Unit 2 Lecture 2

1. Unit 2Lecture 2 INNOVATION & CREATIVITY

2. COVERAGE : • Defining Innovation • Types of Innovation • National Innovation System • Creating Innovative Environment • Managing Innovations

3. CREATIVITY AND INNOVATION How innovative are you?

4. Defining Innovation

5. Defining Innovation Innovation comes from a Latin word INNOVATIO meaning to RENEW or CHANGE “ New products, business processes and organic changes that create wealth or social welfare” – OECD “ Fresh thinking that creates value” “ Successful commercilaisation of a novel idea” “ Application of knowledge in a novel way, promarily for economic benefit” – Economic Intelligence Unit

6. IMPORTANCE OF INNOVATION How important is innovation to your organsiation’s long term success ? • Critically important : 47 % • Important : 40 % • Somewhat important : 12 % • Somewhat unimportant : 1 % ( EIU Survey – 2006)

7. IMPORTANCE OF INNOVATION IN INDIA • 17 % LARGE FIRMS RANK INNOVATION AS TOP STRATEGIC PRIORITY • 75 % RANK INNOVATION AS THE TOP 3 PRIORITIES • 81 % STRONGLY AGREE THAT INNOVATION HAS BECOME CRITICAL TO GROWTH AND COMPETITIVENESS • 42% LARGE FIRMS AND 17 % OF SMEs HAVE INTRODUCED NEW TO THE WORLD INNOVATIONS ( Innovation in India – National knowledge Commission 2007)

8. MISCONCEPTIONS • Creativity : It is the capabilities or act of conceiving something original or unusual • Innovation : It is the implementation of something new • Invention : It is the creation of something that has never been made before and is recognised as the product of some unique insight

9. MISCONCEPTIONS • Creativity – Ideas Invention – Novel ideas Innovation – Delivery of novel ideas 2. Every invention is innovation but every innovation is not invention 3. Invention is conversion of cash into ideas. Innovation is conversion of ideas into cash 4 Creativity is thinking new things. Innovation is doing new things. 5. Innovation is applied creativity 6.People are creative. Products or processes are innovative 7. Creativity is small component of innovation process 8.Innovation is 1 % inspiration and 99 % perspiration ( Thomas Edison)

10. Defining Innovation • “ INNOVATION IS DEFINED AS A PROCESS BY WHICH VARYING DEGREE OF MEASURABLE VALUE ENHANCEMENT IS PLANNED AND ACHIEVED , IN ANY COMMERCIAL ACTIVITY. THIS PROCESS MAY BE BREAKTHROUGH OR INCREMENTAL, AND IT MAY OCCUR SYSTEMATICALLY IN A COMPANY OR SPORADICALLY; IT MAY BE ACHIEVED BY : • INTRODUCING NEW OR IMPROVED GOODS OR SERVICES AND/OR • IMPLEMENTING NEW OR IMPROVED OPERATIONAL PROCESSES AND/OR • IMPLEMENTING NEW OR IMPROVED ORGANISATIONAL/MANAGERIAL PROCESSES IN ORDER TO IMPROVE MARKET SHARE, COMPETITIVENESS AND QUALITY, WHILE REDUCING COSTS ( National Knowledge Commission)

11. TYPES OF INNOVATIONS • PRODUCT INNOVATION $3000 cars, $300 computers and $ 30 mobile phones Nano car, Chota kool refrigerator, Tata-Swach water purifier • PROCESS INNOVATION Dell, Arvind care hospital • INNOVATION IN BUSINESS MODELS Hindustan lever ( Shakti project) • INCREAMENTAL OR BREAKTHROUGH INNOVATION PC, Cloud computing , Nepster • REVERSE INNOVATION

12. NATIONAL INNOVATION SYSTEM “THE NETWORK OF INSTITUTIONS IN THE PUBLIC AND PRIVATE SECTORS WHOSE ACTIVITIES AND INTERACTIONS INITIATE, IMPORT, MODIFY AND DIFFUSE NEW TECHNOLOGIES ( Freeman, 1987) “ THE ELEMENTS AND REALTIONSHIPS WHICH INTERACT IN THE PRODUCTION, DIFFUSION AND USE OF NEW, AND ECONOMICALLY USEFUL, KNOWLEDGE AND ARE EITHER LOCATED WITHIN OR ROOTED INSIDE BORDERS OF A NATION STATE” ( Lundvall, 1992) “ A SET OF INSTITUIONS WHOSE INTERACTIONS DETERMINE THE INNOVATIVE PERFORMANCE OF NATIONAL FIRMS” (Nelson, 1993)

13. NATIONAL INNOVATION SYSTEM “ THE NATIONAL INSTITUIONS , THEIR INCENTIVE STRUCTURE AND THEIR COMPETENCIES, THAT DETERMINE THE RATE AND DIRECTION OF TECHNOLOGICAL LEARNING ( OR THE VOLUME AND COMPOSITION OF CHANGE GENERATING ACTIVITIES) IN A COUNTRY “ (Patel and Pavitt 1994) “ THAT SET OF DISTINCT INSTITUIONS WHICH JOINTLY AND INDIVIDUALLY CONTRIBUTE TO THE DEVELOPMENT AND DIFFUSION OF NEW TECHNOLOGIES AND WHICH PROVIDES THE FRAMEWORK WITHIN WHICH GOVERNMENTS FORM AND IMPLEMENT POLICIES TO INFLUENCE THE INNOVATION PROCESS. AS SUCH IT IS A SYASTEM OF INTERCONNECTED INSTITUIONS TO CREATE, STORE AND TRANSFER OF KNOWLEDGE, SKILLS AND ARTEFACTS WHICH DEFINE NEW TECHNOLOGIES “ ( Metcalfe,1995)

