2. Chapter 1 Introduction Chapter 1 McGraw-Hill/Irwin© 2005 The McGraw-Hill Companies, Inc. All rights reserved.

3. Importance of Technological Innovation Technological innovation now the single most important driver of competitive success in many industries Many firms earn over one-third of sales on products developed within last five years Globalization has increased competitive pressure; Product innovations help firms protect margins by offering new, differentiated features. Process innovations help make manufacturing more efficient.

4. Importance of Technological Innovation Advances in information technology have enabled faster innovation CAD/CAM systems enable rapid design and shorter production runs Net effect: Shorter product lifecycles (more rapid product obsolescence) More rapid new product introductions Greater market segmentation

5. Impact on Society Innovation enables a wider range of goods and services to be delivered to people worldwide More efficient food production, improved medical technologies, better transportation,etc. Increases Gross Domestic Product by making labor and capital more effective and efficient However, may result in negative externalities, E.g., pollution, erosion, antibiotic-resistant bacteria

6. Impact on Society The majority of R&D funds spent in OECD countries come from industry, and percentage has been increasing.

7. Innovation by Industry: The Importance of Strategy To be successful at innovation, firms need carefully crafted strategies and implementation processes. Innovation funnel Most innovative ideas do not become successful new products.

8. Research Brief How long does new product development take? Study by Abbie Griffin of 116 firms found: Length of development cycle varies with innovativeness of project Incremental improvements took 8.6 months from concept to market introduction Next generation improvements took 22 months. New-to-the-firm product lines took 36 months New-to-the-world products took 53 months. Half of the companies had reduced their cycle time by an average of 33% over last five years.

9. The Strategic Management of Technological Innovation Part One: The foundations of technological Innovation Sources of innovation Types and patterns of innovation Standards battles and design dominance Timing of Entry Part I: Industry Dynamics of Technological Innovation Chapter 2 Sources of Innovation Chapter 5 Timing of Entry Chapter 4 Standards Battles and Design Dominance Chapter 3 Types and Patterns of Innovation

10. The Strategic Management of Technological Innovation Part Two: Formulating Technological Innovation Strategy Defining the organization’s strategic direction Choosing innovation projects Collaboration strategies Protecting innovation Part II: Formulating Technological Innovation Strategy Chapter 6 Defining the Organization’s Strategic Direction Chapter 9 Protecting Innovation Chapter 8 Collaboration Strategies Chapter 7 Choosing Innovation Projects

11. The Strategic Management of Technological Innovation Part Three: Implementing Technological Innovation Strategy Organizing for innovation Managing the new product development process Managing new product development teams Crafting a deployment strategy Part III: Implementing Technological Innovation Strategy Chapter 10 Organizing for Innovation Chapter 13 Crafting a Deployment Strategy Chapter 12 Managing New Product Development Teams Chapter 11 Managing the New Product Development Process

12. Discussion Questions 1. Why is innovation so important for firms to compete in many industries? 2. What are some of the advantages of technological innovation? Disadvantages? 3. Why do you think so many innovation projects fail to generate an economic return?