Innovation in enterprises - Universidad Autónoma...
Transcript of Innovation in enterprises - Universidad Autónoma...
Seminar
Innovation in enterprisesRelevance, strategic management,
success factors and barriers
Eva Kirner
Universidad Autónoma Metropolitana-Iztapalapa, Mexico City
January 16/17, 2007
OUTLINE
1. Fraunhofer Society and the Fraunhofer Institute for Systems and Innovation Research
2. Innovation: definitions, basic concepts, theories and typologies
3. Management of the innovation process: innovation routines, success factors and barriers
4. Measuring innovation: macroeconomic and microeconomic indicators, innovation capability
5. The role of SMEs in the innovation system
6. Knowledge/technology transfer and the concept of open innovation
7. Summary
History
Joseph von Fraunhofer(1787-1826)
The Fraunhofer-Society 1949 - today
Discovery of“Fraunhofer-Lines“
in the sun spectrum
New methods of lensprocessing
Head of Royal Glass Factory
The Fraunhofer-Society in Germany
Itzehoe
BerlinGolm
Magdeburg
Hannover
Braunschweig
Bremen
OberhausenDortmund
Duisburg
AachenEuskirchen
SchmallenbergSt. Augustin
IlmenauJena
Dresden
Chemnitz
Würzburg
Erlangen
Pfinztal
DarmstadtKaiserslauternSt. Ingbert
SaarbrückenKarlsruhe
Stuttgart
Freiburg
Freising
Rostock
Teltow
CottbusHalleSchkopau
Paderborn
Nürnberg
Efringen-Kirchen
MünchenHolzkirchen
Leipzig
Branches of Institutes, Research Institutions, Working Groups, Branch Labs and ApplicationCenters
Institutes
80 research units at approx. 40 locations
Financing of the Fraunhofer-Society
ContractResearch
0
200
400
600
800
1000
1200 Mio €Defense Research
Expansion Investments
Public Project Financing
Contract Financing(industry)
Institutional Funding
2004200019951990
The Fraunhofer Institute for Systems and Innovation Research
§ studies how innovations originate, who profits from themand how they can be promoted
§ evaluates economic, social and political potentials and the limits of technical innovations
§ helps decision-makers in industry, science and politics in taking strategic decisions / setting a strategic course
§ utilises the newest theories, models, social-sciencemeasurement instruments and databases and constantlydevelops them further
§ handles ca. 250 research projects per year
Technology Industry
interdisciplinaryresearch at
the interface of
Society
Research Areas
Innovation Systems and Policy
Policy analyses and policy consultancyNational and sectoral innovation systemsInnovation indicators
Regions and Market Dynamics
Regional innovation systemsFounding and financingNew services
Regulation and New Markets(ISI capital office Berlin)
Regulation and innovationStandardisation and new markets
Emerging Technologies
Emergence and diffusion of new technologiesPolitical, societal framework conditionsNew technologies in innovation systemsHealthcare system
Energy Policy and Energy Systems
Energy and climate policyEnergy and material efficiencyRenewable energy sourcesEnergy sector
Sustainabilityand Infrastructures
Water resources managementTraffic systems Value added chainsClimate policy
Task Force:
Innovation Indicators
Industrial and Service Innovations
Evaluation of industrial innovation policyTechnical-organisational innovationsHolistic innovation managementInnovative business models
Facts and Figures
33% economists
13% industrial engineers
15% engineers
18% natural/ life scientists
21% social scientists
53% state national
3.8% state international
13.7% industry
23% EU
6.5% research promotion funds (DFG etc.)
Broadly based know-how
Clients
Budget 2005: approx. € 12 million
240 research and consultancyprojects per year
Number of staff: 140(90 scientists)
Fraunhofer ISI – Systemic Approach towards Innovation
• Analysis of the innovation system
• Analysis of the interaction between different agents and institutions in the innovation process
• Research within the triangle Economy, Technology and Society
• Use of different methods to analyse innovation processes and patterns
-Set of innovation indicators at micro and macro level
-Quantitative empirical research (different types of surveys)
-Qualitative empirical research (case studies, expert and stakeholder interviews, workshops)
-Foresight (delphi, scenario analysis, roadmapping)
Industrial and service innovations
Field of research: Modernisation of production and service mainly in the manufacturing industry
Type of research: interdisciplinary research at the interface of society/individual, organisation and technology
Form of activity: contract research for national and European public and private sector
People: interdisciplinary research team:EngineeringSocial SciencesEconomicsBusiness AdministrationWork Psychology
Evaluation of Industrial Innovation PoliciesAssessment of policy measuresInternational comparisonPolicy instruments Identification of research needs
Holistic Innovation ManagementAnalysis of enabling factors and obstacles for product, service, process and organisational innovation Indicators for innovation activity, speed and success Instruments for strategic development and planning
Techno-Organisational Innovations
Scenarios, Foresight, Technology AssessmentDiffusion analysisPotential assessment on a sectoral, regional, corporate and national level
Innovative Business Models and Value ChainsInnovative (sustainable) service, operating and business models Outsourcing and relocation trends, location assessmentStrategic controlling
Industrial and service innovations: research areas
Section 2
Innovation: definitions, basic concepts, theories and typologies
§ Definition of innovation
§ Types of innovation
§ Dimensions of innovation
§ Theories and basic concepts
§ Example 1: Indicators in the innovation system
§ Example 2: Future technologies
Why Innovation?
§ Technological progress: increased rate of scientific discoveries, increase of technological knowlede base
§ Change of market: customers demand differenciated and complex problemsolutions
§ Intensification of competition: market competition is largely carried out and isbased on innovation
§ Globalisation: increases all other developments additionally
Firms have to innovate in order to survive
Innovation: Definitions
Everybody is talking about innovation, but what exactly is an innovation?
§ The original meaning of innovation (innovare) is to make something new
§ Innovation emerges through "creative destruction" (Schumpeter)
§ Innovation is a means to achieve competitive advantage through "new technologies and new ways of doing things" (Porter)
§ Innovation = Invention + Exploitation (Rogers)
§ Innovation as a core business process, necessity for firms survival (Tidd et al.)
§ Innovation as the result of complex collaboration and interaction patterns between individuals, companies, and institutions within the innovation system (Lundvall)
§ Innovation is any thought, behavior or thing that is new because it is qualitatively different from existing forms (Barnett)
Examples for innovations and innovative firms
• Toyota
• Amazon
• Ebay
• Li & Fung
• Nokia
• Low-cost airlines
• IKEA
• Benetton
• ZARA
• …
• Personal computer
• Internet
• Mobile phones
• New pharmaceuticals
• High tech fibres, new materials
• Robots
• Functional food
• Sensor systems
• …
Types of innovation
Schumpeter: innovation is a new product, a new production method, a new market, a new source of supply or a new form of organisation
Dosi: innovation is the search, discovery, experimentation, development, imitation and adoption of new products, new production processes and new organisational set-ups
Damanpour: innovation is the adoption of an internally generated or purchased device, system, policy, program, process, product or service that is new to the adopting organisation
OECD: "an innovation is the implementation of a new or significantly improvedproduct (good or service), or process, a new marketing method, or a neworganisational method in business practices, workplace organisation or externalrelations" (Oslo Manual 2005)
Types of innovation: the "4 Ps" of innovation (Tidd, Bessant, Pavitt
§ Product innovation: changes in the things (products/services) which an organisation offers
§ Process innovation: changes in the ways in which they are created and delivered
§ Position innovation: changes in the context in which the products/services are introduced
§ Paradigm innovation: changes in the underlying mental models which frame what the organisation does
Dimensions of innovation: Complexity and degree of novelty
New versions of motor car,
aeroplane, TV
New generations e.g. MP3 and
download vs. CD and cassette
music
Improvements to components
New components for existing
systems
Advanced materials to
improve component
performance
Steam power ICT 'revolution' bio-
technology
COMPONENT LEVEL
RADICALINCREMENTAL
SYSTEM LEVEL
('doing what we do better') ('new to the enterprise') ('new to the world')Source: Tidd,Bessant, Pavitt 2005,
Innovation space
INNOVATION
(incremental… radical)
(incr
emen
tal…
radi
cal)
(incr
emen
tal…
radi
cal)
(incremental… radical)
POSITION
'PARADIGM' (MENTAL MODEL)
PROCESS PRODUCT/SERVICE
Source: Tidd, Bessant, Pavitt 2005
Different innovation fields in enterprises
§ Holistic understanding of innovation
§ Innovation is more than R&D!
