Global Innovation Management
Motivation for this Book Link to heading
This second edition of Global Innovation Management updates materials I have been using in classes taught at Hong Kong University of Science and Technology, University of Illinois – Chicago, the Vietnam EMBA and the University of Science and Technology in China. It addresses a question that I have encoun- tered for at least a decade now: ‘If you think you have invented a winning innovation, how can you bring your innovation out of the labo- ratory and turn it into a commercially success- ful product?’ It is a question that comes up often today, in all areas of industry. The ques- tion crosses many disciplines, and is one that I wish were pursued more actively in business schools.
Nearly three decades ago Michael Porter suggested that innovation should be seen as a combination of invention and commercializa- tion, reflecting received wisdom in both indus- try and academe. There are many books on the market that address innovation, the largest number being devoted to the first half of this combination – how to be inventive. Topics range from systems for helping people to be more creative to better managing laboratories and generating ideas. Clearly these activities must predicate any commercial successes in the mar- ket. They are necessary but not sufficient. The second half of the combination has received less attention; though there are several good books on commercialization of innovations, the study it has received has been incomplete. Existing books in the market that address innovation tend to fall into three categories: (1) behavioural texts on how to be more crea- tive; (2) industrial design and research and development (R&D) management books; and (3) industrial organization books that study the sources and influence of innovation. This book is intended to fill a slightly different niche – at once pragmatic, yet supported by field research and theory. It concerns the process of being a successful innovator. It is part history, part the- ory and part practical guide to the myriad tasks involved in innovating for a living. I hope it will find an audience with inventors, not just in labs but in market channels and in service industries, who want to turn their ideas into profitable and sustainable businesses.
It was my goal, in writing this text, to address the management of each major task on the path from idea creation to successful commercializa- tion of an innovation. Creativity is addressed, in Chapter 11, mainly as a primer on identify- ing creative people and helping them to achieve their potential. I am biased in believing that, even though everyone can learn to be more cre- ative, only a small percentage of the population is good enough to generate commercially useful innovations. These ‘creative types’ can be tem- peramentally idiosyncratic and require special handling.
Many of the other tasks in innovation parallel the concerns of entrepreneurs, but with substan- tially less historical information about how to structure your business models, and substantially more uncertainty about products and customers. Variations in traditional management required of innovations constitute the main body of this text. Finally, I spend time answering the question ‘Why bother?’ It is not uncommon to encoun- ter objections to the myriad difficulties entailed in high-tech and high-innovation businesses with suggestions that the firm would be better served by ‘sticking to its knitting’, so to speak, and only engaging in traditional, well-under- stood business activities. Unfortunately, glo- balization and the rise of internet business have moved many such ‘traditional’ industries to places where labour costs are low, environmen- tal standards lax and factory scales huge. It has commoditized them, making it difficult for new entrants or small operations to compete even if they wanted to. The greatest profits today are to be made in areas with high technological and business risk.
I have avoided the overuse of the term ‘tech- nology’ throughout this book, though many of our most successful innovations – automobiles, televi- sions, music players, airplanes, refrigerators and so forth – have succeeded only long after all of the detailed technological components were well understood and developed. The technology is too often out there in the lab, waiting for the right ‘for- mula’ to make it attractive to a wider consumer base. This book assumes that the raw technologi- cal components are already with us, just waiting to be plucked from the laboratory, or to be searched on Google Patent Search or called up over lunch with our engineering staff. Or it assumes that you’ve already identified your technology (maybe you’ve been hovering over it in your lab for the past two years) and you now want to figure out what next. Or that you are a salesperson, or prod- uct designer or hold any one of a number of other jobs in the firm that need to keep seeking the next big thing. The question arises as to how to manage all of the parts of a successful – with the empha- sis on successful – design, development, introduc- tion, sale and promotion of an innovation. In my system, technology is just one of the many com- ponents that have to be grafted into the overall innovation for success.
In my classes, I make use of a substantial amount of material that is not included in the text, but rather is available from the companion website to this book. The website allows me to continually update material, as well as provide supplemental presentation slides and exercises for in-class usage. It also provides a server plat- form for software programs which support the text. Server-based software provides me with greater latitude in my offerings than would a CD of software. First, it is much easier to pro- gramme a user interface as a web page than as a stand alone shell (and also gives me the fall- back, in case of programming errors, of quickly correcting the interface). Second, I can compute user input with powerful software on the server (e.g. MatLab) that would be infeasible and expensive to implement in standalone support programmes. Finally, there are fewer copyright problems in placing material on a web page because they can be linked to a broad range of sources that can be tapped to help solve a problem, complete a plan or update your cur- rent knowledge. Where intellectual property issues do crop up, they can be resolved quickly. I believe the combination of a printed textbook – which is portable, easy to read, annotatable and easy to search – in combination with a supple- mentary web page – which can include updates, classroom materials and software – offers the best of both worlds. Visit https://he.palgrave. com/westland2 for online resources. This book is designed to be used as a textbook in a one- or two-semester class on innovation, in an engineering programme, business programme or other science programme. There are 13 chap- ters, which fit with a 14-week semester. I teach my courses in two 7-week sessions. The second semester tends to overwhelmingly focus on financial analysis, as both investment bankers and corporate managers are quite interested in this aspect of innovation.
This text is divided into three sections cover- ing specific topical clusters: Internal components needed for success- ful innovation: this cluster of chapters pre- sents the ‘building blocks’ of innovation. Here an innovation is not a product or ser- vice – rather it is a market niche defined by the customer’s own needs, problems and willingness to trade money for solutions, recognizing that every innovation must ulti- mately be sold in a competitive market. External factors in commercializing an inno- vation: intellectual property laws, disruptive innovation, technology acceleration and the competition for venture capital and finance are all important for successful innovation, but are only partly under the control of the innovator.
Social and technological ecosystems in which innovation thrives: emerging plat- forms such as robotics, autonomous vehi- cles, smart devices and artificial intelligence expand the innovator’s palette while intro- ducing risk. These in turn will evolve in a context of the individual, community and society which is rapidly moving us towards a creativity-based economy. Because of the breadth of topics covered in this text, each chapter is intended to present the main ideas and components and their use and relevance to the innovation process. At the end of each chapter, I provide references and further reading that fills in the details that are needed for a practical implementation. You need to get the ‘big picture’ first, and then go back and start filling in details, especially since the details are likely to be different for every invention, every market and every project.