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Introduction

(Courtesy of:
Paul Trott, Innovation Management and
New Product Development, 4th edition,
Prentice Hall; 2008.
Invention and innovation: an introduction.
http://labspace.open.ac.uk/course/view.php?id=
4339&topic=all

Innovation Versus Invention

Innovation is concerned with the commercial and practical


application of ideas or inventions.
It is the creation of business/ecncomic value through
differentiations (technical, business, sales marketing, customer
service, product, etc.)
Invention refers to a scientific discovery with a clear technical
advantage over the current state-of-the art, and generally
protected by a patent.
Invention, then, is the conception of the idea, whereas innovation
is the subsequent translation of the invention into the economy
Innovation = theoretical conception + technical invention +
commercial exploitation
Invention has nothing to do with commercial success - whereas
innovation has everything to do with it.

Invention vs. Unsuccessful


Innovation
An example of an invention
Scientists and development engineers at a household cleaning products
company had been working for many months on developing a new
lavatory cleaning product. They had developed a liquid that when sprayed
into the toilet pan, on contact with water, would fizz (bubbling sound and
sparkle).
The effect was to give the impression of a tough , active cleaning product.
The company applied for a patent and further developments and market
research were planned.
However, initial results both from technical and market specialists led to
the abandonment of the project. The preliminary market feedback
suggested a fear of such a product on the part of consumers. This was
because the fizz and sparkle looked too dramatic and frightening.
Furthermore, additional technical research revealed a short shelf-life for
the mixture. This is a clear example of an invention that did not progress
beyond the organization to a commercial product.

Invention vs. Unsuccessful


Innovation (Cont.)
An example of unsuccessful Innovation
There is often a great deal of confusion surrounding
innovations that are not commercially successful.
A famous example would be the Sinclair C5, a small,
electrically driven tricycle or car.
Unfortunately for Clive Sinclair, the individual behind the
development of the product, it was not commercially
successful.
Commercial failure, however, does not relegate an innovation
to an invention.
This means that , the fact that the product progressed into the
marketplace makes it an innovation even though it is an
unsuccessful one

The Sinclair C5*

The Sinclair C5 is a battery electric vehicle


invented by Sir Clive Sinclair and launched
by Sinclair Research in the United Kingdom
on 10 January 1985.
The vehicle is a battery-assisted tricycle
steered by a handlebar beneath the
driver's knees.
Powered operation is possible making it
unnecessary for the driver to pedal.
Its top speed of 15 miles per hour (24
km/h), is the fastest allowed in the UK
without a driving licence.
It sold for 399 plus 29 for delivery.
It became an object of media and popular
during 1980s Britain and was a commercial
disaster, selling only around 17,000 units,

*http://en.wikipedia.org/wiki/Sinclair_C5

Pause for thought


In 2003 the BBC ran a series of television programs exploring
the innovation route from idea to retail shelf. Viewers were
asked to cast their vote on a selection of prototype products;
the winning three products would receive financial and
technical backing to develop and market their idea. Some of
the winning ideas were: evolutionary swimming goggles; a
new type of ink pen; a collapsing waste basket. Which of
these are inventions and which are innovations?

Innovation vs. Entrepreneurship


The capacity and willingness to undertake
conception, organization, and management of
a productive venture with all attendant risks,
while seeking profit as a reward.
Entrepreneurship is a powerful mixture of
energy, vision, passion, commitment,
judgment and risk-taking that provides the
motive power behind the innovation process.

Importance of Innovation
Businesses operate with the knowledge that their competitors will inevitably
come to the market with a product that changes the basis of competition
A decline in product innovation leads to a decline in market share.
The ability to change and adapt is essential to survival.
Companies that do not invest in innovation put their future at risk. Their
business is unlikely to prosper, and they are unlikely to be able to compete if
they do not seek innovative solutions to emerging problems (Australian
government website, 2006).
Many small and medium-sized enterprises (SMEs) fail because they dont
see or recognize the need for change.
Innovation is the motor of the modern economy, turning ideas and
knowledge into products and services (UK Office of Science and Technology,
2000

Importance of Innovation (CONT.)

In Canada, the success of many high-growth, small and


medium-sized enterprises (SMEs) is significantly connected to

innovation.
According to Statistics Canada, the following factors characterize successful
small and medium-sized enterprises
Innovation is consistently found to be the most important characteristic
associated with success.
Innovative enterprises typically achieve stronger growth or are more
successful than those that do not innovate.
Enterprises that gain market share and increasing profitability are those
that are innovative.(Government of Manitoba, Canada, 2006)

Importance of Innovation (CONT.)

In every industry from aerospace to pharmaceuticals and from


automobiles to computers, leading companies were able to
Innovate

Market leaders in 20007

Importance of Innovation (CONT.)

Worlds Most
Innovative
Companies

Importance of Innovation (CONT.)


Joseph Schumpeter was among the first to emphasize the importance of
new products as stimuli to economic growth
He argued that the competition provided by new products was much
more important than marginal changes in prices of existing products
Economies are more likely to grow due to development of new products
such as new computer software or pharmaceutical drugs than reduction
of prices of cars.
According to Schumpeterian economic theory, sustained economic
growth arises from competition among firms.
Firms try to increase their profits by devoting resources to create new
products and developing new ways of making existing products.