§ Interdependencies between innovation
fields
§ Strategic fit between innovation strategy and overall business strategy necessary
§ Innovation does not need to be pursued in all fields at once, but influences of activities in one field on the others should be taken into consideration
physical
Dienstleistungs -
innovation
Produktions -
technik
Organisatorische
Innovation
FuE - basiertes
neues Produkt
intangible
innovation
product
innovation
process
Dienstleistungs -
innovation
Produktions -
technik
Organisatorische
Innovation
FuE - basiertes
neues Produkt
Service innovations
Manufacturingtechnology
Organisational innovations
ProductInnovations
Fraunhofer ISI
Innovation: Theories and basic concepts
Market based view (Porter)
§ Focus on the market
§ Economic development of firms is determined by their respective market or sector
§ Competitive advantage is achieved by successfully adapting products and services to the relevant market
§ "Five forces" driving industry competition: power of suppliers, power of buyers, new entrants, substitute products, rivalry amongst established firms
§ Generic market strategies for firms: cost leadership (economies of scale, minimise costs), product differentiation (high quality, response time), niche strategy (niche market)
Innovation: Theories and basic concepts
Resource based view (Prahalad/Hamel, Teece, Pisano)
§ Focus on resources, competencies and capabilities of the firm
§ Internal resources determine competitiveness through "individual strength", not external market
§ Internal resources and capabilities are easier to manage and control than external market
§ They determine the markets the firm can be active in and it´s success
§ Firms are successful by possessing better capabilities and resources than their competitors
§ Differences in market success are explained by different resource bases of firms
"Strategic Fit" between internal capabilities and market requirements
Porter: "What is Strategy" (1996):
§ Necessity to integrate general business goals/business strategy and inovationactivities. Otherwise there is a risk for inconsistencies and loss of competitiveadvantage
§ This view combines the market oriented and the resource oriented view. Neithermarket demand, nor the firm´s resource base alone determine the success of innovation, but their strategic combination
§ A strategic fit between business strategy and innovation strategy, based on internalresources, is required. This can be achieved through systematic mapping of strategically important business activities and their options for innovation
Example for strategic fit: Southwest Airlines' activity system
Limitedpassenger
service
Frequent, reliabledepartures
Lean, highlyproductive
ground and gatecrews
Very low ticketprices
Short-haul point-to-point routes
between midsizecities and
secondary airports
High aircraftutilization
No baggagetransfer
Noconnectionswith other
airlines
Standardizedfleet of 737
aircraft
Limited useof travelagents
Automaticticketing
machines
15-minutegate
turnarounds
No meals
No seatassignments
Highcompensa-
tion ofemployees
Flexibleunion
contracts
HIgh level ofemployee
stock
“Southwest,the low-fare
airline“
Source: Porter 1996
Innovation: Theories and basic concepts
Evolutionary economics (Nelson, Winter, Freeman):
§ Changes in technology, routines occur constantly in the economy
§ Therefore, some kind of evolutionary process must be in act
§ Following Darwin mechanisms of variation, selection and self-replication have been identified
§ Further developments: self-organisation, complexity theories, system theories, emergence
Innovation: Theories and basic concepts
Within the last decades, a shift has occurred from the classical, linear paradigm of innovation to non-linear models:
§ "Chain Link Model" of innovation (Kline/Rosenberg): connection between innovation activities and actors, feedback loops
§ Innovation as "Think, Play, Do" (Dodgson/Gann/Salter): intensification of innovation through "innovation technology" like simulation, modelling, virtual reality etc. Different modes, fluid processes, feedback, integration and learning
§ "Fifth Mode of Innovation" (Rothwell): complex system of networks
Innovation as non-linear, creative, interwoven, complex and collaborative activity
Three generic types of technology: intensification of innovation
Intensify
OMTImplement
ICTEnable
IvTCreate
Innovation technology:
Search tools
Modelling and simulation
Visualization / virtual reality
Rapid prototyping
Design and production technology:
CNC / FMS / CAD / CAM / CIM / CIP
Networking and coordination technology:
MRP / ERP / PMS / TQM / JIT
Information technology:Computers and servers
Open systems
Bandwidth
Sensors
Communications
technology:Internet / www
WIFi / 3G
EDI
Source: Dodgson et al. 2005
Think, Play, Do: Technology, Innovation, Organisation
Play
OMTICT
IvT
DoThink
Source: Dodgson et al. 2005
Rothwell’s five generations of innovation models
System integration and extensive networking, flexible and customized response, continuous innovation
Fifth
Parallel model, integration within the firm, upstream with key suppliers and downstream with demanding and active customers, emphasis on linkages and alliances
Fourth
Coupling model, recognizing interaction between different elements and feedback loops between them
Third
Simple linear models – need pull, technology push
First and second
Key featuresGeneration
Source: Tidd, Bessant, Pavitt 2005
Historical idealized character of innovation
Individualized innovation
Corporatized innovation
Distributed innovation
19th century 21st century20th century
Inte
rdep
end
ence
s
Understanding Innovation
Source: Tidd, Bessant, Pavitt 2005
Innovation Systems Approach
Nelson, Carlsson, Lundvall:
- Innovation Systems generate, diffuse and use innovations
- Innovation Systems consist of components and relationships between the components
- Components of Innovation Systems are: actors (individuals, firms, organisations, institutions, groups of actors like associations), tangible and intangible artefacts, institutional regulations and framework conditions
Different forms of Innovation Systems:
§ National Innovation Systems (Lundvall, Nelson, Edquist)
§ Regional Innovation Systems (Howells, Cooke/Morgan)
§ Technological Innovation Systems (Carlsson)
§ Sectoral Innovation Systems (Malerba)
Innovation System: A Heuristic
Large companies
Mature SMEs
New, technology-based firms
Demand
Consumers and/ or state (agencies) (final demand)
Producers (intermediate demand)
Framework Conditions
Financial environment; taxation and
incentives; propensity to innovation
and entrepreneurship; mobility
Industrial System
Intermediaries Research institutes
Brokers
Professional education and
training
Higher educationand research
Public sectorresearch
Education and Research System
Government
Governance
RTD policies
Political System
Banking, venturecapital
IPR and informationInnovation and
business supportStandard and norms
Infrastructure
The reach
of public policies …
Source: Technopolis 2000, modified and extended by Kuhlmann and Edler, ISI
Factors influencing national systems of innovation
? Innovations in oil and gas, mineral ore, and food and agriculture in North America, Scandinavia and Australia
Local natural resources
? Labour-saving innovations in the USA
? Europe-USA differences in automobile technology
? Environmental technology in Scandinavia
? Synthetic fertilizers in Germany
Input prices
? Railways in France
? Medical instruments in Sweden
? Coal-mining machinery in the UK (<1979)
Public investment activities
? Automobile and other downstream investments stimulating innovation in computer-aided design and robots in Japan, Italy, Sweden and Germany
Private investment activities
? Quality food and clothing in France and Italy
? Reliable machinery in Germany
Local buyers' tastes
ExamplesFactors in
Source: Tidd, Bessant, Pavitt 2005
Technological accumulation in different national Innovation Systems
Textiles
Textile machinery
Dyestuffs
Iron ore
Fine chemicals
Marine engines
Productionmachines
Iron and steel
Miningmachines
Discovery of insulin
Robots
Metal products
Synthetic insulin
Naturalinsulin
Pigproduction
Enzymes
Switzerland
Sweden
Denmark
Source: Tidd, Bessant, Pavitt 2005
Technological trajectories and disruptive innovation
"Technological trajectories" (Dosi) are laid out by the core set of possibilities of a firm or an innovation system. These trajectories or innovation paths are a result of past activities and previous accumulation of knowledge
"Disruptive innovation" (Christensen) occurs either through significant market changes or through radical technology changes. "The innovator´s dilemma" constitutes in deciding which is the adequate response to faced challenges, whether continuous or discontinuous change is necessary
Innovation through new technologies
§ New technologies are the driving force behind most innovations
§ Typically, new technologies go through a cycle of development, starting with the scientific discovery and ending with market diffusion
§ Although the technology cycle seems to be prototypical, not every technology passes through all stages. Some technologies "never make it" to market diffusion
§ To know in which phase of the cycle a particular technology is at present, is of uttermost importance for policy makers
Technology cycle - Phases
1. Discovery – Basic development and exploration of new opportunities offered by a new technology
2. Euphoria – Transdisciplinary work on the new opportunities the invention is offering for solving old problems. Stimulation of ambitious ideas for even broader application
3. Disillusion – Problems becoming more frequent and therefore focussing on only the most promising application possibilities
4. Reorientation – Stabilisation on selective fields through technology substitution
5. Rise – First imitations by competitors and development of a dominant design
6. Diffusion – Development of further application possibilities through scale effects
Example 1: Technology phase specific indicators in the innovation system
Aim of project:
§ Innovation system analysis – selected energy-related new technologies
§ Identification of indicators for different phases of the technology cycle
§ Identification of relevant areas of indicators in the innovation system
§ Assessment of policy measures and priorities for support
EduaR&D: National Research Project on technological system analysis and assessment of new technologies (2004-2006)
Example: Policy measures for different technology phases
Fraunhofer ISI
Discovery: Institutional funding, science support programmes encouraging high risk research, funding of infrastructure
Euphoria: Cooperation between basic and applied research, structural cooperation between research and industry, mobility schemes between research and industry, support of patenting and licensing
Disillusionment: Support of supply side, support of testing and demonstration activities, seed financing
Reorientation: lead market studies, user involvement, venture capital
Rise: Public procurement, technology transfer, regulation and standardization
Diffusion: adjustment to the development of niches, enable feedback loops between diffusion and knowledge creation
Example 2: Manufacturing Visions (ManVis)
§ Creating a knowledge community “Manufacturing Visions” by gathering diverse views from actors of different European countries and regions on the future of manufacturing
§ Initiating public discourse across established lines of thinking and strengthening competitive and sustainable manufacturing
§ To provide detailed input to policymakers at all levels (national, regional, EU) for informed decision-making on actions towards sustainable and competitive manufacturing in Europe
§ To support European manufacturing industries to learn about and face the long-term challenges of changing markets and frameworks
