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Table of Contents
Cover
About the Authors
Preface to the Sixth Edition
How to Use This Book: Key Features
CHAPTER 1: Innovation – What It Is and Why It Matters
1.1 The Importance of Innovation
1.2 Innovation Is not Just High Technology
1.3 It’s Not Just Products…
1.4 Innovation and Entrepreneurship
1.5 Strategic Advantage Through Innovation
1.6 Old Question, New Context
1.7 What Is Innovation?
1.8 A Process View of Innovation
1.9 Innovation Scopes and Types
1.10 Key Aspects of Innovation
1.11 Innovation Management
Summary
Further Reading
Case Studies
References
CHAPTER 2: Innovation as a Core Business Process
2.1 Different Circumstances, Similar Management
2.2 Services and Innovation
2.3 Variations on a Theme
2.4 A Contingency Model of the Innovation Process
2.5 Evolving Models of the Process
2.6 Can We Manage Innovation?
2.7 Learning to Manage Innovation
2.8 What Do We Know About Successful Innovation Management?
2.9 Beyond the Steady State
Summary

1
Further Reading
Case Studies
References
CHAPTER 3: Building the Innovative Organization
3.1 Shared Vision, Leadership, and the Will to Innovate
3.2 Appropriate Organizational Structure
3.3 Key Individuals
3.4 High Involvement in Innovation
3.5 A Roadmap for the Journey
3.6 Effective Team Working
3.7 Creative Climate
3.8 Boundary-Spanning
Summary
Further Reading
Case Study
References
CHAPTER 4: Developing an Innovation Strategy
4.1 “Rationalist” or “Incrementalist” Strategies for Innovation?
4.2 Innovation “Leadership” versus “Followership”
4.3 The Dynamic Capabilities of Firms
4.4 Appropriating the Benefits from Innovation
4.5 Exploiting Technological Trajectories
4.6 Developing Firm-specific Competencies
4.7 Globalization of Innovation
4.8 Enabling Strategy Making
Summary
Further Reading
Case Studies
References
CHAPTER 5: Sources of Innovation
5.1 Where Do Innovations Come From?
5.2 Knowledge Push
5.3 Need Pull
5.4 Making Processes Better

2
5.5 Crisis-driven Innovation
5.6 Whose Needs? The Challenge of Underserved Markets
5.7 Emerging Markets
5.8 Toward Mass Customization
5.9 Users as Innovators
5.10 Using the Crowd
5.11 Extreme Users
5.12 Prototyping
5.13 Watching Others – and Learning From Them
5.14 Recombinant Innovation
5.15 Design-led Innovation
5.16 Regulation
5.17 Futures and Forecasting
5.18 Accidents
Summary
Further Reading
Case Studies
References
CHAPTER 6: Search Strategies for Innovation
6.1 The Innovation Opportunity
6.2 When to Search
6.3 Who Is Involved in Search
6.4 Where to Search – The Innovation Treasure Hunt
6.5 A Map of Innovation Search Space
6.6 How to Search
6.7 Absorptive Capacity
6.8 Tools and Mechanisms to Enable Search
Summary
Further Reading
Case Studies
References
CHAPTER 7: Innovation Networks
7.1 The “Spaghetti” Model of Innovation
7.2 Innovation Networks

3
7.3 Networks at the Start-up
7.4 Networks on the Inside …
7.5 Networks on the Outside
7.6 Networks into the Unknown
7.7 Managing Innovation Networks
Summary
Further Reading
Case Studies
References
CHAPTER 8: Decision Making Under Uncertainty
8.1 Meeting the Challenge of Uncertainty
8.2 The Funnel of Uncertainty
8.3 Decision Making for Incremental Innovation
8.4 Building the Business Case
8.5 Concept Testing and Engaging Stakeholders
8.6 Spreading the Risk
8.7 Decision Making at the Edge
8.8 Mapping the Selection Space
Summary
Further Reading
Case Studies
References
CHAPTER 9: Making the Innovation Case
9.1 Developing the Business Plan
9.2 Forecasting Innovation
9.3 Estimating the Adoption of Innovations
9.4 Assessing Risk, Recognizing Uncertainty
9.5 Anticipating the Resources
Summary
Further Reading
Case Studies
References
CHAPTER 10: Creating New Products and Services
10.1 Processes for New Product Development

4
10.2 Factors Influencing Product Success or Failure
10.3 Influence of Technology and Markets on Commercialization
10.4 Differentiating Products
10.5 Building Architectural Products
10.6 Commercializing Technological Products
10.7 Implementing Complex Products
10.8 Service Innovation
Summary
Further Reading
Case Studies
References
CHAPTER 11: Exploiting Open Innovation and Collaboration
11.1 Joint Ventures and Alliances
11.2 Forms of Collaboration
11.3 Patterns of Collaboration
11.4 Influence of Technology and Organization
11.5 Collaborating with Suppliers to Innovate
11.6 User-led Innovation
11.7 Extreme Users
11.8 Benefits and Limits of Open Innovation
Summary
Further Reading
Case Studies
References
CHAPTER 12: Promoting Entrepreneurship and New Ventures
12.1 Ventures, Defined
12.2 Internal Corporate Venturing
12.3 Managing Corporate Ventures
12.4 Assessing New Ventures
12.5 Spin-outs and New Ventures
12.6 University Incubators
12.7 Growth and Performance of Innovative Small Firms
Summary
Further Reading

5
Case Studies
References
CHAPTER 13: Capturing the Business Value of Innovation
13.1 Creating Value through Innovation
13.2 Innovation and Firm Performance
13.3 Exploiting Knowledge and Intellectual Property
13.4 Sharing and Distributing Knowledge
13.5 Exploiting Intellectual Property
13.6 Business Models and Value Capture
13.7 Dynamics of Generative Interaction
Summary
Further Reading
Case Studies
References
CHAPTER 14: Capturing Social Value
14.1 Building BRICs – The Rise of New Players on the Innovation Stage
14.2 Innovation and Social Change
14.3 The Challenge of Sustainability-led Innovation
14.4 A Framework Model for Sustainability-led Innovation
14.5 Responsible Innovation
Summary
Further Reading
Case Studies
References
CHAPTER 15: Capturing Learning from Innovation
15.1 What We Have Learned About Managing Innovation
15.2 How to Build Dynamic Capability
15.3 How to Manage Innovation
15.4 The Importance of Failure
15.5 Tools to Help Capture Learning
15.6 Innovation Auditing
15.7 Measuring Innovation Performance
15.8 Measuring Innovation Management Capability
15.9 Reflections

6
15.10 Developing Innovation Capability
15.11 Final Thoughts
Summary
Further Reading
Case Studies
References
Index
End User License Agreement

List of Tables
Chapter 1
TABLE 1.1 Where Innovation Makes a Difference
TABLE 1.2 Entrepreneurship and Innovation
TABLE 1.3 Strategic Advantages Through Innovation
TABLE 1.4 Changing Context for Innovation (Based on [25])
TABLE 1.5 Examples of Paradigm Innovation
TABLE 1.6 Some Examples of Innovations Mapped on to the 4Ps Model
TABLE 1.7 Some Examples of Sources of Discontinuity
TABLE 1.8 Stages in the Innovation Life Cycle
Chapter 2
TABLE 2.1 Examples of Incremental and Radical Innovations in Services
TABLE 2.2 Challenges in Social Entrepreneurship
TABLE 2.3 Advantages and Disadvantages for Small Firm Innovators
TABLE 2.4 Different Innovation Management Archetypes
TABLE 2.5 How Context Affects Innovation Management
TABLE 2.6 Rothwell’s Five Generations of Innovation Models [73]
TABLE 2.7 Overview of the Difficulties from Taking a Partial View of Innovation
TABLE 2.8 Core Abilities in Managing Innovation
Chapter 3
TABLE 3.1 Components of the Innovative Organization
TABLE 3.2 Mintzberg’s Structural Archetypes
TABLE 3.3 High-involvement Innovation in German and Austrian Companies
TABLE 3.4 Stages in the Evolution of HII Capability
TABLE 3.5 Potential Assets and Liabilities of Using a Group
TABLE 3.6 Climate Factors Influencing Innovation

7
Chapter 4
TABLE 4.1 The Effects of Corporate Governance on Innovation
TABLE 4.2 Relative Importance of National and Overseas Sources of Technical Knowledge (% Firms
Judging Source as Being “Very Important”)
TABLE 4.3 Effectiveness of Methods of Learning About Competitors
TABLE 4.4 Inter-industry Differences in Product Development Lead Time
TABLE 4.5 Cases of Standardization and Innovation Success and Failure
TABLE 4.6 Inter-industry Differences in the Effectiveness of Patenting
TABLE 4.7 Five Major Technological Trajectories
TABLE 4.8 Patterns of Innovation in the “New” and “Old” Economies
TABLE 4.9 Two Views of Corporate Structure: Strategic Business Units and Core Competencies
TABLE 4.10 The Strategic Function of Corporate Technologies
TABLE 4.11 Technological Accumulation Across Product Generations
TABLE 4.12 Indicators of the Geographic Location of the Innovative Activities of Firms
TABLE 4.13 Criteria for Evaluating Different Types of Research Project
Chapter 5
TABLE 5.1 Some Examples of Knowledge-push Innovations
TABLE 5.2 Challenging Assumptions About the Bottom of the Pyramid
TABLE 5.3 Options in Customization (after Lampel and Mintzberg [24])
Chapter 6
TABLE 6.1 Challenges in Innovation Search
TABLE 6.2 Breakdown of Sources of Innovation by Firm Size (Based on the UK National Innovation
Survey)
Chapter 7
TABLE 7.1 Competitive Dynamics in Network Industries
TABLE 7.2 Types of Innovation Networks
TABLE 7.3 Barriers to New Network Formation (Based on [23])
TABLE 7.4 Challenges in Managing Innovation Networks
Chapter 8
TABLE 8.1 Examples of Business Models
TABLE 8.2 Problems Arising from Poor Portfolio Management (Based on [32])
TABLE 8.3 Examples of Internet as a Route to Business Model Innovation
TABLE 8.4 Examples of Justifications for Nonadoption of Radical Ideas
TABLE 8.5 Selection Challenges, Tools, and Enabling Structures
Chapter 9

