kavala innovation management fees 2012.ppt
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Prof. Dr. Werner Fees, GSO MI Nürnberg – Page 1 Innovation Management
Prof. Dr. Werner Fees
Georg-Simon-Ohm University of Applied Sciences Nuernberg/Germany
INNOVATION MANAGEMENT
Prof. Dr. Werner Fees, GSO MI Nürnberg – Page 2 Innovation Management
Georg-Simon-Ohm University of Applied Sciences
n One of the largest Universities of Applied Sciences in Germany n Full scope: 12 faculties, 7 institutes and competence centers n Bachelor, Master of Arts, Master of Science, MBA programs, further education
programs and dual study variants. n Intensive research: most research-active of all Bavarian Universities of Applied
Sciences and leading in third-party funds n Worldwide partnerships: 130+ partner universities, 1,100 foreign students from 96
nations.
Prof. Dr. Werner Fees, GSO MI Nürnberg – Page 3 Innovation Management 3Georg-Simon-Ohm Management-Institute | www.gso-mi.com
page
An application-oriented University with a 185-year tradition - top modern
1st Railway in Germany in 1835 (Scharrer)
Ohm's Law of Physics
Bronze Casting for Art Applications (Burgschmiet)
1st Steel Construction Bridge in Germany (Kuppler)
Synthetic Colour Ultramarin (Leykauf)
1st Industrial Electric Power Transmission (Boveri)
Special Effects Oscar 1996 for "Independence Day" (Schopper)
Bavarian Innovation Award 1999 (Poisel)
Special Effects Oscar 2004 for "Lord of the Rings" (Design Faculty Graduate)
Georg-Simon Ohm President 1839 - 1849
Georg-Simon-Ohm University of Applied Sciences
Prof. Dr. Werner Fees, GSO MI Nürnberg – Page 4 Innovation Management
Your Lecturer in this Course: Prof. Dr. Werner Fees
§ Academic background: § Degree in business administration (Dipl.-Kfm.) at Nuremberg university § PhD in business management (strategic management)
§ Professional experience: § 10 years management experience in telecommunications industry
(Philips, Lucent Technologies) as Head of Strategic Planning, Head of Product Management, Vice-President Controlling
§ 10 years experience as Management Consultant and Trainer (e.g. for Ericsson, Lucent Technologies, Deutsche Telekom)
§ Professor of Management at GSO University Nuremberg § Academic Director of GSO Management Institute § Visiting Professor at US-, Chinese, and Greek Universities § Contact: [email protected], Tel. 5880-2893
Prof. Dr. Werner Fees, GSO MI Nürnberg – Page 5 Innovation Management
Content
1. Innovation – what it is and why it matters 2. Innovation as a core business process 3. Building the innovation organization 4. Sources of innovation 5. Building the innovation case 6. Creating new products and services 7. Capturing the benefits of innovation
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© 2009 John Wiley & Sons Ltd. www.managing-innovation.com
Joe Tidd and John Bessant ISBN: 978-0-470-99810-6
6
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Chapter 1
Innovation – what it is and why it matters
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© 2009 John Wiley & Sons Ltd. www.managing-innovation.com
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Innova&on and Performance
What is innova-on? “Companies achieve compe&&ve advantage through acts of innova&on. They approach innova&on in its broadest sense, including both new technologies & new ways of doings things”
-‐ Michael Porter (emphasis added)
8 © 2009 John Wiley & Sons Ltd. www.managing-innovation.com
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Innova&on and Performance
Innova-on has to be ac-vely managed: “Innova&on is the specific tool of entrepreneurs, the means by
which they exploit change as an opportunity for a different business or service. It is capable of being presented as a discipline, capable of being learned, capable of being prac&ced” -‐ Peter Drucker (emphasis added)
9 © 2009 John Wiley & Sons Ltd. www.managing-innovation.com
Prof. Dr. Werner Fees, GSO MI Nürnberg – Page 10 Innovation Management
What is an Innovation?
