Chapter 1 Innovation Management: An Introduction

Zeynep ÖNCÜ
Very compatitive business market
“The ability to change and adapt is
essential to survive”
Being innovative
Innovation is necessary
to survive
“…not to innovate is to die.”
Christopher Freeman (1982)
Innovation is not a single action but a total
process of interrelated sub processes.
It is not just the conception of a new idea, nor the
invention of a new device, nor the development of
a new market.
Table 1:
Market leaders in 2011
Nineteenth-century economic development fuelled by
technological innovations
Table 2:
selecting and successfully implementing the
best ideas
Innovation is not a one-step activity, rather than
affecting entire organization.
the most important issue is to manage the associated
Acceleration in economic growth was the
result of technological progress.
According to the Schumpeter ; competition
posed by new products was far more
important than marginal changes in the
prices of existing products.
Figure 1:
Overview of the innovation process
The expansion in manufacturing activities
was simultaneously matched by an expansion
in administrative activities. This represented
the beginnings of the development of the
diversified functional enterprise.
Unfortunately, many of the studies of
innovation have treated it as an artefact that
is somehow detached from knowledge and
skills and not embedded in know-how
This inevitably leads to a simplified
understanding, if not a misunderstanding, of
what constitutes innovation.
This section shows why innovation needs to
be viewed in the context of organisations and
as a process within organisations
Individuals in the innovation process
Innovation and invention
Successful and unsuccessful innovations
Different types of innovations
Technology and science
Identifies individuals as a key component of
the innovation process.
Creative individuals
Firm operating functions and activities
Firms architecture and external linkages
The quality of being an entrepreneur.
starting new businesses.
describing activities within a firm or large
In a study of past and future research on the
subject of entrepreneurship, Low and
MacMillan, define it as ‘the process of
planning, organising, operating, and
assuming the risk of a business venture.
The definition of design with regard to
business seems to be widening ever further
and encompassing almost all aspects of
A key question however, is how design relates
to research and development?
Design is the main component in product
Today the process is dominated by computer
software programmes that facilitate all
aspects of the activity; hence the product
development activities and the environments
in which design occurs have changed
innovation is the first cousin of invention, but
they are not identical twins that can be
Innovation is not a single action
Invention is the conception of the idea,
whereas innovation is the subsequent
translation of the invention into the economy.
innovation depends on inventions but
inventions need to be harnessed to
commercial activities before they can
contribute to the growth of an organisation.
Creativity: the thinking of novel and
appropriate ideas. Innovation: the successful
implementation of those ideas within an
There is often a great deal of confusion
surrounding innovations that are not commercially
Kodak disk camera
Sinclair C5
Commercial failure, however, does not relegate
an innovation to an invention.
The fact that the product progressed from the
drawing board into the marketplace makes it
an innovation – albeit an unsuccessful one.
Industrial innovation not only includes major
(radical) innovations but also
minor(incremental) technological advances.
Indeed, successful commercialisation of the
innovation may involve considerably wider
organisational changes.
Technological innovation can be accompanied
by additional managerial and organisational
changes, often referred to as innovations.
Product innovation
Process innovation
Organizational innovation
Management innovation
Production innovation
Service innovation
We need to consider the role played by science
and technology in innovation.
Science can be defined as systematic and
formulated knowledge.
Technology is knowledge applied to products
or production processes.
Science provides us with information which
was previously Unknown by unlike engineers,
Engineers and not scientists who make
Humorous and popular view of inventions
and innovations has been reinforced over the
years and continues to occur in the popular
press. Many industrialists and academics
have argued that this simple view of a
complex phenomenon has caused immense
harm to the understanding of science and
The literature on what ‘drives’ innovation has
tended to divide into two schools of thought:
the market-based view
the resource-based view.
Innovation may be described as a process
and involves:
 a response to either a need or an
opportunity that is context dependent;
 a creative effort that if successful results
in the introduction of novelty;
 the need for further changes.
The framework emphasises the importance
placed on interaction (both formal and informal)
within the innovation process. Indeed,
innovation has been described as an
information–creation process that arises out of
social interaction.

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