Innovation & Knowledge

Describe organizational learning

(March, 1991) gaining/creating knowledge (new knowledge/recombining existing knowledge) to develop something novel that can be translated into innovation

what is formal and informal university-industry collaboration?

Formal: contract, such as a joint research project, a licensing deal or contract research Informal: all informal ways of interaction, for example at conferences, workshops or informal meetings

Explain competence-enhancing innovation

builds on a company's existing knowledge and technology Example: Sony that decides to build digital cameras

Explain search depth in open innovation

the number of different external innovation sources that a firm draws heavily from

why are open science threatened?

the role of patents - exclude others from using an invention - secrecy undermines the ability of other researchers to build on those research results

Explain process innovation

Process innovations refer to the way an organization conducts its business, for example, new manufacturing processes or marketing techniques.

Explain search breadth in open innovation

the number of different external innovation sources a firm draws from

Which corporate functions is the key driver of firm's long term performance?

'The answer depends on the company' - Marketing - Innovation management - Finance - Business Development - Production - Human ressource management - Supply-chain management - Distribution - Accounting

Who profits from innovations?

- Customers: value exceeds price - Suppliers: selling larger quantities when innovation gets popular - Imitators: saving R&D cost - Innovators: of course

explain the negative effects of open innovation

- Grafer (sur smiley) antal eksterne kilder After a certain threshold, firms may over search because they fail to attend to the vast diversity of innovation sources, with transaction and coordination costs overtaking the positive effects of widely exploring external innovation knowledge

Explain innovation as a process

- Idea -> Discovery -> Research -> Development -> Invention -> Market launch -> Exploitation There are feedback loops and fluid boundaries between the stages. OR 'The innovation funnel': another process model with a wide opening and a narrow end. The idea is that if a constant stream of ideas is screened for viability, ideas that turn out not to be viable are discarded. Over time the number of ideas narrows down to only a few that the company seeks to pursue. Along the way, the ideas are developed further and need to clear certain hurdles, for example related to their likely commercial potential.

which are the 5 forms of IPR protection?

- Patents: new inventions - Copyrights: original creative forms (text, music) - Tade marks: use of identification (logo, words,symbols) - Registered designs: external appearance (cola bottle, design stol) - Trade secrets: valuable info (fx recipe, customer list) Informal protection: complex design so it is hard to copy

Explain exploitation in organizational detail

- Strategy: deliberate strategies, clear goals - Leadership: managing contradictions - Structure: mechanistic - Incentives: pay for performance - Processes: execution-oriented to generate incremental innovation eg. use stage gate model - Sources of innovation: internal - Acquisition (fx acquisition of startup): integration (big firm) - Customer involvement: mainstream customers fx focus groups

Explain exploration in organizational detail

- Strategy: emerging strategies - Leadership: create space for learning - Structure: organic - Incentives: tolerance for early-failures and rewards for long-term successes - Processes: search-oriented, fx lean startup methods, open and collaborative - Sources of innovation: external - Acquisition (fx acquisition of startup): autonomy - Customer involvement: lead users

What kinds of risk are associated with innovation?

- Technological risk: the technology turns out to be infeasible. - Market risk: the threat of competition on the market. - Financial risk: the financial resources required to finance an innovation project that may turn out more costly than expected. - Legal risk: the risk of unwittingly infringing on someone else's intellectual property rights - Time-related risk: the window of opportunity that needs to be open for an innovation to succeed on the market. If developing a new product took too long, customers may no longer be interested in it as a seemingly simple product.

What is open innovation?

- a distributed innovation process - based on purposively managed knowledge flows across organizational boundaries, - using pecuniary and non-pecuniary mechanisms. (use both inbound and outbound innovation)

What are differences between science and industry? (institutional logics)

- academic logic: often scientist - commercial logic: often industrial researchers These differ considerably from each other in terms of their mission, goal, type of research, how results are disclosed or not, what the working practices are, how they are financed, and how individuals are motivated.

