Innovation as creative destruction pdf

Innovation in Practice Pilot 2010

Innovation in Practice

in novation

―Innovation‖ exists in our skillful adaptive relationships to those environments in which we exist….

in novation

… our relationships to each other in those environments….

in novation

… the materials that constitute those environments….

… the objects or tools that we make with those materials that then further facilitate or ―afford‖
our relationship to those environments

in novation

… and even more specifically in those ―communities of practice‖ that provide us with the
necessary knowledge and requisite skills to do all of these things!

Innovation in Practice Pilot 2010

DISCOURSES IN INNOVATION 1:
DISCLOSING THE (K)NEW:

LEARNING, SKILL ACQUISITION AND THE
PRODUCTIVIST LIMITS OF INNOVATION THEORY

DISCOURSES IN INNOVATION 1: DISCLOSING THE (K)NEW:
LEARNING, SKILL ACQUISITION AND THE PRODUCTIVIST LIMITS OF INNOVATION THEORY

• General Introduction and course overview.

• Innovation as Creative Destruction – Schumpeter and Beyond.

• Innovation as ‗History Making‘ - Ontological Design and the disclosure of the
(k)new.

• Innovation and ‗Expertise‘‖ - Hubert Dreyfus and the ‗tacit‘ nature of ‗skillful‘
innovation.

• Innovation in ‗Practice‘ – The ‗tacit‘ knowledge of innovatory practice. Flores,
Schon, and Nonaka.

• Innovative Change – Stephen Turner and the ―object‖ of transformative ‗practice.

• Innovation and Systemic Change – Open Source Innovation, Distributed Mind,
and the Economy of Contribution.

• Summation, Critical Review and Essay Planning

Haridimos Tsoukas
Complex Knowledge. Studies in Organizational Epistemology

Open Ontology/Enactivist Epistemology/Poetic Praxeology

The world in which we exist – and thus ―innovate‖ within – can only be truly
understood according to the ―complex‖ logic of an:

“Open Ontology” as opposed to a ―Closed Ontology‖ – that is a perception of the
world or the nature of our existence that sees it as being in a constant state of flux or
change, and the future as ―open, unknowable in principle‖ and always holding,
―the possibility of surprise.‖

An “Enactivist Epistemology” as opposed to a ―Representationalist‖ one – that is a
perception of the world, or a theory of how we understand it, that recognizes the
central role of our own ―enactive‖ participation in its construction, rather than in its
ability to transparently ―re-present‖ some absolutely determinable truth or reality.

A “Poetic Praxeology” as opposed to an ―Instrumentalist‖ one – that is, similarly to
the ―enactivist‖ position, an understanding of how our own individual creative
development, utilization of, or taking up of those ―practices‖ that inform those
contexts in which we exist, also contribute to the transformation of that background
of historically available ―practices‖ that condition those contexts – much in the
same way that a poet transforms the language which they use through their
utilization of it.

Pheonomenology/Pragmatism/Cybernetics/Systems Theory

William James - January 11, 1842 – August 26, Heinz Von Foerster born November 13, 1911 –
1910 October 2, 2002

Henri Bergson born, 8 October 1859 – 4 January Stephen Toulmin - 25 March 1922 - 4 December
1941 2009

John Dewey – born October 20, 1859 – June 1, Stafford Beer – born September 25, 1926 - August
1952 23, 2002

Alfred North Whitehead born 15 February 1861 – Humberto Maturana September 14, 1928 –
30 December 1947
Alasdair Macintyre - 12 January 1929
Ludwig Wittgenstein - born 26 April 1889 – 29
April 1951 Richard Rorty – born October 4, 1931 – June 8,
2007
Michael Polanyi - March 11, 1891 – February 22,
1976 George Lakoff - May 24, 1941

Martin Heidegger - born September 26, 1889 – Francisco Varela - September 7, 1946 – May 28,
May 26, 1976 2001

Hans-Georg Gadamer - born February 11, 1900 – Charles Taylor - born 28 January 1948
March 13, 2002