European foresight project in preparation of the Manufuture platform (2003-2005)
Objectives:
Austria, ARC Systems Research
Belgium, Agoria, the multisector federation for the technology industry
Bulgaria, BAMDE, Bulgarian Association for Management Development and Entrepreneurship
Croatia, University of Zagreb, Faculty of Economics Department of Organisation and Management
Denmark, DTI, Danish Technological Institute
Estonia, IBATTU, Institute of Business Administration at Tallinn Technical University
Finland, VTT, Technical Research Centre of Finland
France, Innovation 128
Germany, ISI, Fraunhofer Institute for Systems and Innovation Research, B-WISE GmbH
Greece, LOGOTECH SA, Innovation & Development
Hungary, FME, Foundation for Market Economy
Italy, FR, Fondazione Rosselli
Netherlands, TNO-STB, TNO-Institute for Strategy, Technology and Policy
Norway, Sintef, Stiftelsen for industrial og teknisk forskning vedNorges Tekniske Hogskole
Poland, University of Lodz, Department of Entrepreneurship and Industrial Policy
Romania, AES-Manager, Academy of Economic Studies
Slovakia, University of Technology, Department of Manufacturing Systems, Faculty of Manufacturing Systems
Slovenia, LAPOM, University of Maribor, Faculty of Mechanical Engineering
Spain, Ascamm Foundation; OPTI; IPTS
Sweden, IVF, Industrial Research and Development Corporation
Turkey, Tubitak, Scientific and Technical Research Council of Turkey
United Kingdom, Institute for manufacturing, University of Cambridge, Cranfield University - School of Management
Example: Delphi-study "Manufacturing Visions" (ManVis): Partners
Example: ManVis Delphi-Electronic questionnaire with 101 statements
Assessment of statements on:
General sections:•Manufacturing Technology
•Strategy, org. & management
•Product features and concepts
•Logistic/ supply chain
•Working conditions
Industrial sectors:•Transport
•Machinery
•Fabricated metal products
•Traditional products
•Equipment/electronics/instruments
•Rubber and plastics
Example: Expert participation in the ManVis countries
Ca. 3100 participants from all over Europe:
• Industry 54%
• Research 36%
• Government 9%
• Unspecified 1%
0
50
100
150
200
250
300
350
400
450
500
Ger
man
y
Italy
Fran
ceUn
ited
King
dom
Polan
dSp
ainRo
man
iaTu
rkey
Hung
ary
Neth
erlan
dsSw
eden
Austr
iaBu
lgaria
Belgi
umG
reec
eSl
ovak
iaDe
nmar
kFi
nland
Croa
tiaSl
oven
iaNo
rway
Esto
nia
0,0%
5,0%
10,0%
15,0%
20,0%
25,0%
Highest number of answers to a statement
Median number of answers to statements
Weight according to number of employees (%)
num
ber o
f ans
wer
s pe
r sta
tem
ent
wei
ght a
cord
ing
to n
umbe
r of e
mpl
oyee
s
Manvis Survey 1st Round - FinalTotal number of experts: 3.121Median number of answers per statement: 1.332
level of activity
timediscoveryand exploration
euphoria disillusion reorien-tation
rise diffusion
sciencepush
demandpull
1
23
4
6
5
Nano-/bio-manufacturing
Advancedmaterials
Rapid technologies
MEMS
ICT in manufacturing
scope of activities
level of activity
timediscoveryand exploration
euphoria disillusion reorien-tation
rise diffusion
sciencepush
demandpull
1
23
4
6
5
Nano-/bio-manufacturing
Advancedmaterials
Rapid technologies
MEMS
ICT in manufacturing
scope of activities
Example: Selected ManVis results: New manufacturing technologies
Example: New technologies, Nano- und biotechnologies starting 2020
Smart materials (15% don't know)
Electronic lablesNano Manufacturing (8% never, 12% don't know)
MEMS
Manufacturing with living organisms (15% don't know)Rapid technologies (15% don't know)
2005 2010 2015 2020
Lo
wH
igh
Time
Imp
ort
anc
e
Summary Section 2
§ Innovation is imperative. Changes in the products and services offered and in the ways of producing, delivering or organising are necessary for survival
§ Innovation has to realise a strategic competitive advantage
§ Innovation is a multidimensional and multidisciplinary phenomenon
§ Innovation has become more complex in the last decades, involving different actors
§ Innovation is an interactive, socially embedded process
§ National Systems of Innovation shape the innovation environment of firms (resources, demand, technological paths) but they do not determine strategy
§ New technologies are a main driving force behind innovation
§ Strategic choices need to be made by enterprises: the management of innovation is a key task
Section 3
Management of the innovation process: innovation routines, success factors and barriers
§ Generic phases of the innovation process in enterprises
§ Innovation through alliances
§ The relevance of innovation routines and dynamic capabilities
§ Example: Acceleration of innovation
The "Black Box" of the innovation process
InputInputTransformation
?
Transformation
?
OutputOutput
"Black Box"
InputInputTransformation
?
Transformation
?
OutputOutput
"Black Box"• Innovation input
(resources) as basis and necessary starting point for innovation
• Innovation output as the result of innovation
• Transformation of input into output is a complex process (innovation process)
• No clear relation between input and output
The innovation process: generic phases
§ Searching (What is happening out there which needs a response?): scanning the environment (internal and external), processing relevant signals about threats and opportunities for change
§ Selecting (We cannot do everything): deciding which of these signals to respond to (on the basis of a strategic view of how the enterprise can best develop
§ Implementing (Make it happen): translating the idea into something new and launching it in an internal or external market. This phase involves:
- Acquiring the knowledge resources to enable innovation - Executing the project under conditions of uncertainty which require extensive problem solving- Launching the innovation and managing the process of initial adoption- Sustaining adoption and use in the long term – or revising the original idea and modifying it –
reinnovation
§ Learning (What can we do better next time?): using the opportunity to learn from processing through this cycle so that a knowledge base can be built and the management of the process can be improved
Adapted frome: Tidd, Bessant, Pavitt 2005
Generic phases of the innovation process in enterprises
LEARN
Search Select Implement(Acquire/Excecute/Launch/Sustain)
TIME
Source: Tidd, Bessant, Pavitt 2005
Innovation through alliances: Why collaboration?
§To reduce the cost of technological development or market entry
§To reduce the risk of development or market entry
§To achieve scale economies in production
§To reduce the time taken to develop and commercialise products
§To promote shared learning
Example:
Collaboration between Philips and Sony on compact disc (CD). Initial development or a prototype by Philips in 1978. Anticipated problems with turning it into a world standard, therefore strategic alliance with Sony (due to its manufacturing capability and access to the Japanese market). Jointly, the commercial product has been developed, produced and introduced into the market, first in Japan, then in Europe and the US (1983). The new format was adopted by the influential Electronic Association of Japan, becoming an official and de facto international standard.
Adapted from: Tidd, Bessant, Pavitt 2005
Innovation through alliances: Forms of collaboration
§ There is no single optimal form of collaboration
§ Technological and market characteristics, as well as company culture and strategic considerations determine possible forms of collaboration
§ Low versus high strategic significance:
- Low strategic significance: contracting, technology licensing as tactical, short term forms of collaboration
- High strategic significance: joint ventures, strategic alliances, innovation networks as long term structures for collaborative learning (e.g. Airbus, co-development, critical mass)
§ Horizontal versus vertical relationships:
- Horizontal collaboration includes consortia or relationships with potential competitors. Motives are access to complementary technological or market know-how
- Vertical collaboration includes relationships with suppliers or customers. Motives are mainly cost reduction, but also access to new ideas and market know-how
Adapted from: Tidd, Bessant, Pavitt 2005
Innovation through alliances: Forms of collaboration
? Search costs, product performance and quality
? Cost and risk reduction
? Reduced lead time
Short termSubcontract / supplier relations
? Knowledge leakageSubsequent differentiation
? Expertise, standards, share funding
Medium termConsortia
? Contract cost and constraints
? Technology acquisitionFixed termLicensing
Network
Joint venture
Strategic alliance
? Static inefficiencies
? Strategic driftCultural mismatch
? Potential lock-inKnowledge leakage
? Dynamic, learning potential
? Complementary know-how
? Dedicated management
? Low commitmentMarket access
Long term
Long term
Flexible
Type of collaboration
Disadvantages (transaction costs)
Advantages (rationale)Typical duration
Source: Tidd, Bessant, Pavitt 2005
Innovation through alliances: Common reasons for the failure of alliances
13Asymmetric incentive
25Unrealistic expectations/time
25Lack of commitment
25Personnel clashes
25Operational/ geographic overlap
25Insufficient trust
25Cultural mismatch
38Strong-weak relation
38Partner problems
50Strategic/goal divergence
% studies reporting factor (n=16)Reason for failure
Source: Tidd, Bessant, Pavitt 2005
Supplier relationships: the influence of objectives and supply market
Market relation/
contractual
Lean supply/
partnership
relation
Supply alliances/
Co-innovation
Homogeneous
Cost
IndeterminateDifferentiated
Process and product innovation
Lead time,
quality
OB
JEC
TIV
ES
SUPPLY MARKET
Not
coupled
Tightly
coupled
Loosely
coupled
Source: Tidd, Bessant, Pavitt 2005
Innovation through alliances: Vertical collaboration, supplier relationships
§ Vertical relationships are explained by resource dependence and agency theory –need to control key technologies in the value chain
§ Closer links to suppliers and customers can help to reduce costs through specialisation and sharing information
§ Timing of the involvement and the quality of the relationship with suppliers are critical factors
§ There are different forms of intensity in supplier relationships, varying from short-term contractual agreements to long-term close supplier relationships with input into design or engineering
§ Depending on the objective of collaboration, different forms of supplier relationships are suggested
Innovation through alliances
§ Main reasons for collaboration: reduction of costs, time or risk of access to unfamiliar technologies or markets
§ Make-or buy-decisions (transaction cost analysis) consider the short-term trade offs between developing an innovation in-house versus external mechanisms, whereas a strategic learning framework focuses on the dynamic, long-term potential for acquiring new technological, market or organisational competencies
§ The chosen form of collaboration depends on many factors such as motives of the partners, the nature of technologies and markets or the degree of complexity
§ The success of alliances depends on various factors: organisational issues dominate such as mutual trust and the level of communication
Adapted from: Tidd, Bessant, Pavitt 2005
Innovation routines and dynamic capabilities
Resources/Input (tangible and intangibleassets, competences)
Routines/Transformation process
DynamicCapabilities
Results/Output
Source: Burr (2004) with adaptations
Dynamic capabilities: organisationalknowledge which enables the firm to sustain the competitive advantage in a changing environment (Nelson/Winter; Teece/Pisano)
Organisational/Innovation routines: the "personality of the firm" (Tidd et al.) and involve established sequences of actions, a mixture of technologies, formal procedures or strategies and informal conventions or habits (Levitt/March). Routines have an existence independent of particular individuals.
