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Defining Soft Innovation

Paul Stoneman

in Soft Innovation: Economics, Product Aesthetics, and the Creative Industries

This chapter introduces the issues and provides a fuller argument as to why soft innovation, conceptually, is important. Innovation that encompasses the artistic, formal (as in the contrast between ... More

This chapter introduces the issues and provides a fuller argument as to why soft innovation, conceptually, is important. Innovation that encompasses the artistic, formal (as in the contrast between form and function), intellectual or aesthetic, has largely been ignored in the mainstream literature on innovation. At the centre of the analysis here is a form of innovation labelled soft innovation, defined to encompass changes in goods and services that primarily impact upon these aspects rather than functional performance. Soft innovation mainly concerns product innovation and product differentiation. The emphasis upon product differentiation means that economic analysis designed for exploring (static) models in differentiated markets can be brought to bear upon dynamic questions relating to innovation. Innovation in terms of new product launches in such markets may reflect either movements towards equilibrium or changes in the equilibrium. Two main types of soft innovation are detailed: the first involving changes in products in the creative industries; the second involving changes in the aesthetic/intellectual dimensions of products in other industries.Less

The Importance of Process and Product Innovation for Productivity in French Manufacturing and Service Industries

Jacques Mairesse and Stephane Robin

in Innovation and Growth: From R&D Strategies of Innovating Firms to Economy-wide Technological Change

This chapter examines the effect of innovation on labour productivity in France, using a general framework that accounts for research activities and for both product and process innovation. To ... More

This chapter examines the effect of innovation on labour productivity in France, using a general framework that accounts for research activities and for both product and process innovation. To control for selection and endogeneity effects, the chapter estimates a nonlinear multiple-equations econometric model. This model is estimated on the third and fourth waves of the French component of the Community Innovation Survey, using a three-step and a two-step estimation procedure. The chapter identifies process innovation as the main driver of labour productivity in the manufacturing industry, but the results are less consistent in the services industry. Sensitivity analyses actually suggest that our two indicators of innovations both tend simply to measure overall innovation. When a single indicator is used, the chapter finds a positive effect of innovation in all industries and in all periods. The chapter concludes with some cautionary words relating to the joint modelling of the impacts of product and process innovation on productivity.Less

Managing the Development and Transfer of Process Technologies in the Semiconductor Manufacturing Industry

Melissa M. Appleyard, Nile W. Hatch, and David C. Mowery

in The Nature and Dynamics of Organizational Capabilities

A considerable literature on firm‐level differences in capabilities deals with product innovation, whereas intra‐firm management of process innovation has received less attention. This paper analyses ... More

A considerable literature on firm‐level differences in capabilities deals with product innovation, whereas intra‐firm management of process innovation has received less attention. This paper analyses the management of the new process technologies in the semiconductor industry. It shows that successful development and introduction of new process technologies relies on the replication of complex ‘routines’ within a firm, since in many cases a new manufacturing process is developed in an R and D facility and then transferred to a manufacturing site. Firm‐specific differences in the management and organization of process innovation, as well as in the degree of coordination of new product and new process development strategies, appear to be significant and influence performance.Less

The process of health care innovation: problem sequences, systems, and symbiosis

Davide Consoli, Andrew McMeekin, J. Stan Metcalfe, Andrea Mina, and Ronnie Ramlogan

in The Economics of New Health Technologies: Incentives, organization, and financing

This chapter examines the role of process in innovation. It analyses an interesting evolutionary perspective and presents empirical evidence from an example of the intra-ocular lens and the treatment ... More

This chapter examines the role of process in innovation. It analyses an interesting evolutionary perspective and presents empirical evidence from an example of the intra-ocular lens and the treatment of glaucoma. It focuses on systems of innovation, arguing that generation and delivery of new medical practices is dependent on the creation of sophisticated innovation systems that rely on the specialization, diversification, and co-ordination of activities that are complementary to health care institutions.Less

Exploring Knowledge Integration and Innovation

Christian Berggren, Anna Bergek, Lars Bengtsson, and Jonas Söderlund

in Knowledge Integration and Innovation: Critical Challenges Facing International Technology-Based Firms

This introduction relates the principal idea behind the book — that knowledge integration is a vital part of the dynamics of the innovation process ߞ to previous literature on knowledge integration, ... More