8
TABLE 9.1 Criteria Used by Venture Capitalists to Assess Proposals
TABLE 9.2 Types, Uses, and Limitations of Different Methods of Forecasting
TABLE 9.3 Use and Usefulness of Criteria Project Screening and Selection
TABLE 9.4 Management of Conventional and Risky Projects
TABLE 9.5 Resource Allocation for Different Types of Innovative Project
TABLE 9.6 List of Potential Factors for Project Evaluation
Chapter 10
TABLE 10.1 Some Key Studies of New Product and Service Development
TABLE 10.2 The Influence of Product Novelty on the Effectiveness of Tools Used for Product
Development
TABLE 10.3 Characteristics of Service “High Innovators”
Chapter 11
TABLE 11.1 Motives for Collaboration
TABLE 11.2 Technological and Organizational Factors that Influence Acquisition Mechanisms
TABLE 11.3 Common Reasons for the Failure of Alliances (Review of 16 Studies)
TABLE 11.4 The Effects of Collaboration on Product Development
TABLE 11.5 Factors Influencing Success of Collaboration
TABLE 11.6 Determinants of Learning Through Alliances
TABLE 11.7 Factors Influencing the Success of Relationships Between Firms and Contract Research
Organizations
TABLE 11.8 Types of Horizontal and Vertical Collaboration
TABLE 11.9 Successful Management Practices to Promote Supplier Innovation
TABLE 11.10 Potential Benefits and Challenges of Applying Open Innovation
Chapter 12
TABLE 12.1 Objectives of Corporate Venturing in the United Kingdom
TABLE 12.2 Comparison of Motives for Corporate Venturing in the United States and Japan
TABLE 12.3 Systematic Differences Between Technical and Commercial Orientations
TABLE 12.4 Components of a Typical Business Plan for a New Venture
TABLE 12.5 Criteria for Selecting Corporate Ventures
TABLE 12.6 Potential Sources of Conflict Between Corporate and Venture Managers
TABLE 12.7 Type of New Venture and Links with Parent
TABLE 12.8 Motives, Structure, and Management of Corporate Ventures
TABLE 12.9 University Ventures Funded by Venture Capital
TABLE 12.10 Initial Conditions Influencing the Success of New Ventures
TABLE 12.11 Degree and Type of Innovation and Small Firm Performance

9
TABLE 12.12 Some of the Fastest Growing Private Firms in the United Kingdom
Chapter 13
TABLE 13.1 Knowledge Management Implementation Strategies
TABLE 13.2 Process Model Linking Innovation Phase to Knowledge Management Activities
TABLE 13.3 Patent Indicators for Different Sectors
TABLE 13.4 Some Examples of Generic Business Models
TABLE 13.5 Variation in Value Creation within and across Sectors
Chapter 14
TABLE 14.1 Challenges in Social Entrepreneurship
TABLE 14.2 Examples of Sustainability-led Innovation
TABLE 14.3 Operational Optimization
TABLE 14.4 Organizational Transformation
TABLE 14.5 Systems Building
Chapter 15
TABLE 15.1 Audit Frameworks to Support Capability Development

List of Illustrations
Chapter 1
FIGURE 1.1 The 4Ps of innovation space.
FIGURE 1.2 Suggested innovations mapped on to the 4Ps framework.
FIGURE 1.3 Dimensions of innovation.
FIGURE 1.4 Component and architectural innovation.
FIGURE 1.5 The innovation life cycle.
FIGURE 1.6 Simplified model of the innovation process.
Chapter 2
FIGURE 2.1 A model of the innovation process.
FIGURE 2.2 Managing steady-state and discontinuous innovation.
FIGURE 2.3 Groups of firms according to innovation capability.
FIGURE 2.4 Process model of innovation.
FIGURE 2.5 Key questions in the select phase.
FIGURE 2.6 Key questions in the implement phase.
Chapter 3
FIGURE 3.1 The five-stage high-involvement innovation model.
Chapter 4
FIGURE 4.1 Internationalization of R&D by region (% R&D expenditure outside home region).

10
FIGURE 4.2 Use of technology intelligence methods by sector.
Chapter 5
FIGURE 5.1 Where do innovations come from?
FIGURE 5.2 Types of new product [6].
FIGURE 5.3 The pattern of disruptive innovation.
FIGURE 5.4 The role of design-driven innovation.
Chapter 6
FIGURE 6.1 The five-question framework.
FIGURE 6.2 Exploit and explore options in search.
FIGURE 6.3 A map of innovation search space.
FIGURE 6.4 Sources of information used for product and/or process innovations by degree of
importance, EU-28, 2010–12 (1) (% of all product and or process innovative enterprises).
FIGURE 6.5 The open-innovation model [49].
Chapter 7
FIGURE 7.1 Spaghetti model of innovation.
FIGURE 7.2 Different network perspectives in innovation research.
FIGURE 7.3 Four generic approaches to network building.
FIGURE 7.4 Types of innovation network.
Chapter 8
FIGURE 8.1 Uncertainty and resource commitment in innovation projects.
FIGURE 8.2 The innovation funnel.

FIGURE 8.3 Outline map of innovation selection space [44].1

Chapter 9
FIGURE 9.1 Typical diffusion S-curve for the adoption of an innovation.
FIGURE 9.2 Uncertainty in project planning.
FIGURE 9.3 An example of a matrix-based portfolio.
Chapter 10
FIGURE 10.1 Stage-gate process for new product development.
FIGURE 10.2 Development funnel model for new product development.
FIGURE 10.3 Factors influencing new product success.
FIGURE 10.4 Key factors influencing the success of new product development.
FIGURE 10.5 How technological and market maturity influence the commercialization process.
FIGURE 10.6 How market maturity influences resources and performance.
FIGURE 10.7 Relationship between innovation and performance in fast-moving consumer goods.

11
FIGURE 10.8 Quality function development (QFD) matrix.
FIGURE 10.9 Technical and behavioral segmentation for high-technology products and services.
FIGURE 10.10 Developer–adopter relationship for complex products.
FIGURE 10.11 Innovation and growth in the service sector.
FIGURE 10.12 Factors influencing the effectiveness of new service development.
Chapter 11
FIGURE 11.1 A model for collaboration for innovation.
FIGURE 11.2 Collaboration by sector and region.
FIGURE 11.3 How objectives and nature of supply market influence supplier relationships.
FIGURE 11.4 Types of user innovation.
FIGURE 11.5 Strategies to support open innovation.
Chapter 12
FIGURE 12.1 The role of venturing in the development and commercialization of innovations.
FIGURE 12.2 Factors influencing the decision to establish a new venture.
FIGURE 12.3 Cash flow profiles for three types of technology-based ventures: (a) research-based, e.g.,
biotechnology; (b) development-based, e.g., electronics; (c) production-based, e.g., software.
FIGURE 12.4 Venture capital as a percentage of GDP (1997).
FIGURE 12.5 The most effective structure for a corporate venture depends on the balance between
leverage or learning (exploit versus explore).
Chapter 13
FIGURE 13.1 Task, organizational context, and knowledge types.
FIGURE 13.2 A model of knowledge structuring and sharing.
FIGURE 13.3 Process model of knowledge management for innovation.
FIGURE 13.4 Typical lifetime cost of a single patent from the European Patent Office.
FIGURE 13.5 Business model canvas.
FIGURE 13.6 A chain of mechanisms that support generative interaction.
Chapter 14
FIGURE 14.1 The journey toward sustainability-led innovation.
FIGURE 14.2 A typology of sustainable innovations.
Chapter 15
FIGURE 15.1 Simplified model of the innovation process.
FIGURE 15.2 Kolb’s cycle of experiential learning.
FIGURE 15.3 Outline framework for innovation measurement.
FIGURE 15.4 Developing innovation management capability.

12
Managing Innovation
Integrating Technological, Market and Organizational Change

Sixth Edition

JOE TIDD
Science Policy Research Unit (SPRU), University of Sussex, UK

JOHN BESSANT
Business School, University of Exeter, UK

13
 VP AND EDITORIAL DIRECTOR Mike McDonald
EXECUTIVE EDITOR Lise Johnson
EDITORIAL ASSISTANT Alden Farrar
EDITORIAL MANAGER Leah Michael
CONTENT MANAGEMENT DIRECTOR Lisa Wojcik
CONTENT MANAGER Nichole Urban
SENIOR CONTENT SPECIALIST Nicole Repasky
PRODUCTION EDITOR Loganathan Kandan
COVER PHOTO CREDIT © stephan kerkhofs/Shutterstock

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Copyright © 2018, 2013, 2009, 2005, 2001 Joe Tidd and John Bessant. All rights reserved. No part of this publication may
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ISBN: 978-1-11937945-4 (PBK)
ISBN: 978-1-119-37944-7 (EVALC)
Library of Congress Cataloging in Publication Data:
Names: Tidd, Joseph, 1960-author. | Bessant, J. R., author.
Title: Managing innovation : integrating technological, market and organizational change / by Joe Tidd and John Bessant.
Description: Sixth Edition. | Hoboken : Wiley, [2018] | Revised edition of the authors’ Managing innovation, [2013] |
Identifiers: LCCN 2017059953 (print) | LCCN 2018006518 (ebook) | ISBN 9781119379416 (epub) | ISBN 9781119379409
(pdf) | ISBN 9781119379454 (pbk.)
Subjects: LCSH: Technological innovations—Management. | Industrial management. | Technological innovations. |
Organizational change.
Classification: LCC HD45 (ebook) | LCC HD45 .T534 2018 (print) | DDC 658.5/14—dc23
LC record available at https://lccn.loc.gov/2017059953
The inside back cover will contain printing identification and country of origin if omitted from this page. In addition, if
the ISBN on the back cover differs from the ISBN on this page, the one on the back cover is correct.

