Welcome to the I Can't Sleep podcast,
Where I help you learn a little and sleep a lot.
I'm your host,
Benjamin Boster,
And tonight let's fall asleep learning about innovation.
Innovation is the practical implementation of ideas that result in the introduction of new goods or services or improvement in offering goods or services.
ISO TC 279 in the standard ISO 56020 defines innovation as a new or changed entity realizing or redistributing value.
Others have different definitions.
A common element in the definitions is a focus on newness,
Improvement,
And spread of ideas or technologies.
Innovation often takes place through the development of more effective products,
Processes,
Services,
Technologies,
Artworks,
Or business models that innovators make available to markets,
Governments,
And society.
Innovation is related to,
But not the same as invention.
Innovation is more apt to involve the practical implementation of an invention,
I.
E.
New improved ability to make a meaningful impact in a market or society,
And not all innovations require a new invention.
Technical innovation often manifests itself via the engineering process when the problem being solved is of a technical or scientific nature.
The opposite of innovation is exnovation.
Surveys of the literature on innovation have found a variety of definitions.
In 2009,
Berege et al.
Found around 60 definitions in different scientific papers,
While a 2014 survey found over 40.
Based on their survey,
Berege et al.
Attempted to formulate a multidisciplinary definition and arrived at the following.
Innovation is the multi-stage process whereby organizations transform ideas into new or improved products,
Service,
Or processes in order to advance,
Compete,
And differentiate themselves successfully in their marketplace.
In a study of how the software industry considers innovation,
The following definition given by Crossan and Oppiden was considered to be the most complete.
Crossan and Oppiden built on the definition given in the Organization for Economic Cooperation and Development,
OECD,
Oslo Manual.
Innovation is production or adoption,
Assimilation,
And exploitation of a value-added novelty in economic and social spheres.
Renewal and enlargement of products,
Services,
And markets,
Development of new methods of production,
And the establishment of new management systems.
It is both a process and an outcome.
American sociologist Everett Rogers defined it as follows,
An idea,
Practice,
Or object that is perceived as new by an individual or other unit of adoption.
According to Alan Altshuler and Robert D.
Benn,
Innovation includes original invention and creative use.
These writers define innovation as generation,
Admission,
And realization of new ideas,
Products,
Services,
And processes.
Two main dimensions of innovation are degree of novelty,
Either whether an innovation is new to the firm,
New to the market,
New to the industry,
Or new to the world,
And kind of innovation.
I.
E.
,
Whether it is process or product-service system innovation.
Organizational researchers have also distinguished innovation separately from creativity by providing an updated definition of these two related constraints.
Workplace creativity concerns the cognitive and behavioral processes applied when attempting to generate novel ideas.
Workplace innovation concerns the processes applied when attempting to implement new ideas.
Specifically,
Innovation involves some combination of problem-opportunity identification,
The introduction,
Adoption,
Or modification of new ideas germane to organizational needs.
Promotion of these ideas and the practical implementation of these ideas.
Peter Drecker wrote,
Innovation is the specific function of entrepreneurship,
Whether in an existing business,
A public service institution,
Or a new venture started by a lone individual in the family kitchen.
It is a means by which the entrepreneur either creates new wealth-producing resources or endows existing resources with enhanced potential for creating wealth.
In general,
Innovation is distinguished from creativity by its emphasis on the implementation of creative ideas in an economic setting.
Amabile and Pratt in 2016,
Drawing on the literature,
Distinguish between creativity,
The production of novel and useful ideas by an individual or small group of individuals working together,
And innovation,
The successful implementation of creative ideas within an organization.
In 1957,
The economist Robert Sallow was able to demonstrate that economic growth had two components.
The first component could be attributed to growth in production,
Including wage labor and capital.
The second component was found to be productivity.
Ever since,
Economic historians have tried to explain the process of innovation itself,
Rather than assuming that technological inventions and technological progress result in productivity growth.
The concept of innovation emerged after the Second World War,
Mostly thanks to the works of Joseph Schumpeter,
Who described the economic effects of innovation processes as constructive destruction.
Today,
Consistent neo-Schumpeterian scholars see innovation not as neutral or apolitical processes.
Rather,
Innovation can be seen as socially constructed processes.
Therefore,
Its conception depends on the political and societal context in which innovation is taking place.
According to Shannon Walsh,
Innovation today is best understood as innovation under capital.
This means that the current hegemonic purpose for innovation is capital valorization and profit maximization,
Exemplified by the appropriation of knowledge,
E.
G.
Through patenting.
