SEB711 1 Introduction

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SEB711: Developing Innovation

Introduction

School of EngineeringFaculty of Science and TechnologyDeakin University

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Why did you chose this subject ?

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What do you think is Developing Innovation?

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Introduce yourself

SEB711Do you have an idea about anInnovation ?

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What do you think is the biggest problem when developing an innovation ?

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Topics

1. Introduction & overview2. Business plan 3. Concept analysis (SWOT), Entrepreneurs, 4. IP protection and literature search 5. Market analysis including competitors, PEST, 5 forces 6. Financials7. Financing sources, e.g. FFF, Awards, Grants, Angles, VC,

Equity,IPO, Croudfunding, Bank Loans etc.8. Marketing strategies , e.g. How to find and approach customers etc.9. Preparation for Investor Pitches10. Valuations11. Growth Strategies12. Pitches

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Definitions> Creativity> Invention> Patent> Innovation> Entrepreneur

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Creativity

> To bring something into existence that would not have occurred naturally

> Abstract form For example an idea, a concept, a

proposal

> Physical form For example an object, drawing,

painting, “thing”

Certainly creative but is it anything else?

Not in this universe

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Similar to creativity in that it involves things that never previously existed or would occur naturally

> Regardless of any value it creates or adds

The difference between a creation and an invention is:

> To be considered an invention you must be able to prove the creation can be made, used, practiced, or expressed. you have to prove that it can exist and perform as you claim

> You can seek legal protection for an invention In most countries by applying for a Patent for your intellectual property

Invention

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(i) there must be an "invention", belonging to any field oftechnology (see G-II);(ii) the invention must be "susceptible of industrial application"(iii) the invention must be "new" (see G-IV to VI); and(iv) the invention must involve an "inventive step" (see G-VII). (not obvious for an

expert)Additionally:(i) the invention must be such that it can be carried out by a personskilled in the art (after proper instruction by the application); thisfollows from Art. 83. Instances where the invention fails to satisfythis requirement are given in F-III, 3; and Art. 83(ii) the invention must be of "technical character" to the extent that itmust relate to a technical field (Rule 42(1)(a)), must beconcerned with a technical problem (Rule 42(1)(c)), and musthave technical features in terms of which the matter for whichProtection is sought can be defined in the claim (Rule 43(1)) (see F-IV, 2.1).http://documents.epo.org/projects/babylon/eponet.nsf/0/6c9c0ec38c2d48dfc1257a2

1004930f4/$FILE/guidelines_for_examination_2012_en.pdf

Patent requirements (EPO June 2012)

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> Innovation like invention involves things that never previously existed or would occur naturally

> But innovation must create or add value

> So let’s define innovation as:

something new that creates or adds value

Innovation

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Innovation

Something new that creates or adds value

> By definition, an innovation provides value

> A mix of elements may exist

Technology

Design

Invention

Marketing

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What’s the difference between them?

Creation something new and may exist or function and may provide value

Invention something new and can exist and function and may provide value

Innovation something new and does exist and function and does provides value

Creation, Invention, Innovation

Creations

Inventions

Innovations

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> It’s easy to develop something new It may never be of any use It may be immediately useful It may be useful sometime in the future

> It’s much harder to develop something new that is: Practical Is beneficial to use or apply Provides value to someone

• Such as:– Improved quality of life– Or increased profitability– Or monetary value

Innovation versus Invention

An iPod docking station with toilet roll holder

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Invention> Something that never previously existed

Regardless of any value it creates or adds

> Immediate output is “Intellectual Property” Protect by patents

• Must be “New” and “Novel”• Not merely an obvious application or extension of “prior art”

> Although it is new it may have no value Now or even in the foreseeable future

> It may be easy to copy or imitate You can seek injunctions and monetary damages from infringers

through the legal system• But its generally an expensive and intensive process• You may lose – the court might invalidate your patents

Innovation versus Invention

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Innovation> Something new that creates or adds value

By definition, an innovation has value

> A mix of elements may exist Technology Design Invention Marketing

> Some protection possible under the patent system Innovation patents

> Protection often more cost effective by Design registration Trademark registration Being hard to imitate in its entirety