14
About the Authors

JOE TIDD is a physicist with subsequent degrees in technology policy and business administration.
He is professor of technology and innovation management at SPRU, and visiting Professor at
University College London, and previously at Cass Business School, Copenhagen Business School, and
Rotterdam School of Management. Dr Tidd was previously Deputy Director of SPRU and Head of the
Innovation Group and Director of the Executive MBA Program at Imperial College.
He has worked as policy adviser to the CBI (Confederation of British Industry), presented expert
evidence to three Select Committee Enquiries held by the House of Commons and House of Lords,
and was the only academic member of the UK Government Innovation Review. He is a founding
partner of Management Masters LLP.
He was a researcher for the 5-year International Motor Vehicle Program of the Massachusetts
Institute of Technology (MIT), which identified Lean Production, and has worked on technology and
innovation management projects for consultants Arthur D. Little, CAP Gemini, and McKinsey, and
numerous technology-based firms, including American Express Technology, Applied Materials,
ASML, BOC Edwards, BT, Marconi, National Power, NKT, Nortel Networks, and Petrobras, and
international agencies such as UNESCO in Africa. He is the winner of the Price Waterhouse Urwick
Medal for contribution to management teaching and research and the Epton Prize from the R&D
Society.
He has written 9 books and more than 60 papers on the management of technology and innovation,
with than 17,000 research citations, and is Managing Editor of the International Journal of
Innovation Management (http://www.worldscientific.com/worldscinet/ijim), the official journal of
International Society of Professional Innovation Management. He hosts the Innovation Masters
YouTube channel and is part of the Intrapreneurship Hub, a collaborative venture between Sussex,
Bocconi, and Renmin business schools.
JOHN BESSANT

15
Originally a chemical engineer, John Bessant has been active in the field of research and consultancy
in technology and innovation management for over 35 years. He is currently holds the Chair in
Innovation and Entrepreneurship at the University of Exeter and has visiting appointments at the
universities of Erlangen-Nuremburg, Queensland University of Technology, and the National
University of Ireland.

16
Preface to the Sixth Edition
Innovative firms outperform, in both employment and sales, firms that fail to innovate [1]. We know
that those organizations that are consistently successful at managing innovation outperform their
peers in terms of growth, financial performance, and employment and that the broader social benefits
of innovation are even greater [2]. However, managing innovation is not easy or automatic. It
requires skills and knowledge, which are significantly different to the standard management toolkit
and experience, because most management training and advice are aimed to maintain stability, hence
the most sought after degree is an MBA – Master of Business Administration. As a result, most
organizations either simply do not formally manage the innovation process or manage it in an ad hoc
way. Studies confirm that only around 12% of organizations successfully manage innovation, and
only half of these organizations do so consistently across time [3].
Since the first edition of Managing Innovation was published in 1997, we have argued consistently
that successful innovation management is much more than managing a single aspect, such as
creativity, entrepreneurship, research and development, or product development [4]. Our companion
texts deal with such issues more fully [5], but here we continue to promote an integrated process
approach, which deals with the interactions between changes in markets, technology, and
organization. In this sixth edition, we continue our tradition of differentiating our work from that of
others by developing its unique characteristics:
Strong evidence-based approach to the understanding and practice of managing innovation, drawing
upon thousands of research projects, and “Research Notes” on the very latest research findings.
Managing Innovation had more than 8000 citations in Google Scholar in 2017;
Practical, experience-tested processes, models, and tools, including “View,” first-person accounts from
practicing managers on the challenges they face managing innovation;
Extensive additional interactive resources, available from the Wiley Book Companion Site (BCS),
including video, audio pod casts, innovation tools, interactive exercises, and tests to help apply the
learning. Further video is available on our YouTube channel, innovation masters
(https://www.youtube.com/channel/UCG3tXfZXJpDZOGJXuzCUVLw/videos).
In this fully updated sixth edition, we draw upon the latest research and practice, and have extended
our coverage of topical and relevant subjects, including business model innovation, open innovation,
user innovation and crowdsourcing, service and social innovation.
Our understanding of innovation continues to develop, through systematic research,
experimentation, and the ultimate test of management practice and experience. As a result, it is a
challenge for all of us interested in innovation to keep abreast of this fast-developing and
multidisciplinary field. In the general field of business research, the 200 or so active research centers
worldwide produce some 5000 papers each year, many relevant to managing innovation [6]. In the
more specialist fields of technology and innovation management, the 120 research centers worldwide
publish several hundreds of papers each year [7]. One goal of this book is to help make sense and
navigate through this mass of material. Another is to encourage action. As we declared in the first
edition, and still believe strongly, this book is designed to encourage and support practice, and
organization-specific experimentation and learning, and not to substitute for it.
We would like to acknowledge the extensive feedback, support, and contributions from users of the
previous editions, our own colleagues and students, the team at Wiley, and the growing community

17
of innovation scholars and professionals who have contributed directly to this sixth edition, in
particular, the generous participants in the workshops we ran in London, Manchester, Melbourne
Rotterdam, Berlin, Barcelona, Helsinki, Budapest, and Kuala Lumpur.

JOE TIDD & JOHN BESSANT

January 2018

References
1. Tidd, J. and B. Thuriaux-Alemán, Innovation management practices: Cross-sectorial adoption,
variation and effectiveness, R&D Management, 2016. 46(3), 1024–1043.
2. Tidd, J., From knowledge management to strategic competence. 2012, Imperial College Press, third
edition.
3. Jaruzelski, B., J. Loehr, and R. Holman, The global innovation 1000: Why culture is key,
Strategy+Business, Issue 65. 2011, Booz and Company.
4. Eagar, R., et al., The future of innovation management: The next 10 years, Prism, Issue 2011/1.
2011, Arthur D. Little.
5. Bessant, J. and J. Tidd, Entrepreneurship. 2018, Wiley; Innovation and entrepreneurship. 2015,
Wiley, 3rd edition; Strategic innovation management. 2014, Wiley; Isaksen, S. and J. Tidd, Meeting
the innovation challenge: Leadership for transformation and growth. 2006, Wiley; Bessant, J., High
involvement innovation. 2003, Wiley.
6. Mangematin, V. and C. Baden Fuller, Global contests in the production of business knowledge,
Long Range Planning, 2008. 41(1), 117–139.
7. Bhupatiraju, S., et al., Knowledge flows – Analyzing the core literature of innovation,
entrepreneurship and science and technology studies, Research Policy, 2012. 41(7), 1205–1218;
Martin, B., P. Nightingale, and A. Yegros-Yegros, Science and technology studies: Exploring the
knowledge base, Research Policy, 2012. 41(7), 1182–1204.

18
 How to Use This Book: Key Features
This sixth edition of Managing Innovation has seven key features throughout the book and as
associated resources to support learning:

1. Research Notes, which present the latest empirical findings from academic studies to deepen your
knowledge.
2. View, first-person accounts of how innovation is managed in practice.
3. Video interviews, experienced managers and leading academics share their insights.
4. Examples of Innovation in Action, short, real-life examples of innovation.
5. Practical Tools, to experiment and apply the models and methods to improve innovation in a range
of contexts.
6. Extended Case Studies, for deeper understanding, class discussion, and analysis.
7. Multiple-choice Questions, to chart progress and test the understanding of key concepts.

In this print edition, most of these additional features are freely available to students on the Wiley
Book Companion Site (BCS), which is available from the main book page you can find through
https://www.wiley.com/en-
us/Managing+Innovation%3A+Integrating+Technological%2C+Market+and+Organizational+Cha
nge%2C+6th+Edition-p-9781119379416.
In addition, for instructors, the BCS provides Power Point slides, exercises and a test bank of
questions and answers.

19
CHAPTER 1
Innovation – What It Is and Why It Matters

“A slow sort of country” said the Red Queen. “Now here, you see, it takes all the running you can
do to keep in the same place. If you want to get somewhere else, you must run at least twice as fast
as that!”
— Lewis Carroll, Alice through the Looking Glass

You don’t have to look far before you bump into the innovation imperative. It leaps out at you from a
thousand mission statements and strategy documents, each stressing how important innovation is to
“our customers/our shareholders/our business/our future and most often, our survival and growth.”
Innovation shouts from advertisements for products ranging from hairspray to hospital care. It nestles
deep in the heart of our history books, pointing out how far and for how long it has shaped our lives.
And it is on the lips of every politician, recognizing that our lifestyles are constantly shaped and
reshaped by the process of innovation.

20
Innovation makes a huge difference to organizations of all shapes and sizes. The logic is simple – if we
don’t change what we offer the world (products and services) and how we create and deliver them,
we risk being overtaken by others who do. At the limit, it’s about survival, and history is very clear
on this point: survival is not compulsory! Those enterprises that survive do so because they are
capable of regular and focused change. (It’s worth noting that Bill Gates used to say of Microsoft that
it was always only 2 years away from extinction. Or, as Andy Grove, one of the founders of Intel,
pointed out in his autobiography, “only the paranoid survive!”) [1].
In this chapter, we’ll look at the challenge of innovation in more detail – what it is, why it matters,
and, most importantly, how we might think about organizing and managing the process.

1.1 The Importance of Innovation

This isn’t just hype or advertising babble – you can get a feel for the importance attached to it in the
View 1.1.