Quickly explain the history of innovation

- geniuses, lone inventors --> R&D labs in companies or separate units --> open models of innovation, multi spanning activity, can happen everywhere

Benefits of Crowdsourcing

- numbers and diversity (many ideas) - problem-solving success and speed (decrease time to find solution) - fresh perspective

What cannot be patented?

- scientific discoveries without industrial application - scientific or mathematical methods - aesthetic creations (music) - devices contrary to accepted physical laws (Time Machine) - new animal

What are the contract and IP considerations in university-industry collaboration?

1. Foreground IP: who will own and who will have the use rights 2. Background IP: describes all IP that the partners bring into the collaborative project 3: Publication: what can be published and when 4: Confidentiality: what project results will remain confidential

3 aspects/traits of digital innovations

1. Occur in digital platforms 2. Inno. is created through distributed networks 3. Inno. consists of combinations

Explain knowledge distribution

1. functionally distributed: functional roles in the value chain 2. contextually distributed: contextual or cognitive proximity vs. distance 3. geographically distributed: geographical proximity vs. distance

Explain Teece's 'profiting from innovation' framework

3 areas innovators need to pay attention to in order to understand how they benefit from innovation: - Appropriability regime - Dominant design paradigme - Complementary assets

Explain component innovation

A component innovation (modular innovation), entails changes to one or more components of a product system without significantly affecting the overall design. fx adding gel to a bicycle seat

What is the science push model?

A linear model to explain innovation (1950s) Scientific discovery → invention → commercialization → sales

What is pyramiding search?

Active search. Interview an expert who then know who to talk to next, and next and so on. The efforts of pyramiding search is lower than just screening, because you use experts to tell who to talk to next it enables the organization to be more flexible in the problem formulation, learn from interview to interview and also get more detailed information compared to broadcast search

What are the two search methods in open innovation?

Active search: org. search for solvers that have the right knowledge, but they don't always know who has the right answer Passive search (by activating self-selection among potential problem solvers via open calls: org. say they have a problem and wait for people to come with solutions - crowdsourcing and broadcast search

Dahlander & Gann (2010) on advantages and disadvantages of open innovation

Advantages: accessing external ideas and resources Disadvantages: involve challenges in protecting intellectual property and appropriating benefits from innovation.

What is antecedents and moderators of organizational ambidexterity?

Antecedents: what drives ambidexterity (structure, context, leadership) Moderators: what makes ambidextrous arrangements more or less likely to succeed

Explain closed innovation models vs open

Closed: using only internal knowledge, going in one market Open: using both internal and external knowledge, can also go in different markets og make new markets

Explain business model innovation

Companies commercialize innovative ideas through their business model. Eventually, it is the company's business model that determines how successful it is with its innovations. When companies decide to change their business model, we call it business model innovation.

Explain contextual ambidexterity

Contextual ambidexterity enables employees to carry out both exploratory and exploitation learning processes without restricting certain time periods or certain business units to exploration. So exploration can emerge basically everywhere and also in unintended ways. The core idea is that ambidexterity is rooted in an individual's ability to explore and exploit. This is very different from achieving structural ambidexterity, where only the top managers need to be ambidextrous. What influences an individual employees ambidexterity: personal characteristics, prior knowledge, hiring strategy, rewards, socialization, or autonomy

What is Schumpeter thoughts on creative destruction?

Creative destruction is a result of radical innovation and innovation always requires new technical or scientific outputs combined with economic exploitation

What innovation is not?

Creativity, Knowledge, Entrepreneurship. These are building blocks to innovation, but is not commercialization.

Explain the choices of open innovation approach

Depends on: - the degree of innovation a company needs to aim for, ranging between incremental and radical. More radical innovation needs more distant knowledge sources being accessed and leveraged in open innovation search. - the complexity of the innovation problem. More complex problems need flatter versus hierarchical governance forms - the hiddenness of the solution knowledge. Hidden and widely dispersed solution knowledge needs more self selection versus centralized selection search.