Innovation routines and dynamic capabilities
• Routines are know-how which became encoded in organisational memory (Coriat)
• There are different levels of routines: "higher" meta-routines monitor and evaluate "lower" repetitive routines and change them if necessary, therefore no basic contradiction between innovation and routines
• Routines are programmes drawing upon individual skills (Coriat)
• Routines are the building blocks of capabilities (Nelson/Winter)
• Dynamic capabilities are closely related to strategy
Innovation routines and dynamic capabilities
§ Innovation routines are firm-specific, that is what makes them an individual asset of the firm
§ Well functioning innovation routines are accumulated innovation knowledge in action
§ Routines are the "genes" of the firm (from an evolutionary perspective)
§ Innovation routines lead to dynamic capabilities, which apply the firm´s accumulated knowledge to a changing environment
§ Dynamic capabilities emphasize the key role of strategic management in adapting, integrating and re-configuring internal and external organisational skills, resources and functional skills toward a changing environment (Dreher)
§ To be strategic, a dynamic capability needs to be directed towards an actual market need, needs to be unique and difficult to copy
Routines in different phases of the innovation process
LEARN
Search Select Implement(Acquire/Excecute/Launch/Sustain)
TIME
Source: Tidd, Bessant, Pavitt 2005
Routines for Scanning
§ Defining the relevant market
§ Understanding market dynamics
§ Market forecasting
§ Technological forecasting
§ Establishing external linkages
§ Benchmarking
§ User interaction
Dreher 2006
Routines for Selection
§ Establishing fit with business strategy, defining framework
§ Concept development
§ Concept testing
§ Integration of different perspectives
§ Supplier involvement
§ Lead user involvement
§ Stakeholder involvement
Dreher 2006
Routines for Implementation
§ Stage gate process
§ Early involvement and concurrent engineering
§ Teamworking (cross functional teams)
§ Project management structure
§ Support tools (rapid prototyping, CAD)
§ Market development tools
Dreher 2006
Routines for Learning
§ Goal setting and regular assessment
§ "Lessons learned", structured reflection
§ Communities of practice
§ Regular feedback
§ Review process
§ Continuous improvement processes
Dreher 2006
"Ingredients" of successful innovation
§ Successful innovation is strategy based
§ Successful innovation depends on effective internal and external linkages
§ Successful innovations requires enabling mechanisms for making change happen
§ Successful innovation can only happen within a supportive organisational context
Areas of routines for successful innovation
Phases in the innovation process
StrategyEffective implementation mechanisms
Supportiveorganizationalcontext
Effective externallinkages
Source: Tidd, Bessant, Pavitt 2005
"Good practice" in innovation management
? Involvement of different perspectives, use of teambuilding approaches to ensure effective team working and develop capabilities in flexible problem-solving
Cross-functional teamworking
? Choice of structure – e.g. matrix / line / project / heavyweight project management – to suit conditions and tasks
Appropriate project management structures
? Concurrent or simultaneous engineering to aid faster development whilst retaining cross-functional involvement
Overlapping / parallelworking
? Carrying forward lessons learned – via post-project audits, etc.
? Development of continuous improvement culture
Learning and continuous improvement
? Use of tools – such as CAD, rapid prototyping, computer-supported co-operative work aids (e.g. Lotus Notes) – to assist with quality and speed of development
Advanced support tools
? Bringing key perspectives into the process early enough to influence design and prepare for downstream problems
? Early detection of problems leads to less rework
Early involvement of allrelevant functions
? Stage-gate model
? Close monitoring and evaluation at each stage
Systematic process for progressing new products
Key featuresComponent
Source: Tidd, Bessant, Pavitt 2005
Components of the innovative organisation
? Participation in organisation-wide continuous improvement activityHigh involvement in innovation
? Within and between the organisation and outside
? Internally in three directions – upwards, downwards and laterally
Extensive communication
? Long-term commitment to education and training to ensure high levels of competence and the skills to learn effectively
Continuing and stretching individual development
? Internal and external customer orientation
? Extensive networking
External focus
? Appropriate use of teams (at local, cross-functional and inter-organisational level) to solve problems. Requires investment in team selection and building
Effective team working
? Promoters, champions, gatekeepers and other roles which energize or facilitate innovationKey individuals
? High levels of involvement within and outside the firm in proactive experimentation, finding and solving problems, communication and sharing of experiences and knowledge capture and dissemination
Learning organisation
? Positive approach to creative ideas, supported by relevant motivation systemsCreative climate
? Organisation design which enables creativity, learning and interaction. Not always a loose 'skunk works' model; key issue is finding appropriate balance between 'organic and mechanistic' options for particular contingencies
Appropriate structure
? Clearly articulated and shared sense of purpose
? Stretching strategic intent
? 'Top management commitment'
Shared vision, leadership and the will to innovate
Key characteristicsTheme
Source: Tidd, Bessant, Pavitt 2005
Example: Acceleration of innovation
Core questions:
1. How could product innovation be accelerated in enterprises?
2. Which are the most relevant "time drivers" in firms which prolong development times?
3. How much of the development time could be saved if these time drivers could be eliminated?
4. Which organisational routines are the most relevant as regards development speed?
Internal research project of the Fraunhofer Society between 2003 and 2005, involving various research institutes
Starting point 1: No innovative dynamics in the German mechanical and electronical engineering sector
Source: Survey Innovationen in der Produktion, Fraunhofer ISI; n=1329 (1997), n=1442 (1999), n=1258 (2001), n=1140 (2003)
[in %]
0
10
20
30
40
50
60
70
80
90
100
Turnover in the last 3 years with:Enterprises which in the last 3 years produced:
new products products newto the market
Fraunhofer ISI, Karlsruhe
1997
1999
2001
2003
new products products newto the market
Example: Acceleration of innovation
Starting point 2: Constant use of resources for R&D in the German mechanical and electronicalengineering industry
Fraunhofer ISI, Karlsruhe
1997
1999
2001
2003
0
2
4
6
8
10
12
14
16
18
20
Percentage of R&D expenditures of turnover Employees in R&D
Source: Survey Innovationen in der Produktion, Fraunhofer ISI; n=1329 (1997), n=1442 (1999), n=1258 (2001), n=1140 (2003)
[in %]
Example: Acceleration of innovation
Starting point 3: innovation competence concentrated only on few employess the German
manufacturing sector
12,2
31,1
41,8
5,3
6,9
14,1
43,8
6,4
10,2
14
37,1
7,3
9,6
28,8
31,3
0% 10% 20% 30% 40% 50%
Single employee
Processes and structures independent of persons
EnterprisesSource: Survey Innovationen in der Produktion 2003, n=1399, Fraunhofer ISI
Production innovation competence
Process innovation competence
Reorganisational competence
Fraunhofer ISI, Karlsruhe
Fewemployees
Team of employees
Not relevant forthe enterprise
Example: Acceleration of innovation
Starting point 4: in spite of increased global competition, constant time-to-market in the German mechanical and electronical engineering industry
02468
1012141618202224262830
02468
1012141618202224262830
99 or less employees
100 to 499 employees
500 or more employees
1997
1999
2001
2003
1997
1999
2001
2003
Tim
e-to
-mar
ket
(in m
onth
s)
Fraunhofer ISI, Karlsruhe
Average time-to-market fora new product
Example: Acceleration of innovation
Example: Acceleration of innovation – an empirical study on "time drivers"
Methodology:
Telephone interviews of 253 manufacturing enterprises in Germany with own product development
Aim of survey:
Identification of the most important factors (time drivers), which prolong time-to-market
Assessment of time-saving possibilities
Results:
• 40% of the whole time-to-market could be saved in the ideal case (independent of company size)
• Time-to-market is crucial for the market success of the new product
• 62% of enterprises need more time for the product development than actually planned
• The most important time-driving factors are: unclear goals, changing product specifications, the need for technical adjustments as well as lacking skills and expertise of employees
-
1
4
2
3
73
61
66
62
21
20
9
13
15
15
0 10 20 30 40 50 60 70 80
500 or more
100 to 499
99 or less
Total
Share of enterprises [in %]
1
4
2
3
73
61
66
62
17
21
17
20
9
13
15
15
0 10 20 30 40 50 60 70 80
less time than plannedtime as plannedmore time than plannedno planning of time-to-market
Nearly two thirds ofthe interviewed firmsneeded longer than planned
Planning of time-to-market by firm size
Example: Acceleration of innovation – an empirical study on "time drivers"
Fraunhofer ISI, Karlsruhe
Example: Acceleration of innovation – an empirical study on "time drivers"
1. Unclear goals at the beginning of the project (50%)
2. Unclear or changing product specifications (44%)
3. Unexpected need for technology adjustments (28%)
4. Project management and planning deficiencies (28%)
5. Collaboration problems within the team or company (25%)
6. Insufficient coordination of available expertise (22%)
7. Lacking skills of workforce (22%)
8. Lack of motivation of project members (17%)
9. Difficulties in the application of new technologies (12%)
10. Difficulties with product launch (11%)
11. Problems in collaborating with external partners (8%)
12. Delay in development of product-related services (8%)
13. Unsolved legal questions (5%)
Time drivers by frequency:
Fraunhofer ISI, Karlsruhe
Fraunhofer ISI, Karlsruhe
Time-drivers by frequency and time-saving potential
0
5
10
15
20
25
30
35
40
45
50
0 2 4 6 8 10 12 14 16 18 20 22 24 26
Unklare Ziele bei Projektbeginn
Produktspezifikationen unklar bzw. ä ndernd
Unerwarteter technischer bzw. technologischer Anpassungsbedarf
Fehlende Mitarbeiterkompetenzen (fachlich oder personell)
Motivationsprobleme bei Projektbeteiligten
Mangelnde Zusammenf ü hrung von vorhandenen Kompetenzen
