Learning Objectives

Chapter 5 By the end of this chapter you will develop an

understanding of:
• where innovations come from – the wide range of
Sources of innovation different sources which offer opportunities to
entrepreneurs
• idea of ‘push’ and ‘pull’ forces and their interaction
(knowledge-push/technology-push/supply-push,
demand pull)
• innovation as pattern of occasional breakthrough and
long periods of incremental improvement
• importance of different sources over time
• where and when you could search for opportunities
to innovate
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Technology Push & Demand Pull

Tech Push--3M: Post-it notes, Scotch tape, Scotch guard,

Dobie scouring pads, Ace bandages, Thinsulate
insulation

Others?

Demand Pull--can you list some? (evolution of digital

camera is one…)

Are these incremental or radical innovations?

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 Types of product innovation Disruptive innovation & emerging markets
• What is ‘disruptive innovation’ first of all?

• It is in the media everywhere…but 9 times out of 10 the

term is misused and misunderstood.
New to the world products

New product lines

• Please see my handout on disruptive innovation and
Line extensions
we can discuss…
Repositionings
• The role of emerging markets is fertile ground for
Cost reductions
innovation. But not necessarily the kind of innovation
Incremental product
improvements we first think of.

• We will do a group exercise on ‘frugal innovation’ after

Figure 5.2 of the book indicates a typical breakdown, and we could construct a the slides
similar picture for process innovation

Mass customization Other sources of innovation

what is it? From the textbook:
- “Ability to offer highly configured bundles of non-price
factors configured to suit different market segments (with
the ideal target of total customization – i.e. market size of
1)”
- “but to do this without incurring cost penalties and the
setting up of a tradeoff of agility versus prices”
- What are the enabling technologies for products?
- What about services?
• Users as innovators (Von Hippel – skateboards,
medical equipment, construction equipment, advanced
manufacturing, software etc)
• Extreme users (national defence, aerospace,
enthusiasts, extreme professionals – boring machines
for the Chunnel, subs for Mariana Trench, Ryzen2 uses
7nm process)
• Watching others (benchmarking your products /
processes)
• Recombinant innovation (taking innovation from
someplace else – Reebok pump running shoe)
• Design led innovation (Apple)
• Regulation (internal combustion engine – fuel
mileage, Trump admininstration)
 How to search Summary
Korean Innovation Survey (waves 2012, 2014, 2016)
Mfg Service • innovations don’t appear perfectly formed!
1. Your firm or affiliates 21.0% 7.5% • process is not simply a spark of imagination
2. Suppliers (raw materials, parts, software) 8.5% 4.1%
giving rise to changing the world!
3. Customers and clients 13.9% 5.8%
• instead innovations come from a number of
4. Competitors in the same industry 8.4% 4.0%
5. Private service firms (consulting, commercial lab) 3.4% 2.2%
sources which interact over time
6. University and higher education institutions 4.7% 1.6% • sources of innovation fall into 2 broad classes –
7. Government, public and private research institute 5.7% 3.5% technology push and demand pull
8. Conference, exhibition, fairs 8.1% 2.5% • although they almost always act in tandem:
9. Journals, books 6.4% 2.4%
innovation arises from the interplay between the
10. Association, coop, etc. 5.5% 2.8%
two
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