ITIS407

IS Innovation and New

Technologies

Fall 2021
 Instructor
• Dr. Mohammed Ali Eltaher

• Ph.D., in Computer Science & Engineering

▪ Social Media Data Mining
• M.S., in Intelligent System
• B.S., in Computer Science

• Email: m.eltaher@uot.edu.ly
 Course Information

• Textbook:
The Management of
Technology and
Innovation: A Strategic
Approach, 2nd edition,

White and Bruton

• PowerPoint slides
 Work and Grading

• Homework assignments
• Two midterms, one final
• Participation can help on margins
• Academic honesty policy
 General Background - Definitions

• Science – understanding the natural world – out

of “natural philosophy”– observes natural world
– discovery oriented .
• Technology – System to organize scientific and
technical knowledge to achieve a practical
purpose – “systems” include technical advance
plus models to implement that advance – moves
from observation to implementation
 General Background - Definitions

• Research – increasing scientific OR technical

knowledge or both.
• Invention – applying research knowledge to
create a practical idea/device.
• Innovation – built on scientific discovery and
breakthrough invention(s) – is the system of
Research, Invention, & Development using both
science and technology to commercialize
 General Background - Definitions

• Innovation System – the ecosystem for

developing innovation – operates at 2 levels: the
institutional actors, and the face-to-face groups.
• Innovation Wave – 40/50 year cycle of
innovation based on radical, breakthrough,
disruptive invention, then applications piled on
this, productivity rises, then long period of
incremental invention.
General Background - Definitions
• “Valley of Death” – where invention and
innovation usually dies - gap between
research and development – institutions
often not in place to bridge this gap, and
move idea into development prototyping
and production, then invention into inn
Technology & Innovation
Scientific Discovery

Invention

Innovation

Technology

Process to Be Managed—Discovery to Application

 Definition of Technology

• The processes used to change inputs into

outputs.

• The application of knowledge to perform work.

• The theoretical and practical knowledge, and

skills that can be used to develop products as
well as their production and delivery system.
 Definition of Technology

• The technical means people use to improve

their surroundings

• The application of science, especially to

industrial or commercial objectives; the entire
body of methods and materials used to achieve
such objectives
Definition of Innovation

• Innovation – the
• use of new technological or market
knowledge to offer a new product or
service that customers want
• Innovation = invention +
commercialization
• Innovation - the adoption of ideas that
are new to the adopting organization
 The innovation process
EXTERNAL-
MARKET-LEVEL
AGENTS OR FIRM-LEVEL
PROCESS
INITIATIVES FIRM-LEVEL INITIATIVES

Applied research Development Adoption or

Basic research Investment purchase decision
ACTIVITIES Information collation Testing

Inventions Prototypes Market penetration

Discoveries Innovation
OUTPUTS Blueprints Beta-versions (product or process)
Ideas Plans
Adaptation
Improvement

RESEARCH AND DEVELOPMENT COMMERCIALISATION DIFFUSION

STAGE
1 2 32 4 5
 Invention, Innovation, Diffusion

• Invention: creation of an idea to do or make

something (profitability not yet verified)
• Innovation: new product/ process
commercially valuable i.e. successfully
developed inventions.
• Diffusion: the spread of a new
invention/innovation throughout society or at
least throughout the relevant part of society.
▪ Without this cannot gain full benefits
Twentieth-century technological
innovations
A typology of innovations
 Types of Innovation
• Product versus Process Innovation
▪ Product innovations are embodied in the outputs of an
organization – its goods or services.
▪ Process innovations are innovations in the way an
organization conducts its business, such as in
techniques of producing or marketing goods or
services.
▪ Product innovations can enable process innovations
and vice versa.
▪ What is a product innovation for one organization might
be a process innovation for another
• E.g., UPS creates a new distribution service (product
innovation) that enables its customers to distribute their goods
more widely or more easily (process innovation)
 Types of Innovation
• Radical versus Incremental Innovation
▪ The radicalness of an innovation is the degree
to which it is new and different from previously
existing products and processes.
▪ Incremental innovations may involve only a
minor change from (or adjustment to) existing
practices.
▪ The radicalness of an innovation is relative; it
may change over time or with respect to
different observers.
• E.g., digital photography a more radical innovation
for Kodak than for Sony.
 Types of Innovation
• Competence-Enhancing versus Competence-
Destroying Innovation
▪ Competence-enhancing innovations build on the
firm’s existing knowledge base
• E.g., Intel’s Pentium 4 built on the technology for Pentium III.
▪ Competence-destroying innovations renders a firm’s
existing competencies out-of-date.
• E.g., electronic calculators rendered Keuffel & Esser’s slide
rule expertise obsolete.
▪ Whether an innovation is competence enhancing or
competence destroying depends on the perspective of
a particular firm.
 Types of Innovation
• Architectural versus Component Innovation
▪ A component innovation (or modular innovation)
entails changes 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
▪ An architectural innovation entails changing the
overall design of the system or the way components
interact.
• E.g., transition from high-wheel bicycle to safety bicycle.
▪ Most architectural innovations require changes in the
core components also.
 Evolutionary Patterns of
Development
• A process that begins with basic scientific
discoveries and ends with commercial
products that are adopted by a wide range
of customers
 Evolution of technology

Better
New Product products
technology introduced adopted by
invented to market more
Technology Refine the people
evolves and technology
performance and develop
improves new
generations of
products
 Radical and Incremental
Technological Change

• Most technological innovation is

incremental, and involves small
improvements to existing technologies.
• Some technological innovation is radical,
and involves fundamentally new ways of
solving a problem
 The Nature of Innovation and
Competition
• Product innovation: when technological
innovation involves the creation of new goods
and services sold to customers
• Process innovation: when technological
innovation involves problem solving that
improves the method of creating or delivering a
product or service
• Fluid phase dominated by product innovation
• Specific phase dominated by process innovation
 Competence-Enhancing and
Competence-Destroying Innovation
• Radical new technology does not always
undermine the capabilities of incumbent firms
• It is competence-enhancing if it makes use of
existing knowledge, skills, abilities structure,
design, production processes and plant and
equipment
• It is competence-destroying if it undermines
existing skills, structures, etc.
• Established firms are able to transition to a
radical technology when that technology is
competence-enhancing but fail to do so when it
is competence-destroying
 Architectural Innovation
• A modular innovation is one that changes
the components from which the innovation
is created, but not the linkages between
those components
• An architectural innovation is one that
changes the linkages between the
components, but leaves the components
themselves intact
Why incumbent firms fail in the face
of Architectural Innovation
1. Often lack the right external linkages to gather
information about a new technology
architecture emerging in an industry
2. Often lack the capacity to recognize the value
of information about architectural innovation
that is presented to them
3. Often have difficulty making use of information
because adopting an architectural innovation
typically requires a company to restructure
Disruptive Technology and Value Networks

• For new firms: target a new or underserved

segment of the market with a disruptive
innovation
• For incumbent firms: make sure core technology
conforms to the features of the dominant design
because deviation from the dominant design will
make it harder for you to satisfy customers once
that design has emerged
• As an incumbent firm, develop a new company
to exploit the disruptive technology, rather than
ignoring it, or trying to develop the technology
within the confines of your existing organization
 Incremental vs. radical innovation

• Organizational view of classifying innovations

• Innovation is radical if the technological
knowledge required to exploit it is very different
than existing knowledge (existing knowledge
becomes obsolete)
• Radical innovations are competence
destroying
• Innovation is incremental if the knowledge
required to exploit it builds on existing
knowledge (competence enhancing)