Chapter 2 = midterm

Question 1

What is Innovation?

Answer 1

The practical implementation of an idea into a new device or process.

Question 2

What are some sources that innovation can arise from?

Answer 2

• Individuals, design solutions for own needs
• Research efforts at universities, government laboratories and incubators
• Private non-profits
• Firms (a primary engine). Typically have greater resources than individuals and a management system that aims resources at a collective purpose. Have incentives to develop new offerings.
• Networks of the above innovators (even more important). Linkages leverage knowledge and other combined resources.

Question 3

What is an Idea?

Answer 3

Something imagined or pictured in the mind.

Question 4

What is Creativity?

Answer 4

The ability to produce novel and useful work.

Question 5

What is novel work?

Answer 5

Novel work is different from previously produced work, and does not simply follow the next logical step in a sequence of known solutions. How novel a product is depends on how different it is from previous work (minor deviation vs major leap), and on the audience’s prior experiences. If a product is novel to the person who made it, but known to most others, it is called a reinvention. It can also differ how novel a product is across the world.

Question 6

What 5 parts is an individual’s creative ability a function of?

Answer 6

• Intellectual abilities. Intelligence, memory, ability to see problems in unconventional ways and articulate ideas to others.
• Knowledge. Familiar with potential solutions and can select among them, but can also trap you in assumptions that prevent you from generating more novel solutions.
• Personality. High need for autonomy, willingness to challenge authority and high self efficacy (believe can overcome obstacles) can facilitate creativity.
• Motivation. Intrinsic motivation is important for creativity; creative if we work on things we are genuinely interested in and enjoy. Extrinsic rewards can undermine creativity.
• Environment. Lets people be individualistic, is risk tolerant and empowers people to have dissenting views, it can empower creativity.

Question 7

What does organisational creativity depend on?

Answer 7

The creativity of individuals within the organization, and social processes and contextual factors (structure, routines, incentives).

Question 8

What is an Intranet?

Answer 8

A private network, only accessible to authorized individuals

Question 9

How can organizations stimulate creativity?

Answer 9

• Suggestion boxes
• Databases or intranets for raising ideas
• Innovation competitions
• Creativity training programs

Question 10

What are common traits in successful inventors?

Answer 10

• Have mastered the basic tools and operations of the field they invent in, but have not specified solely in that field (different perspectives).
• Curious and more interested in problems than solutions.
• Questions the assumptions made in previous work in the field
• Often have the sense that all knowledge is unified. Seek global rather than local solutions and are generalists by nature.
• May patent or commercialize only a few of their inventions = not necessarily entrepreneurial.

Question 11

What is implied by Innovation by users?

Answer 11

Innovation originates with those who create solutions for their own needs, who have a deep understanding of the need and the incentive to find solutions that fulfill them. No initial intention to profit from the sale of their innovation, since they create it for their own use. Users may develop new products on their own, approach existing manufacturers with design suggestions, or alter the features of an existing product.

Question 12

What is one of the most obvious sources of firm innovation?

Answer 12

Firms’ own research and development efforts. Research can be both basic and applied research.

Question 13

What is Basic research?

Answer 13

Research targeted at increasing scientific knowledge for its own sake. May or may not have any long-term commercial application.

Question 14

What is Applied research?

Answer 14

Research targeted at increasing knowledge for a specific application or need. Typically have specific commercial objectives.

Question 15

What is Development?

Answer 15

Activities that apply knowledge to produce useful devices, materials or processes.

Question 16

What are two previous approaches to innovation that has been criticised?

Answer 16

1. The linear science-push approach. Discoveries in basic science were translated into commercial applications. Little real life applicability.
2. The demand-pull model. Innovation driven by the perceived demand of potential users. Too simplistic.

Question 17

What sources of information and ideas do successful innovator firms utilise?

Answer 17

• In-house R&D, including basic research
• Linkages to customers or other potential users of innovations
• Linkages to an external network of firms that may include competitors, complementors and suppliers
• Linkages to other external sources of scientific and technological information, such as universities and government laboratories

Question 18

What is a complementor?

