Teaching Resources and Instructors’ Guidelines Chapter 3: Innovation, globalization and development ©2015 John Wiley and Sons Innovation & Entrepreneurship 3e by Bessant & Tidd

Innovation & Entrepreneurship 3e by Bessant & Tidd Learning Objectives ©2015 John Wiley and Sons Innovation & Entrepreneurship 3e by Bessant & Tidd

Value creating aspects of innovation The national system of innovation in which the firm is embedded, and which in part defines its range of choices in dealing with opportunities and threats. Its power and market position within the international value chain, which in part defines the innovation-based opportunities and threats that it faces. The capability and processes of the firm, including research, design, development, production, marketing and distribution. The ability to identify and exploit external sources of innovation, especially international networks. ©2015 John Wiley and Sons Innovation & Entrepreneurship 3e by Bessant & Tidd

International Innovation Globalization Entrepreneurship, innovation and growth Efficiency and transparency Regulatory and legal framework ©2015 John Wiley and Sons Innovation & Entrepreneurship 3e by Bessant & Tidd

Four Ways of Being Global (2016) Source: Foreign Policy and A.T. Kearney

Obstacles to International Entrepreneurship ©2015 John Wiley and Sons Innovation & Entrepreneurship 3e by Bessant & Tidd

Emerging Markets of new players ©2015 John Wiley and Sons Innovation & Entrepreneurship 3e by Bessant & Tidd

Examples of emerging economy innovation   ©2015 John Wiley and Sons Innovation & Entrepreneurship 3e by Bessant & Tidd

Examples of emerging economy innovation   ©2015 John Wiley and Sons Innovation & Entrepreneurship 3e by Bessant & Tidd

Innovation & Entrepreneurship 3e by Bessant & Tidd Summary In formulating and executing their development and innovation strategies, business firms cannot ignore the national systems of innovation and international value chains in which they are embedded. Through their strong influences on demand and competitive conditions, the provision of human resources, and forms of corporate governance, national systems of innovation both open opportunities and impose constraints on what firms can do. ©2015 John Wiley and Sons Innovation & Entrepreneurship 3e by Bessant & Tidd

Innovation & Entrepreneurship 3e by Bessant & Tidd Summary However, although firms’ strategies are influenced by their own national systems of innovation, and their position in international value chains, they are not determined by them. Learning (i.e. assimilating knowledge) from competitors and external sources of innovation is essential for developing capabilities, but does require costly investments in R&D, training and skills development to develop the necessary absorptive capacity. ©2015 John Wiley and Sons Innovation & Entrepreneurship 3e by Bessant & Tidd

Innovation & Entrepreneurship 3e by Bessant & Tidd Summary Recent developments have accelerated the globalization of innovation such that countries like India, Brazil and China are major players and even tiny economies like Singapore and Denmark are playing an increasingly important role in creating the knowledge on which future generations of innovation may be built. ©2015 John Wiley and Sons Innovation & Entrepreneurship 3e by Bessant & Tidd

Innovation & Entrepreneurship 3e by Bessant & Tidd Summary It is not countries but firms which carry out much of the R&D – and their activities and locations are themselves becoming globalized. New players are joining the old established giants and playing an increasingly significant role in a world characterized by knowledge flow and open innovation. ©2015 John Wiley and Sons Innovation & Entrepreneurship 3e by Bessant & Tidd

Innovation & Entrepreneurship 3e by Bessant & Tidd Summary On the demand side of innovation the pattern has shifted out of all recognition in the past decade. Most population growth is in the regions of the world where economic growth is also accelerating, driving rising incomes and expectations and creating an explosion of market demand. These ‘emerging markets’ are often different in shape, size and segmentation, but they represent one of the major drivers for innovation in products and services. ©2015 John Wiley and Sons Innovation & Entrepreneurship 3e by Bessant & Tidd

Innovation & Entrepreneurship 3e by Bessant & Tidd Summary We have already seen the growing importance of user-led innovation, so in a world where much of the growth is coming from very different places with different user characteristics, we should expect to see significant shifts in innovations which are aimed at meeting their needs. ©2015 John Wiley and Sons Innovation & Entrepreneurship 3e by Bessant & Tidd

Innovation & Entrepreneurship 3e by Bessant & Tidd Assessment questions What factors influence the location of innovation, and how might these constrain the globalization of innovation? How can firms learn from overseas sources of innovation? Compare the development of capabilities in China and India. What are the key lessons for developing economies?      ©2015 John Wiley and Sons Innovation & Entrepreneurship 3e by Bessant & Tidd