The widespread practice of planned obsolescence,
Including lack of repairability by design,
And the Jevons paradox that describes negative consequences of eco-efficiency as energy-reducing effects tend to trigger mechanisms leading to energy-increasing effects.
Several frameworks have been proposed for defining types of innovation.
Sustaining vs.
Disruptive Innovation One framework proposed by Clayton Christensen draws a distinction between sustaining and disruptive innovations.
Sustaining innovations is the improvement of a product or service based on the known need of current customers,
E.
G.
Faster microprocessors,
Flat-screen televisions.
Disruptive innovation,
In contrast,
Refers to a process by which a new product or service creates a new market,
E.
G.
Transistor radio,
Free crowdsourced encyclopedia,
Etc.
,
Eventually displacing established competitors.
According to Christensen,
Disruptive innovations are critical to long-term success in business.
Disruptive innovation is often enabled by disruptive technology.
Marco Iancidi and Karim R.
Lakhani define foundational technology as having the potential to create new foundations for global technology systems over the longer term.
Foundational technology tends to transform business operating models as entirely new business models emerge over many years,
With gradual and steady adoption of the innovation leading to waves of technological and institutional change that gain momentum more slowly.
The advent of the packet-switched communication protocol,
TCP-IP,
Originally introduced in 1972 to support a single-use case for United States Department of Defense electronic communication email,
And which changed widespread adoption only in the mid-1990s with the advent of the World Wide Web,
Is a foundational technology.
Four Types of Innovation Model Another framework was suggested by Henderson and Clark.
They divide innovation into four types.
Radical innovation establishes a new dominant design and hence a new set of core design concepts embodied in components that are linked together in a new architecture.
Incremental innovation refines and extends an established design.
Improvement occurs in individual components,
But the underlying core design concepts and the links between them remain the same.
Architectural innovation Innovation that changes only the relationships between them,
The core design concepts.
Modular innovation Innovation that changes only the core design concepts of a technology.
While Henderson and Clark,
As well as Christensen,
Talk about technical innovation,
There are other kinds of innovation as well,
Such as service innovation and organizational innovation.
Non-economic innovation As distinct from business-centric views of innovation concentrating on generating profit for a firm,
Other types of innovation include social innovation,
Religious innovation,
Sustainable innovation,
Or green innovation,
And responsible innovation.
Open innovation One type of innovation that has been the focus of recent literature is open innovation or crowdsourcing.
Open innovation refers to the use of individuals outside of an organizational context who have no expertise in a given area to solve complex problems.
User innovation Similar to open innovation,
User innovation is when companies rely on users of their goods and services to come up with,
Help to develop,
And even help to implement new ideas.
Processes Innovation must be understood in the historical setting in which its processes were and are taking place.
The first full-length discussion about innovation was published by the Greek philosopher and historian Xenophon about 430-355 BCE.
He viewed the concept as multifaceted and connected it to political action.
The work for innovation that he uses,
Kynotomia,
Had previously occurred in two plays by Aristophanes.
Plato discussed innovation in his Laws Dialogue and was not very fond of the concept.
He was skeptical to it both in culture,
Dancing and art,
And in education.
He did not believe in introducing new games and toys to the kids.
Aristotle did not like organizational innovations.
He believed that all possible forms of organization had been discovered.
Before the 4th century in Rome,
The words novitas and res nova,
Novarese,
Were used with either negative or positive judgment on the innovator.
This concept meant renewing and was incorporated into the new Latin verb word innovo,
I renew or I restore,
In the centuries that followed.
The Vulgate version of the Bible,
Late 4th century CE,
Used the word in spiritual as well as political context.
It also appeared in poetry,
Mainly with spiritual connotations,
But was also connected to political,
Material,
And cultural aspects.
Machiavelli's The Prince,
1513,
Discusses innovation in a political setting.
Machiavelli portrays it as a strategy a prince may employ in order to cope with a constantly changing world,
As well as the corruption within it.
Here,
Innovation is described as introducing change in government,
New laws,
And institutions.
Machiavelli's later book,
The Discourses,
1528,
Characterizes innovation as imitation,
As a return to the original that has been corrupted by people and by time.
Thus,
For Machiavelli,
Innovation came with positive connotations.
This is,
However,
An exception in the usage of the concept of innovation from the 16th century and onward.
No innovator from the Renaissance until the late 19th century ever thought of applying the word innovator upon themselves.
It was a word used to attack enemies.
From the 1400s through the 1600s,
The concept of innovation was pejorative.
The term was an early modern synonym for rebellion,
Revolt,
And heresy.
