bus 430 final exam

Bus. 430 Final Exam Management of Innovation

Prepared by Colton Goertzen #300092858 for Ken Blawatt - August 15, 2016

MANAGEMENT OF INNOVATION COLTON GOERTZEN �1

Question #11. Innova)onisanintegralpartoftheentrepreneurialprocess.

• Itrequiresanentrepreneurialmindsettoengageinnova)onandtheiden)fica)onofanopportunity.

• DiscusswhatwouldhavebeenrequiredinearlyGreecetocommercializetheaeolopile.

• Speculateonwhatmighthavehappenedtotheglobaleconomyiftherehadbeenthesystemandentrepreneurialpeopletointroducethe“steamturbine”totheeconomiesofthe)me.

The aeolopile was first invented in the 1st century a.d. by Heron of Alexandria. It used compressed air to turn a sphere or cylinder using steam and jets facing opposite directions (1). The fact that the aeolopile was not commercially introduced at the time of its conception proves to us that a revolutionary product is useless until an entrepreneur enters the scene with the foresight and passion to apply this invention to the market. By linking an invention to an opportunity, solving a problem, then commercializing it generating profit and building businesses, entrepreneurs drive the economies of the world forward (Lecture 1, slide 14),(Lecture 3, slide 34). It would have been the entrepreneurs job at the time to educate his customers as to the benefits of having an aeolopile work for them; particularly in the shipping and mining industries which both were reliant on external forces.

Shipping relied on the weather to carry goods throughout the world and as a result was unpredictable. If the ancient engineers could have devised a way for the aeolopile to be put in place on-board ships the rotary motion of the cylinder could have given them the ability to create the first paddle steamer. Another major application it could have had was mining. This is because the mines would have had plenty of resources for aeolopile’s to work.(coal and water). The workers could have used the technology to mechanically carry out mining, reducing the need for workers to manually work the mines. However the aeolopile needed considerable improvement for it to be commercially viable at that time. For example, the steam engines that followed it used a much more effective nozzle design, they had high-strength cast-iron boilers, much more efficient bearings and crucially, they had the necessary gearing to handle the more rigorous loads (1). For these reasons the aeolopile never was able


to cope with the more demanding jobs and thus was the reason it was viewed as only a toy, but with further development and drive the invention could have revolutionized the world.

What Greece lacked to make this product successful was the innovative culture to create enterprises, renew existing businesses and revitalize current organizations (Lecture 1, slide 15). It lacked these three staples of an innovative country because the governing bodies of the times viewed the populous as somewhat of an inconvenience. As such they felt education was unimportant for everyone, however if they had been able to comprehend the advancements individuals contribute to the economy, the graphs in figure 1 would be dramatically shortened.

What this would mean is that each of these innovations in the graph would have come much sooner. Had the Greeks understood that the aeolopile was not a finished product and kept refining it, asking why it works and trying to understand the science behind it our world today would look very different. If the country had sought to encourage entrepreneurial thinking, develop and refine innovations, given entrepreneurial freedom to individuals instead of dictating and offering creative freedom to its people, the society of Greece would have seen the value the aeolopile offered in the long run (Lecture 1, slide 37). Although the country lacked the infrastructure to facilitate development of the aeolopile the main failing of the country at the time was that it lacked the innovative processes necessary for commercialization of the invention, as a result


Figure 1 (Lecture 1, slide 32)

of this the society lacked the market pull to recognize the radical innovation of the steam turbine (Lecture 4, slide 2).

Assuming that Greece and in fact the world at the time had in place the necessary processes and facilities to manage an innovative society, i.e figure 2:

Greece would have been able to refine the aeolopile to increase it’s power output, they would have been able to sell their idea to neighbouring countries through marketing and would thus have become the worlds first entrepreneurial country. This would then spur them on to develop other inventions with marketable potential by using the resources acquired from the aeolopile. Seeing Greece’s success other nations would seek to capitalize on the profits Greece would be achieving from their line of innovative products. At some point the governments of the world would attempt to capture the wealth of Greece for themselves so they most likely would attack Greece so Greece would have to innovate and develop defensive innovations to keep the surrounding nations from trying to take the wealth from Greece by force. This would not have been a problem for Greece because they would already have seen the value of invention and would have probably discovered gun powder by this time, applying it to create rifles. In short if Greece had the capabilities to recognize revolutionary ideas our waves of innovation would have increased exponentially. As a result if Greece continued with the entrepreneurial mindset they would be the superpower of the world today.



Today the state of the world would reflect the ground work Greece had put forward. Thus we would put emphasis on the individuals who show entrepreneurial adeptness within both organizations and the economy, resulting in the next evolutionary step for societies if not the world. What I mean by this is that our world would be 2000 years farther along on it’s evolution and the Kondratieff waves of innovation would be 2000 years more advanced on their trajectory (Lecture 2, slide 40). Putting this into perspective and predicting what the world would look like today, we would already have interstellar travel, Kurzweil’s singularity would already be achieved in that our bodies would already have been abandoned and been replaced with a virtual presence, education would be completely revolutionized with downloadable programs, terrorism would come in the form of cyber attacks or attacks on server warehouses where our minds would be housed, artificial intelligence would have existed for 1900 years and we would have relationships with programs (wether hostile or not), we would have perfected the innovation process already and recognized it’s benefits much sooner and we would remedied global warming. Essentially many if not all of the problems facing the world today would be solved, replaced by new struggles for us to overcome.