Innovation =
Theoretical Conception
+ Technical Invention
+ Commercial Exploitation
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Innova&on and Performance
Innova-on has an inherent variability, but rate of success can be improved through beEer & different management:
85% of new ideas never reach a market 60% of R&D projects are market failures 40% of consumer products & services fail 20% of business products & services fail
11 © 2009 John Wiley & Sons Ltd. www.managing-innovation.com
Prof. Dr. Werner Fees, GSO MI Nürnberg – Page 12 Innovation Management
Models and Modes of Innova&on
Dimensions of ‘innova-on space’: product – changes in the things (products/services) which an
organiza&on offers, process – changes in the ways in which they are created and
delivered posi7on – changes in the context in which the products/
services are introduced paradigm – changes in the underlying mental & business
models which frame what the organiza&on does
12 © 2009 John Wiley & Sons Ltd. www.managing-innovation.com
Prof. Dr. Werner Fees, GSO MI Nürnberg – Page 13 Innovation Management
© 2009 John Wiley & Sons Ltd. www.wileyeurope.com/college/tidd
The 4Ps of Innova&on Space
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www.managing-innovation.com
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Exercise
Give examples for the 4 Ps of Innovation and its character (incremental vs. Radical)
Product Process Position Paradigm
Incremental
Radical
Prof. Dr. Werner Fees, GSO MI Nürnberg – Page 16 Innovation Management © 2009 John Wiley & Sons Ltd. www.wileyeurope.com/college/tidd
Prof. Dr. Werner Fees, GSO MI Nürnberg – Page 17 Innovation Management © 2009 John Wiley & Sons Ltd. www.wileyeurope.com/college/tidd
Prof. Dr. Werner Fees, GSO MI Nürnberg – Page 18 Innovation Management © 2009 John Wiley & Sons Ltd. www.wileyeurope.com/college/tidd
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What do we have to manage?
Systematic scan and analysis of the environment Monitor macro- and microeconomic environment Analyze new trends and breakthrough innovations
Strategically oriented selections from the set of potential triggers for innovation Most difficult!! Which ides should be selected? Analyze fit with strategy, culture, competences
Providing resources to exploit it Only talking and planning is too less! Change innovation strategy if no resources are available (=>
imitation?)
Implement it – from idea to final launch Consequent realization! Announce innovation manager / champion
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Key questions in Innovation Management
1. How do we structure the innovation process appropriately?
2. How do we develop effective behavioral patterns (routines) which define how it operates on a day-to-day basis?
3. How do we adapt or develop parallel ones to deal with the different challenges of “steady-state” and discontinuous innovation?
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The ambidextrous challenge
Radical
Incremental
Doing new things, maybe cannibalizing The old ones?
Doing the old things, just better ...
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www.managing-innovation.com
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Chapter 2
Innovation as a core business process
23 © 2009 John Wiley & Sons Ltd. www.managing-innovation.com
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Systems Innova&on
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How innovation happens?
Success (?)Process
© 2009 John Wiley & Sons Ltd. www.managing-innovation.com
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Systems Innova&on
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How it really happens …..
