Invention is an idea that is new to the world.

Innovation has the potential of creating value through commercial applications.

Moravec’s Paradox: Tasks that are easy for humans to perform (e.g., motor or social skills) are difficult for machines to replicate,
whereas tasks that are difficult for humans (e.g., performing mathematical calculations or large-scale data analysis) are easy for
machines to replicate.

Creative destruction: Process of new innovations replacing and making older innovations obsolete.

Recombinant innovation: Process of combining existing ideas or technologies in new and creative ways to create something new.

Adoption S-curve represents cumulative adoption vs times

Technology S-curve or Innovation S-curve represents the performance of technology over

time

In the world of stand-alone products the co-innovator may not matter much, however, in
case an ecosystem is needed it is imperative to think of complementors.

Calm Waters (Scotch tape, Hoover) , Rough Waters (Intel and Netscape), Technology
Leads (Walkman), Market leads (Digital cameras)

Competence-enhancing technologies strengthen existing capabilities, while competence-destroying technologies destroy existing
capabilities.

Long Tail Phenomenon: A business strategy that allows companies to realize significant profits by selling low volumes of hard-to-
find items to many customers, instead of only selling large volumes of a reduced number of popular items

Be an Imitator when Patent/trademarks are not effective, Dominant design exists, Complementary assets are important and
specialized

Be an Innovator when Patents and trade secrets are effective, Dominant design does not exist, Complementary assets are not
important

Netflix's ladder strategy is an example of a business strategy that involves offering content that is freely available, then acquiring
streaming rights, and then producing original programming.

Architectural innovation: Uses existing technology to create new products or services that reach new consumers or markets. For
example, a smart watch that uses cell phone technology.

Radical innovation: Invents that replace existing business models, often by disrupting existing systems and processes. Radical
innovation can also combine technology with new business models, or create new product categories, to change the relationship
between customers and suppliers.

Incremental innovation: A series of small improvements to a company's existing products or services, usually at a low cost, that can
help differentiate a company from competitors. These improvements can include minor design tweaks, functionality changes, or
new features to make a product more user-friendly.

Modular innovation: A technique that involves redesigning a product or service, or core elements of a product, while leaving the
links between these elements in the usual positions. Modular innovation allows businesses to create new products and services by
using pre-existing components, and also allows data to be shared and reused across applications, enterprises, and communities.

Disruptive Innovation describes a process by which a product or service initially takes root in simple applications at the bottom of a
market—typically by being less expensive and more accessible—and then relentlessly moves upmarket, eventually displacing
established competitors. E.g. Word Processing vs Typewriter, Streaming video vs video rental

Basic research pertains to advancing knowledge to understand phenomena around us

Applied research which relates to problem solving involving a product or process in mind

Tragedy of the anti-commons or gridlock where when multiple owners have exclusionary rights over a scarce resource - when too
many people own pieces of one thing, nobody benefits and can use it

Patent thickets are a large number of patents with overlapping claims and this is a strategy used by firms to protect some core
innovation and to extend the duration of patent protection around drugs.

Software is quite prone to infringement due to the broad nature of protection one can seek with patents on software. Software, by
virtue of being a creative material, is automatically protected by copyrights. India and some parts of Europe have steered away
from granting patents for software.

Copyrights protect any work of creativity that is expressed in a tangible medium. One can non-commercially use another person’s
work (with minimal usage) without prior consent under terms of Fair use. Fair use typically involves criticism, comment, news
reporting, teaching, scholarship, research, with Minimal usage that is non commercial, and/or transformative.

Firms cross-license their patents to avoid patent wars.

The market for ideas involves trading in ideas whereby a startup cooperates with incumbents that act as conduits for
commercialising technology

The paradox of disclosure crops up in the market for ideas- a firm’s willingness to pay for intellectual property depends on the
knowledge of the idea but greater disclosure reduces the bargaining power of the holder of IP.

Modularization accelerates innovation.

The “visible” rules are what are well known to everyone - the linkages or interfaces that specify the overall architecture and the
“hidden” rules specify each module.

While being open allows a firm to create value (open source strategy can be used to launch a new platform to overcome), a closed
strategy allows for value capture to happen.

AI is able to learn today through backward propagation - learning by example, in the same way a child learns about objects around
him/her

Human decision making can be divided into two parts- prediction and judgement, where prediction is an input to judgement.
Loosely speaking, AI is good at prediction while human are good at judgement.

In ecosystem orchestration, a firm needs to create value for itself and other partners as well.