View 1.1
Innovation – Everybody’s Talking About It
“We have the strongest innovation program that I can remember in my 30-year career at P&G,
and we are investing behind it to drive growth across our business,” Bob McDonald, Procter &
Gamble’s chairman of the board, president, and chief executive officer (CEO)
“We believe in making a difference. Virgin stands for value for money, quality, innovation, fun
and a sense of competitive challenge. We deliver a quality service by empowering our
employees and we facilitate and monitor customer feedback to continually improve the
customer’s experience through innovation”
“Adi Dassler had a clear, simple, and unwavering passion for sport. Which is why with the
benefit of 50 years of relentless innovation created in his spirit, we continue to stay at the
forefront of technology,” Adidas about its Future (www.adidas.com)
“Innovation is our lifeblood,” Siemens about innovation (www.siemens.com)
“We’re measuring GE’s top leaders on how imaginative they are. Imaginative leaders are the
ones who have the courage to fund new ideas, lead teams to discover better ideas, and lead
people to take more educated risks,” J. Immelt, Chairman and CEO, General Electric
“Innovation distinguishes between a leader and a follower,” Steve Jobs, Apple
“John Deere’s ability to keep inventing new products that are useful to customers is still the key
to the company’s growth,” Robert Lane, CEO, John Deere

Innovation is strongly associated with growth. New business is created by new ideas, by the process
of creating competitive advantage in what a firm can offer. While competitive advantage can come
from size, or possession of assets, and so on, the pattern is increasingly coming to favor those
organizations that can mobilize knowledge and technological skills and experience to create novelty
in their offerings (product/service) and the ways in which they create and deliver those offerings.
Economists have argued for decades over the exact nature of the relationship, but they have generally
agreed that innovation accounts for a sizeable proportion of economic growth. In a recent book,

21
William Baumol [2] pointed out that “virtually all of the economic growth that has occurred since the
eighteenth century is ultimately attributable to innovation.” Research Note 1.1 gives some examples
of this economic importance.

Research Note 1.1

Why Innovation Is Economically Important
OECD countries spend $1500 billion/yr on R&D [3].
More than 16,000 firms in the United States currently operate their own industrial research labs,
and at least 20 firms have annual R&D budgets in excess of $1 billion.
China has the ambition to spend 2.5% of gross domestic product (GDP) on research by 2020
with the current levels around 2%.
South Korea has superseded Israel as the world’s most R&D-intensive country, spending 4.36%
of GDP on research and development. Other high performers in Asia included Japan at 3.35%
and Chinese Taipei at 3.06%.
In 2008, 16.8% of all firms’ turnover in Germany was earned with newly introduced products,
and in the research-intensive sector, this figure was 38%. During the same year, the German
economy was able to save costs of 3.9% per piece by means of process innovations.
The European Union’s Community Innovation Survey (CIS) reported in 2015 that 53% of the
businesses were innovative, compared to 45% of the businesses in the 2013 survey; 61% of large
businesses (those with more than 250 employees) and 53% of small and medium enterprises
(those with 10 to 250 employees) were innovative.
In the United Kingdom, 28% of innovators were engaged in exports (compared with 10% of
noninnovators); they reported employing more highly qualified staff, particularly staff with
science and engineering degrees (12%, compared to only 4% of noninnovators). 25% of all
businesses used technological (either product or process) innovation, and 42% of all businesses
used nontechnological (organizational or market) innovation, with 27% reported engaging in
“new business practices.”

The consulting firm PWC runs a regular survey of senior executives on the theme of innovation; in
their 2015 Global Innovation Survey, almost half of the 1757 executives interviewed (43%) felt that
innovation is a “competitive necessity” for their organization. This was not simply an act of faith;
PWC data suggests that leading innovators can expect significant rewards both financially and in
terms of competitive positioning. “Over the last three years, the most innovative companies in our
study delivered growth at a rate of 16% above that of the least innovative… In five year’s time, they
forecast that their rate of growth will further increase to almost double the global average, and over
three times, higher than the least innovative. For the average company, this equates to $0.5bn more
revenue than their less innovative peers” [4].
Similarly, BCG in their report on the world’s top 50 innovative companies draw similar conclusions.
The importance issue remains the same – with 79% of respondents in 2015 ranking it as their most
important strategic priority, up from around 66% in 2005. And the benefits expected include not only
market share but also speed of entry into new and fast-growing fields [5].

22
Case Study 1.1 gives some more examples of the link between innovation and growth.

Case Study 1.1

Growth Champions and the Returns from Innovation
Tim Jones has been studying successful innovating organizations for some time – see
http://growthchampions.org/about-us/. His most recent work has built on this, looking to try
and establish a link between those organizations that invest consistently in innovation and their
subsequent performance [6]. His findings show that over a sustained period of time, there is a
strongly positive link between the two; innovative organizations are more profitable and more
successful.
Tim Jones talks about the Growth Champions project in a 2012 interview,
https://www.youtube.com/watch?v=hQJqSGtGb4U. Link included with permission of ISPIM.

1.2 Innovation Is Not Just High Technology

Importantly, innovation and competitive success are not simply about high-technology companies;
for example, the German firm Wurth is the largest maker of screws (and other fastenings such as nuts
and bolts) in the world with a turnover of €11 billion in 2015. Despite low-cost competition from
China, the company has managed to stay ahead through an emphasis on product and process
innovation across a supplier network similar to the model used in computers by Dell [7]. In a similar
fashion, the UK Dairy Crest business has built up a turnover of nearly €1.5 billion (2015) by offering a
stream of product innovations including resealable packaging, novel formats, and new varieties of
cheese and related dairy products, supported by manufacturing and logistics process innovations [8].
Research Note 1.2 gives some more examples of the link between innovation and economic
performance.

Research Note 1.2

Global Innovation Performance
The consultancy Arthur D. Little conducts a regular survey of senior executives around the
world exploring innovation [9]. In their 2012 survey of 650 organizations, the following
emerged:
Top-quartile innovation performers obtain on average 13% more profit from new products and
services, compared to average performers, and 30% shorter break-even time, although the gap is
narrowing.
There is a clear correlation between capability in innovation measurement and innovation
success.
A number of key innovation management practices have a particularly strong impact on
innovation performance across industries.

23
Of course, not all games are about win/lose outcomes. Public services such as health care, education,
and social security may not generate profits, but they do affect the quality of life for millions of
people. Bright ideas when implemented well can lead to valued new services and the efficient
delivery of existing ones at a time when pressure on national purse strings is becoming ever tighter.
For example, the Karolinska Hospital in Stockholm has managed to make radical improvements in the
speed, quality, and effectiveness of its care services – such as cutting the waiting lists by 75% and
cancellations by 80% – through innovation [10]. Similar dramatic gains have been made in a variety
of Indian health-care operations, and several examples are described on the website. Public sector
innovations have included the postage stamp, the National Health Service in the United Kingdom,
and much of the early development work behind technologies such as fiber optics, radar, and the
Internet.
And new ideas – whether wind-up radios in Tanzania or microcredit financing schemes in
Bangladesh – have the potential to change the quality of life and the availability of opportunity for
people in some of the poorest regions of the world. There’s plenty of scope for innovation and
entrepreneurship, and sometimes, this really is about life and death – for example, in the context of
humanitarian aid for disasters.
Table 1.1 gives some examples drawn from across the spectrum showing how innovation makes a
difference to organizations of all shapes and sizes.

24
 TABLE 1.1

Where Innovation Makes a Difference

In Examples
n
ov
at
io
n
Is
A
b
o
ut
…
.
Innovation is driven by the ability to see connections, to spot opportunities, and to take
Id advantage of them. Sometimes, this is about completely new possibilities – for example, by
en exploiting radical breakthroughs in technology. New drugs based on genetic manipulation have
tif opened a major new front in the war against disease. Mobile phones, tablets, and other devices
yi have revolutionized where and when we communicate. Even the humble window pane is the
n result of radical technological innovation – these days, almost all the window glass in the world
g is made by the Pilkington float glass process, which moved the industry away from the time-
or consuming process of grinding and polishing to get a flat surface. James Dyson built a global
cr business from applying new technologies to domestic appliances such as vacuum cleaners and
ea hand driers.
ti
n
g
op
po
rt
u
ni
ti
es

25
 Innovation isn’t just about opening up new markets – it can also offer new ways of serving
N established and mature ones. Low-cost airlines are still about transportation – but the
e innovations that firms such as Southwest Airlines, EasyJet, and Ryanair introduced have
w revolutionized air travel and grown the market in the process. Despite a global shift in textile
w and clothing manufacture toward developing countries, the Spanish company Inditex (through
ay its retail outlets under various names including Zara) has pioneered a highly flexible, fast-
s turnaround clothing operation with over 2000 outlets in 52 countries. It was founded by
of Amancio Ortega Gaona, who set up a small operation in the west of Spain in La Coruna – a
se region not previously noted for textile production – and the first store opened there in 1975.
rv They now have over 5000 stores worldwide and are now the world’s biggest clothing retailer;
in significantly, they are also the only manufacturer to offer specific collections for Northern and
g Southern Hemisphere markets. Central to the Inditex philosophy is the close linkage between
ex design, manufacture, and retailing, and their network of stores constantly feeds back
ist information about trends that are used to generate new designs. They also experiment with new
in ideas directly on the public, trying samples of cloth or design and quickly getting back
g indications of what is going to catch on. Despite their global orientation, most manufacturing is
m still done in Spain, and they have managed to reduce the turnaround time between a trigger
ar signal for an innovation and responding to it to around 15 days.
ke
ts
Equally important is the ability to spot where and how new markets can be created and grown.
G Alexander Bell’s invention of the telephone didn’t lead to an overnight revolution in
ro communications – that depended on developing the market for person-to-person
w communications. Henry Ford may not have invented the motor car, but in making the Model T
in – “a car for Everyman” at a price most people could afford – he grew the mass market for
g personal transportation. And eBay justifies its multibillion-dollar price tag not because of the
ne technology behind its online auction idea, but because it created and grew the market.
w
m
ar
ke
ts
In most economies, the service sector accounts for the vast majority of activity, so there is likely
R to be plenty of scope. And the lower capital costs often mean that the opportunities for new
et entrants and radical change are greatest in the service sector. Online banking and insurance
hi have become commonplace, but they have radically transformed the efficiencies with which
n those sectors work and the range of services they can provide. New entrants riding the Internet
ki wave have rewritten the rule book for a wide range of industrial games – for example, Amazon
n in retailing, eBay in market trading and auctions, Google in advertising, Skype in telephony,
g Uber in transportation, and Air BnB in accommodation.
se
rv
ic
es

