1. Innovation Processes in Transition by Erkki Ormala Professor of Practice, Innovation Management Aalto University, Business School

2. Learning outcomes A general understanding of innovation, innovation processes and innovation management, in different contexts, and their role in society and in business strategy. Understand how innovation can (and cannot) be fostered, managed or steered, and which policies, processes and tools are needed, offering case-based insights in what works and what does not. Understand how innovation is related to other functional business areas such as finance, marketing, buying, customer relations and to the over-all business design. Understand specific issues and topics in fostering and managing innovation, e.g. technology platforms and innovation strategies, innovation in inter-organizational networks, service innovation, user driven innovation, collaboration in innovation, open innovation arrangements such as IP management, business model innovation, etc.

3. Course content 2015 27.October: To give an overall understanding of the innovation process and the role of innovation policy and to summarize Industrial Innovation in Transition; key findings of the study of the Finnish companies and a wider Horizon 2020 project, lecturer: Erkki Ormala 3 November: External speaker: Jussi Impiö, Fuzu; best practice of innovation management, lecturer: Erkki Ormala 10 November: External speaker: Heli Anttila, Fortum; platform economy, lecturer: Erkki Ormala 17 November: External speaker: Kai Husso, RIC; innovation policy; systemic approaches; lecturer: Erkki Ormala 24 November: External speaker: Leo Kärkkäinen, Nokia; innovation in SMEs; lecturer: Erkki Ormala 1 December: External speaker, Hannu Talvitie, Vaisala; Key observations and lessons for the essay writing, Erkki Ormala

4. Workload 18h participating in course sessions (mandatory) 60h reading the background material 82h writing a 5 page essay on a selected and approved topic (about 2000 words) by 10 December 2015

5. Innovation networks enable new ways of knowledge creation and utilization Demand orchestration Innovation orchestration Architecture orchestration Supply orchestration Demand orchestration Architecture orchestration Supply orchestration Innovation orchestration Demand orchestration Architecture orchestration Supply orchestration Innovation orchestration Demand orchestration Architecture orchestration Supply orchestration Innovation orchestration Demand orchestration Architecture orchestration Supply orchestration Innovation orchestration Demand orchestration Architecture orchestration Supply orchestration Innovation orchestration Demand orchestration Architecture orchestration Supply orchestration Innovation orchestration Demand orchestration Architecture orchestration Supply orchestration Innovation orchestration Demand orchestration Architecture orchestration Supply orchestration Innovation orchestration Core Partners with orchestration capability to extended enterprise Core From traditional large enterprise

6. Crowdsourcing Open Innovation User Innovation Co-Creation Social media Source: Modified from Schenk and Guittard, 2009

7. Open Innovation Access and drive global intellectual vision and insight Form strategic collaborations with world-leading institutions to multiply our efforts Build global test beds to learn from broader audiences Engaging the World’s Leading Institutions

8. The Pilot Study in Finland Innovation process –Mapping the future business environment –Innovation strategy –Implementation of the strategy –Expanding the markets and ecosystems

9. Innovation process 1.Mapping the future business environment –Extensive mapping covering key areas, but not integrated into the innovation process 2.Innovation strategy/business strategy –Business strategy dominates leading to incremantal improvements –Very few ’bridgehead’ innovations

11. Innovation process (continued): 3.Implementation of the strategy –Stage gate model dominates –Very few customer driven, crowd sourcing, open innovation and internal incubator based solutions 4.Expanding the markets and ecosystems –Limited understanding of the ecosystem and value chain –Big data seen as an opportunity, but not used extensively –Market and competition perspective conservative not reflecting the business environment vision

12. Challenges to innovation activity on the level of products/technology Ownership of innovations seems to disperse among business units In the stage-gate model, there is internal bureaucracy and personal reflections The stage-gate model seems to serve short-sighted innovation Innovations requiring risk and courage, about which it is difficult to evaluate the anticipated revenue accurately, are often discarded when defining final development programs

