2. Innovation is a ‘mould-breaking’
development in new products or
services or how they are produced
– materials used, the process
employed or how the firm is
organised to deliver them – or how
or to whom they are marketed, that
can be linked to a commercial
opportunity and successfully
exploited
Innovation
3. Innovation is a ‘mould-breaking’
development in new products or
services or how they are produced
– materials used, the process
employed or how the firm is
organised to deliver them – or how
or to whom they are marketed, that
can be linked to a commercial
opportunity and successfully
exploited
Innovation - revisited
4. Innovation Why?
Globalization is inducing strong competitive pressures.
Why??
Technologies are evolving rapidly
Markets are expanding and changing fastly
Customer’s demand ever-changing
What should manufacturers do?
Develop high quality new products more efficiently and effectively.
Where is the catch ?
It is innovation!
Innovation is a major driving force for
Economic growth
expansion of companies.
6. Need to innovate. Why?
51% of the European enterprises are technological innovators
(OECD 2000).
New products or services account for 20% of companies
turnover
12% of companies are highly innovative and generate 50%
of companies turnover
Two out of every three companies introduce new products
and services
7. Innovation defined
Mintzberg (1983)
• It is the means to break away from established pattern. (doing things really
differently)
Kanter (1983)
It is generation, acceptance and implementation of new ideas, processes,
products, services
It is the application of creative concepts.
It is the application of inventions to bring new products and processes
Michael Porter (1990)
‘Companies achieve competitive advantage through acts of innovation.
10. INVENTION VS INCREMENTAL INNOVATIONS
• B I G - B A N G B R E A K T H R O U G H I S I N V E N T I O N
Incremental innovations (Bessant : 1999)
• Small innovations at frequent and regular intervals increases competitive advantage of an
organization
Low High
Innovation scale
Low
High
Freq
Of
Innovations
Increasing
Competitive
edge
17. Schumpter’s innovations
• Introduction of a new or improved good
• Introduction of a new process
• Opening of a new market
• Identification of a new source of supply of raw
materials
• Creation of new types of industrial organisation
18. Schumpeter (1934) Economic Development Theory
Economists believe that;
Economic development changes slowly with population
growth and saving ratios.
The pace of development accelerates when there are wars
and natural disasters.
Schumpeter argues that entrepreneurial led technological
innovations provide a major impetus to economic development.
He cites the major technological breakthroughs in history (shown
on next slide)
19. TECHNOLOGICAL INNOVATIONS
(Major Breakthroughs)
18th century ( ~ 1800)
• Water power, iron, textile
19th century (1800-1900)
Steam, rail-road, steel
20th century
(1900-1950) Electricity, Chemicals, Internal Combustion Engines
(1950-1980) Oil, Electronics, Aviation, Mass production
(1980-1990) Digital networks, software, new communication medias
(1990-2000) INTERNET, e-commerce
Innovation cycle
Is shortening
20. TECHNOLOGICAL INNOVATIONS KEEPS ECONOMIES GOING
New technological innovations leads to
• New industries
• new businesses
• new employment
When technology matures, jobless growth starts due to operations optimizations
Start Growth Maturity Decline
Technology Life Cycle
No
Of
Jobs
Stagnation
Crisis
New jobs?
New
innovation/invention
emerges
Cycle starts again
21. Drucker’s 5-stage approach to innovation
• Analyse, internal and external. Innovate for NOW – timing is
everything
• Innovation is conceptual and perceptual, so look at financial
implications and analyse whether it meets the opportunity
• Keep innovation simple
• Start small, take an incremental approach
• Aim at leadership and dominate the competition as soon as
possible
22. Drucker’s sources of opportunity
for creative innovation
• The unexpected; be ready for un-foreseen event and
develop an attitude of quick and reactive response
for commercial attitude
• The incongruity: difference between expectations
and actual outcomes. Develop ability to spot them
and make it to your use.
• The inadequacy in underlying processes: we take
inadequacy for granted. NO! take your time to fix it
(particularly related to cost and quality)
23. Drucker’s sources of opportunity
for creative innovation
• The changes in industry or market structure:
technology change, legislature change, outside
events)
• Demographic changes: population changes, wars,
medical improvements
• Changes in perception, mood or meaning
• New knowledge
24. Dr Patterson’s Innovative Thinker
(ten types of people)
• Change agent: who does not stick to what he was told
• Consolidator: prefers status quo
• Harmoniser : likes challenge but does not disclose ideas for fear of upsetting people
• Firefighter : who flits from one idea to another idea in imaginative but
unpredictable way
• Cooperator : who likes change but goes with wind
• Catalyst: who is good at thinking new ideas but soon looses interest
• Incremental innovator: implements ideas in step-by-step
• Spice-of-life: do something, anything, new
• Middle-of-the-road : blending ideas but ambivalent about them
25. Are you Adaptor or Innovator?
[ Kirton , 1976 ]
InnovatorAdaptor
Approaches task from unusualEmploys a disciplined, methodical
approach
Discovers problems and avenues
of solutions
Is concerned with solving problems,
rather than finding problems
Questions basic assumptions
related to current practices
Attempts to refine current practices
Has little regard for means; is more
interested in ends
Tends to be means-oriented
Has little tolerance for routine workIs capable of extended detail work
Is sensitive to group cohesion and
cooperation
Has little or no need for consensus;
often is insensitive to others
27. CREATIVITY
• Creativity and Innovation go hand-in-hand for true
entrepreneurship
• Creativity leads to innovation
• Innovation is the most distinguishing features of
Entrepreneurs.
According to Parkhurst (1999) creativity is;
ability or quality to solve hithero unsolved problems;
when developing novel and original solutions to problems
others have solved differently
29. • Left side of brain performs rational &
logical functions
• It tends to be analytic operating in linked
and linear fashion (called logical or vertical
thinking)
• Adaptive innovation is a left brain activity
Left vs Right sides of Brain
30. • Right side operates intuitive and non-
rational thinking
• It creates holistic images and causes
creative innovation
Left vs Right sides of Brain
31. Left vs Right brain Thinkers
• Left brain thinkers work alone
• Right brain thinkers prefer to work in
groups
• Left brains learn things rather experiencing
them while right brains learn by doing
• Left brains make quick decisions while
right brains generate lots of options rather
than focusing on making a speedy
decision
32. Left and Right brains
• The two halves (left and right ) of brain
complement each
• People have a preference for one or the
other approach, and, can switch between
them for different tasks and in different
contexts.
33. Mintzberg (1976) on Left and Right brain
• Planning activity is a left brain activity
• Implementation of the Plan is the right brain activity
• Truly effective managers are those that can harness
both sides of the brain.
34. ARE YOU CREATIVE TYPE ?
(Majaro-1992)
CHARACTERISTICS
• Conceptual fluency : ability to produce many ideas
• Mental flexibility : ability to think creatively
• Originality : ability to produce atypical responses to
problems
• Suspension of Judgment : slow speed of analysis
• Impulsive : ability to express your ‘gut-feel’
• Anti-authority : willing to challenge authority
• Tolerance : high tolerance threshold for ideas of others
