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repared for: ur Chan kay Mln


uone by:
Ashlma !aln, School of 8uslness
Chua el Shan, School of 8uslness
!anuavl Lee Pong 8ul, School of Soclal Sclences
Lum Pul Lln, School of 8uslness
1ay Soo Pan, School of Soclal Sclences
C28


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When you have compleLed Lhls chapLer, you should be able Lo:
(1) ulsLlngulsh beLween Lhe dlfferenL forms of lnnovaLlon, ln Lerms of how lnnovaLlon ls applled Lo
a) roducL lnnovaLlon
b) Servlce lnnovaLlon
c) rocess lnnovaLlon

(2) ulfferenLlaLe Lhe dlfferenL Lypes of lnnovaLlon ln Lerms of componenLs and/or sysLem change uslng
Lhe Penderson and Clark framework, and descrlbe Lhe characLerlsLlcs of each Lype of lnnovaLlon
a) lncremenLal lnnovaLlon
b) Modular lnnovaLlon
c) ArchlLecLural lnnovaLlon
d) 8adlcal lnnovaLlon

(3) ulscuss Lhe value and llmlLaLlons of Lhe lnnovaLlon Lypology

(4) 8eflecL upon Lhe lmpacL of lnnovaLlons on humans, companles & socleLy

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! lnnovaLlons can and do vary enormously
! 1he Lerm lnnovaLlon" ls ofLen mlsused or used by dlfferenL people Lo mean dlfferenL
Lhlngs. Pence, grouplng lnnovaLlons lnLo caLegorles can help us undersLand
lnnovaLlon beLLer
! lnnovaLlons can be caLegorlzed by
(1) lorms or AppllcaLlons of Lhe lnnovaLlon (l.e. whaL lL ls used for)
(2) uegree of novelLy
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! 8efers Lo a new physlcal, Langlble ob[ecL
! MosL obvlous form of lnnovaLlon
! 1argeLed aL consumers Lo aLLracL Lhem Lhrough producL novelLy and/or new
Lechnology
! 8eneflLs consumers wlLh greaLer producL funcLlonallLy
! L.g. Apple lod - due Lo lLs mlnlmallsL deslgn, easy Lo use lnLerface and unrlvalled
performance, lL ls beLLer able Lo meeL Lhe deslres of consumers

LJ M(3EC)( C++,E0?C,+
! 8efers Lo provlslon of new or slgnlflcanLly lmproved servlce Lo consumers
! Less eye-caLchlng Lhan producL lnnovaLlon
! new servlce may be Lhe resulL of new Lechnology, maklng lL posslble Lo provlde a
servlce LhaL ls prevlously unavallable
! lmproved servlce Lyplcally resulLs from dellvery sysLem lmprovemenLs (e.g.
appllcaLlon of lnLerneL), enabllng an exlsLlng servlce Lo be made more exLenslve and
efflclenL
! L.g. Amazon.com - an onllne booksLore LhaL offers a greaLer range of books aL lower
prlces as compared Lo brlck-and-morLar bookshops LhaL lncur addlLlonal renLal cosLs,
cusLomers are also able Lo shop from Lhe comforL of Lhelr homes
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! 8efers Lo a new manufacLurlng process
! More frequenLly overlooked, buL carrles an even blgger lmpacL Lhan producL or
servlce lnnovaLlon
! lnvolves lmprovemenL ln Lechnology, lmproved sysLem of worklng, new meLhod of
organlzlng work, and/or lmproved equlpmenL (caplLal goods)
! Leads Lo greaL reducLlon ln cosLs, lncreased producLlvlLy and promoLes efflclenL
allocaLlon of resources
! L.g. Penry lord's movlng assembly llne allowed speclallzaLlon, reduclng Llme and
efforL ln producLlon, allows conLlnual producLlon and mlnlmlze boLLleneck
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Shows exLenL of change (l.e. degree of lnnovaLlveness) based on sysLem and/or
componenL change
8rlngs ouL Lhe subLle buL lmporLanL dlfferences beLween lnnovaLlons
redlcL lmpacLs broughL abouL by Lhe lnnovaLlon

1he Penderson and Clark framework recognlses LhaL Lhe Lhree dlfferenL forms of lnnovaLlons
are acLually sysLems, and Lhese sysLems are essenLlally made up of componenLs.

ConsequenLly, ln order Lo make a producL, servlce or process, we wlll need 2 dlsLlncL Lypes of
knowledge:
l. 4,5<,+(+? P+,Q-(1.(: knowlng how each componenL performs a well-deflned
funcLlon wlLhln a broader sysLem LhaL makes up Lhe producL. 1hls knowledge forms
parL of Lhe core deslgn concepLs" embedded ln Lhe componenLs
ll. M/F?(5 P+,Q-(1.(9S73)*C?()?;30- P+,Q-(1.(T: knowlng how Lhe varlous
componenLs are llnked/lnLegraLed Lo work LogeLher

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! Small reflnemenLs Lo componenLs so as Lo lmprove performance or funcLlonallLy, buL
always wlLhln Lhe conflnes of Lhe exlsLlng deslgn
! MosL common Lype of lnnovaLlon as gradual lmprovemenLs ln knowledge and
maLerlals assoclaLed wlLh a parLlcular Lechnology lead Lo mosL producLs and servlces
belng enhanced overLlme
! 1echnology ls lmproved raLher Lhan replaced
! L.g. 1: lhone 3 Lo 4 Lo 4s Lo 3
! L.g. 2: Cannon 330u Lo 600u Lo 630u
! lmpacLs: relnforce poslLlon of exlsLlng flrms as Lhey slmply have Lo bulld upon exlsLlng
knowledge Lo dellver sLeady sLream of lncremenLal lnnovaLlons, lncrease markeL
peneLraLlon raLher Lhan creaLe new markeLs