Gregory Bateson – born 9 May 1904 – 4 July 1980

Process Philosophy, Phenomenology, Hermeneutics, Pragmatism,
Cybernetics, Systems Theory, Cognitive Science, Enactive Mind

Complex/Emergent/Enactive/Collaborative
Clay Shirky - Charles Leadbeater - Chris Anderson - Nassim Nicholas Taleb - Don Tapscott and Anthony Williams

Luc Boltanski and Eva Chiapello
The New Spirit of Capitalism

―The Network‖
―As an existing concept, constructed around contemporary ideas,
technologies and research, associated with a specific vocabulary,
models of causality and mathematical models, and formed to offer
an alternative to hierarchical algorithms, ‗network' naturally enough
finds itself mobilized by capitalism. Employed in academic works in
economics and the sociology of work - disciplines that helped to
provide management with its theoretical foundations - it was almost
bound to invade the literature addressed to cadres that we have
studied. This is how the forms of capitalist production accede to
representation in each epoch, by mobilizing concepts and tools that
were initially developed largely autonomously in the theoretical
sphere or the domain of basic scientific research. This is the case with
neurology and computer science today. In the past, it was true of
such notions as system, structures technostructure, energy, entropy,
evolution, dynamics and exponential growth.‖
Boltanski, L and Chiapello, E. (2005) Trans. Ellliott, G. The New Spirit of Capitalism. Verso. London. p. 104

Manuel Castells
The Network Society

Michel Foucault
The Archaeology of Knowledge

―Episteme‖

By episteme, we mean. . . the total set of relations that unite, at a given
period, the discursive practices that give rise to epistemological figures,
sciences, and possibly formalized systems. . . . The episteme is not a
form of knowledge (connaissance) or type of rationality which, crossing
the boundaries of the most varied sciences, manifests the sovereign
unity of a subject, a spirit, or a period; it is the sovereign unity of a
subject, a spirit, or a period: it is the totality of relations that can be
discovered, for a given period, between the sciences when one
analyses them at the level of discursive regularities
Foucault, M. (1972) The Archaeology of Knowledge. Trans.Sheridan, A. M. Harper Collins. New York.

Michel Foucault
The Order of Things. An Archaeology of the Human Sciences

The fundamental codes of a culture - those governing its language, its schemas of perception, its
exchanges, its techniques, its values, the hierarchy of its practices - establish for every man, from the very
first, the empirical orders with which he will be dealing and within which he will be at home. At the other
extremity of thought, there are the scientific theories or the philosophical interpretations which explain
why order exists in general, what universal law it obeys, what principle can account for it, and why this
particular order has been established and not some other. But between these two regions, so distant from
one another, lies a domain which, even though its role is mainly an intermediary one, is nonetheless
fundamental: it is more confused, more obscure, and probably less easy to analyse. It is here that a
culture, imperceptibly deviating from the empirical orders prescribed for it by its primary codes, instituting
an initial separation from them, causes them to lose their original transparency, relinquishes its immediate
and invisible powers, frees itself sufficiently to discover that these orders are perhaps not the only possible
ones or the best ones; this culture then finds itself faced with the stark fact that there exists, below the
level of its spontaneous orders, things that are in themselves capable of being ordered, that belong to a
certain unspoken order; the fact, in short, that order exists. As though emancipating itself to some extent
from its linguistic, perceptual, and practical grids, the culture superimposed on them another kind of grid
which neutralized them, which by this superimposition both revealed and excluded them at the same
time, so that the culture, by this very process, came face to face with order in its primary state. It is on the
basis of this newly perceived order that the codes of language, perception, and practice are criticized
and rendered partially invalid.

Foucault, M. (1970) The Order of Things. An Archaeology of the Human Sciences. Vintage. New York. p xx-
xxi

Benoît Godin
Innovation: The History or ―Genealogy‖ of a Category

Joseph Schumpeter
Innovation as Creative Destruction

Henry Chesbrough
Open Innovation

―The Social Construction of Reality‖
Peter L. Berger and Thomas Luckmann

Personal thoughts,
feelings, ideas, the
personal ego (I) Externalisation

Objectification
Language is institutionalized
Experiences are Reified
Social Values are Legitimized
Consciousness is intersubjective

Internalisation
Social thoughts,
feelings, ideas, the
social ego (me)

Bruno Latour – Actor Network Theory
The Social Construction of Scientific Facts

―Truth‖ is produced in Practice

Francisco Varela and Humberto Maturana
Autopoiesis and Cognition. The Realization of the Living.

