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

2. 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

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

4. 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

5. 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)

6. 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

7. 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

8. 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"

9. 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

10. 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

11. 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

12. 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!"