The Process of

Innovation
Chapter 5

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 Objectives
When you have completed this class you will be able
to:
• Differentiate exploitation from exploration;
• Distinguish the steps in the innovation process;
• Differentiate and distinguish the different activities
associated with the process of innovation;
• Evaluate the techniques available to facilitate the
process of innovation;
• Compare and contrast the open and closed forms of
innovation.

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A generic model of the innovation
process

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 Functions of Prototypes
• Evaluation and testing
• Integration of components & systems
• Learning
• Risk Reduction

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Models and prototypes

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 James Dyson on prototypes
“And all the while I was making cyclones.
Acrylic cyclones, rolled brass cyclones,
machined aluminium cyclones (which
looked like prosthetic limbs for the Tin Man
in the Wizard of Oz – whose life was
changed by a cyclone). For three years I did
this alone.”
Dyson (1997: p122)

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 Design
Likely to cover:
• The precise shape of the product
• The tolerances to which it has to be manufactured
• The materials to be used in manufacture
• The process by which the product will be manufactured

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A manufacturing system

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 Production Engineering
Production Engineering is likely to involve consideration of
the following in order to keep costs down:
• Reducing the parts count
• Using standardised components
• Using self-aligning parts
• Using assembly operations that require a single, linear
motion

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 Rothwell’s 5 Models of the
Innovation Process
1. Technology Push
2. Demand Pull
3. Coupling model
4. Integrated model
5. Network model (Open Innovation)

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Technology push

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Demand pull

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Coupling model

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Integrated model

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Network model

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 Examples of network innovation
Company Product External partners
Apple iPod Sony (battery); Toshiba (hard disk); PortalPlayer
(CPU); Wolfson (DAC); Texas Instruments
(FireWire interface controller); Linear
Technologies Inc (power management system)

Marks & Spencer Chilled ready Small food manufacturers (meals); Packaging
meals firms (microwave tolerant packaging); Logistics
firms (transport); Computer companies (EPOS)

Rolls-Royce Trent 900 engine Hamilton Sundstrand (FADEC); Fiat Avio

(gearbox); Marubeni (engine components);
Volvo (intermediate compressor); ITP (low
pressure turbine); Goodrich (fan casings);
Honeywell (pneumatic system)

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 Network Model
• Facilitating factors:
• Improved communication
• Developments in ICT e.g. CAD and CAM
• Growth of strategic alliances and joint ventures
• Examples
• Biotechnology
• ‘Benetton’ clothing
• Medical instruments

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 Open Innovation
(network model)
“Open innovation is a paradigm that assumes that firms
can and should use external ideas as well as internal
ideas, and internal and external paths to market, as the
firms look to enhance their technology”

Chesbrough (2006: pxxiv)

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Closed v. Open innovation

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 Open Innovation
• One firm leads but uses innovations of other (small?) firms
• External firms supply innovations/technology (under
licence)
• External knowledge/technology can be tapped via network
• Spreads risk & cost
• Faster development because firm buys licences/ technology
– without waiting to invent it

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 Features of Open Innovation
• Explicitly recognises that no one firm can hire all the
best brains, hence the importance of accessing
external knowledge /expertise
• Networking in various forms can provide the means
of linking to external knowledge/expertise
• Recognises that there are innovation strategies other
than a first mover strategy
• Management of intellectual property is vitally
important in order to ensure maximising its value ,
but this can be achieved in various ways

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 Erosion factors favouring Open
Innovation
1. The growing mobility of highly experienced and skilled
people (i.e. can’t keep knowledge inside)
2. Increased time people spend in university training (i.e.
knowledge spills over to lots of firms)
3. Increased availability of private Venture Capital
(i.e. easier for researchers to launch own start-up firm)

Note: old style Closed innovation relied on large firms with own
research labs (e.g. PARC & Bell Labs)

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