INNOVATION and R all notes

2INNOVATION and R&D MANAGEMENT
Lecture 1
• Eureka… Eureka : a cry of joy or satisfaction when one finds or discovers something
1.Innovation: implementation of a new or significantly improved product / process/marketing
method in business practices, workplace organisation or external relations
• Source of firms' competitive advantage and could help differentiate
• Goal is to enhance efficiency and profitability
• Successful innovation requires careful strategies and implementation by incumbents to
introduce innovation to the marketplace and protect the position against new entrants' rivals
• Impact on customers: New needs/solutions/products/quality & Lower prices
3.Impact on society : range of new G&S, provides eco growth, employment, improve people’s lives
• More efficient food production, medical technologies, better transportation, life standards, etc.
• Negative externalities : Declining industry and jobs (Travel agencies, taxi drivers) ; Security (Data) ;
Misuse of technology power (Cyberattacks) ; Pollution (Lithium battery), Antibiotic-resistant bacteria
4.Innovation is
• …finding new solutions to a problem, a new need or create a new need
• …destroying existing markets, transform old ones, or create new ones
• …is responsible for raising quality and lowering prices, improving customer’s life
• …by satisfying customer’s needs better than competitors enhance sales, revenues, profitability
5.Invention (NEW IDEAS => STARTING POINT OF INNOVATION) vs
innovation(subsequential process of converting intellectual thoughts into tangibles => it has
both creative and commercial dimensions)
6.Innovation management : management of all activities involved in the process of idea generation,
technology development, manufacturing and marketing of a new or improved product or
manufacturing process or equipment (includes the management of risks and uncertainty)
7. Uncertainty vs risk
Risk : we know the potential outcomes in advance, e.g. rolling a pair of dice.
Uncertainty : we don’t even know the possible outcomes in advance, let alone their probabilities..
Occurs throughout the entire innovation process: theoretical conception; technical invention and
commercial exploitation and it is a measure of the complexity of the entire innovation process
Discussion Questions
1. What are some of the advantages and disadvantages of innovation for a society?
2. For firms, what does innovation include, and why is it so important?
3. What is the most appropriate definition of innovation?
4. What is innovation management, and what does it include?

8.Measures of innovation:
1.1 Output: Product, Process, technology, Markets
1.2 Input: R&D expenditure, R&D personnel
Research and Development :
• Research : basic(increase understanding of a topic or field without an immediate commercial
application in mind.) and applied research(increase understanding of a topic or field to meet a
specific need. Usually referred to as SCIENCE. )
• Development refers to activities that apply knowledge to produce useful devices, materials, or
processes. Usually referred to as TECHNOLOGY.
An innovation funnel is a tool or process that ensures that
only the best ideas are executed within an organization.
They are further developed, refined, and executed. It
ensures that the organization focuses on the most valuable
innovations.
9. External (Open innovation) vs Internal Sourcing (Closed )
Discussion questions:
1. What is the difference between risk and uncertainty?
2. What traits appear to make individuals most creative?
3. How could firms be more creative?
4. How can the State encourage entrepreneurs and companies to
foster innovation? What is the element behind the process of
innovation that the State can contribute to remove?
CASE STUDY: Getting an Inside Look: Given Imaging’s Camera Pilla
A capsule that is swallowed by a patient that broadcasts images of the small intestine
1.What factors do you think enabled Iddan, engineer with no medical background, to pioneer
the development of wireless endoscopy?
• Collaboration with a gastroenterologist, Dr. Eitan Scapa, allowed him to learn about the
challenges in the field of gastroenterology and get idea of using small cameras for internal
imaging. Through discussions with Dr. Scapa, he gained insights into the limitations of
existing technologies for viewing the small intestine.
• Knowledge background with skills and expertise in optics and imaging technologies that were
relevant to the development of a miniature camera for medical use
• Innovative thinking : apply engineering skills to address medical chall. + innovative thinking
• Tech. advances : availability of small image sensors and the promise of new semiconductor
technologies (CMOS) - allowed development of a prototype for wireless endoscopy.
2.To what degree would you characterize Given’s camera pill as “science-push” versus
“demand-pull”? A combination of both "science-push" and "demand-pull
SP : Scientific curiosity and tech. capabilities : driving forces behind the early stages of development
DP: focus on solving practical medical challenges and meeting the needs of patients and physicians
reflects a demand-driven aspect of the development.
3.The advantages and disadvantages of Iddan and Meron collab with Dr. Swain’s team
Advantages :

1.Complementary Expertise: Dr. Swain's team : expertise in anatomy and the imaging needs of
diagnosing small intestine disorders.
2.Faster process : combining the strengths of both teams. Dr. Swain's team's knowledge of medical
requirements and Iddan's tech. expertise synergized to overcome challenges more efficiently.
3.Improved Device Design: more effective device design, with medical& engineering insights.
Disadvantages: Communication challenges
4.What were the advantages & disadv. of Given being owned by Medtronic
• Access to Capital: financial strength enabled continued R&D, expansion into new
applications, and increased market presence.
• Larger Salesforces: Medtronic's larger and geographically distributed salesforces provided
Given with increased market reach and distribution capabilities. This was advantageous for
getting approval for PillCams in more countries and applications.
• Strategic Support: Medtronic's ownership likely provided strategic support and guidance,
drawing on its experience in the medical device industry. This support could aid Given in
navigating regulatory processes and market dynamics.
Disadvantages:
• Integration Challenges
• Loss of Independence: Given may have less autonomy in DM compared to when it operated
independently.
• Shift in Focus: Being part of a larger corporation might lead to a shift in focus from
entrepreneurial innovation to broader corporate strategies, potentially impacting the
nimbleness and focus on specific niche areas that characterized Given Imaging
Lecture 2
Inventors
Typically master the basic tools and
operations of the field in which they invent,
but they will not have specialized solely in
that field.
*Are curious and more interested in
problems than solutions.
*Question the assumptions made in previous
work in the field.
* Often have the sense that all knowledge is
unified and seek global solutions
*Such individuals may develop many new
devices or processes but commercialize few.
Organizational Creativity is a function of: Creativity of individuals within the organization
• Social processes and contextual factors that shape how those individuals interact and behave
Methods (formal and informal) of encouraging organizational creativity:
• Idea collection systems (e.g., Google suggestion box; 20% time; awards; contests, etc.)
• Creativity training programs & Culture
Innovation by User: by intermediate/ consumer users, rather than suppliers. Ex: Laser sailboat
Innovation by Firms: R&D: activities to innovate and introduce new P&S or to improve existing
• Research:

