Technological Innovation

Laurier Schramm

• Publisher: De Gruyter
• Year: 2017
• ISBN:
  9783110429244
• Edition: 1
• Topic: Technology & Engineering
• Subtopic: Industrial Engineering
• Index: Technology & Engineering

1What is this “Innovation” everyone is talking about?

1.1Technological innovation defined

Everyone seems to be talking about innovation these days. It’s on the news, it’s on board meeting agendas, and it’s driving over 250,000,000 Google search results (Figure 1.1). The term “innovation” has become ubiquitous in business, government, academic, media, and public discussions and appears in an ever-increasing plethora of company names and government policies and programs.

Figure 1.1: The term “innovation” seems to “pop up” almost everywhere.

Unfortunately, as the term has become more commonplace, it has increasingly been used with a variety of meanings, some inconsistent, some dated, some vague, and some incorrect [3]. This has been lamented by many authors. In 2009, Jerry Courvisanos commented that “Innovation is the buzzword of the new century … The problem is the word has become so ubiquitous that it now simply means anything ‘new’, and mostly is just a form of ‘spin-doctoring’” [4].

Based on a review of the business and technological literature up to 2010, de Castro et al. [5] found at least 37 distinctly different perspectives on the meaning of the term “innovation.” A 2011 blog post on innovation by Steven Bell begins by commenting that “We are subject to a non-stop barrage of information about innovation” [6]. Also in 2011, Eunika Mercier-Laurent noted that the term “innovation” has become so broadly and differently interpreted (polysemous), and so fashionable, that it has become commonly used in marketing, sales, and branding promotions [7].

So what is innovation anyway?

Innovation in earlier times. The term “innovation” comes from the Greek word kainotomia, which is derived from kainos, or “new,” and seems to date back to the 5th century BCE [1]. The term seems to have originally referred to new thoughts, sometimes with a neutral or positive connotation, but more often with a negative connotation [1]. Godin [1, 8] distinguishes between two eras within which the term “innovation” has been understood and used quite differently. In the early-modern era, from the 1500s through to the 1800s, innovation meant “introducing novel change,” particularly with regard to religious and/or political change.

The term “innovation” seems to have quickly taken on a very negative, perjorative connotation. Some specific early 18th century examples of books railing against “modern innovations” and “modern innovators” are references [9, 10, 11].

In this era, and whether in religion, politics, or other fields, the use of labels like innovation and innovator was usually meant to imply that the changes were unwanted, unnatural (being apart from the “natural order of things”), revolutionary, and/or dangerous, as in “introducing change into the established order” [1]. Machiavelli warns of this in his 1513 book The Prince (Chapter 6 in reference [12]):

“… it ought to be remembered that there is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things, because the innovator has for enemies all those who have done well under the old conditions, and lukewarm defenders in those who may do well under the new. This coolness arises partly from fear of the opponents, who have the laws on their side, and partly from the incredulity of men, who do not readily believe in new things until they have had a long experience of them. Thus it happens that whenever those who are hostile have the opportunity to attack they do it like partisans …”

In this era, whether in the context of politics or religion, introducing changes (innovation) was the purview of the political and religious leaders, and no one else. In contrast, the terms “reformation” or “restoration” were frequently used to describe positive, moderate, natural-order-restoring changes within religions or governments (with the consent of the leaders).

Innovation in the 20th century. The term “innovation” was used by the economist Joseph A. Schumpeter in the 1930s to describe the conversion of ideas and knowledge into new and commercially successful products and services [13, 14]. Here, “commercially successful” means meeting the needs of customers, the purchasers, and ultimate end-users, in a way that encourages them to take up the new approach and have it diffuse through the marketplace.

Schumpeter’s use of the term “innovation” to describe the introduction of novelty to the commercial marketplace is a technological, commercial, and economic meaning of the term and it was meant to be a positive, but still disruptive, connotation. Schumpeter also coined another important term, “creative destruction,” to describe the process by which innovative products and services displace old ones.

Schumpeter’s theory was that continuing processes of innovation and creative destruction are needed for economic growth. The terms “technological innovation1” or “commercial innovation” are often used to distinguish the 20th century Schumpeterian definition of innovation from that of earlier centuries, and it is this meaning of technological innovation that represents the subject of this book. Technological innovation can be viewed as a process and/or as a result. de Castro et al. [5] provide a review of these uses and the authors advocating for one or the other usage. The best practice is probably to simply be clear when technological innovation is being considered as a process and when it is being considered as a result.

Technological innovation is the conversion of ideas and knowledge into new and commercially successful products, processes, and services.

In their paper “A Critical Look at Technological Innovation Typology and Innovativeness Terminology,” Garcia and Calantone point out some key features of this definition [15]:

“It is important to elucidate that an invention does not become an innovation until it has processed through production and marketing tasks and is diffused into the marketplace … The solution to a basic scientific puzzle or the invention of a new “product” only in a laboratory setting makes no direct economic contribution … A discovery that goes no further than the laboratory remains an invention. A discovery that moves from the lab into production, and adds economic value to the firm (even if only cost savings) would be considered an innovation. Thus, an innovation differs from an invention in that it provides economic value and is diffused to other parties beyond the discoverers.”

Technology and technological capacity. “Technology” is also a very broad term, representing any of a knowledge of how to effectively use a product, process, or service (“know-how”); a way of conducting or controlling a manufacturing activity (a practice or process); or a thing to be manufactured, used, or consumed (product). In this context, a tool can be considered to be a product. Each of these kinds of technology can be protected as IP, and each can be commercialized. “Technological Capacity” (also termed “Intellectual Capital”) is the amount of technological knowledge in an organization, region, or country, divided by the size of the labour force or the population [16]. The rate of growth of an organization’s, region’s, or nation’s technological capacity depends on the rate at which new technology is produced (the “rate of technological progress”) and the rate at which technology is disseminated (the so-called “rate of replication2”).

Technological sophistication. Terms like “high technology” and “low technology” usually refer to the technological sophistication of a new product, process, or service, although such terms have also been applied to entire industries, sectors, and even regions [17, 18]. Technological sophistication, in this context, is often assessed based on direct (and sometimes also indirect) research and development3 (R&D) intensity. Four categories of technological sophistication are often distinguished, based on some measure of R&D intensity, such as R&D investments divided by value-added and/ or gross production values:

–High-Technology (also termed High-Tech4), such as aerospace, pharmaceuticals, and instruments;

–Medium-High-Technology (also termed Medium-High-Tech), such as chemicals, electrical equipment, and motor vehicles;

–...