Types of Innovation
Innovation does not only involve major
(radical) technological advances but also
minor (incremental)

Incremental Innovation
Incremental innovation can occur in any
industry where product characteristics are
well understood and often standardized
Unit profit margins are usually low, production
technology is efficient
There is low uncertainty in the product and
related technology
This type of innovation focuses on cost,
quality, or feature improvements in products,
processes, or services

Examples of Incremental Innovation


Compact fluorescent lamps incremental. Incremental in that
they didn't involve a major new step in the development of
the technology but rather involved technical improvements to
an existing product. However these were important
improvements as they have gained an increasing share of the
domestic lighting market
Edison's electric light radical. Radical in terms of its eventual
impact if less so in terms of its technology. Its ultimate success
was dependent on incremental developments in many related
areas of technology, for example vacuum pumps.

Radical Innovation
Radical innovation explores new technologies or
products
Potential profits are high
There is high uncertainty in the product and related
technology
This type of innovation focuses on products,
processes, or services with unprecedented
performance features
Radical innovations create a dramatic change in
existing markets or industries or they create new
markets/industries

Examples of Radical Innovation


*Edison's phonograph radical. Radical in that nothing like it
had existed before. It caused quite a stir at the time and since
has had a widespread impact on the lives of generations of
people. The initial invention made use of existing technology
but in a radical way. The next 100 years saw steady
incremental improvements in the technology.
Edison's electric light radical. Radical in terms of its eventual
impact if less so in terms of its technology. Its ultimate success
was dependent on incremental developments in many related
areas of technology, for example vacuum pumps.
*when first developed, the phonograph was used to both record and reproduce
sounds

Different Types of Innovation


Both radical and incremental innovations are not exclusively
associated with products

*Float glass is a sheet of glass made by floating molten glass on a bed of molten metal, typically tin,
although lead and various low melting point alloys were used in the past. This method gives the sheet
uniform thickness and very flat surfaces. Modern windows are made from float glass.

*http://en.wikipedia.org/wiki/Float_glass

Models of Innovation
How innovation occurs
There are two schools of thought:
On the one hand the social school argued that
innovations were the result of a combination of
external social factors and influences, such as
demographic changes, economic influences and
cultural changes.
The argument was that when the conditions were
right innovations would occur.
On the other hand the individualistic school
argued that innovations were the result of unique
individual talents and such innovators are born.

Innovation Models

Linear Models
Simultaneous coupling model

Linear Model
There are two basic variations of this model
for product innovation.
Technology-push model
Market-pull model

Technology-push Model

After the Second World War: It is assumed that:

scientists make unexpected discoveries,


technologists apply them to develop product ideas and
engineers and designers turn them into prototypes for testing.
It is left to manufacturing to devise ways of producing the
products efficiently.
Finally, marketing and sales will promote the product to the
potential consumer.

A pushed process is based on existing or newly invented


technology, that the organization has access to, and tries to
find profitable applications to use this technology.
Emphasis on R&D; the market is a recipient of the fruits of
R&D

Examples
Early motor cars.
The invention of the motor car involved technology push
with enthusiasts trying to improve the technology and
persuade people of the viability of the invention.
It was regarded as a toy until improved performance and
falling price made it an attractive product and market pull
became an important factor encouraging further
innovation.
Laser push because it arose out of mathematical theory and
scientific research and in the early stages of its development
had no obvious application.

Market-pull Model

In the 1970s that new studies of actual innovations suggested that the role of the marketplace was
influential in the innovation process.

The model emphasizes the role of marketing as an initiator of new ideas resulting from close interactions
with customers.
These, in turn, are conveyed to R&D for design and engineering and then to manufacturing for production.
In fast-moving

The managing director of McCain Foods argues that knowing your customer is crucial to turning
innovation into profits: He says
Its only by understanding what the customer wants that we can identify the innovative opportunities.
Then we see if theres technology that we can bring to bear on the opportunities that exist
A pulled process tries to find areas where customers needs are not met, and then focus
development efforts to find solutions to those needs

Emphasis on Marketing ; the market is the source for


directing R&D.

Example
Car airbags arising out of the need for
greater safety.
Cellular phone with camera,
Cars w. reduced emission

Simultaneous coupling model


The linear model is only able to
offer an explanation of where the
initial stimulus for innovation was
born, that is, where the trigger for
the idea or need was initiated.
The simultaneous coupling model
suggests that the majority of
innovations involve a creative
coupling of technological and
market factors
Furthermore, the point of
commencement for innovation is
not known in advance.

Examples
High-yielding varieties of wheat and rice pull
and push.
Pull was from the human need to feed people
more efficiently and the economic incentive to
capture a share of a steady market.
Push was from the outcome of scientific
research into biotechnology and gene
manipulation opening up new possibilities

What is Innovation Management?


Innovation management is the discipline of managing
processes in innovation.
Innovation is not a singular event, but a series of activities
that are linked in some way to the others. This may be
described as a process and involves:
a response to either a need or an opportunity that is
context dependent;
a creative effort that if successful results in the
introduction of novelty; the need for further changes.

Innovation in an
organizational context
Early inventions and innovations were the result of
individual effort or an outcome of family business
In previous centuries, it was easier to mobilize the
resources necessary to develop and commercialize a
new product the resources required were minimal
in comparison
Today significant innovations require an
organizational effort.
Recent innovations and scientific developments (ex.
cell phones, computers, new drugs, etc.) are
associated with organizations not individuals

Innovation in an
organizational context (CONT.)

Role of Individuals in Innovation


The individual is a key
component of the
innovation process
Individuals define
problems, come up with
new ideas, perform creative
linkages and associations
that lead to inventions
Managers play a critical role
in deciding what activities
should be undertaken, the
amount of resources to be
deployed, how they should
be realized