Marktzugangs -schwierigkeiten
Ungekl ä rte Rechtsfragen
Keine rechtzeitige Erstellung von produktbegleitenden Dienstleistungen
Probleme bei der Zusammenarbeit mit externen Partnern
Projektleitungs - und Planungsdefizite
Probleme bei Zusammenarbeit im Projektteam bzw. innerhalb des Unternehmens
Schwierigkeiten beim Einsatz neuer Technologien
0 14,8
0 21,5
0
5
10
15
20
25
30
35
40
45
50
0 2 4 6 8 10 12 14 16 18 20 22 24 260 14,8
0 21,5
Average time-saving potential for the time-to-market [in %]
Unclear goals at the beginning of the project
Unexpected need for technology adjustments
Lacking skills of workforce
Lack of motivation of project members
Insufficient coordination of available expertise
Difficulties with product launch
Unsolved legal questions
Delay in development of product-related services Problems in collaborating with external partners
Project management and planning deficiencies
Collaboration problems within the team or company
Difficulties in the application of new technologies
Sh
are
of
ente
rpri
ses
[in
%]
Unclear or changing product specification
Example: Acceleration of innovation – an empirical study on "time drivers"
§ Most common time-drivercategory: Problems related to strategic and operative innovationmanagement
§ Workforce and skill-related problems as well as technical problemsrank in the middle
§ Interface problems rare, but hold high time-savingpossibilities
Fraunhofer ISI, Karlsruhe
Groups of time-drivers
0 21,5
0
5
10
15
20
25
30
35
40
45
50
0 2 4 6 8 10 12 14 16 18 20 22 24 260 14,8
Average time-saving potential for the time-to-market [in %]
Unclear goals at the beginning of the
project
Unexpected need for technology adjustments
Lacking skills of workforce
Lack of motivation of project members
Insufficient coordination of available expertise
Difficulties with product
launch
Unsolved legal questions
Delay in development of product-related services Problems in collaborating
with external partners
Project management and planning deficiencies
Collaboration problems within the team or company
Difficulties in the application of new technologies
Share of enterprises [in %]
Unclear or changing product specifications
Example: Acceleration of innovation – an empirical study on "time drivers"
Summary Section 3
§ In order to generate successful innovations, firms need to manage the innovation process strategically
§ The innovation process passes through different phases which require specific abilities
§ Alliances can contribute to generate innovations
§ Innovation routines help to manage the innovation. They are accumulated firm specific knowledge in action
§ Dynamic capabilities adapt, integrate and re-configure internal and external skills toward a changing environment
§ Well functioning routines and strategically deployed capabilities are success factors for innovation
Section 4
Measuring innovation: macroeconomic and microeconomic indicators, innovation capability§ Challenges in measuring innovation
§ Indicators for innovation
§ Example: Assessment of firms` innovativeness
§ Example: Measuring organisational innovation
Challenges in measuring innovation
1. Different levels: innovation on firm level, regional level, national level
2. Different types of innovation: product, service, process, organisation
3. Different forms: input (resources), process or output (result, performance)
4. Time: time lag between input and output
5. Tacit aspects: non-technological innovation is more difficult to measure than technical innovation
Innovation indicators on macro and micro level
§ On macro economical level of a country: aggregated measures (total expenditures for R&D, patent issues, publication of scientific papers, share of skilled workforce etc.)
§ On micro economical level of the firm: new products, innovation expenditures, use of new technology, process improvement measures
§ Current innovation indicator systems on both macro and micro level are dominated by technological innovation indicators: indicators for non-technological innovations are rarely found
§ Process performance measures: improvement of quality or flexibility, customer satisfaction, cost reduction
EurostatEurostat
Eurostat, OECDOHIMOHIM
• EPO patents per million population• USPTO patents per million population• Triadic patent families per million population• New community trademarks per million population• New community designs per million population
5.15.25.3 NEW5.4 NEW5.5 NEW
OUTPUT – Intellectual property
Eurostat, Eurostat, Eurostat, (CIS)Eurostat, (CIS)Eurostat,
• Employment in high-tech services (% of total workforce)• Exports of high technology products as a share of total exports• Sales of new-to-market products (% of total turnover)• Sales of new-to-firm not new-to-market products (% of total turnover)• Employment in medium-high and high-tech manufacturing (% of total workforce)
4.14.2 NEW4.34.44.5
OUTPUT - Application
Eurostat, (CIS)Eurostat, (CIS)Eurostat, (CIS)Eurostat,Eurostat,Eurostat, (CIS)
• SMEs innovating in-house (% of all SMEs)• Innovative SMEs co-operating with others (% of all SMEs)• Innovation expenditures (% of total turnover)• Early-stage venture capital (% of GDP)• ICT expenditures (% of GDP)• SMEs using non-technological change (% of all SMEs)
3.13.23.33.43.53.6
INPUT – Innovation & Entrepreneurship
Eurostat, OECDEurostat, OECDEurostat, OECDEurostat, (CIS)Eurostat, OECD
• Public R&D expenditures (% of GDP)• Business R&D expenditures (% of GDP)• Share of medium-high-tech and high-tech R&D (% of manufacturing R&D expenditures)• Share of enterprises receiving public funding for innovation• Share of university R&D expenditures financed by business sector
2.12.22.3 NEW2.4 NEW2.5 NEW
INPUT – Knowledge Creation
EurostatEurostat, OECDEurostatEurostatEurostat
• S&E graduates per 1000 population aged 20-29• Population with tertiary education per 100 population aged 25-64• Broadband penetration rate (number of broadband lines per 100 population)• Participation in life-long learning per 100 population aged 25-64• Youth education attainment level (% of population aged 20-24 having completed at least upper
secondary education)
1.11.21.3 NEW1.41.5 NEW
INPUT – Innovation Drivers
European Innovation Scoreboard – Innovation indicators for countries
Assessment of firm´s innovativeness
• Innovativeness needs to be measured multidimensionally: different innovationfileds/areas AND both quantititive and qualitative aspects
• In order to obtain a reference point against which to assess, there are variousoptions:
1. General benchmarking: position the firm in relation to similar firms in the economy
2. Best-practice benchmarking: compare the individual firm´s performance to best-performers
3. Target/actual comparison: identify target innovation measures for the individual firm and compare to actual values
Example 1: Benchmarking of firms’ innovativeness
• Objective: Development of an internet-based self assessment tool for manufacturing firms, especially SMEs. Adaptability to existing enterprise rating systems of banks
• Approach: multidimensional metrics, including quantitative input and output innovation indicators and also qualitative indicators (critical success factors for innovation)
• Result: comprehensive mapping of firms’ innovativeness, benchmarking report
Research and implementation project for the German Federal Ministry for Education and Research (2005-2007)
Example: Benchmarking of firm´s innovativeness: different fields
physical
Dienstleistungs -
innovation
Produktions -
technik
Organisatorische
Innovation
FuE - basiertes
neues Produkt
intangible
innovation
product
innovation
process
Dienstleistungs -
innovation
Produktions -
technik
Organisatorische
Innovation
FuE - basiertes
neues Produkt
Service innovations
Manufacturingtechnology
Organisational innovations
ProductInnovations• Firm level innovation indicators need
to be found for different innovation fields
• Both input (resources) and output (performance) relevant
Fraunhofer ISI, Karlsruhe
Example: Comprehensive assessment of firm´s innovativeness
InputInputTransformation
?
Transformation
?
OutputOutput
"Black Box"
InputInputTransformation
?
Transformation
?
OutputOutput
"Black Box"
Qualitative indicators for the innovation process
physical
-innovation
- Innovation
FuE-basiertes
intangibleinnovation
product
innovation
process
Dienstleistungs-innovation
- Innovation
FuE-basiertes Service innovat
ions
Manufacturing
technology
Organisational
innovations
ProductInnovati
ons
physical
-innovation
- Innovation
FuE-basiertes
intangibleinnovation
product
innovation
process
Dienstleistungs-innovation
- Innovation
FuE-basiertes Service innovat
ions
Manufacturing
technology
Organisational
innovations
ProductInnovati
ons
Product innovation Service innovation
Manufacturing technology Organisational innovation
Input
Input
Input
Input
Output
Output
Output
Output
• Share of sales of R&D expenditures
• Workforce in R&D• Innovation alliances
• Process integrated qualitycontrol (Sensors)
• Electronic Procurement• Use of industrial robots• Supply Chain Management• Simulation
• Workforce in service
• Service alliances
• Offer of new services
• Products younger than 3 years
• Share of sales with newproducts
• Time to market
• Share of sales with newservices
• Development of share of sales with services overtime
• Labour productivity
• Scrap-rate
• Lead time
• Delivery time
• Lead time
• Scrap-rate
• Labour productivity
• Just in time• Segmentation of production• Decentralisation• CIP• Teamwork• Zero buffer• Task integration
Example: Benchmarking of firm´s innovativeness: input and output
Already existing data source: German Manufacturing Survey (n=1200) and German Innovation Survey (n=1131)
Example: Qualitative indicators for innovation processes
n Survey among preselected innovative firms with the objectives of:
- Validation of 28 critical success factors for innovation previously identified in one day-workshops with highly innovative firms
- Development of a data base for best-practice benchmarking
n Realisation: CATI-service providern Time frame: 03. April - 06. May 2006n Target group: Innovative member enterprises of the two largest industrial associations:
- VDMA (German Engineering Association)- ZVEI (German Electrical and Electronic Manufacturers´ Association)
n Adressee: Top managment, members of executive boardn Duration: approx. 20-30 minutesn Interviews: 150
Example of operationalisation
-
+
Operationalisation
-Competence & Knowledge
Strategy
- Qualifications of employeeshas to be adapted to theconstant changen (lifelonglearning)
- Specific development of competencies
"Technical and socialqualifications of employees aresystematically developed."
