Types of Innovation

Rev: Sep, 2013

Euiho (David) Suh, Ph.D.

POSTECH Strategic Management of Information and Technology Laboratory(POSMIT: http://posmit.postech.ac.kr)

Dept. of Industrial & Management EngineeringPOSTECH

Contents

1. Product vs. Process

2. Radical vs. Incremental

3. Competence Enhancing vs. Competence Destroying

4. Architectural vs. Component

5. Technology-Push vs. Demand-Pull

3

Product vs. Process

■ Product Innovation– Embodied in the outputs of an organization– In the outputs: Goods or Services– Examples

■ Process Innovation– Innovations in the way an organization conducts its business– In Producing or Marketing goods or services– Examples• Redesign of Industry Value Chain:

Customer Self Service (e.g. self-oiling service) Customer-to-customer (e.g. eBay)

• Redesign of Processes: Use of real-time and geographical information (e.g. Asiana Airlines Baggage handling system) Workflow management and document management (e.g. ERP)

Hybrid cars Smart Phones HD TV, 3D TV

4

Radical vs. Incremental

■ Radical Innovation– New and different from previously existing products and processes– Example

■ Incremental Innovation– Minor change from (or adjustment to) existing practices– Example

Film Camera Digital Cam-era

Slimmer or Smaller

5

Competence Enhancing vs. Competence Destroying

■ Competence-enhancing Innovation– Builds on existing knowledge and skills– Example

■ Competence Destroying Innovation– Renders existing competencies Obsolete– Example

Intel’s Pentium 4 built on the technology for Pentium III

Electronic calculators rendered Keuffel & Esser’s slide rule expertise obsolete

6

Architectural vs. Component

■ Architectural Innovation– Changes in the overall design of a system– Example

■ Component Innovation– Changes to one or more components– Example

ABS of automobile

High-wheel bicycle to Safety bicycle

7

Technology-Push vs. Demand-Pull

■ Technology-Push Innovation– Pushed through R&D without proper consideration of whether or not it satisfies user

needs– Examples

■ Demand-Pull Innovation– Developed by an R&D function in response to an identified market need– Examples