Purpose or aims… are not features of the organization of any machine
(allo or autopoietic); these notions belong to the domain of our discourse
about our actions, that is, they belong to the domain of descriptions, and
when applied to a machine, or any system independent from us, they
reflect our considering the machine or system in some encompassing
context.

Maturana, Humberto and Varela, Francisco. 1980. Autopoiesis and Cognition: The Realization of the Living,
Dordrecht: D. Reidel

Hannah Arendt
The Human Condition

―The use of the experiment for the purpose of knowledge was already
the consequence of the conviction that one can only know what he has
made himself, for this conviction meant that one might learn about
those things man did not make by figuring out and imitating the process
through which they had come into being.‖

Arendt, Hannah. 1958. The Human Condition, University of Chicago Press, Chicago. p295

Gareth Morgan
Images of Organization

―The Social Construction of Management‖

As much as we might have intellectually realized the enormous ontological and
epistemological significance of mans of these insights – insights that, whether in
the physical sciences or philosophy we have, in many instances, been aware of
for over a hundred years! – we have as yet to recognize the full implications of
their significance within the machinations of our everyday lives. That is in the
ways in which we actually come to know, learn, teach, and act within - or more
importantly for our current purposes, design or ―innovate‖ within - this world of
which we are all a part, and actively, or even more appropriately, ―enactively,‖
contribute to the construction of.

There is an absolutely massive disconnect between what in a few weeks time
we will see Donald Schön and Chris Argyris call our ―espoused theories‖ and our
―theories-in-use.‖ Or what we can even more simply describe as those
fundamental beliefs and practices that actually inform what we do and those
that we claim to inform what we do.

Donald Schon and Chris Argyris
Single and Double Loop Learning

Single-loop Learning
Single-loop learning is an active process of organisational enquiry
that results in the modification of the theory-in-use to keep
organisational performance within acceptable parameters based
on values and accepted norms. The values and norms themselves
– the governing variables – are not changed (Argyris and Schön,
1996, p.20).

Double-loop Learning
Double-loop learning (Figure 1) involves the exploring and
sometimes painful reconsideration of values and strategies. This
can be done individually or on behalf of an organisation when
agents reassess the effectiveness of the organisational values.

Double loop learning is a critical part of an organisations culture of
it is to maintain unity of vision and purpose during times of
conflicting requirements or environmental change.

Ikujiro Nonaka
SECI Model of Innovation
Socialisation, Externalisation, Combination, Internalisation

Socialisation: This is where ―tacit‖ knowledge is
shared through face to face communication or
shared experience .

Externalisation: This is the process through which
―tacit‖ knowledge is embedded or externalised in
language and made communicable.

Combination: This is where various elements of these
externally communicable insights are combined
together to form systematic theories or models etc.

Internalisation: This is where these models are then re-
internalised and form part of our background ―tacit‖
knowledge.

Catherine Malabou
What Sould We Do with Our Brain?

―How could we not note a similarity of functioning between this
economic organization and neuronal organization? How could we not
interrogate the parallelism between the transformation of the spirit of
capitalism (between the sixties and the nineties) and the modification,
brought about in approximately the same period, of our view of
cerebral structures...Revealing that the brain is neither a rigid structure
nor a centralized machine is not enough to stave off the threat of
alienation. In fact, neo-liberal ideology today itself rests on a
redistribution of centers and a major relaxation of hierarchies.
Domination and the crisis of centrality, in a merely seeming paradox,
are perfectly matched with each other. The restructuring of capitalism
(post-Fordist capitalism of the second industrial revolution) was
accomplished at the price of substituting control by self-organization
for planning decided and overseen by a formal centralized authority
within the company.”

Malabou, C. (2008) What Should We Do with Our Brain? Trans. Rand, S. Fordham University Press. New York.