Innovation versus Invention

Apple’s 1st Generation iPod released 2001

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Innovation> Research and Development (R&D)

Seek new knowledge (research) Apply new knowledge (development)

> R&D can be focused on solving defined problems Curing diseases and ailments Putting a man on the moon

> R&D can also produce “by accident” 3M’s Post-It note

> R&D must produce value to the organization Otherwise it is simply a drain on resources

> Appropriate R&D can produce significant value

Innovation versus Invention

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Innovation is the winner

> Invention is often the “starting point” Development of new technologies

> But innovation is how the results of invention are put to use Creating or adding value

In business the focus is (and should) be on innovation Invention (by research) may be an important element

• But it is not sufficient by itself for most companies

Innovation versus Invention

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Creative

A time and relative dimensions in space machine

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Inventive

Source: http://www.littlecrazymonkey.com/funny_pictures/crazy_inventions.htm

Practical?

Any value?

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Inventive

Practical?

Any value?

Sound-muffler for covering the mouthPatent no 4834212, issued 1989

http://business.timesonline.co.uk/tol/business/entrepreneur/article3264420.ece

From Optional Reading article, Top 10 Useless Inventions, The Times, 2008.

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Innovative

The wireless remote control for televisions

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Why Innovate?

A

B

C

The answer is simple:> According to lifecycle theory, all

things must end> Innovate to extend existing products

or services or to produce new products or services

> Factors causing decline may include: Market saturation Competitive alternatives Technology obsolescence

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Innovation for Survival

> Companies can seek to ensure their survival and sustainability whilst also seeking growth through:

Improving their operational effectiveness Developing and implementing a

competitive strategy

> The most successful companies usually apply both methods

For more on this: read the paper posted up on DSO by Michael Porter

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Innovation for Survival

> Operational Effectiveness

To perform similar activities better than your rivals• For example by

– Cheaper cost of production– Lower defects in production– Developing products faster– Eliminating waste and overheads

The risk though is that competitors may similarly adopt the improved effectiveness measures

• The “bar” may be raised across the industry (everyone does it)• So differentiation between companies may not widen (or shrink)

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Innovation for Survival

> Competitive Strategy

Seeking to differentiate your company from the competition• For example by

– Performing different activities– Performing similar activities in a different way

Seek to provide a unique blend of value to customers• Hard to imitate or copy• Considered more valuable by customers than competitors

Trade-offs are often needed• Cannot be all things to everybody at the same time

SEB711Innovation or Extinction ?> Companies that fail to continuously innovate will generally fail

and ultimately cease to exist Unless they can obtain and maintain a competitive position through

operational effectiveness – and that is extremely difficult to do

Image Source: http://blog.thomsonreuters.com/wp-content/uploads/2012/01/kodak-bankruptcy.jpg

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What is an Entrepreneur ?

> The word “entrepreneur” is derived from a French word “entreprendre”

• to undertake

> Dictionary meanings of “entrepreneur” are typically: One who organises, manages, and assumes the risks of a business or

enterprise

> Generally we consider entrepreneurs to be individuals who seek to obtain profits from business activities that involve significant

risks and challenges and do so with as much independence from others as possible

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1. Interest2. Focus3. Persistence4. Supporting environment

4 Key requirements to develop innovations

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Assignments

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Reference Materials> No prescribed textbook> Recommended books:

o Enterprise & Venture Capital, a business builder’s and investor’s handbook, Christopher Goliso Australian Venture Capital guide, Victor Bivello Finding the money: How to raise Venture Capital, Tom McKaskillo The ultimate Deal: get an unbelievable price, Tom McKaskillo The 5th discipline, Peter Sengeo Business Angels: Private capital for private companies, Chris Kane

> Useful resources Daily newspapers and business magazines Engineering and industry journals and publications Management journals and publications Corporate information for industry sector leaders Industry associations and institutions

> Reading materials will be provided on DSO for each topic

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Assignments

> Submitting your written report assignments

Submitting online via DSO is easiest for most students

• Dropboxes will be provided online on DSO for each assignment

• Feedback and marks via DSO

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Lessons learned

> 4 key requirements to develop innovation> Creativity, invention, patent, innovation,

entrepreneur

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Next Week

Business Plans

Howard Frederick

School of Management & Marketing