In the 1800s,
People promoting capitalism saw socialism as innovation and spent a lot of energy working against it.
For instance,
Goldwyn Smith,
1823 to 1910,
Saw the spread of social innovations as an attack on money and banks.
These social innovations were socialism,
Communism,
Nationalism,
Cooperative associations.
In the 20th century,
The concept of innovation did not become popular until after the Second World War of 1939 to 1945.
This is the point in time when people started to talk about technological product innovation and tie it to the idea of economic growth and competitive advantage.
Joseph Schumpeter,
1883 to 1950,
Who contributed greatly to the study of innovation economics,
Is seen as the one who made the term popular.
Schumpeter argued that industries must incessantly revolutionize the economic structure from within,
That is,
Innovate with better or more effective processes and products,
As well as with market distribution,
Such as the transition from the craft shop to factory.
He famously asserted that creative destruction is the essential fact about capitalism.
In business and in economics,
Innovation can provide a catalyst for growth when entrepreneurs continuously search for better ways to satisfy their customer base with improved quality,
Durability,
Service,
And price,
Searches which may come to fruition in innovation with advanced technologies and organizational strategies.
Schumpeter's findings coincided with rapid advances in transportation and communications in the beginning of the 20th century,
Which had huge impacts for the economic concepts of factor endowments and comparative advantage,
As new combinations of resources or production techniques constantly transform markets to satisfy consumer needs.
Hence,
Innovation behavior becomes relevant for economic success.
An early model included only three phases of innovation.
According to Utterback,
1971,
These phases were 1.
Idea generation,
2.
Problem solving,
And 3.
Implementation.
By the time one completed phase two,
One had an invention,
But until one got it to the point of having an economic impact,
One did not have an innovation.
Diffusion was not considered a phase of innovation.
Focus,
At this point in time,
Was on manufacturing.
A prime example of innovation involved the boom of Silicon Valley startups out of the Stanford Industrial Park.
In 1957,
Dissatisfied employees of Shockley Semiconductor,
The company of Nobel laureate William Shockley,
Co-inventor of the transistor,
Left to form an independent firm,
Fairchild Semiconductor.
After several years,
Fairchild developed into a formidable presence in the sector.
Eventually,
These founders left to start their own companies based on their own unique ideas,
And then leading employees started their own firms.
Over the next 20 years,
This process resulted in the momentous startup company explosion of information technology firms.
Silicon Valley began as 65 new entrepreneurs born out of Shockley's eight former employees.
All organizations can innovate,
Including,
For example,
Hospitals,
Universities,
And local governments.
The organization requires a proper structure in order to retain competitive advantage.
Organizations can also improve profits and performance by providing work groups opportunities and resources to innovate,
In addition to employees' core job tasks.
Executives and managers have been advised to break away from traditional ways of thinking and use change to their advantage.
The world of work is changing with the increased use of technology,
And companies are becoming increasingly competitive.
Companies will have to downsize or re-engineer their operations to remain competitive.
This will affect employment,
As businesses will be forced to reduce the number of people employed while accomplishing the same amount of work,
If not more.
For instance,
Former mayor Martin O'Malley pushed the city of Baltimore to use CityStat,
A performance measurement data and management system that allows city officials to maintain statistics on several areas,
From crime trends to the conditions of potholes.
This system aided in better evaluation of policies and procedures with accountability and efficiency in terms of time and money.
In its first year,
CityStat saved the city $13.
2 million.
Even mass transit systems have innovated with hybrid bus fleets to real-time tracking at bus stands.
In addition,
The growing use of mobile data terminals in vehicles that serve as communication hubs between vehicles and a control center automatically send data on location,
Passenger counts,
Engine performance,
Mileage,
And other information.
This tool helps to deliver and manage transportation systems.
Still,
Other innovative strategies include hospitals digitizing medical information and electronic medical records.
For example,
The U.
S.
Department of Housing and Urban Development's HOPE-6 initiatives turn severely distressed public housing in urban areas into revitalized mixed-income environments.
The Harlem Children's Zone used a community-based approach to educate local area children.
And the Environmental Protection Agency's Brownfield Grants facilitates turning over brownfields for environmental protection,
Green spaces,
Community,
And commercial development.
Innovation may occur due to effort from a range of different agents,
By chance,
Or as a result of a major system failure.
According to Peter F.
Drucker,
The general source of innovations are changes in industry structure,
In market structure,
In local and global demographics,
In human perception,
In the amount of available scientific knowledge,
Etc.
In the simplest linear model of innovation,
The traditionally recognized source is manufacturer innovation.
