Sources of Innovation

v The Camera Pill: A capsule that is swallowed by patient that broadcasts images of the small intestine

v Invented by Gavriel Iddan & team of scientistsn Iddan was a missile engineer – no medical backgroundn Project initiated by Dr. Scapa, a gastroenterologistn Iddan applied guided missile concept to problem of viewing the

small intestine

v Developing the Camera Pilln Many hurdles to overcome: size, image quality, battery lifen Formed partnership with Gavriel Meron (CEO of Applitec) for capital

to commercializen Formed partnership with team of scientists lead by Dr. C. Paul Swain

to combine complementary knowledgen Resulted in highly successful, revolutionary product

Case: Given Imaging’s Camera Pill

v Discussion Questions:n What factors do you think enabled Iddan, an engineer with no

medical background, to pioneer the development of wireless endoscopy?

n To what degree would you characterize Given’s development of the camera pill as “science-push” versus “demand-pull”?

n What were the advantages and disadvantages of Iddan and Meron collaborating with Dr. Swain’s team?

Case: Given Imaging’s Camera Pill

Overview

v Different sources of innovation

Discussions

v P&G, 구글, GE, HP 등 국외 거대 기업들은 이미 오픈 이노베이션에뛰어들어 성공을 거두고 있다. P&G는 약 150만명에 달하는 외부 네트워크에 ‘기술요약서’라는기획안을 공개하고 아이디어를 얻는 파격적인 방식을 통해1990년대 말 성장 침체 위기를 벗어났다. 순수익도 4배 이상치솟았다. GE 역시 Imagination Breakthough(상상돌파) 프로젝트라는 신성장동력 개발 프로그램을 통해 차세대 청진기, 하이브리드 기관차 등 새로운 상품 개발을 진행하고 있는가 하면수십억달러의 매출 성과를 올렸다.

외부로부터혁신을가지고들어오는것은어떤장점과단점이있을까?

Discussions

Closed Innovation Principles• The smart people in our field work for

us

• To profit from R&D we must discover, develop and ship it ourselves

• If we create the most and best ideas in the industry, we will win

Open Innovation Principles• Not all the smart people work for us

so we must access knowledge and expertise of bright individuals outside our company

• We don't have to originate the research in order to profit from it

• Building a better business model is better than getting to market first• We should control our IP so that our

competitors don't profit from our ideas

• Free from market pressures

• Knowledge is created, codified, sent and received

• If we make the best use of internal and external ideas, we will win

• Disruptive innovation: passionate users innovate, producers follow

• Knowledge created by interaction

Creativity

v Definitionn The generation of imaginative new ideas, involving a radical new

innovation or solution to a problemn A creative solution to simply integrate existing knowledge in a

different wayn The generation of new ideas or the recombination of known elements

into something new, providing valuable solutions to a problem

v Necessityn 75% of CEOs of the fastest growing companies claim their strongest

competitive advantage is unique products and services (CSC)n 90% of organizations believe innovation is a strategic priority for 2004

and beyond (BCG)

Creativity

v Characteristics according to levelsn Individual creativity

n Intellectual abilities (e.g., ability to articulate ideas)n Knowledge (e.g., understand field, but not wed to paradigms)n Style of thinking (e.g., choose to think in novel ways)n Personality (e.g., confidence in own capabilities)n Motivation (e.g., rely on intrinsic motivation)n Environment (e.g., support and rewards for creative ideas)

n Organizational Creativity n Functions

n Creativity of individuals within the organizationn Social processes and contextual factors that shape how those

individuals interact and behaven Methods of encouraging/tapping organizational creativity:

n Idea collection systems (e.g., suggestion box)n Creativity training programsn Culture that encourages (but doesn’t directly pay for) creativity

Translating Creativity into Innovation

v Innovation vs. Creativityn Implementation of creative ideas into some new device or processn Combining creativity with resources and expertisen Creativity is a behavior – innovation is ideas in action

v Inventorsn One ten-year study found that inventors typically:

n Have mastered the basic tools and operations of the field in which they invent, but they will have not specialized solely on that field.

n Are curious, and more interested in problems than solutions.n Question the assumptions made in previous work in the field. n Often have the sense that all knowledge is unified. They will seek

global solutions rather than local solutions, and will be generalists by nature

n Such individuals may develop many new devices or processes but commercialize few

Translating Creativity into Innovation

v Systemic Approaches

Customer-Oriented Technology-Oriented

Data

Methods

-Evaluation of Cusotmers-Voice of Customer(VOC)-Marketing Research-POS

-QFD-Data Mining-Conjoint Analysis

-Patent Information-Research reports-Implicit knowledge

-Patent Map-TRIZ-Technology Roadmap

Translating Creativity into Innovation

v Reference: QFD

Translating Creativity into Innovation

v Reference: TRIZn Method

n Process

150만 Patents[World Wide]

Inventive Patents[40,000건]

• Definition of Inventive Problems• Levels of Solution• Patterns of Evolution• Regularities of Invention

Key Findings

1

2

3

4

M

1

2

3

4

N

MyProblem

MySolution

Prismof

TRIZAnalogy &

Modification

ManyStandardProblems

ManyStandardsolutions

<Idea generation methods>•Substitute, Combine•Modify, Magnify, Minify •Put to other uses•Eliminate•Reverse, Rearrange,…

Translating Creativity into Innovation

v Reference: Patent Map

*

Translating Creativity into Innovation

v Research and Development by Firmsn Science Push: Early 20C

n Suggest that innovation proceeds linearly n Scientific discovery à invention à manufacturing à marketing

n Demand Pull: After Mid 20Cn argued that innovation originates with unmet customer needn Customer suggestions à invention à manufacturing

n A variety of sources and process: Currentn Most frequent collaborations are between firm and their

customers, suppliers, and local universities n Innovation Models (reference)

n Three phases model of Schumpeter: Invention è Innovation èDiffusion

n Linear Model: Basic research è Applied research è Developmentè Production

n Chain-linked Model

Translating Creativity into Innovation

v Chain-linked Model (Reference)

Innovation in Collaborative Network

v Types of Collaborationn Joint venturesn Licensing and second-sourcing agreementsn Research associationsn Government-sponsored joint research programsn Value-added networks for technical and scientific exchangen Informal networks

v Technology Clustersn Definition: regional clusters of firms that have a connection to a

common technologyn Characteristics

n Proximity facilitates knowledge exchange.n Cluster of firms can attract other firms to area.n Supplier and distributor markets grow to service the cluster.n Cluster of firms may make local labor pool more valuable by

giving them experience. n Cluster can lead to infrastructure improvements

Innovation in Collaborative Network

v Technology Clustersn Factors for construction of clusters

n The nature of the technologyn its underlying knowledge base n the degree to which it can be protected by patents or copyrightn the degree to which its communication requires close and frequent

interaction

n Industry characteristicsn degree of market concentration n stage of the industry lifecycle and transportation costs, n availability of supplier and distributor markets

n The cultural context of the technology n population density of labor or customersn infrastructure developmentn national differences in how technology development is funded or

protected

Innovation in Collaborative Network

v Technological spilloversn Definition

n The benefits from the research activities of one entity spill over to other entities

n Effectsn Significant impacts on technological innovationn Evidences: correlation between patent activity/profit of a firm and

R&D expenditure of other firms within same regionn Possibility of technological spillover

n Strength of protection mechanisms (e.g., patents, copyright, trade secrets)

n Nature of underlying knowledge base (e.g., tacit, complex)n Mobility of the labor pool