Which risks does Germany face in its position as innovation leader?
• Automotive industry and engineering makes up 12 % of knowledge intensive value creation.
• Knowledge-intensive services make up only 24 % in comparison to 30 % value-added share looking at European neighbors and is even low in productivity.
• Eastern Germany shows a significant difference in innovation potential.
• Increasing divergence between European countries weakens Germany’s position as export champion.
Germany is at a crossroads as a global driver of innovation.
What are some exemplary Government measures to support Germany’s position as innovation leader?
Fiscal R&D promotion
Blockchain & AI Strategy
Climate Package
What are megatrends that will have a strong influence on the future?
Sustainability
Urbanization
Mobility
Demographic Change
Digitalization
-> Companies need to be aware about global trends and developments
What is Urbanization?
An increase in a population in cities and towns versus rural areas.
What are reasons for Urbanization?
A large number of people are attracted to urban areas because of:
• The availability of jobs.
• Proper infrastructure – roads, water, electricity etc.
• Availability of social services – health, education, recreation, postal services and police stations.
• A wide variety of entertainment and night life facilities.
What can be said about Mobility?
• In a total of almost 600 locations in Germany, drivers can share cars with other users instead of using a private car.
• Volvo will be the first manufacturer to electrify the entire fleet (including mild hybrids on 48-volt basis).
• In autumn 2016, Volkswagen CEO Matthias Müller announced a battery purchasing program worth 50 billion euros.
• Some companies, such as Volkswagen, are already working on platforms for "Level 5" vehicles that have no drivers on board from the outset.
What can be said about Demographic Change?
In 40 years, Germany could lack around 15 million skilled workers. Demographic change is irreversible in the longterm.
Which measures could have an anti-cyclical effect concerning Demographic Change?
• An increase in the proportion of women in employment (made possible, among other things, by better provision of childcare facilities).
• The inclusion of disabled people in the work process.
• The controlled immigration of skilled workers from abroad.
• An improvement in the educational attainment of school leavers, accompanied by a reduction in the unemployment rate.
What can be said about Digitalization?
• Attention becomes a scarce commodity.
• New digital and internet-based business models -> Startup and beta culture as a role model for companies.
• Computer support in more and more areas of life. Increased information processing in real time.
• New forms of communication and participation: Digital participation of users from developing countries.
• Questioning the system of intellectual property rights and Open Source.
What are the dimensions of exponential growth concerning digitalization?
Processors
Algorithms
Data Storage
Connectivity (Linking people and machines)
How does Urbanization create opportunities for innovation and new business areas?
Effective and environmentally friendly infrastructures
How does Mobility create opportunities for innovation and new business areas?
Effective and sustainable mobility concepts
How does Demographic Change create opportunities for innovation and new business areas?
Efficient and affordable long-term medical care
How does Digitalization create opportunities for innovation and new business areas?
New ways of cooperation, new benefits through digitized products
What can be said about the usage cycles of innovation?
Usage cycles of innovations shorten continuously and companies need to adopt to them.
How can the shortened usage cycles of innovation be explained?
The theory of long waves (Kondratieff waves):
• The waves each cover a period of 40 to 60 years.
• The reason for the long waves of growth is the surge of powerful innovations, so-called basic innovations.
• The exploitation of the economic potential of these basic innovations lasts several decades in each case.
• During this time, a sustained growth dynamic in the economy sets in.
• If the utilization potential of the innovation wave is exhausted and a new basic innovation is not created in time, economic stagnation occurs.
• This economic stagnation can only be overcome by a new wave of innovation, triggered by a new basic innovation.
Illustrate the usage cycles of innovation!
What can be said about Life Cycle in the past and today?
Past: Long cycles
Today: Short Cycles
What can be said about innovations in the past and today?
Past: Few
Today: Continuous
What can be said about Competition in the past?
• expected competition
• cooperation undesirable
• other competitors are opponents
What can be said about Competition in the present?
• greater competition
• alliances with competitors
What can be said about Market in the past?