26
 Innovation offers huge challenges – and opportunities – for the public sector. Pressure to deliver
M more and better services without increasing the tax burden is a puzzle likely to keep many civil
ee servants awake at night. But it’s not an impossible dream – right across the spectrum, there are
ti examples of innovation changing the way the sector works. For example, in health care, there
n have been major improvements in efficiencies around key targets such as waiting times.
g Hospitals such as the Leicester Royal Infirmary in the United Kingdom or the Karolinska
so Hospital in Stockholm, Sweden, have managed to make radical improvements in the speed,
ci quality, and effectiveness of their care services – such as cutting the waiting lists for elective
al surgery by 75% and cancellations by 80% – through innovation.
ne
ed
s
At the other end of the scale, Kumba Resources is a large South African mining company that
I makes another dramatic claim – “We move mountains.” In their case, the mountains contain
m iron ore, and their huge operations require large-scale excavation – and restitution of the
pr landscape afterward. Much of their business involves complex large-scale machinery – and their
ov ability to keep it running and productive depends on a workforce able to contribute their
in innovative ideas on a continuing basis.
g
op
er
at
io
ns
–
d
oi
n
g
w
ha
t
w
e
d
o
b
ut
be
tt
er

Survival and growth pose a problem for established players but a huge opportunity for newcomers to
rewrite the rules of the game. One person’s problem is another’s opportunity, and the nature of
innovation is that it is fundamentally about entrepreneurship. The skill to spot opportunities and
create new ways to exploit them is at the heart of the innovation process. Entrepreneurs are risk-
takers – but they calculate the costs of taking a bright idea forward against the potential gains if they

27
succeed in doing something different – especially if that involves upstaging the players already in the
game. Case Study 1.2 gives some examples of such entrepreneurship in action.

Case Study 1.2

Finding Opportunities
When the Tasman Bridge collapsed in Hobart, Tasmania, in 1975, Robert Clifford was running a
small ferry company and saw an opportunity to capitalize on the increased demand for ferries –
and to differentiate his by selling drinks to thirsty cross-city commuters. The same
entrepreneurial flair later helped him build a company – Incat – that pioneered the wave-
piercing design, which helped them capture over half the world market for fast catamaran
ferries. Continuing investment in innovation has helped this company from a relatively isolated
island build a key niche in highly competitive international military and civilian markets.
“We always eat elephants …” is a surprising claim made by Carlos Broens, founder and head of a
successful tool-making and precision engineering firm in Australia with an enviable growth
record. Broens Industries is a small/medium-sized company of 130 employees, which survives in
a highly competitive world by exporting over 70% of its products and services to technologically
demanding firms in aerospace, medical, and other advanced markets. The quote doesn’t refer to
strange dietary habits but to their confidence in “taking on the challenges normally seen as
impossible for firms of our size” – a capability that is grounded in a culture of innovation in
products and the processes that are involved in producing them.
People have always needed artificial limbs, and the demand has, sadly, significantly increased as
a result of high-technology weaponry such as mines. The problem is compounded by the fact
that many of those requiring new limbs are also in the poorest regions of the world and unable
to afford expensive prosthetics. The chance meeting of a young surgeon, Dr. Pramod Karan
Sethi, and a sculptor, Ram Chandra, in the hospital in Jaipur, India, has led to the development
of a solution to this problem – the Jaipur foot. This artificial limb was developed using Chandra’s
skill as a sculptor and Sethi’s expertise and is so effective that those who wear it can run, climb
trees, and pedal bicycles. It was designed to make use of low-tech materials and be simple to
assemble – for example, in Afghanistan, craftsmen hammer the foot together out of spent
artillery shells, while in Cambodia, part of the foot’s rubber components are scavenged from
truck tires. Perhaps, the greatest achievement has been to do all of this at a low cost – the Jaipur
foot costs only $28 in India. Since 1975, nearly 1 million people worldwide have been fitted with
the Jaipur limb, and the design is being developed and refined – for example, using advanced
new materials.
Not all innovation is necessarily good for everyone. One of the most vibrant entrepreneurial
communities is in the criminal world where there is a constant search for new ways of
committing crime without being caught. The race between the forces of crime and law and
order is a powerful innovation arena – as works by Howard Rush and colleagues have shown in
their studies of “cybercrime” [11].

1.3 It’s Not Just Products…

28
Innovation is, of course, not confined to manufactured products; plenty of examples of growth
through innovation can be found in services [12–14] (In fact, the world’s first business computer was
used to support bakery planning and logistics for the UK catering services company J. Lyons and Co).
In banking, the UK First Direct organization became the most competitive bank, attracting around
10,000 new customers each month by offering a telephone banking service backed up by
sophisticated information technology (IT) – a model that eventually became the industry standard. A
similar approach to the insurance business – Direct Line – radically changed the basis of that market
and led to widespread imitation by all the major players in the sector [15,16]. Internet-based retailers
such as Amazon.com have changed the ways in which products as diverse as books, music, and travel
are sold, while firms such as eBay have brought the auction house into many living rooms.
Research Note 1.3 discusses some examples of innovation in fields that may sometimes be “hidden”
from view.

Research Note 1.3

Hidden Innovation
In 2006, the UK organization NESTA published a report on “The innovation Gap” in the United
Kingdom and laid particular emphasis on “hidden Innovation” – innovation activities that are
not reflected in traditional indicators such as investments in formal R&D or patents awarded. In
a research focusing on six widely different sectors that were not perceived to be innovative, they
argued that innovation of this kind is increasingly important, especially in services, and in a
subsequent study looked in detail at six “hidden innovation” sectors – oil production, retail
banking, construction, legal aid services, education, and the rehabilitation of offenders. The
study identified four types of hidden innovation:
Type I: Innovation that is identical or similar to activities that are measured by traditional
indicators, but which is excluded from measurement. For example, the development of new
technologies in oil exploration;
Type II: Innovation without a major scientific and technological basis, such as innovation in
organizational forms or business models. For example, the development of new contractual
relationships between suppliers and clients on major construction projects;
Type III: Innovation created from the novel combination of existing technologies and processes.
For example, the way in which banks have integrated their various back-office IT systems to
deliver innovative customer services such as Internet banking;
Type IV: Locally developed, small-scale innovations that take place “under the radar,” not only
of traditional indicators but often also of many of the organizations and individuals working in a
sector. For example, the everyday innovation that occurs in classrooms and multidisciplinary
construction teams.

Source: National Endowment for Science, Technology and the Arts (NESTA), 2006, “The innovation gap,” and
2007, “Hidden innovation,” https://www.nesta.org.uk/.

Innovation is becoming a central plank in national economic policy – for example, the UK Office of
Science and Innovation sees it as “the motor of the modern economy, turning ideas and knowledge
into products and services” [17]. An Australian government website puts the case equally strongly –
Companies that do not invest in innovation put their future at risk. Their business is unlikely to

29
prosper, and they are unlikely to be able to compete if they do not seek innovative solutions to
emerging problems. According to Statistics Canada (2006), the following factors characterize
successful small-and medium-sized enterprises:
Innovation is consistently found to be the most important characteristic associated with success.
Innovative enterprises typically achieve stronger growth or are more successful than those that do
not innovate.
Enterprises that gain market share and increasing profitability are those that are innovative.
Not surprisingly, this rationale underpins a growing set of policy measures designed to encourage and
nurture innovation at regional and national levels.

1.4 Innovation and Entrepreneurship

One person’s problem is another’s opportunity, and the nature of innovation is that it is
fundamentally about entrepreneurship – a potent mixture of vision, passion, energy, enthusiasm,
insight, judgment and plain hard work, which enables good ideas to become a reality. As the famous
management writer Peter Drucker put it:
“Innovation is the specific tool of entrepreneurs, the means by which they exploit change as an
opportunity for a different business or service. It is capable of being presented as a discipline,
capable of being learned, capable of being practised” [18].
Entrepreneurship is a human characteristic that mixes structure with passion, planning with vision,
tools with the wisdom to use them, strategy with the energy to execute it, and judgment with the
propensity to take risks. It’s possible to create structures within organizations – departments, teams,
specialist groups, and so on – with the resources and responsibility for taking innovation forward, but
effective change won’t happen without the “animal spirits” of the entrepreneur.
Of course, entrepreneurship plays out on different stages in practice. One obvious example is the new
start-up venture in which the lone entrepreneur takes a calculated risk to bring something new into
the world. But entrepreneurship matters just as much to the established organization, which needs to
renew itself in what it offers and how it creates and delivers that offering. Internal entrepreneurs –
often labeled as “intrapreneurs” or working in “corporate entrepreneurship” or “corporate venture”
departments – provide the drive, energy, and vision to take risky new ideas forward inside that
context. And of course, the passion to change things may not be around creating commercial value
but rather in improving conditions or enabling change in the wider social sphere or in the direction
of environmental sustainability – a field that has become known as “social entrepreneurship.”
This idea of entrepreneurship driving innovation to create value – social and commercial – across the
life cycle of organizations is central to this book. Table 1.2 gives some examples of entrepreneurship
and innovation.

30
 TABLE 1.2

Entrepreneurship and Innovation

Stage Start-up Growth Sustain/Scale Renew

in
Life
Cycle
of an
Orga
nizati
on
Individual Growing the Building a portfolio of Returning to the radical
entrepreneur business through incremental and radical frame-breaking kind of
Creat exploiting new adding new innovation to sustain the innovation, which began
ing technology or products/services business and/or spread its the business and enables
com market or moving into influence into new it to move forward as
merci opportunity new markets markets something very different
al
value

Social Developing the Spreading the idea widely, Changing the system –
entrepreneur, ideas and diffusing it to other and then acting as agent
Creat passionately engaging others in communities of social for next wave of change
ing concerned with a network for entrepreneurs, engaging
social improving or change – perhaps links with mainstream
value changing in a region or players such as public
something in their around a key issue sector agencies
immediate
environment

Research Note 1.4 discusses the ideas of Joseph Schumpeter, the “godfather” of innovation studies.