This introduction relates the principal idea behind the book — that knowledge integration is a vital part of the dynamics of the innovation process ߞ to previous literature on knowledge integration, with its focus on companies' ‘routine’ activities. It presents the book's main empirical focus: internationally competing technology-based firms in, for example, the automotive, heavy electrical equipment, packaging machinery, telecom, tooling, and aerospace industries. It also introduces three major trends that affect conditions for innovation and knowledge integration: internationalization of R&D and production, transformation of markets, and changes in the character of developments in science and technology. In contrast to most definitions, the introduction emphasizes that knowledge integration is more than combining, sharing, or transferring different knowledge bases; it is also a process of creating new knowledge. The introduction concludes with an overview of the twelve chapters, describing how they provide an understanding of knowledge integration as a multilevel process.Less

The Dynamics of Innovation Strategies

Bart Verspagen and Tommy Clausen

in Innovation and Growth: From R&D Strategies of Innovating Firms to Economy-wide Technological Change

This chapter investigates the effect of innovation on the productivity of firms when two technological paths are available: product innovation on the one hand, and process innovation on the other. ... More

This chapter investigates the effect of innovation on the productivity of firms when two technological paths are available: product innovation on the one hand, and process innovation on the other. This is done by estimating a nonlinear multiple-equation econometric model, which allows us to control for both selection and endogeneity. The results suggest that process innovation appears as the main driver of labour productivity in the manufacturing industry, but it is difficult to disentangle the respective effects of product and process innovation. Both types of innovation actually seem to capture ‘overall’ innovation, and when a single indicator of innovation is used, it always has a significantly positive impact on labour productivity, both in the manufacturing industry and in the services.Less

Innovation Through tRaNsFoRmAtIoNaL Design

Vikramjit Singh, Brandon Walther, Kristin L. Wood, and Dan Jensen

in Tools for Innovation

Products that transform to reveal new functionality have been a source of fascination and utility for ages. Such products–transformers, such as the toys with this namesake–have been previously ... More

Products that transform to reveal new functionality have been a source of fascination and utility for ages. Such products–transformers, such as the toys with this namesake–have been previously designed employing ad hoc creativity rather than by pursuing any formal design methodology. By incorporating a design methodology and a concept generation tool for transformers, this research not only unearths further utility for these innovative and revolutionary products but also aids engineers in the design of these devices with dexterity. The success and advantages of transformers result from added functionality while simultaneously using fewer resources and occupying less space. This chapter elucidates the foundation of a methodology for the design of such transforming devices. the basic research conducted on transforming systems involves a combined inductive and deductive approach, uncovering transformation design principles and a novel method for designing transforming products. In the early stages of design, this method employs a unique process to extract customer needs by examining the requirement hierarchy of product usage scenarios. Such an approach broadens the scope of design and aids in identifying opportunities for transforming products while developing process level insights and solutions catering to these needs. During the concept generation phase of design, the method exploits the transformation design principles as a novel tool to complement and expand contemporary concept generation techniques. A unique bicycle accessory that transforms from a lock to a pump and vice versa is provided as an example of the transformational design process. This application displays, in form, the potential of the method to bring about a significant change in the engineering design culture and, in particular, how we innovate.Less

Overview of Fundamental Concepts: Setting the Stage

Albert N Link and Jamie R. Link

in Government as Entrepreneur

This chapter reviews several fundamental concepts to set the stage for later chapters. Emphasis here is more on the concepts per se rather than on their relationship to government as entrepreneur. ... More

This chapter reviews several fundamental concepts to set the stage for later chapters. Emphasis here is more on the concepts per se rather than on their relationship to government as entrepreneur. That integration occurs in each of the subsequent chapters. These interrelated concepts are: the innovation and the innovation process, public/private partnerships, research partnerships, and the productivity slowdown.Less

Technological change and health insurance *

Peter Zweifel

in The Economics of New Health Technologies: Incentives, organization, and financing

This chapter argues that there is a dual causal link between technological change and insurance. On the one hand, technological change often presents new opportunities, but also challenges to ... More

This chapter argues that there is a dual causal link between technological change and insurance. On the one hand, technological change often presents new opportunities, but also challenges to insurers. However, what has been rarely recognized up to now is that insurance may also induce technological change, in the guise of both product innovation and process innovation. The first part of the chapter discusses the impact of innovation on insurance, followed by innovation in medicine and its impact on health insurance. The second half is devoted to the reverse causal relationship, starting with the feedback from insurance to innovation, in general, and ending with the feedback from health insurance to technological change in medicine.Less

Organising for innovation

christian bason

in Leading public sector innovation: Co-creating for a better society

Today, hardly any of society's wicked problems can be solved through the isolated efforts of a single authority. The degree to which the public sector can interact flexibly and make relevant and ... More

Today, hardly any of society's wicked problems can be solved through the isolated efforts of a single authority. The degree to which the public sector can interact flexibly and make relevant and valuable arrangements in the interplay with private and other non-governmental actors is a key component of the public sector's innovation capacity. Collaboration around creation and execution of government policies and services can thus take place across the public, private and third sectors — or in a combination of them all. Innovation labs are instruments for focusing creative efforts and skills. They are able to generate demand through strong internal networks and a proven track record, while they are at the same time strategic opportunists that place themselves exactly where there are concrete challenges to tackle in close interplay with their colleagues. Also, new technologies can be used as a tool for government to run more effective innovation processes.Less

Introduction

Albert N. Link and John T. Scott

in Public Goods, Public Gains: Calculating the Social Benefits of Public R&D

This chapter briefly overviews the book and summarizes each chapter. The book’s focus on U.S. R&D programs is also discussed.

