Today I gave a small speech to the senior years of a high school where I have studied some time ago. It was not related to innovation management, nevertheless I would like to share with you the main points of my speech, which was entitled “Kick-starting your Career”.
The role of technology on our society has been discussed widely. But is technological advancement the single, most important factor shaping our future? There is a very good article over the Neuromarketing blog titled “Futurehype: The Myths of Technological Change”. The article reviews a recent book with the same title by Bob Seidensticker.
Abernathy and Utterback tried to break with this standard by creating a model where product innovation, process innovation, competitive environment and organizational structure were all interacting and closely linked together.
Now, I am talking not only about people who work in research centers but people who will come up with innovations in their house, in their relationship, in their work routine and so on; meaning we need a better definition.
It is not a novelty the fact that radical innovations generate more returns than incremental ones. Just to have an idea of the numbers there is a study from the INSEAD finding that 86% of all innovations are incremental, but they are responsible for generating only 30% of profits on the market. The large pie, over 60% of the profits, comes from the radical innovations, which account for only 14% of the total innovations.
The reasoning behind that argument states that Wal-Mart would be paying low wages to its employees, destroying jobs in competitor retailers, and concentrating its wealth in the hands of few people.
In the fifth part of the series I will present the Teece model, which can be used to predict who will profit from an innovation and to understand what company will have higher incentives to invest in certain innovations.
It is important to differentiate between strategic planning and strategy innovation. Most corporations indeed have defined processes only for carrying out the former, basically studying historical data and making extrapolations for the future.
There are many controversies regarding executive salaries within companies. Over the years different people have proposed different theories to solve the problem. How much should they earn? Upon what variables should the salary be based?
There is a lot of theoretical evidence supporting the model, but does this evidence emerge empirically as well? Not quite. Consider the markets for safety razors, disposable diapers, photographic film, laser printers, game consoles, VCRs, energy drinks, personal computers, internet browsers, operating systems, search engines, online bookstores, online auctions, VoIP services, and the list goes on.