Basic => increases understanding without an immediate commercial goal
Applied => directed at meeting specific needs with commercial objectives.
• Development : apply knowledge to create useful devices, materials, or processes.
Evolution of Innovation Models: 1950s and 1960s, a "science-push" model dominated : innovation
proceeded linearly from scientific discovery to marketing. Later, a "demand-pull" model gained
prominence, emphasizing innovation driven by perceived user demand.
The Role of the State: public and private
➔Directly supporting the innovation efforts of firms via grants or other transfers
➔Indirectly supporting by providing education, training and skills development and fostering
knowledge creation and diffusion
Many of the technologies that make the iPhone and other products and services “smart” were funded
by the US government (Internet, GPS, touchscreen display, voice -activated personal assistant, Siri)
▪ Apple benefit from government - funded basic research activities & received its early -stage finance
for the applied phase from the U . S . government’s program .
▪ Venture capitalists entered after gov. funding had gotten the company to the critical proof of concept
Lecture 3 :
Type of innovation:
1. Product : embodied in the outputs (G&S)(Honda’s hybrid
car, Fb marketplace, Sony PS5).Lead to new product
introductions (e.g. iPhone), greater market segmentation
(e.g. Nutella biscuits), penetration of niche markets (e.g.
Lush cosmetics)
2. Process : inn. in way an organ. conducts its business,
techniques of producing or marketing G&S (e.g., Algorithm
for gene editing or social media for advert)
3. Radical : degree to which it is new and different from
previously existing products and processes.( e.g: mobile
telephone once first introduced; Kodak)
4. Incremental : may involve only a minor change from (or
adjustment to) existing practices. e.g., Gillette
5. Competence-enhancing: build on the firm’s existing knowledge
base. e.g., Intel’s Pentium IV built on the technology for Pentium III.
6. Competence-destroying: render a firm’s existing Competencies
obsolete. e.g., digital cameras for Kodak.
7. Architectural : change overall design of the system or the way components interact. e.g., the
transition from high-wheel bicycle to safety bicycle. Require changes in the underlying
components also.
8. A component/ modular : change to one or more components of a product system without
significantly affecting the overall design. e.g., adding gel-filled material to a bicycle seat

Technology trajectory (cycle or wave) :path/
direction of advancement a technology
follows over time. This path may refer to:
(a) its rate of performance improvements,
(b) its rate of diffusion,
And (c) other change aspects.
(a)& (b) adopted follow a s-shape curve. The
technology performance improvement–
SUPPLY SIDE (Firms) the rate of technology
adoption – DEMAND SIDE (Customers)
S-shape technology improvements :
Phase 1 - Basic research; Few companies & researchers; Technology improves slowly at first because
it is poorly understood; Exploration phase.
Phase 2 – Applied research; More companies and researchers involved; Technology accelerates as
understanding of the technology increases; Exploitation phase.
Phase 3 - Technology then tapers off as it approaches limits or gets substituted by another technology.
S-shape technology diffusion:
Adoption: initially slow bc the tech. is complex, unfamiliar &
expensive. It accelerates as it becomes better understood.
Eventually, market is saturated, rate of new adoptions declines.
• Innovators:2.5% to adopt an inn. They are opinion leaders.
• Early Adopters :13.5% .They are followers.
• The Early Majority is the next 34%—mass market.
• The Late Majority are the next 34%. They are sceptical.
• Laggards:16%. They must feel certain that an innovation
will not fail before adopting it.
S-shape technology diffusion (SCD):
• In part, a function of the s-curve in technology improvements . As tech. becomes better, it becomes
more certain and useful to users, facilitating the adoption. Tech.diffusion tends to take far longer than
information diffusion because it might require time, specific knowledge or expertise.
Technology Cycles: metaphors for Schumpeter’s view of innovation as a creative destruction
phenomenon: interplay between ruptures (discontinuity) in the knowledge process about a specific
technology or application of technology, followed by the incorporation of knowledge into a new
product or process (continuity) up to the acceptance of a dominant design.
• A dominant design is a configuration or set of features that becomes the accepted market standard
Discussion questions
1. What are some reasons that established firms might resist adopting a new technology?= Inertia and
Resistance to change ; Investments in current systems; Risk aversion and organizational culture
2. Are well-established firms or new entrants more likely to (a) develop and/or (b) adopt new
technologies? Why? : (a) => New entrants may be more likely to develop new technologies as they
are often driven by a need to differentiate themselves and disrupt existing markets.Well-established
firms may also engage in research and development, but their focus might be on incremental
innovations or improvements to existing technologies