Innovation & Knowledge Management -
Chapter Summaries
Chapter 1: Innovation - What it is and Why it Matters
1.1 Introduction
Innovation is driven by the ability to see connections, to spot opportunities and to take
advantage of them. It is about opening up new markets and offering new ways of serving
established and mature ones.
1.2 Why innovation matters
Often success derives in large measure from innovation. There is a strong correlation
between market performance and new products. New products can help capture and retain
market shares, and increase profitability in those markets. New product development is an
important capability because the environment is constantly changing. E.g. legislation and
competitors may open new pathways or close down others.
Strategic advantages through innovation are complexity, novelty, legal protection, timing
etc. L1, p7
1.3 Old questions, new context
Changing context for innovation
1. Acceleration of knowledge production
2. Global distribution of knowledge production
3. Market fragmentation
4. Market virtualization
5. Rise of active users
6. Development of technological and social infrastructure
Joseph Schumpeter: Entrepreneurs will seek to use technological innovation to make
profits, thereby destroying old structures and creating new ones. (creative destruction)
Edison: Innovation is the process of the need to complete the development and exploitation
aspects of new knowledge, not just its invention.
1.5 A process view of innovation
There are four key phases of a model of innovation:
Search How can we find opportunities for innovation?
Select What are we going to do - and why?
Implementation How are we going to make it happen?
Capture How are we going to get benefits from it?
Success of failure? Having a clear and focused direction and creating the organizational
conditions to allow focused creativity.
Scopes for innovation
Sometimes it is about completely new possibilities. Equally important is the ability to spot
where and how new markets can be created and grown. Innovation is also about offering
new ways of serving established and mature markets.
4P approach
Product innovation
Process innovation
Position innovation
Paradigm innovation
1.6 Exploring different aspects of innovation
Types of innovation:
(1) Degree of novelty – Incremental or radical innovation?
Incremental innovation - doing what we do but better
Radical – do something different
Level of novelty?
(2) Platform and families of innovation
Development of a basic platform which can be extended in the form of a product
family. Powerful ways for companies to recoup their high initial investments in R&D
by developing the technology across a number of market fields.
- ‘Walkman’ originally developed by Sony as a portable radio and cassette system; the
platform concept has come to underpin a wide range of offerings from major
manufacturers, CD, DVD, MP3
(3) Discontinuous innovation – what happens when the game changes?
Sustainable: innovation build on the firm’s existing knowledge base
- Intel’s Pentium 4 built on the technology for Pentium III.
- Discontinuous:
- Innovation that creates a new market by allowing customers to solve a
problem in a radically new way. Closely related to radical innovation.
- Requires a good deal of user-learning, often disrupts his or her routine, and
may even require new behavior patterns.
- Sources: new market emerges, new technology emerges, new political rules
emerge, running out of road, deregulation, unthinkable events, business model
innovation etc. (p32-36)
- Photocopier machines, personal computer, internet.
(4) Level of innovation – component or architecture
Component –Innovation that change things at the level of components
Architecture – Innovation that involve change in a whole system
(5) Timing – the innovation life cycle
Chapter 3 (2): Innovation as a Core Business Process
Chapter 5 (3): Building the Innovative Organization
Chapter 4: Developing an Innovation Strategy
Chapter 6 (5): Sources of Innovation
Chapter 7 (6): Search Strategies for Innovation
Chapter 8 (7): Innovation Network
Chapter 10: Creating New Products and Services
Chapter 11: Exploiting Open Innovation and Collaboration
Chapter 13: Capturing the Business Value of Innovation
Chapter 14: Creating Social Value
Chapter 15: Capturing Learning from Innovation