31
 Research Note 1.4
Joseph Schumpeter – The “Godfather” of Innovation Studies
One of the most significant figures in this area of economic theory was Joseph Schumpeter, who
wrote extensively on the subject. He had a distinguished career as an economist and served as
Minister for Finance in the Austrian government. His argument was simple; entrepreneurs will
seek to use technological innovation – a new product/service or a new process for making it – to
get strategic advantage. For a while, this may be the only example of the innovation, so the
entrepreneur can expect to make a lot of money – what Schumpeter calls “monopoly profits.”
But, of course, other entrepreneurs will see what he has done and try to imitate it – with the
result that other innovations emerge, and the resulting “swarm” of new ideas chips away at the
monopoly profits until an equilibrium is reached. At this point, the cycle repeats itself – our
original entrepreneur or someone else looks for the next innovation, which will rewrite the
rules of the game, and off we go again. Schumpeter talks of a process of “creative destruction”
where there is a constant search to create something new that simultaneously destroys the old
rules and established new ones – all driven by the search for new sources of profits [19].
In his view , “[What counts is] competition from the new commodity, the new technology, the
new source of supply, the new type of organization… competition which… strikes not at the
margins of the profits and the outputs of the existing firms but at their foundations and their
very lives.”

Video: Stimulating Entrepreneurial Behavior

Select the video link to watch a video where Professor Joe Tidd discusses how organizational
climate and practices relate to entrepreneurial behavior.

1.5 Strategic Advantage Through Innovation

Innovation contributes in several ways. For example, research evidence suggests a strong correlation
between market performance and new products. New products help capture and retain market shares
and increase profitability in those markets. In the case of more mature and established products,
competitive sales growth comes not simply from being able to offer low prices but also from a variety
of nonprice factors – design, customization, and quality. And in a world of shortening product life
cycles – where, for example, the life of a particular model of television set or computer is measured in
months, and even complex products such as motor cars now take only a couple of years to develop –
being able to replace products frequently with better versions is increasingly important. “Competing
in time” reflects a growing pressure on firms not just to introduce new products but to do so faster
than the competitors [20]; in their 2015 survey, BCG found that increasing the speed of innovation
was the most important driver [5].
At the same time, new product development is an important capability because the environment is
constantly changing. Shifts in the socioeconomic field (in what people believe, expect, want, and
earn) create opportunities and constraints. Legislation may open up new pathways, or close down
others – for example, increasing the requirements for environmentally friendly products. Competitors

32
may introduce new products that represent a major threat to existing market positions. In all these
ways, firms need the capability to respond through product innovation.
While new products are often seen as the cutting edge of innovation in the marketplace, process
innovation plays just as important a strategic role. Being able to make something no one else can, or
to do so in ways that are better than anyone else is a powerful source of advantage. For example, the
Japanese dominance in the late twentieth century across several sectors – cars, motorcycles,
shipbuilding, consumer electronics – owed a great deal to superior abilities in manufacturing –
something that resulted from a consistent pattern of process innovation. The Toyota production
system and its equivalent in Honda and Nissan led to performance advantages of around two to one
over average car makers across a range of quality and productivity indicators [21]. One of the main
reasons for the ability of relatively small firms such as Oxford Instruments or Incat to survive in
highly competitive global markets is the sheer complexity of what they make and the huge difficulties
a new entrant would encounter in trying to learn and master their technologies.
Similarly, being able to offer better service – faster, cheaper, higher quality – has long been seen as a
source of competitive edge. Citibank was the first bank to offer automated teller machinery (ATM)
service and developed a strong market position as a technology leader on the back of this process
innovation. Benetton is one of the world’s most successful retailers, largely due to its, sophisticated
IT-led production network, which it innovated over a 10-year period, and the same model has been
used to great effect by the Spanish firm Zara. Southwest Airlines achieved an enviable position as the
most effective airline in the United States despite being much smaller than its rivals; its success was
due to process innovation in areas such as reducing airport turnaround times. This model has
subsequently become the template for a whole new generation of low-cost airlines whose efforts have
revolutionized the once-cozy world of air travel.
Importantly, we need to remember that the advantages that flow from these innovative steps
gradually fall to the competition as others imitate. Unless an organization is able to move into further
innovation, it risks being left behind as others take the lead in changing their offerings, their
operational processes, or the underlying models, which drive their business. For example, leadership
in banking has been passed to those who were able to capitalize early on the boom in information and
communications technologies; in particular, many of the lucrative financial services such as securities
and share dealing have become dominated by players with radical new models such as Charles
Schwab. In turn, there are now major challenges from the world of peer-to-peer lending and other
Web-based financial services.
Research Note 1.5 discusses the innovation imperative facing organizations, and Case Study 1.3
looks in detail at one example – the music industry.

33
Research Note 1.5
The Innovation Imperative
In the mid-1980s, a study by Shell suggested that the average corporate survival rate for large
companies was only about half as long as that of a human being. Since then, the pressures on
firms have increased enormously from all directions – with the inevitable result that life
expectancy is reduced still further. Many studies look at the changing composition of key indices
and draw attention to the demise of what were often major firms and, in their time, key
innovators. For example, Foster and Kaplan point out that, of the 500 companies originally
making up the Standard and Poor 500 list in 1857, only 74 remained on the list through to 1997
[22]. Of the top 12 companies that made up the Dow Jones index in 1900 only one – General
Electric – survives today. Even apparently, robust giants such as IBM, GM, or Kodak can
suddenly display worrying signs of mortality, while for small firms, the picture is often
considerably worse since they lack the protection of a large resource base.
Some firms have had to change dramatically to stay in business. For example, a company
founded in the early nineteenth century, which had Wellington boots and toilet paper among its
product range, became one of the largest and most successful in the world in the
telecommunications business. Nokia began life as a lumber company, making the equipment and
supplies needed to cut down forests in Finland. It moved through into paper and from there into
the “paperless office” world of IT – and from there into mobile telephones.
Another mobile phone player – Vodafone Airtouch – grew to its huge size by merging with a
firm called Mannesman, which, since its birth in the 1870s, had been more commonly associated
with the invention and production of steel tubes! Tui is the company that now owns Thomson,
the travel group in the United Kingdom, and is the largest European travel and tourism services
company. Its origins, however, lie in the mines of old Prussia, where it was established as a
public sector state lead mining and smelting company! [23].

34
Case Study 1.3
The Changing Nature of the Music Industry
April 1, 2006. Apart from being a traditional day for playing practical jokes, this was the day on
which another landmark in the rapidly changing world of music was reached. “Crazy” – a track
by Gnarls Barkley – made pop history as the United Kingdom’s first song to top the charts based
on download sales alone. Commenting on the fact that the song had been downloaded more
than 31,000 times but was only released for sale in the shops on April 3, Gennaro Castaldo,
spokesman for retailer HMV, said: “This not only represents a watershed in how the charts are
compiled, but shows that legal downloads have come of age…if physical copies fly off the
shelves at the same rate it could vie for a place as the year’s biggest seller.”
One of the less visible but highly challenging aspects of the Internet is the impact it has had –
and is having – on the entertainment business. This is particularly the case with music. At one
level, its impacts could be assumed to be confined to providing new “etailing” channels, such as
Amazon.com or hundreds of other websites. These innovations increased the choice and
tailoring of the music purchasing service and demonstrated some of the “richness/reach”
economic shifts of the new Internet game.
But beneath this updating of essentially the same transaction lies a more fundamental shift – in
the ways in which music is created and distributed and in the business model on which the
whole music industry is currently predicated. In essence, the old model involved a complex
network in which songwriters and artists depended on A&R (artists and repertoire) to select a
few acts, production staff who would record in complex and expensive studios, other production
staff who would oversee the manufacture of physical discs, tapes, and CDs, and marketing and
distribution staff who would ensure that the product was publicized and disseminated to an
increasingly global market.
Several key changes have undermined this structure and brought with it significant disruption to
the industry. Old competencies may no longer be relevant, while acquiring new ones becomes a
matter of urgency. Even well-established names such as Sony find it difficult to stay ahead,
while new entrants are able to exploit the economics of the Internet. At the heart of the change
is the potential for creating, storing, and distributing music in digital format – a problem that
many researchers have worked on for some time. One solution, developed by one of the
Fraunhofer Institutes in Germany, is a standard based on the Motion Picture Experts Group
(MPEG) level 3 protocol (MP3). MP3 offers a powerful algorithm for managing one of the big
problems in transmitting music files – that of compression. Normal audio files cover a wide
range of frequencies and are thus very large and not suitable for fast transfer across the Internet
– especially with a population who may only be using relatively slow modems. With MP3,
effective compression is achieved by cutting out those frequencies that the human ear cannot
detect – with the result that the files to be transferred are much smaller.
As a result, MP3 files can be moved across the Internet quickly and shared widely. Various
programs exist for transferring normal audio files and inputs – such as CDs – into MP3 and back
again.
What does this mean for the music business? In the first instance, aspiring musicians no longer
need to depend on being picked up by A&R staff from major companies who can bear the costs
of recording and production of a physical CD. Instead, they can use home recording software

