ISF

• Innovation is the practical implementation of ideas that result in the introduction of new goods or services or improvement in offering goods or services.
• Joseph Schumpeter, an economist and former Minister of Finance, Austria, is known as the "Godfather" of innovation studies.
• Schumpeter stated that entrepreneurs will seek to use technological innovation to gain strategic advantage.
• Schumpeter also stated that innovation leads to creative destruction, which is the constant search to create something new which simultaneously destroys the old rules and establishes new ones.
• Innovation can be categorized into types such as incremental, disruptive or discontinuous, sustaining or modular, and radical or architectural.
• Cumulative gains in efficiency are often much greater over time than those which come from occasional radical changes.
• The concept of Platform or Robust Design allows for enhancement and improvement over many years from the original design concepts.
• The 4PS of innovation include Product, Process, Position, and Paradigm.
• Discontinuous innovation is a major change that creates a new market or significantly transforms an existing one, also known as breakthrough or disruptive, often built on new technology platforms, and is more difficult to commercialize than incremental.
• The advantages of discontinuous innovation include potential to create new markets or significantly disrupt existing ones, potential for high rewards, ability to stay ahead of the competition, and potential to solve important problems.
• The disadvantages of discontinuous innovation include high level of risks, need for a different business model, need for a strong team, possibility of failure, and need for a long-term commitment.
• Impact on pharmaceutical and agricultural industries is expected to be of critical importance even if not yet maximized.
• Biotechnology, materials, IT, and the new or knowledge economy are the four factors influencing effective innovation strategy.
• Velocity in innovation strategy refers to the pace of change of the relevant science, technology, and markets.
• Institution in innovation strategy refers to the role of the government, regulation, and other stockholders.
• Challenge in innovation strategy captures how demanding customers are in terms of product performance, customization, and problem-solving.
• Uncertainty in innovation strategy captures the unsolvable and unpredictable technology and markets.
• Firm-specific competencies have become increasingly influential among economists to explain why firms are different and how they change over time.
• Core competencies approach places the cumulative development of firm-specific technological competencies at the center of the corporate strategy.
• No widely accepted definition or measure of technological competencies exists.
• Technological competencies bypasses two central tasks of corporate technology strategy: to identify and develop the range of disciplines or fields that must be combined into a functioning technology, and to identify and explore new competencies that must be added if the functional capability is not to be obsolete.
• Richard Hall’s Theory of measuring competencies includes intangible assets and intangible competencies.
• The successful development and exploitation of core competencies does not depend on management’s ability to forecast accurately long-term technological and product developments.
• Rather, it is through a long process of trial and error that a new competence may emerge.
• Three related mechanisms affecting the acquisition of competencies are motivation, insight, and knowledge.
• Discontinuous innovation goes through phases such as understanding the market opportunity, identifying and assessing the risks, developing a strategy, building a strong team, and understanding the characteristics of discontinuous innovation.
• Fluid or Ferment Phase refers to the co-existence of old and new technology, with rapid improvements of both, also known as the Sailing Ship effect.
• The Target in the context of innovation is what the new configuration will be and who will want it.
• The Technical in innovation is how new technological knowledge will be harnessed to create and deliver the new configuration.
• Transitional Phase is the period in which the dominant design emerges and emphasis shifts to imitation and development around it, also known as the Developmental Phase.
• The firm’s established product base and related technological competencies will influence the range of technological fields and sectors in which it can compete.
• Specific Phase is when the concept of innovation matures, incremental innovation is more significant, and emphasis shifts to factors like cost.
• The nature of product and customers will strongly influence the degree of choice between quality and cost.
• Discontinuous Innovation is when a firm finds out about a new technology but decides against following it because it does not fit with their perception of the industry or the likely rate and direction of its technological development, examples include Kodak’s rejection of the polaroid process and Western Union’s dismissal of Bell’s telephone invention.
• Christensen’s Disruptive Innovation Theory explains reasons for failure as not being able to cope up with a breakthrough in technology and not being able to cope up on the emerging new markets with very different needs and expectations.
• Innovation can be viewed as a core business process, consisting of Searching, Selecting, Implementing, and Learning.
• Innovation leadership and innovation strategy in small firms are influenced by two features of the firm’s environment: the National System of Innovation and market position.
• Searching in innovation involves scanning the environment (internal and external) for, and processing relevant signals about, threats and opportunities for change.
• Factors influencing local demand for innovation include competitive rivalry, which stimulates firms to invest in innovation and change, else the existence is threatened; lack of competitive rivalry makes firm less fit to compete on global markets through innovation.
• Selecting in innovation involves deciding which of the signals respond to on the basis of the strategic view of how the enterprise can best develop.