Lecture 2 Innovation Management GM0401

1. Lecture 2Innovation ManagementGM0401 Johan Brink Wednesday 8 sep

2. This lecture The external context of innovation • Techno-economic paradigm • Increased R&D spending • Innovation system • Handout case 1

3. Techno-economic growth • GDP= F (Land, Capital, labor, TFP)

4. Techno-economic growth • Total Factor Productivity • Advances in knowledge • Catch-up effect (adoption of existing technologies) • Structural/improved allocation of resources (from low productivity to high) • Economies of scale • Foreign trade effect • Unexplained 20-50% 10-20% 20-40%

5. Revolution & Improvement Opportunities Application & Prosperity Saturation of markets Stagnation, Recession & Depression Low rates & Speculation Techno-economic paradigm

6. Kondratiev: Techno-economic ~50 year Kuznets: Infrastructural investment ~20 Juglar: Fixed investment ~10 Kitchin: Inventory ~3 - 5 Techno-economic paradigm Joseph Schumpeter proposed cluster of innovations as an explanation

7. Increased R&D spending • In 1676, Isaac Newton wrote famously to Robert Hooke, “If I have seen further it is by standing on the shoulders of giants.” • (Forever) Increasing returns? • Fishing out ideas –increase R&D cost • Takes increasingly long time to learn accumulated knowledge • Specialization –”Death of renaissance man” – Teamwork & management

8. Increased R&D spending

12. What is a system? Innovation systems

13. What is a system? Innovation systems Macroeconomic and regulatory context Cluster of industries International networks Communication and infrastructure Education and training system Firms and innovations Science system Supporting institutions Factor markets Product markets

14. Stemcells 2001 Laws History Innovation systems Macroeconomic and regulatory context Cluster of industries International networks Communication and infrastructure Education and training system Firms and innovations Science system Supporting institutions Factor markets Product markets

15. Innovation systems • Regional Marshall,1890 ...and again in the 70ties • Industrial districts

16. Innovation systems Clusters • Traded • Non-traded Diamond model; M. Porter (The competitive advantage of nations)

17. Innovation systems • Technological • Generation • Diffusion • Utilization

18. CASE 1

19. What to do? • Answer the questions: 3 pages, New Times Roman 12 • Prepare slides/presentations (~20 min) • Send text and slides no later than 18.00 Tuesday 14/9 • There are two groups per company • Only one group will present, the other will lead the discussion (ask questions, and complement with their ideas) • Use all sources of info such as the web, papers..

20. Questions • Describe the development and the potential future of the firm in terms of PLC • Describe the development and the potential future of the firm in terms of TLC • How does the Innovation system look like? • Are there any barriers limiting the diffusion of this product? What do they look like? • What would you advice the firm to do in order to increase sales (product diffusion) in; • The short run? • The long run?

22. Some additional material Wave energy • http://www.oceanharvesting.com • http://www.iea-oceans.org/_fich/6/Annual_Report_2009_v2.pdf • http://ec.europa.eu/environment/etap/ Electric Car • http://www.Teslamotors.com • http://www.acea.be/ - Printed • http://www.innovateuk.org/ourstrategy/innovationplatforms/lowcarbonvehicles.ashx Telecom • http://www.neonode.com/ • http://www.gsmarena.com/neonode-phones-22.php -Neonode old products • Ericsson Trends - Printed