Slavoj Žižek
First as Tragedy, Then as Farce – The “Logic” of “Fetishistic Disavowal”

―Not to replicate the caricature of the world: this is what we
should do with our brain. To refuse to be flexible individuals who
combine a permanent control of the self with a capacity to self
modify at the whim of fluxes, transfers, and exchanges, for fear of
explosion. ―

―To ask 'What should we do with our brain?" is above all to
visualize the possibility of saying no to an afflicting economic,
political, and mediatic culture that celebrates only the triumph of
flexibility, blessing obedient individuals who have no greater merit
than that of knowing how to bow their heads with a smile.‖
Malabou, C. (2008) What Should We Do with Our Brain? Trans. Rand, S. Fordham University Press. New York.

Gert Biesta
Critique of the ―representationalist‖ epistemology of modern education

Etienne Wenger and Jean Lave
Communities of Practice/Situated Learning/Legitimate Peripheral Participation

Lave and Wenger reject the view of understanding as arising ―out of
the mental operations of a subject on objective structures‖ and locate
learning not in acquisition of structure, but in the increased access of
learners to participating roles in expert performances.

William F. Hanks,

Learning as “Situated Activity”

Learning viewed as situated activity has as its central defining
characteristic a process we call legitimate peripheral participation. By
this we mean to draw attention to the point that learners inevitably
participate in communities of practitioners and that the mastery of
knowledge and skill requires newcomers to move toward full
participation in the sociocultural practices of a community. ―Legitimate
Peripheral participation‖ provides a way to speak about the relations
between newcomers and old-timers, and about activities, identities,
artifacts, and communities of knowledge and practice. It concerns the
process by which newcomers become part of a community of
practice. A person’s intentions to learn are engaged and the meaning
of learning is configured through the process of becoming a full
participant in a sociocultural practice. This social process includes,
indeed it subsumes, the learning of knowledgeable skills.

According to Wenger there are three elements that are crucial in distinguishing a
community of practice from other groups and communities:

The domain. A community of practice is something more than a club of friends or
a network of connections between people. 'It has an identity defined by a shared
domain of interest. Membership therefore implies a commitment to the domain,
and therefore a shared competence that distinguishes members from other
people.‘

The community. 'In pursuing their interest in their domain, members engage in joint
activities and discussions, help each other, and share information. They build
relationships that enable them to learn from each other.'

The practice. 'Members of a community of practice are practitioners. They
develop a shared repertoire of resources: experiences, stories, tools, ways of
addressing recurring problems—in short a shared practice. This takes time and
sustained interaction. '

Paul Hildreth and Chris Kimble
Innovation through Communities of Practice

―Innovation as Creative Destruction – Schumpeter and Beyond‖.

In this first lecture we will consider of some of the key ways in which innovation
has come to be understood, both practically and conceptually since its
inception. We will place particular emphasis on the ways in which it has been
articulated within the discourses of economics, business, organisation, and
management theory in particular, from Joseph Schumpeter‘s original analysis of
it as ―creative destruction‖ through to Henry Chesbrough‘s most recent ideas on
―open innovation‖.

―This paper advances three hypotheses in order to guide a genealogical history of
innovation as category. The first hypothesis starts with the idea that innovation is
about novelty (arising from human creativity), as etymology, dictionaries and
history suggest. As such, innovation is of any kind, not only material or
technological. In this sense, innovation as category has a very long history.
However, over time the conjunction of two factors gave preeminence to
technological and commercialized innovation in representations: 1) the culture of
things and its capitalistic corollary: industrial development through technology, 2)
academics, the study of technology, and the conceptual frameworks that followed
for policies in science and economic growth. In fact, there is a dialectics here
between reality and language. Events and changes in the world gave rise to new
categories; the latter in turn brought to light changes in the world and, in doing so,
contributed to these changes.‖