Answer 18

Producers of complementary goods or services.

Question 19

How and why may firms form alliances to jointly work on innovation projects?

Answer 19

Through alliances, licensing agreements, joint ventures, etc. Often between firms and their customers, suppliers and local universities. Collaborators can pool resources and share the risk of new projects.

Question 20

What is a firm’s Absorptive capacity?

Answer 20

The ability of an organization to recognize, assimilate and utilize new knowledge.

In-house R&D can help build this capacity.

Question 21

What is a Technology transfer office?

Answer 21

Offices designed to facilitate the transfer of technology developed in a research environment to an environment where it can be commercially applied.

Question 22

How do governments often invest in research?

Answer 22

Through their own laboratories, the formation of science parks and incubators, and grants for other public or private research entities.

Question 23

What is a Science park?

Answer 23

Regional districts, typically set up by government, to foster R&D collaboration between government, universities, and private firms.

Question 24

What is an Incubator?

Answer 24

Institutions designed to nurture the development of new businesses that might otherwise lack access to adequate funding or advice.

Question 25

How can Private nonprofit organizations help innovation?

Answer 25

Can be private research institutes, nonprofit hospitals, private foundations, professional or technical societies, academic and industrial consortia and trade associations. They often perform their own R&D activities, some fund R&D of other organizations, and some do both.

Question 26

Why is collaborative R&D networks important for innovation?

Answer 26

- Especially important in high-technology sectors; unlikely a single org/ind possesses all resources and capabilities needed. - Achieve more than individually.

Question 27

How does the structure of a collaborative R&D network influence the flow of information and other resources?

Answer 27

A dense network with many potential paths should have fairly rapid and widespread information diffusion.

Question 28

How has the web of collaborative firms changed between 1990 and later years?

Answer 28

1990: large and dense web due to IT. Then: declined activity, splintered the web into smaller components

Question 29

Why is it important to understand the drivers of clustering?

Answer 29

- Firms can see that they are positioned to benefit from clustering - Governments can use the knowledge to increase employment, tax revenues and other economic benefits.

Question 30

What is a Technology cluster?

Answer 30

Regional clusters of firms that have a connection to a common technology, and may engage in buyer, supplier, and complementor relationships, as well as research collaboration. Can span a city or a group of neighbouring countries.

Question 31

What may affect firms' ability and willingness to exchange knowledge?

Answer 31

Proximity and interaction. Complex and tacit knowledge may require frequent and close interaction to be meaningfully exchanged -> trust and norms -> higher willingness to exchange knowledge.

Question 32

What is complex knowledge?

Answer 32

Knowledge that has many underlying components, or many interdependencies between those components, or both.

Question 33

What is tacit knowledge?

Answer 33

Knowledge that cannot be readily codified (documented in written form).

Question 34

What is Agglomeration economies?

Answer 34

The benefits firms reap by locating in close geographical proximity to others. Can be increased employment and tax revenues that lead to improved infrastructure.

Question 35

What are some downsides of geographical clustering?

Answer 35

1. The proximity of many competitors can lead to competition that reduces their pricing power in relationships with both buyers and suppliers. 2. Close proximity may increase the likelihood that competitors gain access to proprietary knowledge. 3. Clustering can lead to traffic congestion, high housing costs, and higher concentrations of pollution.

Question 36

What does the degree to which innovative activities are geographically clustered depend on?

Answer 36

- Nature of the technology; underlying knowledge base or degree of possible patent and copyright protections, or how close and frequent interaction the communication requires. - Industry characteristics; market concentration, stage of industry life cycle, transportation costs, and availability of supplier and distributor markets. - The cultural context of the technology; population density or labor or customers, infrastructure development, or national differences in founding or protection of development.

Question 37

What are knowledge brokers?

Answer 37

Individuals or organizations that transfer information from one domain to another in which it can be usefully applied.

Question 38

What are Technological spillovers?

Answer 38

A positive externality from R&D resulting from the spread of knowledge across organizational or regional boundaries. Whether it happens is partially dependent on the strength of protection mechanisms, the nature of the underlying knowledge base and the mobility of the labor pool.