Course Textbook

Innovation and Entrepreneurship: Second Edition

John Bessant & Joe Tidd

2011

Are there any copies available in the library?

The second edition of the text is not that different to the first edition.

The textbook has a website of material (www.iande.info), including cases and multiple choice quizzes.

Chapter 1 The Innovation Imperative

This chapter takes up a lot of words to get across one basic point: “An organisation is like a shark.  It has to constantly move forward or it dies.” Organisations that do not innovate get left behind and in setting up a new business you have to believe you are doing something new or better, or else how do you compete?

The chapter summary at the end of the chapter is a good place to start to get an overview of key points (the chapter summaries get shorter as the text progresses).

The discussion of “innovation space” is quite poetic, but the “exploring” metaphor dangerously implies that product v process and paradigm v position are two continua (i.e. less process innovation means more product innovation). A rather more correct way to attempt to visualise the innovation space is as a four dimensional hyper- space, but that would be be beyond my ability to visualise or Wiley’s ability to print it in a book (although they have printed in  three dimensions).

The case study (pp 46 – 49) of digital music raises interesting issues about the motivations of players and the barriers to radical systemic innovation, although it was written in 2007, so is a little out of date. The case implies that the internet was causing radical innovation in the music industry. In the last five years music distributed over the internet has had enormous impacts, including in the UK the demise of HMV and Woolworths. But the claim, based on the example of the Arctic Monkeys, a combo from a “northern English town”, that the industry was opening up to a wider range of acts and that the role of major record labels was threatened now seems rather overstated. Record labels may have become weaker but the beneficiaries have been the companies controlling the link to the customer (Apple, Amazon, Pandora etc.). Similalry the argument that viral marketing enables David to compete with Goliath is less strong now: major labels have learnt the lesson from independents in keeping interest in artists bubbling, but have the resources to apply a bunsen burner underneath. There is a counterargument that the globalisation of the internet gives large incumbent companies a growing marketing advantage. Tangentially, this was the subject of an article in the last week on the difficulty of independent films finding a market.

The self-test quiz flags up some interesting points. I only scored 9, but I will take that as an A pass.  Question 5 “Innovation always depends on setting up a ‘skunk works’ to get things done” is an odd question: the textbook doesn’t mention “skunk works”, but whatever it is you can guess that if all innovation depended on it you might have heard of it. (We shall cover skunk works later in the course, so do not worry if you do not know what they are) I managed to get question 6 wrong: “Which of the following would be typical examples of ‘market pull’ innovations?” by thinking that AZT treatment for HIV/AIDS  is not a typical example of “market pull”. AZT was first produced in university reasearch in 1964 in research to find new anti-cancer drugs, but then failed to demonstrate any effect in tests on mice. This looks very much like technology push. Between 1964 and 1984 AZT was a therapy waiting for a disease. In 1984 research started to show positive impacts on patients with HIV/AIDS, so this final stage can be seen as ‘market pull’.  On the other hand, the quiz defines the hovercraft as not being a typical example of ‘market pull’, but when hovercraft were first being developed over 50 years ago the developers had to raise the money and this would be in the belief that hovercraft met a market need for faster transportation, which can be seen as ‘market pull’.

 Chapter 2 Social Entrepreneurship and Innovation

It is unfathomable why the chapter on social entreprenuership comes before the textbook has defined in detail what is meant by vanilla entrepreneurship. Fortunately I do not have to teach this session.

The Aravind case covered briefly in the text and in more detail on the website is an interesting example of social entrepreneurship and flags up some issues that we shall return to in the next lecture when we address “frugal innovation”. The following is a video providing more detail on Aravind.

When it comes to including quotations in essays and dissertation it is often the case that lecturers take a dim view of students not citing sources for quotations and an even dimmer view of students making quotations up. On page 58 the text book quotes Karl Marx as saying that innovation is “the flywheel of capitalism”. Marx had very little to say about innovation, so this is an interesting quotation. However I can’t find any record of it anywhere in English or German: i shall give £50 to the first person who can provide a full citation.

 Chapter 3 Globalisation, Development & Sustainability

The section on the globalisation of innovation strongly argues that the world of innovation is not flat, with the loci of innovation unevenly spread around the world. The major trends of multibational national corporations to move away from basing all their research and development in their home countries to locating research and development abroad is highlighted. The short case (p88) on frugal innovation provides a brief introduction to the concept of frugal innovation which can be followed up by reading the articles in The Economist special edition of 2010 that the text cites.

The section on National Systems of Innovation clearly outlines how it is the institutions of countries that explain the differences in levels and patterns of innovation. The rate at which patterns of innovation can change is starkly demonstrated by the section on p 10: ” And Scandinavian countries are now well ahead of the rest of the world (including the USA) in mobile telephony….”. This view was  widely held when the first edition of the  book was produced, but by 2011 the two largest Scandinavian telecommunication companies, Nokia of Finland and Ericsson of Sweden were falling behind US and Asian competitors in mobile telecommunications. (apologies to geographical pedants who rightly claim that Finland  is not in Scandinavia, but I think the textbook is referring to Nokia). The sections in the book on innovation  Russia (pp 100 – 102) and  Brazil (pp 113 – 114) demonstrate that there is variety in  innovation systems in the BRIC countries. This ties in with wider debates around whether the rapid economic growth of RUsia and Brazil, based on resource extraction, provides the resources for the economies to diversify through innovation or whether it squeezes out this diversification ( i.e. “If the returns from investing in resource extraction and processing are so high, why would I invest in risky innovations?) .

The self-test refused to be graded.

Chapter 4  Individual and Organisational Characteristics

Knowledge creation is central to innovation. This chapter tends to take not just a rather psychological approach to conceptualising creativity, but also to take a narrow view within relevant psychologically based research and practice. The section on Personality (pp 158 – 163). The focus on cognitive style and the use of Kirton Adapter-Innovator scale is rather peripheral. As with most psychometric tests, there is a literature questioning whether KAI measures anything essential about the individual or is just another dressed up peronality test. The attraction of questionnaire based scales like KAI is that it enables researchers to collect data on people involved in innovation, with its use in practical management rare.

The section on Processes (pp 164 – 171) is a solid overview of techniques used to generate knowledge.

The section on Environment (pp 172 – 187) covers a range of issues that impact on creativity in organisations. The claims that you can have too much trust seems to be based on the risk of cliques, which is not really too much trust, but rather unevenly distributed trust. Similarly, the claim that you can have too little conflict seems to conflate conflict with debate. In organisation theory “conflict” is not used to describe arguments between people discussing, with supporting reasons, whether to do X or Y, but to refer to situations where individuls or groups take up positions where they always argue against some others (see Wikipedia  ), so from this, because it is blind to argument, conflict is antithetic to creativity.

I scored 4 out of 10 in the self-test questionnaire.