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! new/slgnlflcanLly dlfferenL componenLs buL same archlLecLure and conflguraLlon
! lf Lhe new componenL lnvolves a new Lechnology, lL can change Lhe way ln whlch one
or more componenLs operaLe, buL Lhe overall sysLem and conflguraLlon sLays Lhe
same
! L.g. 1: Cld lod had a splnnlng dlsk as memory, now lL uses flash memory
! L.g. 2: 1he clockwork radlo uses a sprlng based clockwork mechanlsm as power
supply lnsLead of exLernal power supply or baLLerles, whlle Lhe oLher componenLs
remaln unchanged. As such, people ln relaLlvely poor counLrles wlLhouL access Lo a
rellable supply of elecLrlclLy can sLlll use Lhe radlo. lL can also be used by hlkers who
need Lo keep ln Louch wlLh Lhe ouLslde world

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! LxlsLlng componenLs llnked LogeLher ln a new way or sysLem
! ComponenLs remaln unchanged or sllghLly lmproved
L.g.: uyson ConLraroLaLor ` washlng machlne launched ln year 2000 LhaL has 2 drums
lnsLead of 1 LhaL roLaLes ln opposlLe dlrecLlon, glvlng rlse Lo an enLlrely dlfferenL
washlng sysLem

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! new componenLs llnked LogeLher ln a whole new way or sysLem
! usually Lhe resulL of ma[or breakLhroughs, new Lechnologles or ma[or sclenLlflc
advances
! L.g. ersonal CompuLer, ulglLal Camera (fllm cameras records lmages dlrecLly onLo a
llghL-senslLlve coaLed fllm whlle a dlglLal camera records lmages vla an lmage sensor
onLo flash memory cards), 1v uslng CaLhode 8ay 1ube (C81) Lo flaL screen 1v uslng
llquld crysLal dlsplay (LCu) LhaL operaLes ln a LoLally dlfferenL way
! lmpacLs: slgnlflcanL changes Lo markeL & lndusLry whlch leads Lo a hlgh degree of
uncerLalnLy, Allow new enLranLs Lo Lhe markeL, lar reachlng consequences e.g.
creaLlve desLrucLlon", lead Lo new buslness models, new way of llfe, new paradlgms
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Shows LhaL lnnovaLlons are noL homogenous, Lhey can vary greaLly e.g. ln Lerms of
novelLy
Shows Lhe lnfluence of Lechnology and Lechnologlcal change
Pelps us predlcL Lhe effecLs of dlfferenL Lypes of lnnovaLlons on Lhe markeL
o lnnovaLlon on componenLs: we can expecL Lhe lnnovaLlon Lo be rapldly adopLed
and compeLlLlve advanLage of exlsLlng flrms Lo be relnforced
o lnnovaLlon on sysLem/llnkages: noL all flrms wlll be happy as Lhls form of
lnnovaLlon may lead Lo CreaLlve desLrucLlon" - where Lhe lnLroducLlon of an
lnnovaLlon would dlsrupL and desLroy Lhe exlsLlng markeL of Lhe ouLdaLed
Lechnology e.g. lnLroducLlon of ersonal CompuLers desLroyed markeL for
malnframe compuLers
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MaLLer of [udgmenL as Lhere mlghL be overlaps e.g. someLlmes lL ls hard Lo deLermlne
wheLher Lhe componenL ls compleLely new or ls an lmproved one
very producL-orlenLed, buL even so, noL unlversally appllcable Lo all producLs (e.g.
Medlclne pllls do noL have dlfferenL componenLs LhaL are lnLegraLed lnLo a sysLem)
1echnologlcally orlenLed - whlle Lhe Lypology ls good aL dlfferenLlaLlng ln Lerms of
degree of lnnovaLlon ln Lechnologlcal Lerms, lL does noL necessarlly dlfferenLlaLe ln
Lerms of Lhe lmpacL of an lnnovaLlon on socleLy
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Many lnnovaLlons have reduced Lhe amounL of
Llme and efforL requlred Lo do Lhlngs
L.g. lord's assembly llne & ldea of
speclallzaLlon reduced Llme and efforL ln
producLlon, leadlng Lo greaLer efflclency
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WlLh Lhe advancemenL of Lechnology, many [obs
have been replaced by machlnes. As such,
companles do noL need Lo hlre as many workers,
especlally ln Lhe manufacLurlng lndusLry
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lnnovaLlons can offer slmpler soluLlons or
wlder range of consumer cholces
L.g. Pomemakers no longer need Lo spend long
hours hand-washlng Lhe bulk of Lhe cloLhes.
1hey can use washlng machlnes Lo do Lhe same
[ob, perhaps even more effecLlvely
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lnnovaLlons on soclal medla e.g. lacebook have
been crlLlclzed Lo undermlne real human
lnLeracLlons. Such lnnovaLlons also broughL along
problems perLalnlng Lo personal prlvacy, daLa
aggregaLlon and freedom of speech.

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L.g. WlLh emalls, offlces are able Lo cuL down
on Lhe use of paper
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L.g. Many facLory processes lnvolve dlsposal of
large amounL of wasLe producLs, lf noL properly
dlsposed of, may resulL ln envlronmenLal polluLlon
* 1hls llsL ls noL exhausLlve *
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SmlLh, uavld. (2010). AB45*/$%& $%%*,"-$*%. London: McCraw-Plll Plgher LducaLlon.