Process
Project management
- Routines for the risk control of innovation projects
"We systematically manage thefinancial and technical risk of innovation projects (eg. withrisk or portfolio analysis likeSWOT)."
"Employees promotinginnovations are distributed overall hierarchy levels."
Innovation culture- Promotors of innovations in the top managemetn of enterprise
- Staying power in theexecution of innovations
- Each employee should be a promotor of innoations
"In our enterprise there aremany employees who activelypromote innovations."
AreaSuccess factorIndicator
Innovationculture
Innovationculture
Free space foremployees
Free space foremployees
Budget for initial researchwhich is not financed by
customer orders
Budget for initial researchwhich is not financed by
customer orders
Likert Scale
Lev
el o
f ab
stra
ctio
nL
evel
of
abst
ract
ion
Critical success factor
Indicator
Area
Example: Benchmarking of firm´s innovativeness: qualitative innovation indicators
Example: Success factors as qualitative indicators
100% 75% 50% 25% 0% 25% 50% 75% 100%
Relevancy very importantEntirely true
A sufficient number of employees is act ively promot ing innovat ion
Employees promoting innovation are dist ributed over all hierarchy levels
The management actively promotes innovation
Systematic financial and technical risk management
Adaption of working conditions according to individual needs
Individual performance evaluat ion of employees
Employees contribute to innovation with ideas and suggestions
Short and rapid decision-making processes
Systematic incentive systems for new ideas
Employees show high commitment and self-initiat ive
Available budget for initial research
Innovat ion activities are an integral part of the corporate strategy
Required competencies are available within the enterprise
Systematic developement of employees competencies
Competencies of employees can be brought together easily
Availability of an established network of business partners
Regular contacts to external R&D institutions are established
Regular contacts to external organisat ions
Customer involvement in product development
Customer feedback is processed systematically
Excellent knowledge about the competitive environment
Clear def initions of goals at the beginning of innovation projects
Open and t ransparent f low of information
Mistakes in innovation projects are seen as a chance to learn
Early consideration of requirements of different departments
Implementation of future-orientated technologies
Completion of innovation projects within time planned
Systematic selection of innovat ion projects on the basis of selection criteria
-28 different success factors as qualitative indicators for innovativeness
-They reflect previously identified "good practice" in innovation management
- Provide empirical validation of the relevance and use of such "good practice" in actually innovative firms
- Not every factor is of equal importance or needs to be implemented in every enterprise
< 500 employees = 500 employees
Innovation activities are an integral part of the corporate strategy
0% 25% 50% 75% 100%
The management actively promotes innovation
Employees contribute to innovation with ideas and suggestions
Employees show high commitment and self-initiative
Excellent knowledge about the competitive environment
Short and rapid decision-making processes
The management actively promotes innovation
Employees contribute to innovation with ideas and suggestions
Short and rapid decision-making processes
Open and transparent flow of information
Innovation activities are an integral part of the corporate strategy
0% 25% 50% 75% 100%
The management actively promotes innovation
Employees contribute to innovation with ideas and suggestions
Short and rapid decision-making processes
Employees contribute to innovation with ideas and suggestions
Employees contribute to innovation with ideas and suggestions
A sufficient number of employees is actively promoting innovation
Available budget for initial research
Clear definition of goals at the beginning of innovation projects
Employees show high commitment and self-initiative
Relevance “very important” “Entirely true"
Example: Empirically most important critical success factors for innovation
Example: Self assessment tool – Innovation benchmarking
Selecting reference group for benchmarking
Seite 1/3
Up to 49 50-249 250-499 500 and more
Manufacturers of rubber and plastics
Manufacturers of metal products
Manufacturers of machinery
Manufacturers of office machinery and computers
Manufacturers of electrical machinery and apparatus
Manufacturers of medical, precision and optical instruments
Manufacturers of motor vehicles
Selecting reference group for benchmarking
Seite 1/3
Up to 49 50-249 250-499 500 and more
Manufacturers of rubber and plastics
Manufacturers of metal products
Manufacturers of machinery
Manufacturers of office machinery and computers
Manufacturers of electrical machinery and apparatus
Manufacturers of medical, precision and optical instruments
Manufacturers of motor vehicles
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
100%90%80%70%60%40%30%0% 20%10%
The top 5% of enterprises achieved a share of sales withnew products of 50% and more.
Position of yourenterprise
Size(s)= up to 49 employeesSector(s)= manufacturing engineering
The average achieved shareof sales with new products
is at 7% (Median).
The worst 25% ofenterprises achieveda share of sales with newproducts of 0%.
The top 25% of enterprisesachieved a share of sales
with new products of 20% and more.
50%Sah
re o
f sa
les
a chie
ved b
y pr o
duct
innova
tions
Dat
a so
u rce
: Man
nhei
mer
Inno
v atio
nspa
nel (
ZE
W 2
003)
Reference group(s):
Enterprises of reference group
Example for quantitative benchmarking results: sales with new products
Product InnovationsSummary of the findings for your enterprise compared to the reference group*
Worst 25%
Best 25%
Share of sales achieved by product innovations
Share of sales achieved by market innovations
Share of employees working in R&D
Innovation expenditures
R&D-expenditures
Time to market
Key Data
Yes/No-Questions
Continuous R&D-activities
Participation in R&D-cooperations
*Reference group(s): Size(s)= up to 49 employeesSector(s)= manufacturing engineering
= Position of your enterprise
50%
Reference Group
Innovation benchmarking: Input and output indicators per field
100
Example 2: Patterns of Organisational Change in European Industry
Objective: Improvement of surveying organisational innovation in European industry with a special consideration of industry sectors
§ Objective 1:Analysis of the importance of organisational innovations across industry sectors
§ Objective 2: Recommendations for surveying organisational innovation in large scale surveys
§ Objective 3: Use of results to improve the concept and methodology of the European Innovation Scoreboard (EIS) with respect to organisational innovation
Consulting project for the European Commission (2005-2006)
101
• 100 stakeholder interviews with industry and research representatives have been conducted (face-to-face, telephone)
• 28 research interviews and 72 industry interviews
• 9 Sectors: Aerospace, Automotive, Biotechnology/Bio-Pharmaceuticals, Chemical, Electronics, Food, Machinery, Medical devices, Textile
• 12 different countries: UK, Germany, France, Italy, Slovenia, Spain, Ireland, Czech Republic, Bulgaria, Croatia, Sweden, Poland
Example: Importance of organisational innovations – stakeholder interviews
102
Example: Importance of organisational innovations
(1) Decentralisation on a strategic level of the company• Decentralisation of functions into customer or
product-line oriented departments• Decentralisation of formerly centralised functions
(2) Decentralisation on an operative level of the company• Team work/Group work• Cross-functional teams
(3) Cooperation with other companies• Cooperation in production• Cooperation in R&D• Cooperation in administrative activities
(4) Outsourcing/Relocation• Outsourcing/Relocation of production• Outsourcing/Relocation of R&D• Outsourcing/Relocation of administrative activities
(5) Quality Management• Continuous Improvement Processes (CIP)• Total Quality Management (TQM/ISO)
(6) Human Resources Management• Flexibility of work schedules/flexible work time• Upskilling• Regular individual appraisals• Performance based wage systems
(7) Knowledge Management• Systematic instruments to strengthen knowledge
sharing between employees
(8) Production Management• Just-in-time• Zero-Buffer• Simultaneous Engineering• Supply Chain Management
103
Example: Questionnaire
Relevance Impact on increased quality
Impact on increased flexibility
Impact on reduction of costs
Impact on increased innovation ability
yes
no
low
mod
erat
e
stro
ng
don’
t kno
w
low
mod
erat
e
stro
ng
don’
t kno
w
low
mod
erat
e
stro
ng
don’
t kno
w
low
mod
erat
e
stro
ng
don’
t kno
w
(2) Decentralisa-tion on an op-erative level of the company
Team work/Group work O O O O O O O O O O O O O O O O O O
Cross-functional teams (teams consisting of members from different func-tions)
O O O O O O O O O O O O O O O O O O
104
Example: Recommendations for surveying organisational innovation
(1) Complexity of organisational innovation It is not sufficient to ask only for "organisational innovation" in general.It is necessary to differentiate between several concepts of organisational innovation.
(2) Life-cycle of organisational innovation (use or change)It is not sufficient to ask only if organisational concepts have been changed in the last xyyears. It is important to collect data which organisational concepts are implemented at all.
(3) Scope of organisational innovation (use or extent of use)It is not sufficient to ask only for "use" or "non-use" of organisational innovations.It is necessary to gather information about the extent of "use".
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Type
of O
rgan
isat
iona
l Inn
ovat
ion
Stru
ctur
al In
nov.
