Article review: An overview of innovation by Stephen Kline and Nathan Rosenberg Arto Wallin

Characterization of innovation Technological innovation is understood very broadly Not only about hightech (as often in common language) But also "lowtech" products can be seen as technological innovations,( e.g. Pencil or soap) 3 main points: Innovation is transformation process that intertwines technological and economic considerations Innovation processes and systems used are complex and variable --> no single formula Innovation is very difficult to measure Diffusion of innovation to other industries (e.g. Microchip/computers) Cumulative nature of innovations Innovations go through drastic changes over their lifetime --> improvements after first introduction may be vastly more important Innovation may be a: New product New process of production New material (for product) e.g. Cheaper material Innovation in organization / value chain Increased efficiency, better support for a given product, or lower costs Improvement in instruments or methods of doing innovation

Characterization of innovation Measurement of the innovation: Innovation diffusion between industries

Linear model Misrepresents the innovation process as a smooth well- behaved linear process No feedback paths Problems: In real world: Inadequate information, high uncertainty, fallible people Central process of innovation is not science but design Innovation demands feedback , and effective innovation demands rapid, accurate feedback with appropriate follow-on actions

Chain-linked model of innovation 5 major paths for innovation: Central chain of innovation (C) Feedback path (F,f) Chain-linked path (D, K, R) Radical innovation (D) Feedback from the products of innovation to the science (I,S)

Chain-linked model of innovation 5 major paths for innovation: Central chain of innovation (C) Path begins with design and continues through development and productions to marketing

Chain-linked model of innovation 5 major paths for innovation: Central chain of innovation (C) Feedback path (F,f) Iteration of steps Connect back directly from perceived market needs and users to potentials for improvement of product and service performance

Chain-linked model of innovation Systemic nature – how components interact... "process science" - Pure long-range science 5 major paths for innovation: Central chain of innovation (C) Feedback path (F,f) Chain-linked path (D, K, R) Linkage from science to innovation extends all through the process of innovation Use of science occurs in two stages: (K) Using existing stored knowledge, science (R) Creating new knowledge through research "Only when all stages fail to supply the needed information, as often happens, is a call for the second part of science, research needed and justified"

Chain-linked model of innovation 5 major paths for innovation: Central chain of innovation (C) Feedback path (F,f) Chain-linked path (D, K, R) Radical innovation (D) New science enables radical innovations Initiate major changes that create whole new industries E.g. Semiconductors, lasers, atom bombs

Chain-linked model of innovation 5 major paths for innovation: Central chain of innovation (C) Feedback path (F,f) Chain-linked path (D, K, R) Radical innovation (D) Feedback from the products of innovation to the science (I,S) Enabling scientific achievements E.g. Telescope --> Galileo --> modern astronomy Microscope --> Pasteur --> modern medicine

Conclusions Innovation implies creating the new, and the new contains elements that we dont not comprehend at the beginning and about which we are uncertain Spectrum of innovations (from almost no uncertainty to very great uncertainty) Innovation (especially with great uncertainty) is inherently a learning process Easy to overplan False summit effects major contributor to conflicts between innovators and managers Preplanning should focus on goals, rough overall time schedules and budgets Innovation is changing used to be significant competitive advantage, but is now seen more of a cost of staying even in marketplace However, in some industries, the development of new technological products is very expensive (e.g. Pharma, aviation) High financial risks High entry barriers and subcontracting (specialisation) May create resistance to radical innovations

Conclusions Chain linked model provides more accurate representation of innovation process than earlier, simpler models Uncertainty about the end-product, production process and marketing can be reduced at every feedback step and links Initiation step (most often) is not science but design Research is used more often to solve problems all along the chain of innovation Key lesson: process of innovation needs to be viewed as changes in a complete system including market environment, production facilities and knowledge, and the social contexts of the innovating organization "Any model that describes innovation as a single process or attributes its sources to a single cause, or gives a truly simple picture will therefore distort the reality and thereby impair our thinking and decision making!"