Why is innovation important?

Economic growth leading to the creation of jobs and societal welfare. Allows companies to gain a 'temporally' monopoly = higher prices. Innovation allows companies to become profitable, until the speed of imitation catches them.

what are the 4 models of university-industry collaboration?

Idea lab: open model, academics are invited to contribute with ideas on a certain topic. attracting new partners and building relationships that could be developed Grand Challenge: seeks to build an innovation ecosystem beyond individual joint research projects and may be achieved through industry consortia that seek to address a significant societal problem. All through an endowed research centre at a university. Extended Workbench: seeks to harness the capabilities of universities to solve near term problems. Contracts typically govern these interactions, which are mainly transactions in the sense that industry pays for science to solve a specific problem Deep Exploration: characterizes a model of interaction in which both universities and industrial partners dedicate substantial resources to probe deeply into a research area

What is absorptive capacity?

In order to benefit from external knowledge, companies need to possess so-called absorptive capacity, the capacity to recognize and assimilate external knowledge. Companies can usually build absorptive capacity by engaging in research and development themselves

Explain individual vs. organizational creativity

Individual: characteristics, general intellectual abilities, thinking styles, existing knowledge personality traits organizational: conditions that allow employees to be creative, structures, processes, routines, culture, and strategy

Explain Massa and Tucci (2014) on business model innovation

Innovation activity differs according to the industry life cycle. Fx smartphone industry. 1: lot of product innovation and firms 2: Dominant design establishes (iPhone) 3: firms focus on process innovation now instead of product innovation. to lower costs 4. no more process inno. firms start business model inno. (Apple Pay)

Schumpeters definition of innovation

Innovation as recombination. Innovation is the result of combining new and existing resources such as knowledge and technologies in a novel way. The newer resources and innovator uses, the higher are chances that the resulting innovation will be radically new. The more existing resources are used, the higher chances that the resulting innovation will be rather incremental

What is the difference between invention and innovation?

Innovations has been commercialized and introduced to the market. Inventions become innovations when they are commercially exploited. The patent office don't care about commercialization, so a lot of inventions has gained patents even though they are not innovations.

Describe March

Introduced 2 different learning processes: exploration and exploitation. Defines innovation search as part of the organizational learning process through which firms and other institutions attempt to solve problems by balancing exploration and exploitation. Org. learning: gaining/creating knowledge (new knowledge/recombining existing knowledge) to develop something novel that can be translated into innovation Innovation = a product of the learning organization, while at the same time only the learning organization can be an innovative organization.

Why does structural ambidexterity work?

It allows cross fertilization among units while preventing cross contamination. - The coordination happens at the managerial level and that enables the sharing of important resources such as cash, talent, customers between exploration and exploitation units. - But the organizational separation ensures that the distinctive processes, structures and cultures of the exploratory units are not overwhelmed by the forces of "business as usual". - On the other hand, the established units, the exploitative units, are not distracted by activities like launching new businesses. They can continue focusing their attention on exploitative tasks such as refining their operations, involving their products and serving their existing customers.

Explain architectural innovation

It is changing the overall design of the system or the way components interact. Fx. transition from high-wheel bike to todays bike

What is a business model?

Many things, but a model that describes how a company creates, delivers and captures value. It describes how companies can exploit the customers willingness to pay. Value creation: when customers are willing to pay a certain price for a product because it serves a certain purpose and problem Value delivery: Companies need to deliver that value to customer Value capture: they would also like to capture as much value as possible that the product sold creates to the customers

Explain incremental innovation

May involve only a minor change from (or adjustment to) existing practices. Example with Walkman and Ipod

pyramiding search vs. broadcast search

On the one hand, pyramiding search enables the organization to be more flexible in the problem formulation, learn from interview to interview and also get more detailed information compared to broadcast search. On the other hand, though broadcast search might be easier to facilitate, it does not require high interviewer cost or time. But the strength of both is they can give access to contextually distant knowledge, the thing we were after with these methods.

what are the 4 types of collaborative projects in university-industry collaboration?