Pro
cedu
ral I
nnov
.Focus of Organisational Innovation
Inter-Organisational
•Cooperation/networks/alliances (R&D, production, service, sales, etc.) •Make or buy/Outsourcing•Offshoring/relocation•…
•Just in time (to customers, with suppliers)
•Single/dual sourcing•Supply chain management•Customer quality audits•…
•Job enrichment/job enlargement•Simultaneous engineering/concurrent engineering•Continuous Improvement Process/Kaizen•Quality circles•Quality audits/certification (ISO)•Environmental audits (ISO)•Zero-buffer-principles (KANBAN)•Preventative maintenance•…
•Team work in production•Cross-functional teams•Decentralisation of planning, operating and controlling functions•Manufacturing cells or segments•Reduction of hierarchical levels •…
Intra-Organisational
Example: Complexity of organisational innovation
Fraunhofer ISI, Karlsruhe
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Summary Section 4
§ Innovation is a multidimensional phenomenon, therefore different indicators need to be applied for measurement
§ The selection of a specific innovation metrics depends on the type and area of measurement
§ Besides indicators for innovation input and output, also qualitative measures for the innovation process are relevant
§ Benchmarking provides an assessment of firms` innovation capability
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Section 5
The role of SMEs in the innovation system§ SMEs in the economy
§ Innovation in SMEs
§ Advantages and disadvantages of SMEs
§ Example: Empirical typology of innovative SMEs
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Innovation in SMEs
Some facts:
§ The majority of firms in every country are SMEs (in Germany, 80% of all firms employ less than 500 people)
§ The majority of the workforce is employed in SMEs (over 60%)
§ All new firms start as SMEs
- National competitiveness largely depends on the competitiveness of SMEs. Therefore, innovation in SMEs is a key issue
- SMEs cannot be said to be better or worse performers in general compared to large firms, their performance depends on their respective role in the innovation system
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Innovation in SMEs
§ Compared to large firms, innovation in SMEs is much lesser studied
§ Innovation activity in SMEs is often strongly related to the personality of the owner and lacks a systematic strategy
§ SMEs are believed to operate in niche markets and to have advantages as regards flexibility, proximity to customers and coordination
§ Their disadvantages are seen in the lack of economies of scale, lack of technological basis and in the general lack of resources, which confine their possibilities for entering markets with high investment (entry barriers)
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Misleading assertions about innovation in small firms
They also lose a lot, since they have high birth and death rates
‘New small firms create a lot of employment’
Not if you include unmeasured, ‘part-time’ R&D
‘Small firms are much more innovative than large firms, since they account for a higher share of innovations than of R&D’
They do lots of ‘informal’, ‘part-time’ and non-measured R&D, and produce a share of total innovations roughly proportionate to their output and employment
‘Small firms make few innovations since they do so little R&D’
It depends on the product and the technology
‘Small firms make most of the major innovations’
What the evidence showsMisleading assertions
Source: Tidd, Bessant, Pavitt 2005
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How tasks of innovation strategy are accomplished in large and small firms.
? Deliberate organisational design
? Judgement based on formal criteria and procedures
? Own R&D and external networks
? Organisational design
? Organisational processes for knowledge flows across boundaries
? Qualifications of managers and staff
Matching strategic style with technological opportunities
? Judgement based on qualifications and experience of senior management
Judging the learning benefits of investments in technology
? Trade and technical journals
? Training and advisory services
? Consultants
? Suppliers and customers
Monitoring and assimilating new technical knowledge
? Responsibilities of senior managersIntegrating technology with production andmarketing
Large firms Small firmsStrategic tasks
Source: Tidd, Bessant, Pavitt 2001
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Advantages of SME´s
• Time-to-market: Small enterprises need only half as long to develop a product as large enterprises (11 months compared to 22 months).
• Access to market: Product launch and access to market is less of a problem for SME´s,
• Coordination of available skills: SME´s coordinate available skills better than larger enterprises.
• Application of new technologies: SME´s have less problems applying new technologies than large enterprises.
• Product-related services: For SME´s, product-related services pose less of a problem compared to large enterprises.
"Time driver" survey results (Fraunhofer ISI 2005):
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• Problems with external partners: SME´s more frequently have problems with external partners compared to larger enterprises.
• Lack of motivation of innovation project members: The lack of motivation of project members is a problem for SME´s, due to skill shortage
• Skills of employees: Lacking expertise of workforce is more of a problem for SME´s than for large enterprises
• Legal questions: This factor is much more often a problem for SME´s than for large enterprises.
Disadvantages of SME´s
"Time driver" survey results (Fraunhofer ISI 2005):
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Innovation in SMEs – existing empirical evidence
§ General figures show that SMEs participate less in product innovation than large firms
§ SMEs invest on average less in innovation than large firms
§ In spite of that, SMEs are an important source of creativity and innovation, especially young high-tech firms
§ Some evidence suggests that SMEs are more efficient in their innovation activities
§ Typologies of innovation have been based in the past on sectoral classifications
§ Most influential sectoral innovation typology by Pavitt: supplier dominated, scale intensive, specialised suppliers and science based firms
§ Problem: official statistical classifications do not reflect adequately the heterogeneity of market structures and frame conditions
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Categories of innovating small firms (Tidd et al.)
Main tasks of innovation strategy
Sources of competitive advantage
Examples
Links to advanced users and pervasive technologies
Combining technologies to meet users' needs
Producer goods (machines, components, instruments, software)
1. 'Superstar' or 'specialized supplier'?
2. Knowledge or money?
1. Product or process development in fast moving and specializes area
2. Privatizing academic research
Start-ups in electronics, biotechnology and software
Exploiting new IT-based opportunities in design , distribution and co-ordination
Preparing replacements for the original invention (or inventor)
Integration and adaptation of innovations by suppliers
Successful exploitation of major invention or technological trajectory
Traditional products (e.g. textiles, wood products, food products) and many services
Polaroid, DEC, TI, Xerox, Intel, Microsoft, Compaq, Sony, Casio, Benetton
Specialized suppliers
New technology-based firms (NTBFs)
Supplier-dominated
Superstars: small firms into big since 1950
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Example: SMEs and innovation – empirical typology
• Empirical firm typology based on cluster analysis
• Database: German Manufacturing Survey 2003, core manufacturing industries NACE 25, 28-35 (n=926)
• Approach: cluster analysis (Ward) on the basis of structural variables (export rate, production structure, product complexity, batch size, supplier status etc.), NOT on the basis of sector or firm size
• Analysis of clusters as regards different innovation indicators
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Example: SMEs and innovation – general figures
Performance Indicators Non-SMEs SMEs
Product innovator [%-share of "Yes"] 0.74 0.63**Share of Sales achieved by product innovations [%] 0.12 0.13
Market innovator [%-share of "Yes"] 0.72 0.60**Share of sales achieved by market innovations [%] 0.11 0.12
Delivery time [calendar days] 80.4 48.0*
Manufacturing lead time [calendar days] 53.3 37.5+
Scrap rate [%] 0.04 0.05+
Return on sales [%] 0.05 0.05
Labour productivity [in thousand EUR] 96.9 73.7***
Share ofsales achieved by services [%] 6.1 7.6
N 184 742% 0.20 0.80
Significance levels: *** p<0.001 / ** p<0.01 / * p<0.05 / + p<0.1
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Example: Innovation in SMEs – empirical typology
Cluster Variables Categories
Position in value chain - Supplier vs. Original Equipment Manufacturer (OEM)
Product development - According to customer's specification - Standardised programme - No product development
Type of production / assembly - Initiated upon customers´ order - To stock (i.e. made to stock)
Batch size - Single unit production or small batch size (up to 20 pcs. per month) - Medium batch size (20-1000 pcs. per month) - Large batch size (more than 1000 pcs. per month)
Product complexity - Simple products (e.g. cogwheels) - Multipart products with simple structure (e.g. pumps) - Complex products (e.g. machine tools or manufacturing systems)
R&D-Orientation(Percentage of employees workingin the field of Research, Development and Construction )
- < 11% of all employees vs. = 11% of all employees
Export-Orientation(share of exported products)
- < 46% of all products vs. = 46% of all products
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Example: Innovation in SMEs – empirical typology
0%
5%
10%
15%
20%
25%
30%
35%
40%
Cluster 1nC=187 (20,2%)
Cluster 2 nC=278 (30,0%)
Cluster 3 nC=104 (11,2%)
Cluster 4 nC=112 (7,5%)
Cluster 5 nC=69 (7,5%)
Cluster 6 nC=78 (8,4%)
Cluster 7 nC=98 (10,6%)
SMEs (N=742)
Non-SMEs (N=184)
n=1
68
n=2
45
n=7
8
n=7
5
n=4
5
n=6
6
n=6
5
n=1
9 n=3
3
n=2
6 n=3
7
n=2
4
n=1
2
n=3
3
Note: nC = Total number of firms within the correspondent cluster
1. National niche producers of standardised simple products
2. National suppliers of simple products
3. National suppliers of complex, customer specific products
4. Export oriented OEMs of standardised complex products
5. Export oriented suppliers of simple products
6. National manufacturers of complex products
7. Export oriented OEM of standardised, complex products
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Example: Innovation in SMEs – empirical typology
• Identification of seven structurally different industrial clusters, independent of sector or firm size
• SMEs are mainly found in three clusters: national niche producers of standardized, simple products, suppliers of simple products to national customers and high-tech manufacturers of complex products
• While general performance comparison confirmed previously known differences between SMEs and large firms, these general differences did not prevail within clusters
• Innovation performance of SMEs depends more strongly on their structure and market than on size or sector
• Within one cluster the performance of SMEs and large firms is similar
• There seems to be no size disadvantage or advantage per se which would determine performance
• Performance depends on the market and frame conditions
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Summary Section 5
§ SMEs contribute significantly to economic development
§ SMEs have organisational advantages but resource and technological disadvantages
§ SMEs often lack a strategic innovation process
§ They are innovative also in technological (high-tech firms), but more often in non-technological ways
§ Innovation in SMEs is related to their market environment, frame conditions and structural characteristics rather than on the sector they belong to
§ SMEs operate in markets where they can best use their advantages
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Section 6
Knowledge/ technology transfer and the concept of open innovation§ Management of knowledge and technology transfer
§ Closed versus Open Innovation Paradigm
§ Intellectual Property (IP), Lead Users
§ Example for successful technology transfer and open innovation
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Knowledge and technology transfer
§ The major challenge in successfully connecting different agents in the innovation system within an open innovation paradigm is effective management of knowledge and technology transfer
§ Innovative national economies are able to successfully manage technology transfer (Finland, Ireland, USA)
§ The high rate of successful spin-offs from the Palo Alto Research Centre (Xerox) demonstrate the possibility of strong value creation through commercialisation of scientific knowledge (Adobe, 3Com)
§ Different forms of transfer mechanisms: collaborative research, technology licensing, start-ups, spin-offs etc.