―The second hypothesis is that the history of innovation as “creativity” is that of
three concepts (and their derivatives): Imitation → Invention → Innovation.
Certainly, a lot has been written on imitation (literary theory and art theory), as
well as invention (history, sociology, management and economics of technology).
But no one has ever brought the two concepts together in a genealogical history,
and neither has anyone looked at their contribution to the category innovation.
Through Western history, imitation and invention have been contrasted, or are in
tension. The dichotomy reaches its resolution with the idea of innovation in the
twentieth century, particularly the idea of innovation as process: invention and
imitation are two sequential steps in the process leading to innovation. ―

―The third hypothesis is about innovation as a break with the past. Innovation and
the discourses on innovation serve to make sense of modern practices and values.
On the one hand, innovation represents continuity with the past. It is continuity in the
sense that innovation is about novelty, an idea that was present in many forms
before innovation took on a central place in representations, as we will see. It is
also continuity in the sense that innovation is, to many, concerned with
technological invention, which is a dominant understanding of what invention
came to mean over time. However, on the other hand innovation is a break with
the past in the sense that it suggests that invention per se is not enough. There has
to be use and adoption of the invention, namely innovation, in order for benefits
to accrue. ―

Innovation
as a fundamental quality of all economic life
Schumpeter sees the inherent creative ability or ―innovatory‖ potential of all human beings,
no matter what their social standing, and the social leadership that follows such
―innovatory‖ ability, as being the most significant, and transhistorically or universally
important force at work in all economic life.

This is in marked difference to say Marx, and other ―classical economic theorists‖ of his time,
who see this capability as being an enormously historically dependant development.

For Schumpeter it is only through the entrepreneurial initiative of an ―innovative‖ individual
who is capable of reducing the costs of their means of production to a level below that of
their competitors in a ―stationary‖ and ―classical circular flow‖ model of the economy in
which the costs of the goods produced and the price paid for them are meant to be equal
– hence the ―stationary‖ model of analysis of economic system – that any capital is capable
of being freed up for further ―innovation‖ and ―entrepreneurial‖ development, or
investment, that and the economy is catapulted toward that ―dynamic‖ conceptualisation
of it that is so indicative of modern capitalism. Or as Eduardo März, says:

―The qualitative leap from the stationary to the dynamic economy is brought about by the
appearance of the entrepreneur and the innovations initiated by him in the areas of
technology, product differentiation, marketing etc‖

Eduard März, (1991) Joseph Schumpeter. Scholar, Teacher and Politician. Yale University Press. New Haven and London.

―Schumpeter‘s most significant potential contribution[s] to our
understanding of motion [i.e. change, progress, development,
and transformation]in all economic systems was the emphasis
he gave to the role of innovations. ―
Allen Oakley, (1990) Schumpeter’s Theory of Capitalist Motion. A Critical Exposition and Reassessment. Edward
Elgar. London

―The main emphasis in Schumpeter‘s theory of development is
on the sporadic emergence in history of the innovator… [and
the] ultimate cause of social development is to be found in the
sporadic changes brought about by creative individuals
[innovators] in the ‗productive combinations‘ or, in Marx‘s
terms, in the ‗productive forces‘… [because] sooner or later
these lead to institutional adjustments giving rise to a
qualitatively new social structure. ―
Eduard März, (1991) Joseph Schumpeter. Scholar, Teacher and Politician. Yale University Press. New Haven and
London.

―Innovation is possible without anything we should identify as
invention and invention does not necessarily induce
innovation.‖
Schumpeter, J. (1939) Business Cycles: A Theoretical, Historical and Statistical Analysis of the Capitalist Process.
McGraw Hill

To Schumpeter innovations consists of any one of the
following five phenomena:

1) Introduction of a new good;
2) Introduction of a new method of production;
3) Opening of a new market;
4) Conquest of a new supply of raw materials or half
finished goods;
5) Implementation of a new form of organization.

“Open” vesus “Closed” Innovation

Closed Innovation – Centralised R&D

The institution of the central research lab and internal product
development was thus a critical element of the rise of the
modern industrial corporation. Centrally orgaizatized
development were central to companies' strategies and were
regarded as critical business investments. R&D Functions were a
salient feature in the knowledge landscape of the economy,
relatively insulated from the universities and small enterprises,
relatively unconnected to the government, and largely self-
contained.