© 2009 John Wiley & Sons Ltd. www.managing-innovation.com
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Innova&on Process
Generic phases of the innova&on process: Searching & scanning the internal & external environments
Filtering & selec0ng poten-al opportuni-es acquiring the technical, financial & market resources
implemen0ng development & commercialisa-on reviewing & learning from experience
26 © 2009 John Wiley & Sons Ltd. www.managing-innovation.com
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Innova&on Process
Scanning the external environment: iden-fy, segment & exploit lead customers iden-fy, segment & involve key suppliers explicit criteria for selec-ng alliance partners clear objec-ves & guidelines for licensing & out-‐sourcing
involve all relevant par-es e.g. financial & regulatory
use formal exploratory techniques to iden-fy future trends
28 © 2009 John Wiley & Sons Ltd. www.managing-innovation.com
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Innova&on Process
Selec&ng & filtering the opportuni&es for innova&on: Strategic e.g. ‘fit’ Capabili-es e.g. relatedness Commercial e.g opportunity & compe--on Risk/Reward e.g. probability, scale Financial e.g. NPV, op-on value
29 © 2009 John Wiley & Sons Ltd. www.managing-innovation.com
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Innova&on Process
Resourcing the chosen innova&ons:
Scope of innova-on – internal versus external resources Structure of project – e.g. alliances, joint ventures, licensing
30 © 2009 John Wiley & Sons Ltd. www.managing-innovation.com
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Innova&on Process
Implemen&ng the innova&on: Func-onal integra-on & group structure Roles of suppliers, users & other stakeholders Timing & degree of involvement Project management Suppor-ng tools & techniques
31 © 2009 John Wiley & Sons Ltd. www.managing-innovation.com
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Chapter 3
Building the innovation organization
32 © 2009 John Wiley & Sons Ltd. www.managing-innovation.com
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Innova&ve Organiza&on
Leadership, shared vision & climate: innova-on leadership, not senior management broad vision, not detailed strategy organiza-onal climate -‐ ‘the way we do things around here’
33 © 2009 John Wiley & Sons Ltd. www.managing-innovation.com
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Innova&ve Organiza&on
Characteris&cs of an innova&ve climate: Challenge & involvement Freedom & autonomy Trust & openness Idea -me & support Playfulness & humour Conflict & debate Risk-‐taking
34 © 2009 John Wiley & Sons Ltd. www.managing-innovation.com
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Innova&ve Organiza&on
Key individuals, strong teamwork: inventors, champions, entrepreneurs, gatekeepers job rota-on, cross-‐func-onal teams strong project management
35 © 2009 John Wiley & Sons Ltd. www.managing-innovation.com
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Innova&ve Teams
Teams can be innova&ve, but beware of:
‘group think’ -‐ restricts interpreta-on & response, homogeneity limits innova-on
‘siege mentality’ -‐ group vs. organiza-onal goals, commitment to sub unit vs. organiza-on
means vs. ends -‐ aEachment to social system, not course of ac-on
36 © 2009 John Wiley & Sons Ltd. www.managing-innovation.com
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Innova&ve Organiza&on
Appropriate structure: No ‘one best way’ e.g. flat structure Depends on task & environment i.e. con-ngencies e.g. uncertainty
& complexity Ideal configura-ons for different contexts
37 © 2009 John Wiley & Sons Ltd. www.managing-innovation.com
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Innova&ve Organiza&on
External focus: customer focus, not customer driven sensi-ve to & ac-vely scan for external opportuni-es use formal tools e.g forecas-ng, QFD design & par-cipate in diverse networks
38 © 2009 John Wiley & Sons Ltd. www.managing-innovation.com
Prof. Dr. Werner Fees, GSO MI Nürnberg – Page 39 Innovation Management
In a nutshell …
Strategy
Learning
Linkages
Organization
Processes
Key areas relevant for successful innovation management:
Prof. Dr. Werner Fees, GSO MI Nürnberg – Page 40 Innovation Management
Strategy
Does the company have a strategic approach to innovation?
How is the competitive position of the company? What are potential chances and risks? What innovation advantages derive from the NIS
(National Innovation System)? What is the technological competence of the
company? What is the importance of R&D in the company?
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Organization
Supportive organizational context? Centralization of Decision Making? Open and effective Communication? Involvement of workforce in innovation? Adequate rewards for innovation? Strong Teamwork?
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Processes
How are new ideas found? How are new ideas translated into practise?
Is there any systematic approach?
Is there a chance that new ideas are accepted even if they “cannibalize” the running business?
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Linkages
Are there good relationships to suppliers and customers?
Are there discussions with supplier / customers about innovation?
Are there links to Universities and other research institutions?
Are there links / collaborations with other companies?
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Learning
How is the workforce qualification?
How is the experience of the workforce?