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Knowledge and technology transfer mechanisms and transfer activity
Includes among its founding members a person affiliated with the university.
Spin-offs
Obtain licensing agreement to access university technologies.
Start-up companies
Used to expedite the performance of research and accomplished through material transfer agreements.
Exchange of research materials
Licensing of university patents (usually stemming from federally-funded research) to companies for commercialisation.
Technology licensing
University-industry research partnerships that can be encouraged through partial government funding.
Collaborative research
The most frequent form of research relationship, which involves companies directly funding university research.
Sponsored research
DescriptionCommercialisation / Transfer Mechanism
Source: Cunningham and Harney 2006
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OECD: University licences per annum
16824.14049United States
219.5200Switzerland
1714.7250Netherlands
58.844Korea
201.427Italy
337.1234Australia
# Responding Universities
Average per University
Total # LicensesCountry
Source: Cunningham and Harney 2006
126
Cultural barriers
Protection / patentsPublication
SecrecyFree public good
Commercial approachAcademic freedom
Product- / service-drivenTo know how? What? Why?
Demand-side model of actionSupply-side model of action
Short-termLong-term
AppliedBasic research
Financial returnsNew means for further research
Added valueAdvancement of knowledge
New applicationNew invention
Industry ValuesUniversity Values
Source: Cunningham and Harney 2006
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Strategic approach to technology transfer
Source: Cunningham and Harney 2006
StrategicTechnology
Transfer
Organisationstructure
Activities
Mechanisms
Evaluationmechanisms
Policies &procedures
Staff &resources
Culture & ethos for commercialisation
Research commitment, motivation, awareness
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Management of technology transfer
- Main barrier: cultural differences between science and industry
- Other barriers: inflexible structures, lacking reward mechanisms, lacking skills
- Evaluation mechanism helpful: metrics to measure and evaluate technology transfer and commercialisation activities
- Coherent strategy needed
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Example for strategic support for technology transfer: Twente University
? A part-time post in one of the departments at the university
? Expert advice and support by colleagues in the department
? The use of the university's facilities, such as laboratories and test equipment
? Basic accommodation and office facilities within the university
? A risk-bearing loan with no interest
? Use of the university's image and contacts within its wider network
? Possibilities of acquiring orders through the industrial liaison office
? Business management support and practical guidance by an experienced entrepreneur or mentor
? Support in the further development of a business plan via the school course in entrepreneurship
Source: Cunningham and Harney 2006
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What is Open Innovation?
§ In the past: knowledge monopolies, concentrated knowledge
§ Today: lesser restricted flow of knowledge, distributed knowledge. New way of knowledge production: collaborative, transdisciplinary (Gibbons)
§ Contrary to the traditional innovation process, open innovation makes use of external knowledge and resources
§ Research is no longer only about knowledge creation, but also about knowledge brokering: identifying and accessing external knowledge
§ Selling and buying IP
§ Collaboration, alliances, use of internal and external ideas, building business models and strategic IP management are key elements of the open innovation paradigm
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Contrasting Closed and Open Innovation
If we make the best use of internal and external ideas, we will win.
We should profit from others' use of our IP, and we should buy others' IP whenever it advances our own business model.
If we create the most and best ideas in the industry, we will win.
We should control our IP, so that our competitors don't profit from our ideas.
We don't have to originate the research to profit from it.
Building a better business model is better than getting to market first.
If we discover it ourselves, we will get it to market first.
The company that gets an innovation to market first will win.
External R&D can create significant value; internal R&D is needed to claim some portion of that value.
To profit from R&D, we must discover it, develop it, and ship it ourselves.
Not all the smart people work for us. We need to work with smart people inside and outside our company.
The smart people in our field work for us.
Open Innovation PrinciplesClosed Innovation Principles
Source: Chesbrough 2006
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Innovation through Lead Users
§ Traditional concept of manufacturer-centred innovation paradigm: manufacturers identify user needs, develop products and profit by protecting and selling the new development
§ Involvement of Lead Users: Lead Users invent, develop prototypes and are first field users
§ Users innovate because they have a direct benefit from it (surgeons inventing new robotic system for neurosurgery)
§ Lead Users foresee general demand, require solution to specific problems
§ High commercial value of Lead User innovations (scientific instruments, but also consumer goods like TipEx, Gatorade)
von Hippel, Lettl, Luethje:
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Innovation through Lead Users
Target Market
Time
First manufacturer product appears here
Users innovate here
# of usersperceiving
need
Source: Lettl 2006
134
Management of intellectual property
Ideas, Knowledge
Protectable Knowledge
Protected Knowledge • Novel
• Useful
• Tangible
• Lawfully managedSource: Chesbrough 2006
135
Closed Innovation: closed system of idea flow
Company A
Company B
Current Market
Current Market
Source: Chesbrough 2006
136
Xerox´s Innovation Process in 1996: classical, linear process
Emergent technologyopportunities
Emergent marketopportunities
Select marketsoptions
Select technologyoptions
Opportunity Scanning
Phase
I
IIIII
BusinessConceptDevelopment
CorporateStrategicShuttles
BusinessIncubation
Innovation Council
Licensing /spin-out
Source: Chesbrough 1999
137
Open Innovation Paradigm: permeability of boundaries
Company A
Company B
Current Market
Current Market
New Market
New Market
Source: Chesbrough 2006
138
"Living Labs" as one form of implementation of the open innovation paradigm
§ Living labs=living laboratories (European initiative)
§ "Innovation is moving out of the laboratory"
§ Regionally focused innovation initiatives aiming at creating and implementing innovations
§ Actors: firms, universities, research centres, local communities, individuals, associations, institutions
§ Example: Helsinki living lab: Nokia, Technical University Helsinki, City of Helsinki, inhabitants, artists etc.
§ Similar activities: firms creating new innovative areas or science parks around universities or research centres: spin-offs, research labs, education institutions
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Examples for open innovation strategy
§ IBM (network of alliances, strategic IP management/licencing IP, open process of idea generation)
§ Nokia (interactive platform, systematic access of external knowledge)
§ Procter & Gamble (initiative "connect and develop": external sourcing of innovation, move own ideas outside)
§ Linux
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Summary Section 6
§ Knowledge and technology transfer is essential for creating economic value out of scientific research
§ Technology transfer mechanisms help to commercialise inventions
§ Effective technology transfer becomes even more relevant through transformation of the closed innovation paradigm into the open innovation paradigm
§ Open innovation aims at the best possible use and commercial exploitation of existing knowledge, crossing firm and market boundaries
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Summary Section 2: Definitions, theories, basic concepts
§ Innovation is imperative. Changes in the products and services offered and in the ways of producing, delivering or organising are necessary for survival
§ Innovation has to realise a strategic competitive advantage
§ Innovation is a multidimensional and multidisciplinary phenomenon
§ Innovation has become more complex in the last decades, involving different actors
§ Innovation is an interactive, socially embedded process
§ National Systems of Innovation shape the innovation environment of firms (resources, demand, technological paths) but they do not determine strategy
§ New technologies are a main driving force behind innovation
§ Strategic choices need to be made by enterprises: the management of innovation is a key task
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Summary Section 3: Management of the innovation process
§ In order to generate successful innovations, firms need to manage the innovation process strategically
§ The innovation process passes through different phases which require specific abilities
§ Alliances can contribute to generate innovations
§ Innovation routines help to manage the innovation. They are accumulated firm specific knowledge in action
§ Dynamic capabilities adapt, integrate and re-configure internal and external skills toward a changing environment
§ Well functioning routines and strategically deployed capabilities are success factors for innovation
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Summary Section 4: Measuring innovation
§ Innovation is a multidimensional phenomenon, therefore different indicators need to be applied for measurement
§ The selection of a specific innovation metrics depends on the type and area of measurement
§ Besides indicators for innovation input and output, also qualitative measures for the innovation process are relevant
§ Benchmarking provides an assessment of firm´s innovation capability
145
Summary Section 5: The role of SMEs in the innovation system
§ SMEs contribute significantly to economic development
§ SMEs have organisational advantages but resource and technological disadvantages
§ SMEs often lack a strategic innovation process
§ They are innovative also in technological (high-tech firms), but more often in non-technological ways
§ Innovation in SMEs is related to their market environment, frame conditions and structural characteristics rather than on the sector they belong to
§ SMEs operate in markets where they can best use their advantages
146
Summary Section 6: Technology transfer and open innovation
§ Knowledge and technology transfer is essential for creating economic value out of scientific research
§ Technology transfer mechanisms help to commercialise inventions
§ Effective technology transfer becomes even more relevant through transformation of the closed innovation paradigm into the open innovation paradigm
§ Open innovation aims at the best possible use and commercial exploitation of existing knowledge, crossing firm and market boundaries
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GENERAL SUMMARY
1. Innovation is imperative, but innovation is also difficult
2. Innovation is a multidimensional, interactive and socially embedded process
3. Strategic management of the innovation process in firms is of key importance for success
4. Appropriate innovation metrics are necessary for evaluation and control
5. SMEs are important players in the innovation system
6. New technology is a major driver for innovation
7. Through intensification of knowledge production, knowledge and technology transfer are becoming increasingly important
8. Innovation is "moving out of the laboratory" and permeates firm and market boundaries
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Contact
Dr. Eva Kirner
Tel: +49 (0) 721 / 68 09 – 309
e-mail: [email protected]
Fraunhofer Institute for Systems and Innovation Research (ISI) Breslauer Straße 48 76139 Karlsruhe, Germany www.isi.fraunhofer.de
Thank You for Your Attention!