Course Code: BUSS 303/ BBIT 04201

Course Title: TECHNOLOGY AND INNOVATION MANAGEMENT

Introducing technology, innovation and management

Many of us would probably accept that technological and organizational innovation is often

something of a double-edged sword: as new developments occur they inevitably destabilize

existing technological and organizational arrangements, and sometimes social and economic

relations more broadly. One common result, for example – and one with which many of us are

familiar – is what often seem to be endless cycles of organizational change, and the constant pursuit

of technological ‘fixes’ that, if the claims made for them are to be believed, result in cheaper, more

efficient and productive work processes.

Similarly, developments in information and communication technology (ICT) have transformed

many aspects for example teaching and learning environment, manufacturing, communication,

banking etc..

What is innovation?

Joseph Schumpeter, a seminal thinker on innovation and economics, argued that capitalism is

fundamentally a system of change; capitalism is incapable of remaining static (Schumpeter, 1934).

He describes the ‘perennial gales’ of ‘creative destruction’ unleashed by innovation. In 1912

Schumpeter made an early characterisation of innovation as any of five phenomena:

• the introduction of a new good

• the introduction of a new method of production

• the opening of a new market

• the introduction of new forms of organisation.

(Godin, 2008)

The term ‘innovation’ has since been extensively debated, and used in a wide range of ways.

Baregheh et al., 2009 identified 60 definitions of innovation in organisations alone. In part, at least,

these differences are a result of the different concerns of different academic disciplines, the

perspectives of different stakeholders in the innovation process and the different contexts in which

innovation is considered. Whereas an economist may be concerned with the contribution of

innovation to the performance of a national economy and so be interested in the generation of

entirely new products or processes, a social scientist interested in how individuals decide whether

or not to adopt an innovation may be concerned simply with whether a product is new to an

individual. Managers may be concerned with how to prepare their organisation to generate

innovations that are new to their industries and markets or with how their organisation might most

effectively adopt or configure innovations generated elsewhere for use in their own structures and

practices. What the term ‘innovation’ means, then, appears to depend on who is using the term and

the context in which it is used.

2.1 Definitions and types of innovation

Firstly, the broad definition of innovation that we have used as our starting point in this course is

the widely used definition of innovation set out in the Oslo Manual: Guidelines for Collecting and

Interpreting Innovation Data (OECD, 2005). This definition comes from a wider tradition of

research into the measurement of innovation. It is used by organisations such as the Organisation

for Economic Co-operation and Development (OECD) and the Commission of the European
Communities (CEC) to inform innovation policy. This sets out four main types of innovation

(OECD, 2005):

• Product innovation – a good or service that is new or significantly improved. This is

perhaps what we think of most often when we think of an innovation. Recent

examples of product innovation would be ‘smart’ phones and tablet computers.

• Process innovation – a new or significantly improved production or delivery method.

Innovations in the way things are made can critically effect, for example, how widely

accessible they are. A recent, and widespread, example would be the shift in many

retail sectors such as clothing, books and groceries to online sales and associated

distribution.

• Marketing innovation – a new marketing method involving significant changes in

product design or packaging, product placement, product promotion or pricing. The

English football Premiership might be seen as an example of marketing innovation.

The old First Division was replaced by a new organisation that sold broadcast rights

via a new television provider, making the English Premiership perhaps the richest

football league in the world. Essentially the same product was repackaged and made

available via paid-for subscription satellite TV.

• Organisational innovation – a new organisational method in business practices,

workplace organisation or external relations. Open source software is organised very

differently from conventional software development and has become an important

source of software such as the Linux and Android operating systems and a wide range

of applications (including the Firefox browser and Zotero reference management

system).
The OECD definition focuses on what is innovated – product, process, marketing or organisation

– rather than how or why people or organisations choose to use an innovation, or how an innovation

might be produced. In 2005, the inclusion of marketing and organisational innovation in the

definition used in the 3rd edition of the Oslo Manual represented a broadening understanding of

innovation and the recognition of the increasing significance of non-technical innovations. It is a

particularly significant definition in that it is used to inform policy making at European and

international levels.

.1.1 Innovation as process

In the UK, the Department for Business, Innovation and Skills (BIS) defines innovation as follows:

Innovation is the process by which new ideas are successfully exploited to create economic, social

and environmental value.