Is there a systematic / permanent further education of the workforce?
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Exercise
Develop a concept: how would you build up a company in the field of ... e.g. tourism, engineering, retail, ... Use the 5 dimensions from Tidd et al.!
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Chapter 4
Sources of innovation
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Internal Sources: Climate & Crea&vity
“Innova0on is the specific tool of entrepreneurs, the means by which they exploit an opportunity for a different business or service” – Drucker
Crea-vity = ideas, concepts & inven-ons Entrepreneurship = couples opportuni-es & resources Innova-on = process of development & commercialisa-on
48 © 2009 John Wiley & Sons Ltd. www.managing-innovation.com
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Crea&vity
Strategies for idea/concept genera&on: research & analysis imitate or adapt seek inspira-on consult ‘crea-ve’ types apply systema-c crea-vity methods & tools
49 © 2009 John Wiley & Sons Ltd. www.managing-innovation.com
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Crea&vity
Business crea&vity training is not:
logic, research, analysis or intelligence ar-s-c crea-vity / right-‐brain being crazy / a rebel removal of structures, inhibi-ons or fear brainstorming or team building
50 © 2009 John Wiley & Sons Ltd. www.managing-innovation.com
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Crea&vity
Some structured approaches to crea&vity: spider diagrams -‐ visualisa-on of issues mind maps -‐ make assump-on explicit laddering -‐ review goals/level of analysis yes and (vs. ‘either/or) -‐ keep op-ons open lateral thinking -‐ reverse logic, intermediates brainstorming -‐ non-‐evalua-ve idea genera-on
51 © 2009 John Wiley & Sons Ltd. www.managing-innovation.com
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Brainstorming (from Wikipedia)
Two principles contribute to "ideative efficacy," these being "1. Defer judgment," and "2. Reach for quantity.” Following these principles were his four general rules of brainstorming, established with intention to reduce social inhibitions among group members, stimulate idea generation, and increase overall creativity of the group. Focus on quantity: This rule is a means of enhancing divergent production, aiming to
facilitate problem solving through the maxim quantity breeds quality. The assumption is that the greater the number of ideas generated, the greater the chance of producing a radical and effective solution.
Withhold criticism: In brainstormingcriticism of ideas generated should be put 'on hold'. Instead, participants should focus on extending or adding to ideas, reserving criticism for a later 'critical stage' of the process. By suspending judgment, participants will feel free to generate unusual ideas.
Welcome unusual ideas: To get a good and long list of ideas, unusual ideas are welcomed. They can be generated by looking from new perspectives and suspending assumptions. These new ways of thinking may provide better solutions.
Combine and improve ideas: Good ideas may be combined to form a single better good idea, as suggested by the slogan "1+1=3". It is believed to stimulate the building of ideas by a process of association.
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6-3-5 Brainwriting
6-3-5 Brainwriting (also known as the 6-3-5 Method, or Method 635) is a group creativity technique used in marketing, advertising, design, writing and product development originally developed by Professor Bernd Rohrbach in 1968.
Based on the concept of Brainstorming, the aim of 6-3-5 Brainwriting is to generate 108 new ideas in half an hour. In a similar way to brainstorming, it is not the quality of ideas that matters but the quantity.
The technique involves 6 participants who sit in a group and are supervised by a moderator. Each participant thinks up 3 ideas every 5 minutes. Participants are encouraged to draw on others' ideas for inspiration, thus stimulating the creative process. After 6 rounds in 30 minutes the group has thought up a total of 108 ideas.