• local
• expected market
What can be said about Market in the present?
• global
• uncertain market environment
What can be said about quality in the past and today?
Past: Is desirable
Today: Absolutely necessary for survival
What can be said about Production in the past?
• mass production
• large batch sizes
• no ties to suppliers
• large stocks
• fixed production
What can be said about Production in the present?
• customized production
• small batches
• suppliers are partners
• reduced stocks (JIT)
• flexible production
What can be said about Organization in the past?
• bureaucratic
• high vertical integration
What can be said about Organization in the present?
• smaller plants and outsourcing
• agile organization
What is a difference between big and average firms regarding innovation?
Innovativeness is a top priority for big firms
Average firms do not rank innovation as priority
What can be said about the frequency of innovation?
When it comes to Innovation, once is not enough
• Startups are expected to have one successfu lidea. If they do, and are acquired by a larger company, it is a big victory.
• Larger companies are held to a higher standard. Their valuations depend on the market’s belief that they will be able to innovate successfully into the future.
→ The long-lasting success is predetermined by the innovation system the firms are able to establish
How can invention be defined?
Invention can be defined as the first technical implementation or a new combination of existing scientific inventions. Invention may be the result of planned research and development activities or of a chance.
How can innovation be defined?
The Organization for Economic Co-Operation and Development (OECD) defines Innovation “as the successful commercial introduction of a new product, service or process.”
What are different ways to define innovation?
Something qualitatively new
New for the adopting person or unit
A process from idea to implementation: Innovation = Invention + exploitation
A new means-end combination: The synthesis of a market need with the means to achieve and produce a product to meet that need
-> Innovations are new means-end combinations that are introduced into the market
What can be the scope of innovation (“What is new”)?
Product, Service, Process, Business Model, Management Innovation, Social Innovation
What can be the degree of innovation (“How new”)?
Incremental vs. Radical, Multidimensional Newness
What can be the subject of innovation (“New for whom”)?
Individual, Group, Organization, Industry, Society
What can be the process of innovation (“From when”)?
Idea, Concept, Prototype, Product, Usage
What can be the role of innovation (“New with whom”)?
Producer-dominated, User-dominated, cooperative
What can be said about the norm of innovation (“New means successful?”)?
The more innovative, the more successful?
What is product / service as innovation?
Development of a good or service to satisfy specific customer needs
New development or improvement/extension (new functionality, new features, changes in performance or quality, costs)
What is process as innovation?
Novel factor combinations that enable more cost-effective, higher quality, safer or faster production
New manufacturing processes
Increased efficiency in the production of goods and services
What is Business Model innovation?
Changing the value creation architecture
Change in earnings model
What is management innovation?
New administrative processes
Innovative management system
What is Social Innovation?
Change in human / social behavior
What is a business model?
A business model holistically describes the core logic of how value is created and captured through the exploitation of an entrepreneurial opportunity.
Get the business model wrong and there is almost no chance of success.
How can business model innovation be defined?
Business Model Innovation is about creating new models or changing the existing ones to maximize the value created and return it to the organization which created it – capturing value.
Illustrate business models!
Illustrate degree of innovation defined by newness of means & ends!
Illustrate degree of innovation defined by differentiation according to components & connections!
What differentiates the four-dimensional model of degree of innovation from two-dimensional ones?
The four-dimensional concept additionally considers necessary internal & external changes (resource fit).
What are the four dimensions of the four-dimensional concept of innovation?
Technology
Market
Organization
Environment
A radical innovation has high novelty in all four dimensions!
What are aspects of the dimension “Technology” of the four-dimensional concept of innovation?
Technological Principle
System Architecture
Obsolescence of Old Technology
Leap in Performance
What are aspects of the dimension “Market” of the four-dimensional concept of innovation?
Customer Value
Customer Risk
Market Potential
Value Chain
What are aspects of the dimension “Organization” of the four-dimensional concept of innovation?
Competences
Structure, Processes
Strategy
Culture
What are aspects of the dimension “Environment” of the four-dimensional concept of innovation?