Innovations: A Systems Activities Approach

Susana Borrás and Charles Edquist

in Holistic Innovation Policy: Theoretical Foundations, Policy Problems, and Instrument Choices

This chapter comes to grips with the nature of innovation and systems of innovation. It identifies ten specific activities that define systems of innovation. The ten activities are specific elements ... More

This chapter comes to grips with the nature of innovation and systems of innovation. It identifies ten specific activities that define systems of innovation. The ten activities are specific elements directly related to the performance of innovation, that collectively shape the way in which innovation takes place in an innovation system. We call this a ‘systems activities approach’, and it is a broad version of the systems of innovation approach. These activities are partly performed by private organizations and partly by public organizations. The theoretical basis for innovation policy proposed in this book is built from the identification of the concrete problems (failures, bottlenecks, weaknesses, etc.) that afflict innovations and their determinants in systems of innovation, including those problems that might be the unintended consequences of policy itself.Less

Innovation Policy: An Holistic and Problem-Based Approach

Susana Borrás and Charles Edquist

in Holistic Innovation Policy: Theoretical Foundations, Policy Problems, and Instrument Choices

This chapter develops the core of the argument regarding the specific assumptions and theoretical propositions about the role and limits of innovation policy. The theoretical basis for the holistic ... More

This chapter develops the core of the argument regarding the specific assumptions and theoretical propositions about the role and limits of innovation policy. The theoretical basis for the holistic approach to innovation policy proposed in this book is built from a broad version of the systems of innovation approach and the identification of the concrete policy problems that afflict the innovation system, including the unintended consequences of policy. Following from that, the chapter argues that most innovation policies across countries are still partial, not holistic; that innovation policy must be separated from research policy; and that innovation policy-learning can only take place using an analytical model that helps understanding what worked, how, and why.Less

Building the Theoretical Foundations for an Holistic Innovation Policy

Susana Borrás and Charles Edquist

in Holistic Innovation Policy: Theoretical Foundations, Policy Problems, and Instrument Choices

The purpose of this chapter is to provide a summary of the main arguments and conclusions in the book, and to highlight its main contributions. Taking the point of departure from the book’s ... More

The purpose of this chapter is to provide a summary of the main arguments and conclusions in the book, and to highlight its main contributions. Taking the point of departure from the book’s analytical framework, and taking stock of the detailed considerations in its different chapters, this chapter looks into a series of issues related to the design of holistic innovation policy. With this purpose in mind, the chapter summarizes the theoretical foundations of an holistic innovation policy, how policy problems, obstacles, and barriers in innovation systems can be identified, and how policy instruments can be selected. The chapter finishes with a discussion of further avenues for innovation policy and innovation research. This summary chapter can be read independently of the rest of the book.Less

Innovation from the Inside Out: Making Gifts

Roberto Verganti

in Overcrowded: Designing Meaningful Products in a World Awash with Ideas

This chapter shows why in a world overcrowded by ideas innovation should come from the inside-out, i.e. the process should start from ourselves rather than from clients or outsiders. Traditional ... More

This chapter shows why in a world overcrowded by ideas innovation should come from the inside-out, i.e. the process should start from ourselves rather than from clients or outsiders. Traditional innovation processes are typically oriented the other way around: from the outside in. Their focus on solutions requires us to look first outside our organization, and outside ourselves; when we want to innovate solutions we start by going out and observing how users use existing products; then we are advised to “think outside the box” in order to be more creative; and even to invite outsiders to propose masses of novel ideas. Instead, the search for a new direction, i.e. the innovation of meaning, comes from the inside out. It’s a vision that comes from us and is offered to people. A gift to love because, foremost, we love it and we authentically believe it will make their lives better. And it could not be otherwise. You can borrow solutions from outsiders, but you cannot borrow directions and visions from outsiders: you cannot wear the eyes of others. You have to see things yourself. Or, put differently, when it comes to innovation of meanings, the myth of outside-in innovation does not work. We need to take exactly the opposite direction: from the inside out. This has three reasons, which we will elaborate in depth. First, meanings are interpretations, and interpretations cannot be outsourced; they can only come from us. Second, our own interpretations are precious; people will never love something we do not love ourselves. Third, we have the responsibility to drive the world in the direction that we believe makes more sense; this is good for people, for business, and for us; if we abdicate, what is our role in this world?Less

Financial Innovation: Balancing Private and Public Interests

Michael Haliassos

in Financial Innovation: Too Much or Too Little?