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Sugges&on Schemes
Suggestion schemes in Japanese firms: Participation rate is 70% of workers; Adoption rate of suggestions is 87%; Toyota > 2 million suggestions/ year, = 35 per worker; Toshiba 4 million suggestions/year = 77 per worker; Kawasaki Heavy Engineering 7 million
54 © 2009 John Wiley & Sons Ltd. www.managing-innovation.com
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Sugges&on Schemes
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Chapter 5
Building the innovation case
57 © 2009 John Wiley & Sons Ltd. www.managing-innovation.com
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Forecas&ng
Forecas&ng technology & markets, given uncertainty:
explore implica-on of a range of possible trends ensure broad par-cipa-on & informal channels of communica-on
encourage mul0ple sources, debate & (construc-ve) scep-cism
be prepared to change strategy in light of new (& unexpected) evidence
58 © 2009 John Wiley & Sons Ltd. www.managing-innovation.com
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Failures of Forecas&ng
“I think there is a world market for about five computers” (T.Watson, CEO IBM, 1948)
“I cannot conceive of any vital disaster happening to this vessel” (Captain of the Titanic, 1912)
“The war in Vietnam is going well and will succeed”, (R.MacNamara, 1963)
59 © 2009 John Wiley & Sons Ltd. www.managing-innovation.com
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Failures of Forecas&ng
Probe of the Future, TRW Inc., 1969: nuclear-‐powered underwater recrea-on centres 3-‐D colour TV robot soldiers plas-c germ-‐proof houses but not: PCs, Internet, Biotechnology etc
60 © 2009 John Wiley & Sons Ltd. www.managing-innovation.com
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An&cipa&ng Trends
A forecast should include the following:
quan-ta-ve factors, e.g.specific measures qualita-ve factors, e.g scope of forecast -me frame probability assump-ons made
61 © 2009 John Wiley & Sons Ltd. www.managing-innovation.com
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An&cipa&ng Trends
Choice of forecas&ng method depends on: organisa-on’s planning horizon rate of environmental change availability of informa-on accuracy of informa-on availability of resources -‐ -me & money competence & willingness of managers
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Chapter 6
Creating new products and services
1 © 2009 John Wiley & Sons Ltd. www.managing-innovation.com
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New Product Development
Factors affec-ng new product success:
Significant product advantage Clear defini-on of target market Proficiency of pre-‐development
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New Product Development
Dimensions of product advantage:
Unique benefit for customers Rela-ve perceived quality Rela-ve perceived superiority Reduced life-‐cycle cost to customer Solu-on to customers problem
4 © 2009 John Wiley & Sons Ltd. www.managing-innovation.com
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New Product Development
Clear target market: Basis of segmenta-on Customer needs -‐ essen-al features vs. preferences Product aEributes -‐ basic vs. augmented Product concept -‐ benefits, posi-oning & compe-ng
products Market poten-al & aErac-veness
5 © 2009 John Wiley & Sons Ltd. www.managing-innovation.com
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New Product Development
Cri-cal predevelopment ac-vi-es: Ini-al screening -‐ product fit & project scope Preliminary technical assessment-‐ will it work? Preliminary market assessment -‐ will it sell? Financial analysis -‐ sensi-vity & DCF
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Development Process
9
Benefits of having a formal process (n=203)
% of projects
© 2009 John Wiley & Sons Ltd. www.managing-innovation.com
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The Stage-Gate Process
Split-up of the Process in smaller activities, starting with idea finding and finishing with the practical usage of the new problem solution => Control of Risks
Innovation Processes are creative work processes, therefore support is needed through creativity methods in order to increase process effectivity
Innovation Processes are embedded into specific internal and external contexts
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Characteristics of Stage-Gate-Models
Very much cross – functional Appropriate project structure & team work Marketing and Manufacturing are now integral parts Decision points or gates are also cross - functional Capturing the entire process from idea through to launch Much more emphasis on up-front homework or pre-development
work Strong market orientation Parallel or concurrent processing
Sharper decision points with clear Go / Kill criteria
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Overview: The Gates
Gates are predefined and specify a set of "deliverables"
Deliverables include a list of criteria:
"Must meet" => Mandatory
"Should meet" => Desired
Output, e.g. a decision
Gate meetings are usually manned by Top Managers from different functions (resource owner)
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Chapter 7
Capturing the benefits of innovation
74 © 2009 John Wiley & Sons Ltd. www.managing-innovation.com
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Knowledge Management
Central challenges in knowledge management: to iden-fy, order & process explicit informa-on &
knowledge; to encourage the exchange of tacit knowledge between
communi-es of prac-ce; to translate tacit knowledge into explicit knowledge.
