INNOVATION MANAGEMENT

Module 1
• Concept of Innovation
• Historic Perspective
• Types of Innovation
• Innovation Process
• Macroeconomic view of
innovation
• Approaches to innovations
• Assumptions & Barriers to
Innovation
• Innovation Sources

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

WHAT IS INNOVATION?
• Invention
• Technology
• Innovation
• Creating new or improved products, processes
and services
• Knowledge and learning
• Uncertainty

Schumpeter’s distinction between ”Invention”
and ”innovation”
• An ’invention’ is an idea, a sketch or model for a new
or improved device, product, process or system. It
has not yet entered to economic system, and most
inventions never do so.
• An ’innovation’ is accomplished only with the first
commercial transaction involving the new product,
process, system or device. It is part of the economic
system.

Historic Retrospective

Popular View of Science

Dimensions of Innovation
– Product innovation: changes in the things (products or
services) which an organization offers
– Process innovation: changes in the ways in which they are
created an delivered
– Position innovation: changes in the context in which the
product or services are introduced
– Paradigm innovation: changes in the underlying mental
modes which frame what an organization does
the ‘4Ps’ of innovation

Oslo Manual
• Product innovation
– A good or service that is new or significantly improved. This includes
significant improvements in technical specifications, components and
materials, software in the product, user friendliness or other functional
characteristics.
• Process innovation
– A new or significantly improved production or delivery method. This
includes significant changes in techniques, equipment and/or software.
• Marketing innovation
– A new marketing method involving significant changes in product design
or packaging, product placement, product promotion or pricing.
• Organisational innovation
– A new organisational method in business practices, workplace
organisation or external relations.

Table A typology of innovations

Figure Overview of the innovation process

Stage-gate process
IDEA Gate 1
Idea screening
Stage 1
Preliminary evaluation
Gate 2
Detailed evaluation
Stage 2
Product definition
Gate 3
Decision to develop
Stage 3
Development
Gate 4
Decision to test
Stage 4
Testing
Gate 5
Decision to commercialize
Stage 5
Commercialization EVALUATION

Macroeconomic view of Innovation

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