35
and either produce a CD themselves or else go straight to MP3 – and then distribute the product
globally via newsgroups, chatrooms, and so on. In the process, they effectively create a parallel
and much more direct music industry, which leaves existing players and artists on the sidelines.
Such changes are not necessarily threatening. For many people, the lowering of entry barriers
has opened up the possibility of participating in the music business – for example, by making
and sharing music without the complexities and costs of a formal recording contract and the
resources of a major record company. There is also scope for innovation around the periphery –
for example, in the music publishing sector where sheet music and lyrics are also susceptible to
lowering of barriers through the application of digital technology. Journalism and related
activities become increasingly open – now music reviews and other forms of commentary
become possible via specialist user groups and channels on the Web, whereas before, they were
the province of a few magazine titles. Compiling popularity charts – and the related advertising
– is also opened up as the medium switches from physical CDs and tapes distributed and sold via
established channels to new media such as MP3 distributed via the Internet.
As if this were not enough, the industry is also challenged from another source – the sharing of
music between different people connected via the Internet. Although technically illegal, this
practice of sharing between people’s record collections has always taken place – but not on the
scale that the Internet threatens to facilitate. Much of the established music industry is
concerned with legal issues – how to protect copyright and how to ensure that royalties are paid
in the right proportions to those who participate in production and distribution. But when
people can share music in MP3 format and distribute it globally, the potential for policing the
system and collecting royalties becomes extremely difficult to sustain.
It has been made much more so by another technological development – that of person-to-
person networking. Sean Fanning, an 18-year-old student with the nickname “The Napster,” was
intrigued by the challenge of being able to enable his friends to “see” and share between their
own personal record collections. He argued that if they held these in MP3 format, then it should
be possible to set up some kind of central exchange program that facilitated their sharing.
The result – the Napster.com site – offered sophisticated software that enabled peer-to-peer
(P2P) transactions. The Napster server did not actually hold any music on its files – but every
day, millions of swaps were made by people around the world exchanging their music
collections. Needless to say, this posed a huge threat to the established music business since it
involved no payment of royalties. A number of high-profile lawsuits followed, but while
Napster’s activities have been curbed, the problem did not go away. There are now many other
sites emulating and extending what Napster started – sites such as Gnutella, Kazaa, Limewire
took the P2P idea further and enabled exchange of many different file formats – text, video, so
on. In Napster’s own case, the phenomenally successful site concluded a deal with entertainment
giant Bertelsman, which paved the way for subscription-based services that provide some
revenue stream to deal with the royalty issue.
Expectations that legal protection would limit the impact of this revolution were dampened by a
US Court of Appeal ruling, which rejected claims that P2P violated copyright law. Their
judgment said, “History has shown that time and market forces often provide equilibrium in
balancing interests, whether the new technology be a player piano, a copier, a tape recorder, a
video recorder, a PC, a karaoke machine or an MP3 player” (Personal Computer World,
November 2004, p. 32).

36
 Significantly, the new opportunities opened up by this were seized not by music industry firms
but by computer companies, especially Apple. In parallel with the launch of their successful
iPod personal MP3 player, they opened a site called iTunes, which offered users a choice of
thousands of tracks for download at 99c each. In its first weeks of operation, it recorded 1
million hits; in February 2006, the billionth song, “Speed of Sound,” was purchased as part of
Coldplay’s “X&Y” album by Alex Ostrovsky from West Bloomfield, Michigan. “I hope that every
customer, artist, and music company executive takes a moment today to reflect on what we’ve
achieved together during the past three years,” said Steve Jobs, Apple’s CEO. “Over one billion
songs have now been legally purchased and downloaded around the globe, representing a major
force against music piracy and the future of music distribution as we move from CDs to the
Internet.”
This has been a dramatic shift, reaching the point where more singles were bought as downloads
in 2005 than as CDs and where new players are coming to dominate the game. And the changes
don’t stop there. In February 2006, the Arctic Monkeys topped the UK album charts and walked
off with a fistful of awards from the music business – yet their rise to prominence had been
entirely via “viral marketing” across the internet rather than by conventional advertising and
promotion. Playing gigs around the northern English town of Sheffield, the band simply gave
away CDs of their early songs to their fans, who then obligingly spread them around on the
Internet. “They came to the attention of the public via the Internet, and you had chat rooms,
everyone talking about them,” says a slightly worried Gennaro Castaldo of HMV Records. David
Sinclair, a rock journalist suggests that “It’s a big wakeup call to all the record companies, the
establishment, if you like…This lot caught them all napping… We are living in a completely
different era, which the Arctic Monkeys have done an awful lot to bring about.”
Subsequent developments have shown an acceleration in the pace of change and an explosion in
the variety of new business models better adapted to create and capture value from the industry.
For example, the US music download business became dominated by Apple and Amazon (with
70% and 10%, respectively, of the market) – two companies that have their roots in very
different worlds. While the volume of downloads has increased significantly, there is now
competition from alternative business models; for example, streaming services such as Spotify
allow users to rent access to millions of music and other audio titles without having to “own”
any of them. And behind the music business, the same pattern is playing out in films and
entertainment, computer games, and other areas. With the advent of 3D printing and low-cost
design, it becomes possible to make similar models work in the sphere of physical products as
well.

With the rise of the Internet, the scope for service innovation has grown enormously, so much so
that it is sometimes called “a solution looking for problems.” As Evans and Wurster point out, the
traditional picture of services being either offered as a standard to a large market (high “reach” in
their terms) or else highly specialized and customized to a particular individual able to pay a high
price (high “richness”) is “blown to bits” by the opportunities of Web-based technology. Now it
becomes possible to offer both richness and reach at the same time – and thus to create totally new
markets and disrupt radically those that exist in any information-related businesses [24].
The challenge that the Internet poses is not only one for the major banks and retail companies,
although those are the stories that hit the headlines. It is also an issue – and quite possibly a survival
one – for thousands of small businesses. Think about the local travel agent and the cozy way in which
it used to operate. Racks full of glossy brochures through which people could browse, desks at which

37
helpful sales assistants sort out the details of selecting and booking a holiday, procuring the tickets,
arranging insurance, and so on. And then think about how all of this can be accomplished at the click
of a mouse from the comfort of home – and that it can potentially be done with more choice and at
lower cost. Not surprisingly, one of the biggest growth areas in dot.com start-ups was the travel
sector, and while many disappeared when the bubble burst, others such as lastminute.com and
Expedia have established themselves as mainstream players.
The point is that whatever the dominant technological, social, or market conditions, the key to
creating – and sustaining – competitive advantage is likely to lie with those organizations that
continually innovate.
Table 1.3 indicates some of the ways in which enterprises can obtain strategic advantage through
innovation.

38
 TABLE 1.3

Strategic Advantages Through Innovation

Mec Strategic Advantage Examples

hani
sm
Nov Offering something no Introducing the first … Walkman, mobile phone, fountain pen,
elty one else can camera, dishwasher, telephone bank, online retailer, and so on… to
in the world
prod
uct
or
servi
ce
offer
ing
Nov Offering it in ways Pilkington’s float glass process, Bessemer’s steel process, Internet
elty others cannot match – banking, online bookselling, and so on
in faster, lower cost, more
proc customized, and so on
ess
Com Offering something that Rolls-Royce and aircraft engines – only a handful of competitors
plex others find it difficult to can master the complex machining and metallurgy involved
ity master
Lega Offering something that Blockbuster drugs such as Zantac, Prozac, Viagra, and so on
l others cannot do unless
prot they pay a license or
ecti other fee
on
of
intel
lect
ual
prop
erty

39
Mec Strategic Advantage Examples
hani
sm
Add Move basis of Japanese car manufacturing, which systematically moved the
/ext competition – for competitive agenda from price to quality, to flexibility and choice,
end example, from price of to shorter times between launch of new models, and so on – each
rang product to price and time not trading these off against each other but offering them all
e of quality, or price, quality,
com choice, and so on
petit
ive
fact
ors
Timi
ng First-mover advantage – Amazon, Google – others can follow, but the advantage “sticks” to
being first can be worth the early movers
significant market share
in new product fields Personal digital assistants (PDAs), which captured a huge and
growing share of the market and then found their functionality
Fast follower advantage absorbed into mobile phones and tablet devices. In fact, the concept
– sometimes being first and design was articulated in Apple’s ill-fated Newton product some
means you encounter 5 years earlier – but problems with software and especially
many unexpected handwriting recognition meant it flopped. Equally, their iPod was
teething problems, and not the first MP3 player, but the lessons they learned from earlier
it makes better sense to product failures from other companies helped them focus on
watch someone else making the design a success and built the platform for the iPhone
make the early mistakes
and move fast into a
follow-up product
Rob Offering something that
ust/ provides the platform on Walkman architecture – through minidisk, CD, DVD, MP3 …
platf which other variations
orm and generations can be Boeing 737 – over 50 years old, the design is still being adapted and
desi built configured to suit different users – one of the most successful
gn aircraft in the world in terms of sales

Intel and AMD with different variants of their microprocessor

families
Rew Offering something that Typewriters versus computer word processing, ice versus
ritin represents a completely refrigerators, electric versus gas or oil lamps
g new product or process
the concept – a different
rule way of doing things –
s and makes the old ones
redundant

40
Mec Strategic Advantage Examples
hani
sm
Rec Rethinking the way in Zara, Benetton in clothing, Dell in computers, Toyota in its supply
onfi which bits of the system chain management, Cisco in providing the digital infrastructure
guri work together - for underpinning the Web
ng example, building more
the effective networks,
part outsourcing, and
s of coordination of a virtual
the company, and so on
proc
ess
Tran Recombining Polycarbonate wheels transferred from application market such as
sferr established elements for rolling luggage into children’s toys – lightweight micro-scooters
ing different markets
acro
ss
diffe
rent
appl
icati
on
cont
exts
Oth Innovation is all about Napster. This firm began by writing software that would enable
ers? finding new ways to do music fans to swap their favorite pieces via peer-to-peer (P2P)
things and to obtain networking across the Internet. Although Napster suffered from
strategic advantage – so legal issues, followers developed a huge industry based on
there will be room for downloading and file sharing. The experiences of one of these firms
new ways of gaining and – Kazaa – provided the platform for successful high-volume Internet
retaining advantage telephony, and the company established with this knowledge –
Skype – was sold to eBay for $2.6 billion and eventually to
Microsoft for $8.5 billion.