14. CHALLENGES The researchers in R&D per million people in 2006: India (119), China (715), South Korea (3723), US (4628) and Japan (5300) R&D expenditure - 0.8 per cent of GDP Education , skill & infrastructure need new investments Need more productivity from the existing institutions Linkages between academia, research and industry need to be strengthened

15. CHALLENGES India Ranked 119 of 149 countries in the 2004 Science Citation Index India produces only 6,000 PhDs a year in science and 1,000 in engineering Less than 20 % of public support for R&D is for civilian applications Indian Institute of Technology was granted 3-6 patents a year compared with 64 for the Stanford and 102 for the Massachusetts Institute of Technology (McKinsey) According to WIPO statistics (2009) India was granted 7,539 patents while the equivalent number for Japan was 1,64,954, the US was 1,57,283, the Republic of Korea was 1,23,705, and China was 67,948 In 2006, India had 119 researchers in R&D per million people, while China had 715, South Korea had 3723, US had 4628 and Japan had 5300

16. STATUS OF INNOVATION IN INDIA As per Global Innovation Index rankings ( 2011) : India ranks 62 and its rank was 56 and 41 in 2010 and 2009 Most innovative countries are Switzerland, Sweden, Singapore, Hongkong, Finland, Denmark, USA, Canada, Netherlands and UK India ranks after South Africa, Serbia, Oman, Argentina, Thailand As per survey of Economic Intelligence Unit ( 2006) India ranks at 50 after Turkey, Jordan, Cuba, Bulgaria etc Finland, Denmark, USA, Switerzland, Sweden, Netherlands, Australia, Canada, Germany and France are at the top.

17. INNOVATION PENTAGON

18. Solve the problem Remove three sticks to leave four

19. See this figure? Divide the figure below into as many pieces as you can by making four straight cuts with a long knife

20. 2 Dimensions=11 Cuts and pieces

21. 3 dimensions=14 imagine it’s a cake

22. Another Perspective Fold it after each cut=16

23. New Challenge A company manufactures glassware. The last step of the process is to wrap glasses individually in used newspapers and then place them in a specially designed box. The box is then sealed. Management notices low productivity with this last step, observing that workers occasionally stop to read the newspapers? What can management do to increase productivity?

24. Steps to Personal Creativity 1. Accept that you can be creative 2. Question traditional assumptions 3. Expand your problem-solving styles 4. Employ creativity techniques 5. Practice thinking in new ways 6. Learn when your creative thinking is best Adapted in part from Higgins, James M. 1997. Escape From The Maze. New York: New Management Publishing.

25. Relevance to Globalization In a rapidly changing global world, managers must use all their abilities to anticipate opportunities and threats

26. Future Visions of the Auto Industry Fuel injections will require much less gas Need for lean production There will be need for small autos to serve utilitarian mass markets There will be more women drivers in Europe and Asia Emotions will be used to promote products Increased speed limits More roads will be needed

27. Future Visions of the Food Industry This is a recession-proof industry with very slim profit margins We see segmentation of markets and niche development Many consumers/nations leapfrog to the latest trends rather than following a particular development process The natural environment is increasingly important Computer technology linking suppliers gets food to market at a lower price In Western countries there is a trend toward less cooking in the home

28. Envisioning Techniques • Linear • step-by-step; scenario planning, etc. • Intuitive • imagery; brainstorming; analogy

29. Stimulants to Work Creativity* 1) FREEDOM in deciding work to do or how to do it 2) CHALLENGE to work hard on important projects 3) RESOURCES needed to do the work 4) ENCOURAGEMENT from a supervisor who is a good work model, sets appropriate goals, supports and has confidence in the work group 5) WORK GROUP SUPPORTS such as diverse skills, people who communicate well, are open to new ideas, constructively challenge one another’s work, trust and help each other, and feel committed to their work 6) ORGANIZATIONAL ENCOURAGEMENT in a culture that supports creativity and communicates a shared vision of organization

30. Obstacles to Work Creativity 1) ORGANIZATIONAL IMPEDIMENTS such as internal political problems, harsh criticism of new ideas, destructive internal competition, avoidance of risk and overemphasis on the status quo 2) WORKLOAD PRESSURES such as extreme time pressure, unrealistic expectations, or distractions

31. Weigh the Odds You have 50 coins of which one is slightly heavier than all others. This weight difference can be detected on a balance scale What is the least number of weighings required to find the heaviest coin?

32. Summary Innovation comes from a Latin word INNOVATIO meaning to RENEW or CHANGE “ New products, business processes and organic changes that create wealth or social welfare” – OECD “ Fresh thinking that creates value” Misconceptions • Creativity : It is the capabilities or act of conceiving something original or unusual • Innovation : It is the implementation of something new • Invention : It is the creation of something that has never been made before and is recognised as the product of some unique insight

33. Laqs and Saqs Explain Innovation with Example Explain Creativity with Example What are the Challenges in Implementing Innovations.