Financial innovation takes different forms and is evolutionary, making it difficult to predict its costs and benefits ex ante. It is driven by user needs, especially their desire to alter the ... More

Financial innovation takes different forms and is evolutionary, making it difficult to predict its costs and benefits ex ante. It is driven by user needs, especially their desire to alter the risk-reward structure they face, as much as by financial institutions’ desire to reap the temporary economic rents from innovation, which are subsequently diffused through imitation and standardisation. Banks have an economic interest to mitigate the risks that may result from innovation for their clients and for themselves; product approval processes and dedicated risk management processes are crucial instruments for this. But as private actors have no incentive to include potential social costs in their risk assessments, public intervention is needed to address the systemic risk implications of financial innovation. A macro-prudential approach seems more promising to safeguard financial stability than product-specific intervention.Less

Functional Procurement as Demand-Side Innovation Policy

Susana Borrás and Charles Edquist

in Holistic Innovation Policy: Theoretical Foundations, Policy Problems, and Instrument Choices

Public procurement occurs when public agencies purchase products (goods, services, and systems). The rationale, purpose, and starting point of public procurement should always be to solve societal ... More

Public procurement occurs when public agencies purchase products (goods, services, and systems). The rationale, purpose, and starting point of public procurement should always be to solve societal problems, to satisfy human needs, or to meet global challenges, such as environmental and health problems. This chapter discusses how public procurement can influence the direction and speed of innovation processes, as an instrument of innovation policy operating from the demand side. The chapter focuses on four specific kinds of procurement, namely (1) direct innovation procurement, (2) catalytic innovation procurement, (3) functional regular procurement, and (4) pre-commercial procurement. A conclusion is that functional specification is needed for all four of these different kinds of procurement. Questions addressed are: how can we achieve an increase in the use of innovation-enhancing procurement? What types of procurement initiatives have the potential to influence innovations most? And how can these be designed and implemented?Less

Innovation and Onshoring: The Case for Product Variety

Donald B. Rosenfield

in Production in the Innovation Economy

Using the lens of onshoring versus offshoring, this chapter draws on interviews with executive at large firms with substantial manufacturing presence in the US, finding that interviewees cited a ... More

Using the lens of onshoring versus offshoring, this chapter draws on interviews with executive at large firms with substantial manufacturing presence in the US, finding that interviewees cited a number of reasons for locating production offshore. In addition, the author develops an analytic model of the total cost of a product and how various product characteristics might affect that cost. The model identifies innovativeness as a factor that supports onshoring as well as pointing out that product variety itself is a form of innovation. Three major factors foster onshoring: innovation in products and processes, a low ratio of value to weight, and a high variety of products.Less

Why We Need an Holistic Innovation Policy: Goals, Problems, and Instruments

Susana Borrás and Charles Edquist

in Holistic Innovation Policy: Theoretical Foundations, Policy Problems, and Instrument Choices

This chapter introduces the main idea of the book, namely, the theoretical foundations, the problem-oriented approach, and the focus on the instrument choices of an holistic innovation policy. The ... More

This chapter introduces the main idea of the book, namely, the theoretical foundations, the problem-oriented approach, and the focus on the instrument choices of an holistic innovation policy. The chapter argues that innovation studies have left unfinished the theoretical foundations for the design of innovation policy. The chapter also argues that a starting point for developing it is the identification of the problems that tend to afflict the performance of innovation systems and the ten determinants of innovation processes. This provides the basis for the choice of innovation policy instruments. The chapter provides a road map of the contents of the book.Less

The Future of Crowdsourcing: From Idea Contests to MASSive Ideation

Johann Füller, Katja Hutter, and Julia Hautz

in Leading Open Innovation

This chapter examines the future of the crowdsourcing based on experience in the development of the software platform MASSive Ideation. It explains that unlike other idea contests for open ... More

This chapter examines the future of the crowdsourcing based on experience in the development of the software platform MASSive Ideation. It explains that unlike other idea contests for open innovation, MASSive Ideation enables the generation and evaluation of numerous ideas and supports their further elaboration into promising concepts with the collaboration of a large and geographically scattered crowd. This chapter speculates that more companies should consider the use of creative potential of crowds to enrich their innovation processes.Less