Open science: unrestricted and dispersed acces Attenuated monopoly: unrestricted and concentrated acces. only one or a few project partners own and can actual use the project result Knowledge monopoly: restricted and concentrated. project results are also kept confidential Closed circle: restricted and dispersed acces. project results are kept confidential, but all partners in the consortium own and have access to them

explain Dominant design paradigme (Teece, 1996)

Pre-paradigmatic: lots of design variety, followers good chance of developing better designs DOMINANT DESIGN Paradigmatic: now price competition and process innovation

Explain the connection between product and process innovation

Product and process innovation can enable each other. For example, a new product may require a new manufacturing process, or a manufacturing process may depend on an innovative machine. It is important to understand that one and the same thing could be both product and process innovation, depending on the perspective. When UPS, the parcel delivery service, launches a new distribution service, it is a product innovation for UPS. If another company uses that distribution service in its delivery, it is a process innovation.

Explain product innovation

Product innovations are embodied in tangible goods or intangible services. Today's modern economies are largely based on services. McDonald's (service) introduced digital ordering kiosks and was able to save costs and offer a new experience to customers using the restaurant service.

How is digital innovation different from non-digital innovation?

Products used to be stable and easily differentiated 3 convergence characteristics: - User experience merged in one device (tv, radio, phone) - Combine digital and physical components in something 'smart' - combine industries (smartphone & payment services) 3 generative characteristics: - reprogrammable (easier than physical products) - inno. results in more inno. (waves) - data by individuals can be used to new inno. (restaurants)

explain protection vs. diffusion

Protection: greater control and a profitability Diffusion: Other companies working on similar designs may help improve and promote a technology (Tesla and electric cars)

Example of business model innovation

Ryanair: customers may not have a high willingness to pay for a Ryanair flight, but the low fares make it attractive to fly with them. Low costs, low quality staff, no meals,

what are the conflicting interest in university-industry collaboration?

Scientists: academic logic. seek interesting collaborations that can further their scientific career University: generating revenues by engaging in technology transfer, for example by licensing out or selling technologies to third parties Industry: seek access to the unique knowledge and skills they can find at universities, and they are also interested in hiring talented university graduates

What is Schumpeter thoughts on firm size for innovation?

Small entrepreneurial firms have advantages associated with higher flexibility, less formalization and bureaucracy. At the same time, they often lack the resources to innovate, particularly the financial resources. Larger firms are typically better equipped with resources and can engage in resource demanding innovation projects. But larger firms are also less flexible and have a more formalized and bureaucratic organization structure, which oftentimes stifles creativity. So it's unclear whether smaller or larger firms are the better innovators.

Explain the ways to achieve Organizational ambidexterity

Structural ambidex. (differentiation): putting exploration and exploitation activities into structurally separated business units, aligned by top management = big firms Contextual ambidex. (integration): creating an organizational context that enables employees to do exploration and exploitation activities at the same time = smaller firms Simultaneous attention: pursuing exploit. + explor. at the same time Sequential attention: temporarily cycling through periods of exploi + explor Static alignment: adopt and sustain a certain configuration over a longer time Dynamic alignment: enable different structural, contextual or sequential arrangements overtime In general, there is an agreement that achieving organizational ambidexterity is rather a dynamic activity than a static alignment of exploration and exploitation.

Research and development (R&D)

Structured process that aims at generating more knowledge = the way to innovation. - Basic research: gaining scientific insights and has little orientation towards practicability - Applied research: results from basic research are further developed with a concrete application in mind - Development: results from Applied Research are developed into specific solutions

Explain O'reilly and Tushman (2004) view on structural ambidexterity

Studied 35 breakthrough innovations - most of the breakthroughs emerged from ambidextrous organizations with structurally separated units having their own processes, structures and cultures working on radical innovation.

What is the outcome of science and scientific knowledge?