This is where a person or business innovates in order to sell the innovation.
Another source of innovation is end-user innovation.
This is where a person or company develops an innovation for their own personal or in-house use,
Because existing products do not meet their needs.
MIT economist Eric Von Hippel identified end-user innovation as the most important source in his classic book on the subject,
The Sources of Innovation.
The robotics engineer Joseph F.
Engelberger asserts that innovations require only three things.
One,
A recognized need.
Two,
Competent people with relevant technology.
And three,
Financial support.
The Klein chain-linked model of innovation places emphasis on potential market needs as drivers of the innovation process and describes the complex and often iterative feedback loops between marketing,
Design,
Manufacturing,
And R&D.
Innovation by businesses is achieved in many ways,
With much attention now given to formal research and development,
R&D,
Or breakthrough innovations.
R&D helps spur on patents and other scientific innovations that leads to productive growth in such areas as industry,
Medicine,
Engineering,
And government.
Yet,
Innovations can be developed by less formal on-the-job modifications of practice,
Through exchange and combination of professional experience,
And by many other routes.
Investigation of relationship between the concepts of innovation and technology transfer revealed overlap.
The more radical and revolutionary innovations tend to emerge from R&D,
While more incremental innovations may emerge from practice,
But there are many exceptions to each of these trends.
Information technology and changing business processes and management style can produce a work climate favorable to innovation.
For example,
The software tool company Atlassian conducts quarterly ship-it days in which employees may work on anything related to the company's products.
Google employees work on self-directed projects from 20% of their time,
Known as innovation time off.
Both companies cite these bottom-up processes as major sources for new products and features.
An important innovation factor includes customers buying products or using services.
As a result,
Organizations may incorporate users in focus groups,
User center approach,
Work closely with so-called lead users,
Lead user approach,
Or users might adapt their products themselves.
The lead user method focuses on idea generation based on leading users to develop breakthrough innovations.
USTER,
A project to innovate Europe's surface transportation system,
Employs such workshops.
Regarding this user innovation,
A great deal of innovation is done by those actually implementing and using technologies and products as part of their normal activities.
Sometimes,
User innovators may become entrepreneurs selling their product.
They may choose to trade their innovation in exchange for other innovations,
Or as they may be adopted by their suppliers.
Nowadays,
They may also choose to freely reveal their innovations using methods like open source.
In such networks of innovation,
The users or communities of users can further develop technologies and reinvent their social meaning.
One technique for innovating a solution to an identified problem is to actually attempt and experiment with many possible solutions.
This technique was famously used by Thomas Edison's laboratory to find a version of the incandescent light bulb economically viable for home use,
Which involved searching through thousands of possible filament designs before settling on carbonized bamboo.
This technique is sometimes used in pharmaceutical drug discovery,
Thousands of chemical compounds are subjected to high throughput screening to see if they have any activity against a target molecule,
Which has been identified as biologically significant to a disease.
Promising compounds can then be studied,
Modified to improve efficacy and reduce side effects,
Evaluated for cost of manufacture,
And if successful,
Turned into treatments.
The related technique of A-B testing is often used to help optimize the design of websites and mobile labs.
Scholars have argued that the main purpose for innovation today is profit maximization and capital valorization.
Consequently,
Programs of organizational innovation are typically tightly linked to organizational goals and growth objectives,
To the business plan,
And to market competitive positioning.
Davila et al.
2006,
Note,
Companies cannot grow through cost reduction and re-engineering alone.
Innovation is a key element in providing aggressive top-line growth and for increasing bottom-line results.
One survey across a large number of manufacturing and services organizations found that systematic programs of organizational innovation are most frequently driven by improved quality,
Creation of new markets,
Extension of the product range,
Reduced labor costs,
Improved production processes,
Reduced materials cost,
Reduced environmental damage,
Replacement of products or services,
Reduced energy consumption,
And conformance to regulations.
Different goals are appropriate for different products,
Processes,
And services.
According to Andrea Vaona and Mario Pianta,
Some example goals of innovation could stem from two different types of technological strategies.
Technological competitiveness and active price competitiveness.
Technological competitiveness may have a tendency to be pursued by smaller firms and can be characterized as efforts for market-oriented innovation,
Such as a strategy of market expansion and patenting activity.
On the other hand,
Active price competitiveness is geared toward process innovations that lead to efficiency and flexibility,
Which tend to be pursued by large established firms as they seek to expand their market foothold.
Whether innovation goals are successfully achieved or otherwise depends greatly on the environment.
Prevailing in the organization.