13. Challenges to Innovation activity at the company level A need for more creativity, experimenting and entrepreneurship in order to create breakthrough innovations The focus of management is on emphasizing incremental development of existing activities New initiatives and actively changing the business environment were not emphasized in the interviews, even if changes in the business environment were actively monitored in the strategy process It is often possible to promote new openings and radical innovations only outside the current organizational structure and the existing strategy The development logic followed by companies causes an innovation gap at the level of society

14. Innovation policy conclusions: Innovation policy should help the natural integration of the new innovation instruments into the innovation processes in companies Improving conditions for public/private partnerships Increasing the understanding of the role of innovation in economic and social development as well as in job creation In Finland the most important issue in reforming innovation policy is to strengthen the part of the innovation system that genuinely supports the development of new and internationally competitive business –Understanding of business concepts, emerging value domains and the ways of capturing the value –Improving systems integration in the innovation system –Funding of growth companies –Developing company spin-offs and business incupators

15. Industrial Innovation in Transition Photo: 5278205683_dcbcda7fea_o_Flickr_CCAttribution_BY_Horia_Varian_Modified This project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement No 64935. The European Commission has no liability in respect for the above contents.

16. Introduction ● Industrial innovation has fundamentally changed over the last ten years. At the same time European competitiveness and employment have become more and more dependent on increasing national and industrial innovativeness and innovative capabilities. ● The project supports an innovation-based growth strategy for Europe by stimulating the modernisation of industrial innovation management practices. ● The project investigates the state of the art innovation processes and practices in various industry segments. ● A specific focus is on ecosystem based innovations and their impact on transforming current market structures and busienss models. This project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement No 64935. The European Commission has no liability in respect for the above contents. Photo: 5278205683_dcbcda7fea_o_Flickr_CCAttribution_BY_Horia_Varian_Modified

17. Objectives of the study To examine the innovation process management of the European companies. How well the modern innovation tools have been adopted and what are the experiences of their use. The study will produce advice for European companies which will allow them to use the new tools and best management practices in order to improve the efficiency and effectiveness of their innovation performance. Innovation process management differs from one industry to another. The study examines what are the key differences in various industries and adapts the best management practice to reflect the sectorial differences. The study will examine how well the current innovation policy tools are able to respond to the changing industrial innovation. It will produce a number of recommendations how the innovation systems in Europe should be developed to bridge the gap between Europe and its main competitors. To develop a research methodology that can be used by the Member States, Industrial Federations and the Commission for studies which allow them to check whether their innovation promotion portfolio is responding to the current needs of the industrial innovation. The ultimate objective of the study is to improve the innovation performance of European companies and the effectiveness of innovation policy instruments in order to generate new growth and jobs for Europe.

18. Project Consortium The project is implemented in collaboration by the following partners: ● Aalto University ● University of Twente ● University of Manchester ● Joanneum Research Center ● Zabala Innovation Consulting This project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement No 64935. The European Commission has no liability in respect for the above contents. Photo: 5278205683_dcbcda7fea_o_Flickr_CCAttribution_BY_Horia_Varian_Modified

19. Key Activities ● In-depth interviews of 800 European companies ● Policy review and workshops with national and regional stakeholders. ● Creation of research toolbox for Member States and the EC for replicating the study. ● Extensive dissemination activities ● Policy recommendations This project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement No 64935. The European Commission has no liability in respect for the above contents. Photo: 5278205683_dcbcda7fea_o_Flickr_CCAttribution_BY_Horia_Varian_Modified

20. How to Get Involved? ● IIT will organise a series of national and EC level events from H2/2015 onwards. ● The policy workshops provide a platform for policy discussion and debate. ● The IIT project will also participate in the major European innovation events. ● More information: www-iit-project.eu This project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement No 64935. The European Commission has no liability in respect for the above contents. Photo: 5278205683_dcbcda7fea_o_Flickr_CCAttribution_BY_Horia_Varian_Modified

21. Thank you