Technology is the outcome of actually applying scientific knowledge. The application of scientific knowledge for practical purposes, is called technology Companies often invest in technology but do not really want to invest in science and basic research. That is why government invest in universities. It also takes substantial investment by firms to actually benefit from scientific advances, they must invest into absorptive capacity and complementary innovation example: laser

Explain radical innovation

The degree to which it is new and different from previously existing products and processes. The distinction from incremental innovation is essentially about the degree of novelty of an innovation. The radicalness of an innovation is relative, it may change over time or with respect to different observers. Example with Walkman and Ipod

Explain NASAs open innovation home run

They used crowdsourcing. Problem: find reliable ways of predicting solar storms

Explain Dahlander & Gann (2010)

Titel: how open is innovation? Discusses the concept of openness in the context of innovation within organizations. Highlights the need for a conceptual framework to define and classify different dimensions of openness in innovation. Factors contributing to the rise of openness, such as changing work patterns, globalization, improved market institutions, and new technologies. They categorize open innovation into different forms of openness, both inbound and outbound, as well as pecuniary and non-pecuniary.

Explain geographical knowledge distribution

Valuable knowledge may be located in places that are far away from a company: US, Europe, Asia. It may also be found in close proximity, fx clusters, or science parks, which are characterized by the presence of universities, small and large companies, as well as incubators and services companies.

Explain competence-destroying innovation

When a new innovation destroys existing knowledge and competence in the industry. So companies need to adjust to the new innovation to still compete. Often seen in technology innovation. The emergence of digital cameras destroyed the polaroid camera. HÖVDING: if they got really popular, it could have been competence-destroying

Explain contextual knowledge distribution

When knowledge may be distant from one's own field of expertise Fx medical industry, valuable knowledge may be found in analogous markets. These are markets distant from the target market, in which essentially the same problem exists.

Can pyramiding search cross domain-specific boundaries?

Yes! experts will also make referrals into distant domains

what is a patent?

a right of ownership over an invention which is granted to an inventor by a government for a specified period of time Patents allow inventors to prevent others from making, using, or selling an invention without permission.

Explain Appropriability regime (Teece, 1996)

describes the degree to which a firm is able to capture the returns from its innovations. - determined by how easily or quickly competitors can copy the innovation - can be tight or loose regimes /industries - tight regime: codified knowledge, protectable, hard to copy, constrained new entrants (medical) - loose regime: tacit knowledge, not protectable, easy to copy, open new entrants (food)

what is 'the systems of innovation model'?

dominant view today innovation is seen as interactive nonlinear process which occurs in systems of interactions between firms, research institutions, government and other actors

Explain functional knowledge distribution

example: BMW Manufactures cars = process innovation BMW is a supplier to car rental companies BMW uses components from suppliers It becomes more interesting when users or suppliers move beyond their usual functional role to develop innovative courses.

What is local search?

exploitation (internal search). using knowledge close to their existing knowledge bases

What is distant search?

exploration (external search). move away from organizational routines to generate knowledge.

Explain exploration

exploration focuses on discovering what is yet to be known. While many well managed firms may be successful at exploitation, many of these are also poor at exploration. Exploration search means experimenting with new alternatives characterized by risk taking, variation, flexibility, discovery, or play. Embedded in these forms of innovation searches failure, respectively learning from failure. The results are uncertain, distant in terms of time and of course, also often negative.