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Inven&on versus Innova&on
Goodyear invented vulcanized rubber, but did not create Goodyear Tires;
Howe invented the sewing machine, but Singer later infringed the patent;
Spangler invented the vacuum cleaner , but Hoover was first to commercialise it;
Paterson developed DOS, but Gates bought the rights ($25,000!) & licensed it to IBM.
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Patents
Patents provide a legal monopoly on IPR for a limited period (usually 20 years):
novelty -‐ no part of ‘prior art’ inven-ve step -‐ non ‘obvious’ industrial applica-on -‐ inu-lity test patentable subject -‐ discovery vs. inven-on clear & complete disclosure
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Designs
Design registra&on is a cross between patent & copyright protec&on:
provides protec-on for up to 25 years: protects only visual appearance covers four features -‐ shape, configura-on, paEern & ornament cheaper & easier than patent protec-on, but more limited scope
78 © 2009 John Wiley & Sons Ltd. www.managing-innovation.com
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Designs
Design rights are similar to copyright protec&on, but mainly apply to three-‐dimensional ar&cles:
any aspect of the ‘shape’ or ‘configura-on’ internal or external, whole or part excludes integral & func-onal features
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Copyright
Limited legal protec&on of certain material for a specific term: type of material -‐ ‘original’ literary (inc. s/w), drama-c, musical,
& ar-s-c works protec-on -‐ reproduc-on in ‘material form’ within 50 years infringement -‐ ‘substan-al taking’ vs. ‘fair dealing’
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Trade Marks
Trade marks (& names) can be registered for a specific period (usually 10 years) & then renewed (usually for further periods of 10 years):
dis-nc-veness -‐ so as not to prevent others from trading decep-veness -‐ not similar to other marks, or to infer product
quali-es
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Limits of IPR
Intellectual property rights also incur costs & risks:
cost of search, registra-on & renewal need to register in various na-onal markets full & public disclosure of your idea need to be able to enforce
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Patent Costs
0 5000 10000 15000 20000 25000 30000 35000 40000
1996 US $
Singapore
Malaysia
Korea
UK
France
Netherlands
US
Germany
Japan
Years 1-5 Years 6-10 Years 11-15 Years 16-20
Germany
Netherlands
UK
Malaysia
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Licensing
Considera&ons in a licensing agreement: degree of exclusivity -‐ exclusive, sole or non-‐exclusive scope -‐ territory & type of end use period -‐ no longer than licensor’s IPR payment -‐ royalty, lump sum or cross-‐license
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Licensing
Typical licensing agreement includes:
grant of rights -‐ exclusivity, territory, term transfer of know-‐how -‐ support & training produc-on & marke-ng -‐ materials fees & royal-es -‐ levels & condi-ons protec-on of IPR -‐ all par-es rights & resp. termina-on of agreement -‐ when & how
85 © 2009 John Wiley & Sons Ltd. www.managing-innovation.com
Prof. Dr. Werner Fees, GSO MI Nürnberg – Page 86 Innovation Management
Licensing
Benefits of licensing to licensor: reduce development costs & risks; reach a larger market; exploit in other applica-ons; establish standards; gain access to complementary technology; block compe-ng developments; convert compe-tor into defender.
86 © 2009 John Wiley & Sons Ltd. www.managing-innovation.com
Prof. Dr. Werner Fees, GSO MI Nürnberg – Page 87 Innovation Management
Licensing
Benefits of licensing to licensee: access to know-‐how speed of market entry overcome internal resource constraints reduce technical & market uncertain-es low cost acquisi-on of know-‐how
87 © 2009 John Wiley & Sons Ltd. www.managing-innovation.com