1. “An Overview of Innovation” Sources Kline, J. and Rosenberg, N. (1986), “An Overview of Innovation”, in R. Landau and N. Rosenberg (eds), The Positive Sum Strategy: harnessing Technology for Economic Growth, Whashington, DC, National Academy Press, 00.275-305 Students Luís Vieira Miguel Carvalho

2. Market Factors Progress Factors Change in income Relative Prices Underlying Demographics Fashioning of New Products Improving the Performance Decrease Cost of Production Innovation: Characterization & Proccess Nov. 2003 Innovation Risks / Uncertainty New ProductNew Process of Production Substitution for a cheaper material Reengineering Improvement in instruments or methods of doing innovation

3. Innovation: Characterization & Proccess Nov. 2003 Risks / Uncertainty The greater the change introduced, the greater the uncertainty Technical Performance Market Response Ability to absorb and utilize changes State of Knowledge TechnicalSocial / Economical Compromise Necessity to create models

4. Innovation: Linear Model Nov. 2003 Research Development Production Marketing Only One Way (No feedback paths) Creats Distortions: Not Science But Design (Innovation Creates Science) This is a Process of Learning and Cumulated Experience If we are to think clearly about innovation, we have no choice but to abandon the linear model What then do we put in its place?

5. Innovation: Chain-linked Model Nov. 2003 Potential Market Knowledge Distribution & Market Detailed Design & Test Redesign & Production Invention / Analytical Design Research

6. Innovation: Product life-cycle Nov. 2003 Early Stages High degree of Uncertainty Find successfull designs and to organize stable production and marketing around them. Final Stages Lower degree of Uncertainty Innovations typically are more concerned with process changes that reduce production costs.

7. Innovation: Economics of Innovation Nov. 2003 Rising Development Costs Escalation of Finnancial Risks Resistance to Radical Innovation

8. Conclusions Any view of the technical aspects of innovation that suggest a single, central path for innovation, or that science plays the central initiating role, is far too simple and is bound to inhibit and distort our thinking about the nature of processes of innovation. The degree of uncertainty is strongly correlated with the amount of advance that we propose in a given innovation but also on the current state of underlying science and relevant engineering knowledge on the subject. Successful innovation requires the coupling of the technical and the economic in ways that can be accommodated by the organization while also meeting market needs, and this implies close coupling and cooperation among many activities in the marketing, R&D, and production. Nov. 2003