Explain outbound innovation

export internal knowledge to external partners to maximize the value of the company's innovation activities

explain stokes matrix (science)

fundamental understanding? (yes/no) considerations of use? (yes/no) Pure basic research: yes & no (nuclear) Use-inspired basic research: yes & yes (pasteurization) Pure applied research: No & yes (light bulb)

what are the barriers of university-industry collaboration?

heterogeneity - Not all companies are equally likely to forge a collaboration with the university - firms are more likely to interact with universities both formally and informally, when they are larger, younger, more R&D intensive, internationally oriented and in high-tech industries they need to agree on IPR and who owns what. conflicting interests Not Invented Here syndrome

Explain search depth

how frequently an organization uses and re-uses existing internal knowledge. Long term using will eventually decrease the ability to innovate. therefore they need new external knowledge. (sur smiley)

Explain search scope

how widely an organization explores new (external) knowledge - affect the ability to innovate. (stigende)

Define innovation

innovations are qualitatively new products or processes that differ significantly from what existed before, a new way of doing things that is commercialized or adopted by an organization

Explain internal vs external sources of innovation

internal: the company itself, employees external: customers, market research, university research, suppliers

explain Complementary assets (Teece, 1996)

key in determining the extent to which innovators can benefit from their innovations. - a bundle of know-how and assets that are required by an innovator to actually commercialize an invention. can either be owned, acquired or contracted for access

what is scientific knowledge

knowledge generated in publicly funded research conducted at universities. external source

what is the science demand pull model?

market needs --> R&D --> commercialization

What is broadcast search? (passive)

people submit solutions to organizational problems that were posted freely. broadcast search might be easier to facilitate, it does not require high interviewer cost or time.

what are the 2 types of digital innovations?

personal-level: Hover running shoe, app to track movement Industry-level: B2B, 3D measurement device combination between physical and digital components that together create a digital innovation

Explain exploitation

relates to refining a companies existing competences or knowledge bases. It is characterized by terms such as efficiency, production, implementation, execution or choice. Usually the results of the exploitative innovation processes are positive, proximate and predictable. That means exploitation focuses on utilizing what firms already know. Most well managed firms are good at exploitation.

What does it require to integrate open innovation?

requires building absorptive capacity, including a strategy in support of open innovation, open innovation leadership, organizational designs in terms of structural, cultural, or procedural arrangements

What is the definition of digital innovation?

the carrying out of new combinations of digital and physical components to produce novel products

What is the difference for universities as external source than for customers and suppliers?

they are not profit oriented and scientists employed at such institutions work for the advancement of science, which is a public good.

How and why do companies protect their innovations?

to retain control and to appropriate the returns. limit imitations intellectual property rights (IPR), patent protection

explain tournament-based crowdsourcing and collaboration-based crowdsourcing

tournament: people competing to come up with the best solution and at the end you choose the one that you as an organization like the most. collaboration: it's rather an aggregate of individual contributions there is also something in between

explain the effects of open innovation

user generated ideas by means of crowdsourcing were significantly more novel and displayed higher levels of customer benefit as compared to ideas generated by professional engineers and designers. We furthermore found no difference between the feasibility of the best user generated ideas and the internal ideas.

Explain inbound innovation

using external knowledge to innovate internally

Explain Organizational ambidexterity

when leaders embed activities related to balancing exploration and exploitation into the firm at the same time. ambidexterity: fx using both right and left hands Ambidextrous organizations are capable of simultaneously exploiting existing competences and exploring new opportunities.

What is open science?

when universities have to publish their research to everyone Open Science stipulates that research results should be made publicly available to support the accumulative nature of science. Research builds on prior insights and not making research open would lead to a duplication of research effort. Openness also facilitates complementary research and allows to replicate and verify research results. In short, open science increases the efficiency and effectiveness of science

Explain the matrix to better understand radical and incremental innovation (Pearson, 1990).

x-axis: change in means (technology) y-axis: change in ends (markets) New tech. + new markets = radical New tech. + existing markets = Innovations induced by new means Existing tech. + new markets = Innovations induced by new ends Existing tech. + existing markets = incremental

Explain the matrix to better understand radical and incremental innovation (Henderson & Clark, 1990).

x-axis: core concept = key component (Reinforced or overturned) y-axis: linkages between core concepts and components (unchanged or changed) Overturned core con. + changed linkages = radical innovation Overturned core con. + unchanged linkages = modular innovation Reinforced core con. + changed linkages = architectural innovation Reinforced core con. + unchanged linkages = incremental innovation