(BIS, 2012)

This definition draws our attention towards how innovation happens – ‘the process by which new

ideas are successfully exploited’. This is central to the management of technological innovation,

and hence to much of this course. The new idea or invention is not by itself enough; it needs to be

part of a wider process that realises value. Figure 1 illustrates this process of innovation as a series

of activities progressing from ‘idea generation’ (loosely, invention) through to marketing and

adoption in the market place (‘diffusion’). This happens in the context of the ‘push’ of new

technologies (‘state of the art in technology and production’) and the ‘pull’ of societal and

economic demand (‘needs of society and the market place’), which are discussed in Section 5.
Figure 1 The coupling model of innovation (adapted from Rothwell, 1992)

This is a rather stylised and simplified model of innovation. For example, it portrays innovation

solely in relation to manufacturing, whereas service innovation currently represents a hugely

significant arena. It does, however, encourage us to think of innovation as a complex process. You

will also see, later in this course, that it draws on a model of innovation that has undergone

significant revision and refinement. For now, though, it serves our purpose of recognising that

innovation is a process that happens in both technological and socioeconomic contexts which it

both influences and is influenced by.

A second element of the BIS definition is the idea of value. As we have already noted, this value

may be realised in economic terms but potentially also in social or environmental terms. These

areas are both increasingly seen as critical elements and domains of innovation.

2.1.3 Diffusion

The final definition of innovation that we consider is from the work of one of the most influential

writers on the diffusion of innovations, Everett Rogers, and is concerned primarily with how

innovations spread. Rogers has defined innovation as follows:

An innovation is an idea, practice or object that is perceived as new by an individual or other object

of adoption. It matters little, so far as human behaviour is concerned, whether or not an idea is

‘objectively’ new as measured by the lapse of time since its first use or discovery.

(Rogers, 2003, p. 12)

As Rogers is concerned primarily with why people and organisations decide whether or not to

adopt an innovation, it matters less whether that innovation is absolutely novel than that it is new

to a would-be adopter and the circles in which they move. An understanding of how and why a

target audience of people or organisations decides about an innovation can be critical to its success

or failure.

Who are the innovators?

newspapers, books and elsewhere, misconceptions have emerged about innovation and the

innovation process. One of the most common image/stereotype is of the lone ‘boffin’ inventor

working tirelessly day and night in his workshop (or garage or shed) to realise a long dreamt of

idea that will result in an invention of ground-breaking significance. This may be an idealised

exaggeration, of course, but something similar has become a powerful image that is often

associated with innovation. How often have we heard the stories of Bill Gates

(www.microsoft.com ), James Dyson (www.dyson.co.uk ) or Steve Jobs (www.apple.com )?

3.1 Individuals and groups

Leaving aside for now the fact that the common stereotype conflates innovation and invention, it

is, however, not typical of reality. Individuals can and do play a pivotal role in how innovations

arise and develop, of course. But in many cases innovations happen through dogged hard work,

chance or even imitation. Much of this activity will have taken place within and between groups

or teams of people, rather than residing in the ideas and work of an individual.

So, individually or collectively generated ideas play a crucial role in innovation – as they do in

invention. But in many ways generating and capturing ideas is the relatively easy part of the

process. As Pfeiffer and Goffin (2000) noted, the more difficult part is putting good ideas into

practice and, perhaps even more importantly, gaining value from so doing. This always involves

adapting and modifying the original ‘raw’ idea to serve an organisation’s internal and external

circumstances. This is why in many organisational settings where innovation is regarded as a key

element of strategy the ‘ideal’ employee is someone who can work in a research capacity, then

move through to developing (for example) a new process, a saleable product or a valuable service.
3.2 Beyond product innovation

There is also a tendency to think of innovation only in terms of new products, particularly as we

are regularly bombarded with advertising for such ‘stuff’, as we note later. Yet arguably the

greatest single innovation of the 20th century, the one which most changed society, the patterns of

living and our economies, was not a new product but a process, a way of producing a product.

Henry Ford’s production line for manufacturing cars made them affordable for the first time to

people on moderate incomes. It also had a profound impact on the way in which work within

Ford’s factories was structured and carried out. Ford introduced the production line, with workers

carrying out the same tasks, at a set speed, over and over for the duration of their shift.

The benefits (and costs) arising from Ford’s innovation obviously had a profound impact on the

world for consumers, manufacturers and more widely. There are, of course, many newer examples

of technological innovations (and inventions) that have enabled more wide-ranging process and

organisational innovation. Advances in ICT enabled the process and organisational innovations

that led to the advent of call centres, often in locations that bore little or no relation to the location

of the customers who had to make use of them. As in Ford’s production line and its contemporary

examples, the technology used in call centres has not only impacted organisations and their

customers, but also on the way work is structured and controlled. It is worth noting, however, that

evidence has existed for some years that shows organisations that are first to market with an

innovative product or services are frequently less successful than those which follow on later

(Rogers, 2003; von Hippel, 2005).