Infrastructure
Regulation, Legislation
Institutions
Norms, Values
Who are potential subjects of innovation?
Individuals / Experts
The leading authority
The industry
A national economy
Manking
Innovative is what is considered to be innovative
What can be said about individuals / experts as the subject of innovation?
Use of the new product / service in your own work or consumer environment
Novelty may already be known to other individuals
What can be said about the leading authority as the subject of innovation?
Business perspective
Company leaders determine what is innovative
Judgment institutionalized in companies
What can be said about the industry as the subject of innovation?
Industrial economic perspective
Technologically or commercially the same group(suppliers, competitors)
What can be said about a national economy as the subject of innovation?
National economic perspective
National Patent Office determines what is innovative after examination
What can be said about mankind as the subject of innovation?
Most consistent concept of innovation
Innovative is what was invented and economically used for the first time in the history of mankind
How can innovation be differentiated based on the process (From when?)?
Initiative
Research
Development
Start of adoption
Ongoing usage
Innovation is more than just invention. It is the trigger of a process
What can be said about initiative as innovation?
Considering a previously unknown object
What can be said about research as innovation?
Theoretical foundation and empirical verification of discoveries or observations
Determination of causes and effects
Determination of functional relationships
What can be said about development as innovation?
Implementation of research results and observations
What can be said about start of adoption as innovation?
Introduction of the new product into the market or the new procedure into the enterprise
What can be said about ongoing usage as innovation?
serial production
• large-scale production
• sustainable diffusion
What are major threats for companies regarding innovation?
Increasing speed of change
Discontinuous change
Learning not only knowing
External threats force companies to rethink their value creation
Illustrate the innovation funnel!
What are the different types of open innovation?
Outside-In process
Inside-out process
Coupled process
What is the outside-in process?
Integrate external knowledge (e.g., customers, suppliers)
What is the inside-out process?
Let others commercialize your ideas, sell / license intellectual property (IP) and technology
What are coupled processes?
Couple outside-in and inside-out process (e.g., alliances with complementary partners)
Illustrate the different types of open innovation within the innovation funnel!
Who are pontential subjects of innovation?
Company
Public authorities
Suppliers
Research and educational institutions
Co-supplier
Dealer
Clients
Consulting
Competitor
What can be said about public authorities as the subject of innovation?
- Subsidies, infrastructure
- Brokerage services
- Laws, ordinances
What can be said about suppliers as the subject of innovation?
- New materials
- New components
- New systems
What can be said about research and educational institutions as the subject of innovation?
- Technological knowledge
- Training services
- Junior staff
What can be said about co-supplier as the subject of innovation?
- Complementary knowledge
- Solution of interface problems
What can be said about dealer as the subject of innovation?
- New demand trends
- Developments in competitors
What can be said about clients as the subject of innovation?
- Definition of new requirements
- Implementation partner
- Reference effect
What can be said about consulting as the subject of innovation?
- Innovative concepts
- Process design
- Finance & legal services
What can be said about competitor as the subject of innovation?
- Exchange of information
- Enforcement of norms andstandards
- Advertising subsidies
Illustrate the involved parties in the different stages of the innovation process!
What are aspects of “Value through tradition”?
• proven, tested, reliable
• solid workmanship, good craftsmanship
• aesthetically pleasing, timeless, "classic", "cult", culturally valuable
• distinctive, authentic, genuine
• rare, unique• sophisticated, perfect in detail
• experienced in childhood, taken over by parents and grandparents
• natural, original
What are aspects of “Value through innovation”?
• new functionality, new quality of experience(e.g. Netflix)
• (suddenly) higher performance
• fewer "side" effects, lower risks, better tolerability
• easier, more error-free operation, more comfort
• everywhere, always available
• environmentally friendly, resource-saving technology
How can innovation be summarized?
Innovation...
• is a process of different activities,
• that have been developed by different actors,
• are carried out in one or more organisations,
• to develop novel combinations of means and ends
• and introduce them to the market or the organization.
Last changed2 years ago
