Innovation in EISIGS Tony Larsson Professor of Embedded Systems and Henrik Florén, Associate Professor of Industrial Management

Innovation research role in EISIGS Teach the process of innovation and how to manage it Specific innovation research interests (examples): Product development processes (e.g. the front end of innovation) Business model innovation “Green innovations” Role in EISIGS: Make sure that the PhDs will learn the right things about innovation… Support the innovation parts of PhD work Organize courses and innovation activities

Why a focus on innovation in EISIGS? Companies are challenged by meeting the demands brought by the accelerating development of digital technology and the increased globalization of business environments There is a need for researchers that can recognize, utilize and develop the innovation potential of industrial companies “strengthen Swedish industry by training doctoral level researchers that have both technical depth and a broad understanding of industrial requirements, the innovation process and which innovations that can lead to business opportunities.” (citation from the EISIGS application)

Aims with the innovation constituent An awareness of how the PhD specialization in a technological field relates to the innovation capability of their company / institute An understanding of innovation systems (in which technology is developed) and what makes some companies’ able to explore and exploit opportunities in such innovation systems PhDs will learn more about the relationship between technology development and business development.

Aims (cont.) Complement technical expertise with an understanding of the interplay between technological development and business development The aim is not to make them innovation researchers EISIGS PhDs should be technology experts/researchers with an understanding of the business aspects of technological R&D

What is “innovation”? Invention = “Creating something new that has never existed before” (The New Oxford Dictionary of English, 1998, p. 960) Innovation = “Making changes to something established by introducing something new.” (The New Oxford Dictionary of English, 1998, p. 942) Innovation = Invention + Diffusion/Exploitation

Why is innovation important (cont.)? Out of the 500 companies originally making up the Standard and Poor 500 list in 1857, only 74 remained in 1997 (Foster and Kaplan, 2002) Of the top 12 companies which made up the Dow Jones index in 1900, only one (General Electric) survives today (Tidd and Bessant, 2013) Experiences of companies that are able to survive (e.g. 3M, P&G, Siemens), show that much of their longevity can be traced to a capacity to innovate on a continuing bases. Many companies that survive, change their core business over time. Innovation is key to this transformation.

Drivers of innovation Emerging technologies (e.g. digital photography) Competitor actions (e.g. Ryan Air) New ideas from customers, strategic partners, and employees (e.g. mountain bikes) Emerging changes in the external environment (e.g. “the green movement”)

1. Product innovation Introducing a new screen size for TVs Changing from a CRT TV to a flat screen Adding functionality such as Internet access to TVs 2. Process innovation Building new systems that assemble a TV set faster and cheaper Redesigning the assembly line so that TVs can be manufactured more reliably Outsourcing the production of the plastic covers on TVs so costs can be reduced and quality improved 3. Service innovation Changing the way dealers sell new TVs in order to cut costs Changing the way customers get rid of their old TVs by a take-back policy Offering credit finance options to allow customers to purchase TVs

Incremental innovation Low degree of “newness” Improving the old Builds on existing knowledge Keeps companies competitive in a short term Negatively correlated to breakthrough innovation

Radical innovation High degree of “newness” Dramatically changes social or business practices Leads to knowledge destruction/disruption Creates new markets Leads to rapid growth Includes great uncertainties: Technological Market

Incremental vs radical innovation asdfsad

Innovation and R&D; what is the connection? Innovation = Invention + Diffusion/Exploitation Develop something new that can be diffused on a market. R&D is critical to developing something new, but in order for this “new” to be diffused firms need to understand the factors affecting the diffusion of new products (goods/services) and to “manage innovation”. To invent something takes certain skills (e.g. technological expertise), and to commercialize this invention takes another set of skills (e.g. taking it to the market).

How will the innovation parts of EISIGS be organized? Continuous activities: Innovation-coaching: (1) thesis-oriented and (2) practice-oriented Study-visits with innovation focus Discrete activities: 1.Courses/course moments Introduction course on innovation (September 2014) Innovation courses (e.g. innovation management, innovation dynamics in complex systems, corporate governance and innovation) 2.Seminars/workshops with innovation in focus Innovation seminars with invited international guests from academia as well as industry will be planned as a continual activity with invitations to the industrial partners that the PhD students are connected to.

How will the innovation parts be visible in theses? No general model for how this should be done The innovation aspects will be tied and adapted to specific PhD-projects. Two examples of how the innovation aspect can materialize: A PhD student may write an article that applies an innovation perspective on the technological content of the thesis subject A chapter in thesis (e.g., in the “kappa”) that applies an innovation perspective.

Introduction course on Innovation Management A basic introduction to: 1.Technology and innovation strategy 2.Innovation methodology/technology Three meetings and homework between the gatherings.

Thanks for the attention! Questions?