1.6 Old Question, New Context

“Constant revolutionizing of production, uninterrupted disturbance of all social conditions,
everlasting uncertainty … all old-established national industries have been destroyed or are daily
being destroyed. They are dislodged by new industries … whose products are consumed not only
at home but in every quarter of the globe. In place of old wants satisfied by the production of the
country, we find new wants … the intellectual creativity of individual nations become common
property”

41
This quote does not come from a contemporary journalist or politician but from the Communist
Manifesto, published by Karl Marx and Friedrich Engels in 1848! But it serves to remind us that the
innovation challenge isn’t new – organizations have always had to think about changing what they
offer the world and the ways they create and deliver that offering if they are to survive and grow.
The trouble is that innovation involves a moving target – not only is there competition among players
in the game, but the overall context in which the game is played out keeps shifting. And while many
organizations have some tried and tested recipes for playing the game, there is always the risk that
the rules will change and leave them vulnerable. Changes along several core environmental
dimensions mean that the incidence of discontinuities is likely to rise – for example, in response to a
massive increase in the rate of knowledge production and the consequent increase in the potential for
technology-linked instabilities. But there is also a higher level of interactivity among these
environmental elements – complexity – which leads to unpredictable emergence. (E.g., the rapidly
growing field of VoIP (Voice over Internet Protocol) communications is not developing along
established trajectories toward a well-defined end point. Instead, it is a process of emergence. The
broad parameters are visible – the rise of demand for global communication, increasing availability of
broadband, multiple P2P networking models, growing technological literacy among users – and the
stakes are high, both for established fixed-line players (who have much to lose) and new entrants
(such as Skype). The dominant design isn’t visible yet – instead, there is a rich fermenting soup of
technological possibilities, business models, and potential players from which it will gradually
emerge).
Case Study 1.4 explores the ways in which Kodak is reinventing itself through redeploying some of
its knowledge base.

Case Study 1.4

Reinventing Kodak
The difficulties of a firm such as Kodak illustrate the problem. Founded around 100 years ago,
the basis of the business was the production and processing of film and the sales and service
associated with mass-market photography. While the latter set of competencies are still highly
relevant (even though camera technology has shifted), the move away from wet physical
chemistry conducted in the dark (coating emulsions onto films and paper) to digital imaging
represented a profound change for the firm. It needed – across a global operation and a
workforce of thousands – to let go of old competencies, which are unlikely to be needed in the
future, while at the same time to rapidly acquire and absorb cutting-edge new technologies in
electronics and communication. Although they made strenuous efforts to shift from being a
manufacturer of film to becoming a key player in the digital imaging industry and beyond, they
found the transition very difficult, and in 2012, they filed for Chapter 11 bankruptcy protection.
Significantly, this is not the end of the company; instead, it has regrouped around other core
technologies and developed new directions for innovation-led growth in fields such as high-
speed, high-volume printing.

Table 1.4 summarizes some of the key changes in the context within which the current innovation
game is being played out.

42
 TABLE 1.4

Changing Context for Innovation (Based on [25])

Context Indicative Examples

Change

OECD estimates that around $1500 billion is spent each year (public and private sector)
in creating new knowledge – and hence, extending the frontier along which
Accelera “breakthrough” technological developments may happen.
tion of
knowled
ge
producti
on

Knowledge production is increasingly involving new players especially in emerging

market fields such as the BRIC (Brazil, Russia, India, China) nations – so the need to
Global search for innovation opportunities across a much wider space. One consequence of this
distribut is that “knowledge workers” are now much more widely distributed and concentrated in
ion of new locations – for example, Microsoft’s third largest R&D center employing thousands
knowled of scientists and engineers is now in Shanghai.
ge
producti
on

Traditionally, much of the world of business has focused on the needs of around 1 billion
people since they represent wealthy enough consumers. But the world’s population has
Market just passed the 7 billion mark and population – and, by extension, market – growth is
expansio increasingly concentrated in nontraditional areas such as rural Asia, Latin America, and
n Africa. Understanding the needs and constraints of this “new” population represents a
significant challenge in terms of market knowledge.
Globalization has massively increased the range of markets and segments so that these are
now widely dispersed and locally varied – putting pressure on innovation search activity
Market to cover much more territory, often far from “traditional” experiences - such as the
fragment “bottom of the pyramid” conditions in many emerging markets [26] or along the so-called
ation long tail – the large number of individuals or small target markets with highly
differentiated needs and expectations.

43
Context Indicative Examples
Change

The emergence of large-scale social networks in cyberspace pose challenges in market

research approaches – for example, Facebook with over 1 billion members is technically
Market the third largest country in the world by population. Further challenges arise in the
virtualiz emergence of parallel world communities – for example, by some accounts, World of
ation Warcraft has over 10 million players.

Although users have long been recognized as a source of innovation, there has been an
acceleration in the ways in which this is now taking place – for example, the growth of
Rise of Linux has been a user-led open community development [27]. In sectors such as media,
active the line between consumers and creators is increasingly blurred – for example, YouTube
users has around 100 million videos viewed each day but also has over 70,000 new videos
uploaded every day from its user base.
Major shifts in resource and energy availability prompting search for new alternatives
and reduced consumption. Increasing awareness of impact of pollution and other
Growing negative consequences of high and unsustainable growth. Concern over climate change.
concern Major population growth and worries over ability to sustain living standards and manage
with expectations. Increasing regulation on areas such as emissions and carbon footprint.
sustaina
bility
issues

Increasing linkages enabled by information and communications technologies around the

Internet and broadband have enabled and reinforced alternative social networking
Develop possibilities. At the same time, the increasing availability of simulation and prototyping
ment of tools have reduced the separation between users and producers [28,29].
technolo
gical and
social
infrastru
cture

1.7 What Is Innovation?

One of America’s most successful innovators was Thomas Alva Edison, who during his life registered
over 1000 patents. Products for which his organization was responsible include the light bulb, 35 mm
cinema film, and even the electric chair. Edison appreciated better than most that the real challenge
in innovation was not invention – coming up with good ideas – but in making them work technically
and commercially. His skill in doing this created a business empire worth, in 1920, around $21.6
billion. He put to good use an understanding of the interactive nature of innovation, realizing that

44
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independently
Independents
indescribable
indeterminate
index
indexes
indexing
INDIA
Indian
INDIANA
Indianapolis
Indians
indicate
indicated
indicates
indicating
indication
indications
indicted
indictment
indictments
Indies
indifference
indifferent
indifferently
indigenous
indigestible
indigestion
indignant
indignantly
indignation
indignity
indigo
Indios
indiquant
indirect
indirectly
indiscretion
indiscriminate
indispensable
indispensably
indisputable
indisputably
indissoluble
individual
individuality
individually
individuals
indomitable
INDONESIAN
Indonesians
indoor
indorse
indorsed
indorsement
indubitable
induce
induced
inducement
induces
inducing
inductance
inducted
induction
indulge
indulged
indulgence
indulgences
indulgent
indulges
indulging
indunas
Indus
industrial
industrialism
Industries
industrious
industry
ineffaceably
ineffective
Ineffectual
inefficiency
inefficient
inelastic
inequality
inequitable
ineradicable
inertia
inestimable
inevitable
inevitably
inexhaustible
inexpediency
inexpedient
inexpensive
inexplicable
inexplicit
inexpressible
inextricably
infallible
infallibly
infamous
infamy
infancy
infant
Infanta
Infanticide
INFANTRY
infants
infect
infected
infecting
infection
infectious
infer
inference
Inferior
inferiority
infernally
inferred
inferring
infested
infidelium
infinite
infinitely
infirm
infirmaries
inflamed
inflammable
inflammation
inflammatory
inflexible
inflict
inflicted
inflicting
Influence
influenced
influences
influential
influenza
influx
inform
informal
informally
informant
informants
information
informed
informing
informs
infraction
infractions
infrequency
infrequently
infringe
infringement
infringing
infused
ING
ingenious
ingeniously
ingenuity
Ingersoll
ingested
Ingolf
ingots
inhabit
inhabitant
inhabitants
inhabited
inhabiting
inhabits
inhaled
inharmonious
inherent
inherit
inheritance
inheritances
inherited
inheritor
inherits
inhibition
inhuman
inhumanity
iniquities
iniquitous
iniquity
initial
initiate
initiated
initiation
initiative
Initiator
injected
injecting
injection
injudicious
injunction
injunctions
injure
injured
injuries
injuring
injurious
injuriously
injury
injustice
Inland
inlet
inlets
Inman
inmates
inn
Inner
Innes
innings
innocence
innocent
innocently
innocuous
innovation
innovations
innumerable
inoculated
Inoculation
inoculations
inoffensive
inoperative
inopportune
Inouye
inquire
inquired
inquirer
inquires
inquiries
inquiring
inquiry
inquisitive
inroad
inroads
insane
insanity
insatiable
insatiate
inscribe
inscribed
inscription
Inscriptions
insect
insecticide
insects
insecure
insecurity
inseparable
insert
inserted
insertion
inshore
inside
insight
insignia
insignificance
insignificant
insincere
insincerity
insinuation
insinuations
insist
insisted
insistence
insistent
insisting
insists
insolence
insolent
insolvency
insolvent
insolvents
insomnia
insomuch
inspect
inspected
inspecting
INSPECTION
inspections
Inspector
Inspectorate
inspectors
inspiration
inspire
inspired
inspiring
inst
installation
installations
installed
installment
installments
instalment
instalments
instance
instances
instant
instantaneous
instantaneously
instanter
instantly
Instead
instigated
instigates
instigating
instigation
instigator
instigators
instill
instinct
instinctive
instinctively
instincts
Institut
Institute
instituted
institutes
institution
institutional
institutions
instruct
instructed