as a guideline for Mazovia in the fight against recession caused by COVID-19. MAZOWSZE Studia Regionalne, (33), 27-38.
- The future work of 6th^ wave. https://www.taylorfrancis.com/chapters/edit/10.1201/9781003337928-2/future-work- sixth-wave-sofi-kurki-markku-wilenius
- Investigation of Factors Affecting COVID-19 and Sixth Wave Management Using a System Dynamics Approach, https://www.hindawi.com/journals/jhe/2022/4079685/
- Silva, G., & Di Serio, L. C. (2016). The sixth wave of innovation: Are we ready?. RAI Revista de Administração e Inovação, 13(2), 128-134. Instructor Vu Thi Dan Tra (PhD) Government Innovator Researcher Regulator and policy maker Customer NHS Covid-19 App Military labs E-scooters? Lead user Public procurement Innovative products and services SMEs The roles of government in innovation Instructor Vu Thi Dan Tra (PhD)
Innovation Ecosystem
Instructor Vu Thi Dan Tra (PhD)
Start-up Ecosystem
Instructor Vu Thi Dan Tra (PhD)
Start-up Ecosystem Canvas
Adeo Ressi CEO and Founder of the Founder Institute
Start-up Ecosystem Canvas - a framework for local
startup leaders to map out their community.
=> To promote collaboration in startup communities
and help aspiring entrepreneurs see the resources
available to them
Instructor Vu Thi Dan Tra (PhD) What is Vietnamese goverment doing now to foster The Vietnam’s startup ecosystem?
- Mission: the start-up nation (2017)
- National project 844: "Support for a National Start-up Ecosystem to 2025” – Signed by Vice Prime Minister in 18/05/2016.
- FIRST - "Fostering Innovation through Research, Science and Technology” – 2013- Project: “Silicon Valley Ecosystem in Viet Nam‟ on June 4, 2013 - Ministry of Science and Technology
- The National Technology Innovation Fund ( NATIF) was founded by the Decision No. 1342/QD-TTg, dated August 5, 2011 of Prime Minister on establishing National Technology Innovation Fund.
- Many collaborative project between goverment and other countries: IPP, SECO. Instructor Vu Thi Dan Tra (PhD)
Accelerators^ VIETNAM STARTUP ECOSYSTEM^ created by
Seed Events Co-Working Space Government Community & Media Corporate Buyers Series A and Series B Venture Capital Funds Corporate Instructor Vu Thi Dan Tra (PhD)
AND MORE…
Instructor Vu Thi Dan Tra (PhD)
Fostering Innovation and Start-ups at FTU
- FTU Innovation and incubation space - FIIS
- FTU curriculum: E&I curricular
- FTU student program: FBA innovation challenge, FTU Student
mentoring program
Instructor Vu Thi Dan Tra (PhD) OUTSTANDING STARTUPS FROM FTU Instructor Vu Thi Dan Tra (PhD)
Creativity
Instructor Vu Thi Dan Tra (PhD)
Creativity
“Creativity is the process of human thinking under a certain
pressure and creating new and useful ideas”
Novelty: as new as creating a great idea with special
characteristics
Useful: expressing through that creative idea is actually useful in
practice
Instructor Vu Thi Dan Tra (PhD) Instructor Vu Thi Dan Tra (PhD)
Human Process
Pressure
Creativity
Instructor Vu Thi Dan Tra (PhD)
Problem
Open
External Internal
Motivation
Close
(Unsworth, 2001)
Type of creativity
Instructor Vu Thi Dan Tra (PhD)
