Innovation Management GM0401

1. Innovation ManagementGM0401 5 september Institute for Innovation and Entrepreneurship (IIE) Schoolof Business, Economics and Law University of Gothenburg Johan Brink

3. This course • Formal: 10.15 to 13 • Some lectures will be shorter • Informal: Read before! Q&A and Discussions • 2 Cases (30% final grade) • Groups: write, presentations and discussions • Small groups, 3-4 students + ½ class A&B • Mandatory case presentations • Exam (70% final grade) • Fri 28 October, 8-13, Folkets Hus • Re-exam • Sat 10 Dec, 8-14, Folkets Hus

4. The Structure of MTIHow is this course run? The Book: The Management of Technological Innovation; Dodgeson, Gann and Salter MTI is structured through three dimensions: 1. What are the overall context and forms for the emergence of technological innovation? (Chapters 1-3) 2. How MTI helps create, shape and deliver innovation for firm (chapter 4-9). Approaches, tools & techniques Not Chapter 8, Innovation in Operations and Processes 3. What are the future challenges of MTI? 5 future challenges (Chapters 10)

5. Additional required readings • Amabile, T. (1998) How to kill creativity, Harvard Business Review, Sep-Oct 77-87 • Arthur, B (2007) The structure of Invention, Research Policy 36: 274-287 • Bergek et al (2008) Analyzing the functional dynamics of technological innovation systems: a sceme of analysis, Research policy 37: 407-429 • Chesbrough (2003) The era of Open Innovation, MIT Sloan Management review, Spring 35-41 • Chesbrough, H and D. Teece, (1996), When Is Virtual Virtuous? Harvard Business Review, Jan-Feb, 65-73 • Cooper, R. (2008) Perspective: The stage-gate Idea-to-launch process-update, what´s new, and nextgen systems, Journal of Product Innovation Management 25:213-232 • Courtney, H. et all. (1997) Strategy under uncertainty, Harvard Business Review, Nov-Dec, 67-79 • Lam, A. (1997) Embedded Firms, Embedded knowledge, Organization Studies, 18/6 973-996 • Lieberman M. and Montgomery, D. (1988) Strategic Management Journal, Vol 9, Issue Special issue Strategy content research (summer 1988) 41-58 • Malerba, F. (2002), Sectoral systems of innovation and production, Research Policy 31 247–264 • Olleros, F.-J. (1986) Emerging Industries and the Burnout of Pioneers, Journal of Product innovation management, Vol.1, pp.5-18 • Pavitt, K. (1984) Sectoral patterns of technical change: Towards a taxonomy and a theory, Research Policy, 13:343-373 • Rosenbloom, R. and M. Cusumano, (1987) Technological pioneering and the competitive advantage, California Management Review, Vol 29:4 51-76 • Teece, D (1986)Profiting from technological innovation: Implications for integration, collaboration,licensing and public policy, Research Policy, 15:285-305 • Tushman, M. and C. O´Reilly, (1996) Ambidextrous Organizations, California Management Review, Vol 38:4, 8-30 • Verganti, R. (2008), Design, Meanings and Radical Innovation: A metamodel and a Research Agenda. Journal of Product Innovation Management 25:436-456

8. What is Innovation? ...and what is invention?

9. What is Innovation? The creation of a new idea and its reduction to practice and it includes all the activities required in the commercialization of new technologies (Freeman and Soete, 1997) An 'innovation' is the implementation of a new or significantly improved product (good or service), or process, a new marketing method, or a new organisational method in business practices, workplace organisation or external relations. OSLO manual OECD 1997 Something new, as a product of imagination or a device or process originated after experimentation. Webster ...and what is invention?

10. How others think about innovation http://youtu.be/2NK0WR2GtFs

11. New to: New to the world New to the industry New to scientific community New to the market(place) New to the firm New to the customer New what: New technology New product line New product benefits/features New product design New process New service New competition New customers New customer need New consumption patterns New uses New improvements/changes New development skills New marketing/sales/distribution skills New managerial skills New learning/experience/knowledge New quality/benefits Innovation in research

12. New to: New to the world New to the industry New to scientific community New to the market(place) New to the firm New to the customer New what: New technology New product line New product benefits/features New product design New process New service New competition New customers New customer need New consumption patterns New uses New improvements/changes New development skills New marketing/sales/distribution skills New managerial skills New learning/experience/knowledge New quality/benefits Innovation in research OUTCOME & PROCESS!

13. Definitions TECHNOLOGY ? MANAGEMENT ? THE MANAGEMENT OF TECHNOLOGICAL INNOVATION ?

14. Definitions TECHNOLOGY A replicable artefact with practical application of knowledge in developing and using it MANAGEMENT The strategic and practical approaches to the construction, development and maintenance of the firm’s sustainable competitiveness THE MANAGEMENT OF TECHNOLOGICAL INNOVATION The construction of adequate flexibility and efficiency needed for conducting the firm’s scientific, technological, organiszational, financial, and business activities in order to introduce and commercialize a new product or process

15. Why study Innovation Management? • How has the smartphone changed your life? • What would you do if it didn´t worked? • How has it changed society?

16. Business – competitivnes Relative: Compared to competitors Absolute: There must be a market for what the firm does Why study Innovation Management?

17. Changes? Globalization Bigger markets -Liberalization Niches Shorter product life cycles New products (<5 Years old) account for 30% of the profits of US firms and for high-performing firms account for nearly half of sales and profits (Cooper& Edgett, 2007). Finance markets Are more likely to be granted credit and easy access to finance than non-innovators (Czarnitzki & Kraft 2004). Have higher productivity and productivity growth than non-innovators (Criscuolo, Martin & Haskel 2003).

18. Faster!

19. Growth! Percentage change in employment, 1994-2000 Share of new products in sales, 1994-1996

20. …Innovation and Knowledge

21. ...and Wealth creation/destruction

22. …High-tech: Growth of employment and GDP! High-technology industries grew more than two-and-a-half times faster than manufacturing industry as a whole between 1980 and 2003 (NSB, 2006) Trade in hi-technology goods (requiring high level of R&D) doubled in real terms in the OECD countries between 1994 and 2003 (OECD 2005) High-technology industries in the USA increased from 11% of domestic production in 1980 to 13.5 % in 1990, and to 34% in 2003 (NSB, 2006) The return to R&D investment, both social and private , are consistently assessed to be high. Mansfield et. Al (1977) found that the social returns from R&D investment to be 56 %, and private returns to be 25%

23. …Low-tech: Structural change Prosperity & declines! • Innovative countries and regions have higher productivity and income than the less innovative ones (Fargerberg, 2005). • Entire industries, such as the Swiss watch industry, and geography regions, such as Silicon Valley in California, can be invigorated or depressed by technological change (Saxenian 1994; Utterback 1994).

24. ...and new economic theories New Growth Theory Evolutionary economics ”Traditional Neoclasical Economics” consider technology as an ”exogenous” factor GDP=F(Land, Capital, Labour)

25. Monday 12 sep • Read chapter 1 • Read chapter 2: 25-31 + 41-53, • Read chapter 3:54-60 • Arthur (2007)The structure of Invention, Research Policy 36: 274-287