1. Vortselas, A. (n.d.). How would the world today be different if the aeolipile device (steam engine invented in 60 AD) had been developed further?. In Quora. Retrieved August 16, 2015, from https://www.quora.com/How-would-the-world-today-be-different-if-the-aeolipile-device-steam-engine-invented-in-60-AD-had-been-developed-further


Question #3

2. New product and services innovation is important to three levels of society; the government and the economy, to corporations/organizations and to the individual in society.

How does new product and/or services development make a contribution to:

• Building the economy?

• Help corporations stay in business?

• Provide opportunity for individual success?

When someone invents some new improved device, product, or process it is only an invention. What transforms inventions into innovations is when the invention is included into a commercial transaction. Only then is it considered an innovation (Lecture 2, slide 13). Building on this central idea being able to market an invention and sell it to customers is in fact the majority of all economic activity. Thus when this action is repeated the economy is running smoothly. Where the entrepreneur fits into the equation is when an individual is able to identify an opportunity, then through researching the works of others, developing a hypothesis, testing prototypes, marketing the idea and finally changing environment of the world. This is known as the process of Marconomic Innovation as seen in figure 4.

If we carry this individualistic process of innovation over into a whole organization we see that depending on the culture of that organization if the innovation will reach fruition or not. The most innovative organizations are characterized by the 10 traits in figure 3, they promote creativity in both product and process innovation, they are receptive to both internal and externally developed forms of technology, they accept that with uncertainty comes risk and are willing to accept this, they also promote cross functional cooperation between groups. Companies such as these are the ones which influence the world dramatically because they don’t let ideas become bogged down by bureaucracy within the business. It is then the company that has a major impact on the economy. Now the company can avoid a large portion of the risk associated with innovation by simply acquiring new technology or processes from external factors. This mitigates the risk because the company doesn’t have to go through the costly and problematic process of developing new products, technology or


techniques; which we saw in class has a one in 60 chance of succeeding in lecture 7 (slide 32).

One aspect of modern business which does help to offset the cost of R&D is the ability for business within the market to form strategic alliances with governments, distributors, different agents throughout the market, joint ventures, banks, support services and suppliers (Lecture 5, slide 35). By utilizing these different groups and including them into the R&D, marketing and sales processes, costs can be significantly lessened when introducing new products. Another way for businesses to curtail spending during product development is the limit their R&D to incremental innovation much like Sony does with it’s Playstation line of gaming consoles. Essentially, every couple years they come out with a new version of the same product which means that they don’t have to spend a vast amount coming out with a new product which is as good as it will ever get. Thus spending is stretched out over many years rather than all at once (Lecture 5).

Some may ask if new product development is so costly and problematic why should we bother trying to do it? Well when we look at companies such as GM, Nokia and Blackberry R&D was a large portion of their budgets so why did they perform poorly? Their downfall came from the kind of R&D that they chose to perform which centred around incremental innovation, ultimately bringing them to decline where as companies like 3M, Apple, Nvidia and John Deere have utilized radical innovation which disrupts current markets and displaces the slow to react companies, forcing them into decline (Lecture 3, slide 27). In the



end companies need to innovate because of the demands placed on them by consumers and because the competition within the market requires companies to continually innovate.

When we couple the individual drive for change to the corporate drive to increase revenue and finally to the overall economy whose goal is economic growth we find that the real determining factor in the growth of the economy is based on the individuals ability and access to process which facilitate fluidly, the marketing of inventions to the world. This is more easily understood by analyzing the economy itself. Here we see it is based on transactions between buyers and sellers, which create jobs and incomes for the population. Taxation of these incomes gives societies governments, financial services and social institutions, all which raise that societies standard of living and when the standard of living increases we say that economy is prospering (Lecture 1, slide 13).

To summarize, innovation comes from the economic activity generated when an invention is used or involved in some way during a commercial transaction. At this point the entrepreneur has innovated either a product, service, or process and if an organization can perform this same action repeatedly that company is said to be innovative. Applying to the society, if enough companies carry out business in this fashion then the economy is competition based and the organizations are required to innovate to stay relevant within the market. As the societies compete the economy grows because those businesses attract customers from around the world growing the country’s economy. This is shown in figure 4 quite effectively:


OrganizationIndividual Government

Figure 4 (Lecture 3)

This schematic gives an easy to follow step-by-step system for all individuals, organizations and governments to follow so that they can understand the true driving factors for the economy and rework the economic fallacies of supply and demand, which have been accepted for the past 200 years.


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