INNOVATION MANAGEMENT

CHETAN T.R

Module 1

• Concept of Innovation • Historic Perspective• Types of Innovation• Innovation Process• Macroeconomic view of

innovation • Approaches to innovations• Assumptions & Barriers to

Innovation• Innovation Sources

Concept of Innovation“Technological innovations are defined

as new products and processes and major technological modifications to products and processes. An innovation is considered performed if it is introduced to the market (product innovation) or implemented in the production process (process innovation). Innovation includes many research, technological, organizational, financial and commercial activities.

WHAT IS INNOVATION?

• Invention• Technology• Innovation• Creating new or improved products, processes

and services• Knowledge and learning• Uncertainty

Schumpeter’s distinction between ”Invention” and ”innovation”

• An ’invention’ is an idea, a sketch or model for a new or improved device, product, process or system. It has not yet entered to economic system, and most inventions never do so.

• An ’innovation’ is accomplished only with the first commercial transaction involving the new product, process, system or device. It is part of the economic system.

Historic Retrospective

Popular View of Science

Dimensions of Innovation

– Product innovation: changes in the things (products or services) which an organization offers

– Process innovation: changes in the ways in which they are created an delivered

– Position innovation: changes in the context in which the product or services are introduced

– Paradigm innovation: changes in the underlying mental modes which frame what an organization does

the ‘4Ps’ of innovation

Oslo Manual• Product innovation

– A good or service that is new or significantly improved. This includes significant improvements in technical specifications, components and materials, software in the product, user friendliness or other functional characteristics.

• Process innovation– A new or significantly improved production or delivery method. This

includes significant changes in techniques, equipment and/or software.

• Marketing innovation– A new marketing method involving significant changes in product design

or packaging, product placement, product promotion or pricing.

• Organisational innovation– A new organisational method in business practices, workplace

organisation or external relations.

Table A typology of innovations

Figure Overview of the innovation process

Stage-gate processIDEA Gate 1

Idea screening

Stage 1Preliminary evaluation

Gate 2Detailed evaluation

Stage 2Product definition

Gate 3Decision to develop

Stage 3Development

Gate 4Decision to test

Stage 4Testing

Gate 5Decision to commercialize

Stage 5Commercialization EVALUATION

Macroeconomic view of Innovation

Figure 1.7 Interactive model of innovationSource: Adapted from R. Rothwell and W. Zegveld (1985) Reindustrialisation and Technology, Longman, London.