GROUP-3

Gopesh Dutt Pandey

Jasprit Kaur
Kamal Bhakar
Kautuk Srivastava
Komal Modi
Manas Pratap Singh
Nikhil Mishra
Ragini Bagrodia
Rahul Raj
Utkarsh Pandey
 Introduction
Where would humankind be if we didn’t had the ability to innovate?
Imagine a life without agriculture, the wheel, the alphabet, printing or a world without airplanes, automobiles,
telecommunications and refrigerators.
Good thing we don’t have to imagine that.
◈Innovation is an age old phenomenon.
◈There is something inherently “human” about the tendency to think about new and better ways of doing
things and try them out in practice.
◈Innovation can be defined as a process that involves multiple activities to uncover new ways to do things.

The case covers -

★ What is Innovation?
★ Innovation in making
★ How Innovation differs?
★ Systematic nature of Innovation
★ Innovation and Economic Performance
 What is innovation

1.
 What we know about Innovation?
Early Researches on Innovation

◈Started in 1960s.

◈Debunking myths about the nature of

innovation.

◈Gave important insights on how to proceed.

◈Cross disciplinary nature of Innovation.

 What is Innovation?

Invention vs Innovation

◈Differences and Linkages

◈Where do they occur?

◈How to turn an Invention into Innovation?

The example of GE in the 20th century

 Types of Innovation
According to Schumpeter

◈ New products

◈ New methods of production

◈ New sources of supply,

◈ Exploitation of new markets

◈ New ways to organize business

 Classification of Innovation
on the basis of how radical the idea is!

🞚 Radical Innovation ◈ Incremental/Marginal Innovation

Imitation or Innovation
◈ Different Ideas or Same?
◈ Perspective of researchers
 Innovation in Making

2.

Schumpeter’s view
● Fundamental uncertainty
inherent in all innovation
projects.
● Need to move quickly before
someone else did.
● Prevalence of “Resistance to
new ways”
● Innovation is outcome of
continuous struggle between
individual entrepreneurs and
social inertia, with the latter
being partly endogenous.
Innovation in Making
Innovation in Firms
● There are more chance of
innovation in a larger
organization
● Firms may get first mover
advantage or also risks getting
“locked in”.
● Firms should avoid getting
“stuck” and remain open to
different ideas.
● Pluralistic Leadership provide
more room for innovation than
homogenous unitary leader
style.
● Innovation consist of new
combinations of existing skills,
ideas, capabilities and
resources.
Knowledge, Relationship
and Innovation
● Firms are not closed system
comparable to isolated population
of ancient times .
● Both large and small firms
increasingly depend on external
sources in their innovative activity
● Structure of the firm and its
knowledge base co-evolve into a
setup that is beneficial for day-to-
day operations, but constrain any
innovation.
● Partners linked together with
strong ties perform better in
comparison to those with weak ties
but many time show network
dependency.
● Innovative firm also cultivate
“weak ties” to maintain capacity of
changing its orientation.
 3.
How Innovation Differs

10
1. Center of Innovation :
a. Overtime, center of Innovation has changed from Uk to Germany and for a long time now USA
b. The productivity and income of the population increases compared to neighboring countries
c. Currently, Far east Asia is becoming the new center of Innovation.
2. High technological competition (competition through innovation) is the driving force of economic
development.
3. First mover advantage : Scarce
a. When a company introduces an important innovation, there is swarming of Imitators
b. Imitators are more likely to succeed if they improve upon the original innovation

4. Innovation differing based on Product life cycle Theory :

a. Product innovation matters the most at early stage when there are different and competing products in the market.
b. In later stages, greater emphasis on process innovation, scale economics and cost competition.
5. Policy Making :
a. The Product Life Cycle Theory differs based upon the type of industry
b. Therefore, taking differences into account policy makers Should design the policies.

6. Pavitt’s Taxonomy :
c. Two types of high tech industry. “Science based” and “Specialized Suppliers”
d. Medium Tech : Scale - Intensive sector (Transport Equipment)
e. Low Tech : Not necessarily innovative, Low R&D (Most of their technology from other sectors)
 Systematic nature of
Innovation
4.
 THE SYSTEMIC NATURE OF INNOVATION
SYSTEM OF INNOVATION
Determinants of Innovation Process

• Firms do not normally innovate in isolation, but in collaboration and interdependence with other Organizations. These
organizations may be other firms (suppliers, customers, competitors, etc.) or non-firm entities such as universities,
schools, and government ministries.
GE Open Innovation Manifesto focuses on the collaboration
between experts and entrepreneurs from everywhere to share
ideas and passionately solve problems.
• The behavior of organizations is also shaped by institutions such as laws, rules, norms, and routines-that constitute
incentives and obstacles for innovation.
Type of regulation Negative incentive effects Positive incentive effect
Environmental protection Restricts innovation and creates Creates incentives for
compliance costs development of new eco-friendly
processes and products
Bankruptcy laws Restrictions to acquire external Increased confidence of creditors
funds for risky investments to invest in innovation
• These organizations and institutions are components of systems for the creation and commercialization of knowledge.
Innovations emerge in such "systems of innovation.“
 COMPONENTS OF SYSTEM OF INNOVATION

Institutions are sets of common habits, norms, routines,

Organizations are formal structures that are
established practices, rules, or laws that regulate the relations
consciously created and have an explicit purpose. They
and interactions between individuals, groups, and
are players or actors. Some important organizations in
organizations They are the rules of the game Example-rules
SIs are firms, universities, venture capital organizations
and norms influencing the relations between universities and
and public agencies
firms.

STRENGTHS OF SYSTEM OF INNOVATION APPROACH:-

The System of Innovation approach places innovation and learning processes at the center of
focus.

• The SI approach adopts a holistic and interdisciplinary perspective.

• The SI approach emphasizes interdependence and non-linearity.

• The SI approach can encompass both product and process innovations

• Emphasizes the role of Institutions.

 AN D
T I O N NC E
O VA R M A
INN O
5.
PE R F
OM IC
ECON

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 INNOVATION AND ECONOMIC PERFORMANCE
● The primary purpose of MARX-SCHUMPETER model was to explain the long run economic change
as known as ‘Development’.
● Technological competition is the major form of competition in capitalist economy, new combination
of innovation and existing knowledge opens up possibilities for new business ventures.
● This way a stage is set for continuous Innovation and developments of business opportunities.
● Major technological changes require extensive organizational and institutional change to run its
course. Although such change is difficult because of the continuing influence of existing competitions.
● POSNER(1961) explained that economic growth of a country or organization depends upon two
factors i.e innovation, which enhances the difference and imitation which reduces the difference.
● Developed countries need to keep innovating in order to stay running. Since Innovation introduces
variety into economic sphere.
● Factors that effect growth rate of different major economies are
1) Innovation
2) Imitation
3) Commercial exploitation of technology and developments.
THANK YOU