This article examines the concept of brokerage models of innovation. It discusses the principles of brokerage theories and explains that while traditional models of innovation focus on the generation of novel solutions, brokerage theories focus on how managers recognize and recombine existing resources. Brokerage models of innovation also highlight how organizations are embedded within larger field landscapes and how managerial strategies, structures, and actions aimed at innovation will be enabled or constrained by the institutional dynamics unfolding at these larger levels. This article also highlights the innovation lessons from Thomas Edison, Elmer Sperry, and Design Continuum.
Lorenzo Massa and Christopher L. Tucci
This chapter offers a broad review of the literature at the nexus between Business Models and innovation studies and examines the notion of Business Model Innovation in three different situations: Business Model Design in newly formed organizations, Business Model Reconfiguration in incumbent firms, and Business Model Innovation in the broad context of sustainability. Tools and perspectives to make sense of Business Models and support managers and entrepreneurs in dealing with Business Model Innovation are reviewed and organized around a synthesizing meta-framework. The framework elucidates the nature of the complementarities across various perspectives. Finally, the use of business model-related ideas in practice is discussed, and critical managerial challenges as they relate to Business Model Innovation and managing business models are identified and examined.
This chapter reviews conceptual and empirical arguments for expecting the structure and nature of capital markets to impact on the financing of innovation. Market failure and innovation systems approaches to problems in the financing of innovation are reviewed, including approaches based on the varieties of capitalism, insider and outsider financial systems, and legal rights literatures. The complementarity between financial markets and other markets coordinating the allocation of resources is emphasized so that the impact of financing problems on innovation behaviour cannot readily be separated from wider system effects. The chapter concludes that there are generic issues involved in the financing of innovation related centrally to the long-term and uncertain nature of the pay-offs to innovation investment. The evidence suggests that different financial systems embedded in different financial market and legal structures address different elements of this problem in different ways. Relatively coordinated and bank-financed insider systems appear to offer greater commitments of long-term patient capital alongside investment in firm-specific human capital. There are big pay-offs in these systems in terms of incremental innovation in particular. The death of bank-based coordinated systems has been, as Mark Twain remarked on reading his obituary, greatly exaggerated.
This chapter examines collaboration—the shared commitment of resources to the mutually agreed aims of a number of partners—and innovation management. Very few organizations, if any, can innovate alone, and collaboration with a select number of partners creates the complementarities necessary for innovation, encourages learning, and better equips organizations to deal with uncertainty and complexity. The chapter explores collaborations between firms and between businesses and universities, government policies for collaboration, the role of brokers, and collaboration and technical standards. The management of collaboration has to deal with the instabilities and tensions inherent in this organizational form. Critical tasks include partner selection and structuring and organizing the collaboration. The chapter argues the advantages of managing collaboration as part of the architecture of innovation ecosystems.
Ritsuko Ozaki and Mark Dodgson
This chapter argues it is important for effective innovation management to understand how innovations are consumed. The diffusion of innovation depends on the fit between innovation and consumers’ circumstances and underlying values. Investigation as to how socially contextual and emotional factors, as well as more rational factors such as costs, utility, and technical functionalities, affect innovation adoption decisions is crucial. By using the example of Josiah Wedgwood, the chapter shows how innovation is affected by the broader social and cultural changes that influence patterns of consumption. It uses the examples of hybrid vehicles and green electricity tariffs to reveal the complexities in decisions to consume innovation, understanding of which better informs value propositions from innovation.
Candace Jones, Mark Lorenzen, and Jonathan Sapsed
Creative industries experience a variety of changes, which are driven by differing forces. However this variety may be understood by considering two dimensions: semiotic codes; the signifiers of symbolic value that consumers derive from products, and the material base; the formats, fabrics, and physical human activities underpinning these products. We characterize four types of change, based on high and low change combinations with semiotic codes and the material base: Preserve, Ideate, Transform, and Recreate. This framework is applied to a range of creative industries, from mature sectors like museums, architecture, and fashion, through the many transitions of film production, to contemporary digital advertising and online content creation. We show how each of the change types appear to have different drivers related to public policy, demand, technology, and globalization, offering an alternative classification framework to guide creative industries scholars, practitioners, and policy-makers.
Roberto Verganti and Claudio Dell'Era
Studies of innovation management have often focused their investigations on two domains: technologies and markets. Technological innovation has been capturing most attention, especially as far as radical technological change is concerned. Design has recently gained much attention among practitioners and scholars as a source of innovation. Still, the role of design in innovation and competition remains a rather young (preparadigmatic) area, with blurred boundaries and often unclear or contrasting perspectives. In this chapter we aim to provide a theoretically solid and empirically grounded view on design from a very specific angle: design as a source of innovation. The chapter first defines what innovation driven by design is and how it stands apart from other approaches of innovation. It shows that design is related to the innovation of the meaning of products and services: an innovation that concerns the purpose, the ‘why’ people use things, rather than the functionality and performance of products (i.e. the ‘what’ and ‘how’).
Innovation is an expensive process; significant resources must be expended to initiate, direct, and sustain it. It is a process that takes time which means that the resources that support it must be committed until the process is complete. According to this article, contemporary economists of innovation have largely neglected the relationship between finance and innovation. This article notes that empirical research has not kept pace with theoretical developments and the evidence that does exist, even on basic propositions, is often ambiguous. Furthermore, this article points to serious limitations associated with the dominant analytical approaches employed in micro- and macroeconomic research on finance for analyzing the dynamics of economic change. In closing, it draws attention to some crucial questions that need to be addressed in new research on finance and innovation.
Michael A. Hitt, Susan E. Jackson, Salvador Carmona, Leonard Bierman, Christina E. Shalley, and Douglas Michael Wright
Little systematic research has been done on strategy implementation, yet there is a body of work providing guidance for implementation efforts. The authors examine three basic collections of work on resources and governance, managing human capital, and accounting-based control systems, explaining how these issues have implications for strategy implementation. Although the chapters in this Handbook provide many useful insights concerning issues that must be addressed in order to effectively implement firms’ strategies, there is need for more and systematic work. The purposes of this final chapter are to identify promising future research directions and to serve as a catalyst for the creation of additional collections of work that can enhance our understanding of strategy implementation. The five specific topics for which more work on strategy implementation is needed are innovation and entrepreneurship, marketing strategies and services, managing operations, managing financial assets and human capital, and strategies (international, acquisitions, differentiation).
Bjørn T. Asheim and Meric S. Gertler
The process of knowledge production exhibits a very distinctive geography. This article argues that this geography is fundamental, not incidental, to the innovation process itself: that one simply cannot understand innovation properly if one does not appreciate the central role of spatial proximity and concentration in this process. The goal of this article is to demonstrate why this is true, and to examine how innovation systems at the subnational scale play a key part in producing and reproducing this uneven geography over time. This article addresses four key issues. First, it looks at the reason why location matters when it comes to innovative activity. Second, it turns to examine regional innovation systems, and the role played by them in generating and circulating new knowledge leading to innovation. Third, the article considers the relationship between regional systems of innovation and institutional frameworks at the national level. Finally, the relationship between local and global knowledge flows is examined.