Underlying Logic

The logic underlying this approach to innovation was one of closed
centralized, internal R&D. At its root, the logic implies a need for deep
vertical integration. In other words, in order to do anything, one must
do everything internally, from tools and materials, to product design
and manufacturing, to sales, service, and support. Outside the fortified
central R&D castles, the knowledge landscape was assumed to be
rather barren. Consequently, the firm should rely on itself - and not
feeble outside suppliers-for its critical technologies.

Xerox

Similarly, Xerox needed to make its own toner, its own copier, its own
light lens, and its own feeding and sorting subsystems in order to deliver
high-volume, high-quality xerography to its customers. Because Xerox
was pushing mechanical and electrical systems father than anyone
else in its applications, there was no available supplier base with which
to work. During the early years, Xerox found that it even needed to
make its own paper; to get the optimal paper characteristics that
would feed well through its copier systems.

Erosion Factor 1:
The Increasing Availability and Mobility of Skilled Workers

Despite the company's dominance, the mobility of disk-drive
engineers caused IBM's leadership to erode over time. An engineer
named Al Shugart left IBM to go to Memorex, where he helped
Memorex improve its hard-disk drives that plugged into IBM
mainframe computers. Then he left Memorex to start a company
called Shugart Associates' pursuing a new kind of hard-disk drive, the
8 inch disk drive, intended for minimal computers and workstations.
Eventually when he fell out with the backers of Shugart, he left to start
another new company, called Sea-gate, which made still smaller 5
inch drives for personal computers. With each job change he made,
Shugart took a substantial number of people with him to the new
company. Each of Shugart's new start-up companies was thus able to
hit the ground running.

Erosion Factor 2:
The Venture Capital Market

Prior to 1980, little VC was available in the United States. Although
there were start-up companies that arose from people who migrated
out of large firms, these new enterprises had to struggle to find capital.
The ability of companies to attract older talented staff to due new
venture was also impaired by a lack of adequate capital to justify file
risk of leaving a well-capitalized company for an unknown start-up
company.

Erosion Factor 3 :
External Options for Ideas Sitting on the Shelf

The earlier tensions between the incentives of the research group and
those of the development group gave rise to a buffer inventory of
ideas sitting on the shelf. The tensions between these functions are not
new, but now there is an important difference. As a result of the
combination of erosion factors I and 2 there exists a second, outside
path to market for many of these ideas.

Erosion Factor 4:
The Increasing Capability of External Suppliers

When companies like IBM wanted to increase the performance of
their early mass-storage systems, they found that they could not rely
on external suppliers to supply components of sufficient technical
capability in sufficient volume with high quality. More generally,
companies seeking to create new products and services in the
middle of the twentieth century found that the surrounding
environment lacked the requisite knowledge, production
experience, and financial capital to serve as reliable partners in
building the materials, components, and systems needed to serve
the market. Thanks to the confluence of Many of the factors
already noted, such as tile expansion of universities and university
enrollments, the availability of well-trained workers to companies of
all sizes, and the increased presence of VC, the external supply
base is much more developed that it was prior to WWII

Open Innovation
New Attitudes, Directions, and Practices

The traditional paradigm that companies used to manage industrial R&D is
indeed over in most industries. But that does not mean that internal R&D itself
has become obsolete. What we need is a new logic of innovation to replace
the logic of the earlier period. Companies must structure themselves to
leverage this distributed landscape of knowledge, instead of ignoring it in the
pursuit of their own internal research agendas. Companies increasingly cannot
expect to warehouse their technologies, waiting until their own businesses
make use of them.

The new logic will exploit this diffusion of knowicdge, rather than ignore it. The
new logic turns the old assumptions on their head. Instead of making money
by hoarding technology for your own use, you make money by leveraging
multiple paths to market for your technology. Instead of restricting the
research function exclusively to inventing new knowledge, good research
practice also includes accessing and integrating external knowledge. Instead
of managing intellectual property as a way to exclude anyone else from using
your technology, you manage IP to advance your own business model and to
profit from your rivals'

Innovation as creative destruction pdf

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