3.3 Beware of the hype

(and unintended) impacts and consequences. We need to treat some of the claims for the

transformative power of certain examples of innovation with care. Online shopping may be

relatively ‘new’ and convenient, and Facebook may have ushered in an age when people could

have an almost infinite number of ‘friends’ regardless of their location or whether they have

actually met. However, shopping without physically entering a shop (so called mail order or

catalogue shopping), and ‘virtual’ friendships (pen pals writing letters to each other, often without

having met) both existed long before the advent of the internet. Both were made possible by

innovations that were ground breaking in their day. Compare also the impact of the introduction

of running water, electric lighting and indoor plumbing with some more recent ‘innovations’. As

Chakrabortty (2012) comments, ‘You might love your iPhone, and I might spend too much time

on Twitter, but we’d both be fine if they’d never been invented.’

Wilby (2012) continues in a similar vein when he notes that:

Supermarkets are full of things that claim to be ‘new and improved’. Technologists tweak

vegetables and fruits to make them last longer and look better, without regard to flavour. Bankers

develop ‘products’ that, however you cut it, are still about borrowing and lending. We have digital

radio and high-definition TV, though not everybody thinks either improves on what existed before.

(Wilby, 2012, p. 33)

We can debate the extent to which a new product or service is innovatory, or not, of course, with

our conclusion perhaps being more dependent on perception than fact. There is one feature of our

modern day consumer culture that, although a recognised feature of the innovation process since

the 1950s, has, as Wilby goes on to note, become all too dominant:
For many companies, skilful marketing has replaced innovation. It’s cheaper and less risky to

convince customers something is groundbreaking, even if it isn’t, than develop something truly

innovatory.

(Wilby, 2012, p. 33)

Interestingly the use of the term ‘innovation’, and our willingness to attribute ground-breaking

powers to it, also seems to parallel the way in which ‘entrepreneur’ and ‘entrepreneurialism’ have

become idealised – almost mythical – constructs over the latter part of the 20th and into the 21st

century. In both cases it often seems that we are asked to believe that if countries can be more

innovative and entrepreneurial, then economies will automatically grow and societies benefit.

However, we should take a moment to think more critically about some of the claims for

entrepreneurialism and innovation. We might, for example, question the extent to which a

commercial organisation (or its CEO/owner) taking over a service that was previously run by the

state – such as a railway, prison, water company or services for unemployed people – is really

being entrepreneurial or innovative in so doing.

In reality the overuse of both terms is in danger of devaluing their utility. It is for this reason that

we want you to maintain a critical awareness of innovation and claims for its potential and power

as you work your way through this course. We expand on the subject of assessing and evaluating

technological innovation later in this course, but before we do, it is appropriate at this point to take

a brief detour to introduce and discuss two related aspects of innovation that stem from the ways

in which we understand and interact with technology.

4 The meaning of ‘technology’

in our discussion so far this has often simply been abbreviated to innovation. On one level the

reason for doing this is simple – to avoid constant repetition of the longer term. There are, however,

two other important reasons. The first stems from the fact that almost all innovations have a

technological dimension or component. Consequently, almost all examples of innovation and

technological innovation can be regarded as one and the same thing. This has always been true of

product innovation, but became an increasingly important feature of organisational innovation

from the industrial revolution onwards and especially since the advent and subsequent

convergence of ICTs

4.1 Defining technology

The second stems from how we define technology for the purpose of this course. Put briefly, we

see technologies not simply as technological artefacts, such as an iPhone or laptop, but also

as knowledge. If you have not thought of technology in this way before, it may seem odd but you

will actually find very few definitions of technology that only refer to technology as artefacts. An

accurate definition will also include reference to a body of knowledge and practice (often referring

to the application of scientific knowledge, although the emphasis on scientific is, in fact, too

narrow). Indeed, we could say that technology as artefact and knowledge represent two of the

components of the ‘bundles’ of assets, such as specific forms of intellectual property,

organisational capabilities, complementary technologies and even commercial brands that together

provide potentially innovative products and services.

A further distinction can be made between technology as mode of enquiry and action. This refers

to the techniques by which technological knowledge is itself created. For example, a particular
approach to continuous improvement that used to get a lot of attention in innovation management

literature in the early 1990s and has endured into the 2000s is the Japanese ‘Kaizen’ model, which,

it was argued, was particularly effective for organisations that needed to deal with high rates of

change and complexity in their operations and environment.

Interestingly, mention of process improvement brings up another very important distinction in the

meaning of technology, which is between process and product technologies. The former is what

an organisation uses to accomplish its tasks. The latter is delivered to customers. Product in this

context means both goods and services.