innovation

--05.8.1-- Day and Schoemaker, 2000, Managing Emerging Technologies

Emerging technologies are the future of some industries and will transform many others. ...[they] are creating a need for new best practices, core competencies, and competitive strategies. ... Managing emerging technologies requires a very different set of skills, frameworks, and strategies than managing existing technologies.

The management challenges ... cut across the entire organization, calling on disciplines including finance, managing alliances, human resources, entrepreneurship, network theory, marketing, strategy, and many others.

Priority issues of emerging technologies management:

1. Evaluation of emerging technologies. How do firms make decisions and commitments in the face of the extreme uncertainty of an emerging technology?
2. Designing and managing alliances. How can established and entreprenerial firms ally themselves to capitalize on their core strengths to achieve mutual benefits? How does the alliance lifecycle evolve?
3. Strategies for participating in emerging technologies. How do firms decide whether to aggressively commit to a new strategy (by acquisition, licensing or internal development), participate in a web of alliances, or adopt a 'watch and wait' approach? What are the risks and rewards of these and other strategies?
4. Developing products for really new markets. How can firms improve their ability to develop breakthrough product concepts that will drive the creation and/or use of emerging technologies, and cope with the ambiguity in market potential, customer requirements and competitive capabilities?
5. Designing organizations to compete in emerging technologies. What organizational structures should firms use to develop and commercialize an emerging technology? What incentives and systems are needed to encourage the innovators and champions within the organization?
6. Managing intellectual property. How do firms identify opportunities [to] acquire intellectual property and protect it from loss to partners or competitors? What is the value and role of intellectual property in an information economy?
7. Evolution of emerging technology-based industries. How are emerging-technology-based industries different from traditional industries? How do they emerge and evolve and what are their best practices, strategies and success factors?
   

--Stehr, 2002--

The tremendous importance of scientific and technical knowledge in developed societies is related to one unique attribute of such knowledge, namely, that it represents incremental capacities for social and economic action or an increase in the ability of how to do it that may be privately appropriated, if only temporarily.

Incremental knowledge lacks homogeneity, and some achieve the status of key inventions, discoveries, or economic applications. This depends on the context and contingencies at hand.

Incremental knowledge is not new, what is new is the tempo with which it is being produced, as well as the extent to whcih the proficatbility of a company and its ability to sustain competitive advantages are dependent on new knowledge, or the defence of its market share is dependent on access to and implementation of incremental knowledge.

The faster new knowledge diffuses, the sooner the economic advantage and ability to profit from it diminishes. Firms are inclined to hoard and protect incremental knoweldge from easily diffusing. Thus, scientific knowledge is one of the most important conditions for the possibility of modernization in the sense of a persistent extension and enlargement of social and economic action.

The probability of fabricating incremental knowledge and enjoying the economic advantages that flow from such knowledge is a stratified and contingent process. Advantage goes to those who already have made and command significant elements of incremental knowledge. Incremental knowledge is most likely to be easily obtained by those who are able to benefit disproportionately from what they already know.

What is scarce and difficult to obtain is not access to any knowledge, but to incremental knowledge, that is, specific or novel knowledge claim. The greater the tempo with which knoweldge ages or decays, the greater the potential influence of those who manufacture or augment knowledge and those who transmits those increments. ...'it is a continuing sequence of innovation at a pace that provides a lead, however short, over the others' that provides advantage.

In economic settings, incremental knoweldge has particular importance as a source of added value. The strategic importance of knoweldge as an immediately productive force in economic contexts specifically affects the ways in which production and the delivery of services is organized, as well as the types and the diversity of commodities and services produced.

The commitment of private firms to innovation is closely linked to their ability to temporarily appropriate the marginal additions to knowledge and the economic advantages that may accrue from the control over such knowledge.

For Joseph Schumpeter, innovations become a central, if not the main component of the dynamics of economic action. Innovations are seen to be more important than is price competition among firms. Pioneering entrepreneurs who 'reform or revolutionize the pattern of production by exploiting an invention or, more generally, an untried technological possibility for producing a new commodity or producing an old one in a new way, by opening up a new source of supply of materials or a anew outlet for products, by reorganizing an industry' are at the centre of the dynamics of the capitalist system ([1942] 1950: 132).

For Schumpeter, innovations refer to the initial introduction of a new product or system (product innovation) and process into the economy (process innovation).

The term innovation is inclusive and refers to the realization of additional knowledge as well the entire process of transforming knowledge into practice. Schumpeter includes the diffusion process of the realized invention throughout the population of potential users. The developmental process moves in a linear fashion from invention to innovation and diffusion.

Knowledge has to be first generated, then made available, interpreted, and linked to local circunstances before it can be implemented. The former task is the job of knowledge producers, the latter the task of experts, counsellors and advisers whose function is to pragmatize knowledge.

The realization of knowledge is an extremely complex intellectual and organizational process that relies on sources of knowledge both internal and external to firms or organizations. The social process of innovation does not follow consistent patterns.