Process of Technological Change: Innovation Narayanan: Chapter 3 Process of Technological Change: Innovation

Chapter objectives Innovation and its components Variables that stimulate innovation Four major types of innovation Interrelationships between characteristics of technological change Characteristics of innovative firms Managerial implications of the dynamics of technical change. egekwu-spring 2005

Dynamics of Tech. change Firm level problem recognition technology choice solution development(innovation&adoption) commercialization and implementation Technology level out of firm’s control tech developers and facilitators, customers, regulators, others ... egekwu-spring 2005

Implications to MOT as a result of dynamics Identify two implications (relative to dynamics of technological change) for management of technology (MOT) using examples from your experience: “The key to effective management of technology lies in linking technological solutions to market realities” egekwu-spring 2005

Implications continued: “Breakthroughs are hard to come by, and the financial payoffs have a tendency to go to someone other than the originator” Narayanan, p.59 “Make things that do what people expect them to. Build them to make these things easier rather than more complicated. Make them look and feel familiar” Eric Tucker, Tech. Review, April 2002 these three simple ideas rule out so much of what is envisioned for many tech products. egekwu-spring 2005

Innovation Definition - includes both output and the process of arriving at a technically feasible solution to a problem initiated by a technological opportunity or customer/societal need Imitation Innovation Competitors Adoption Consumers egekwu-spring 2005

Components of innovation process refers to the means organizations use in achieving technological solution output refers to the product or service that result from the innovation hardware software evaluation information-a major activity during diffusion stage egekwu-spring 2005

Drivers of innovation at the firm level Market factors response to market demands or competitive climate Input factors high labor costs can lead to investments in process technologies expensive raw materials egekwu-spring 2005

Question:Examples of Drivers of innovation Give examples of innovation created by market factors input factors egekwu-spring 2005

Process of innovation Market pull innovations - specific market need necessitates tech advancement tend to be incremental innovations Technology-push innovations - advancement of technology directed towards increased technical performance of output R&D efforts, and more frequent with new and emerging technologies. egekwu-spring 2005

Innovation outputs: component knowledge Vs. component configuration Incremental Modular Architectural Radical egekwu-spring 2005

1. Evolution of technology- the changes to performance characteristics of a specific technology over time. More complex than the 2 extremes of “inventor genius” or “orderly and planned process” S-curve of technology evolution: stages Emergence Rapid improvement Declining improvement Maturity egekwu-spring 2005

Evolution of technology What are some performance characteristics? S-curve impact of technology performance Learning processes (refer to stages of product development) Technology limits egekwu-spring 2005

2. Technology progression - process by which existing technologies become obsolete Radical breakthrough - mostly a chance occurrence Accumulation of learning/knowledge about technology egekwu-spring 2005

3. Levels of technology development Does innovation always follow/begin with need identification? There is often a lag between an invention and its application (innovation) Major technological advances result from clusters of innovations egekwu-spring 2005

Technology change agents Federal and State research institutions (labs, NASA) Private research entities – Batelle, universities, etc. Entrepreneurs and others egekwu-spring 2005

Characteristics of innovative firms Entrepreneurial innovation Managed innovation Internal organizational characteristics – formalization, centralization, Resources Openness to external information Informal internal communication egekwu-spring 2005

Imparts of environmental trends on innovation Globalization Time Compression Technology integration – advanced systems engineering skills are still rare egekwu-spring 2005