Topic 5: Innovation and Design - P2

Topic 5: Innovation and Design - P2  

Innovation innovation – getting ideas made and sold – is harder than invention. To bring an invention to the market there are a number of obstacles to overcome – technical,

financial and organizational. The invention has to be made using appropriate materials and manufacturing processes depending on the nature of the product and

the numbers required. Then, once an innovation is available to potential buyers, there are a number of factors that influence how well it will sell and how rapidly it

is likely to diffuse. Factors affecting sales and diffusion include characteristics of the innovation itself, conditions of the market and any relevant regulations. 

The point at which the electric light first became available on the market was the moment the invention

became an innovation. So an innovation is a new or improved product, process or system that has reached

the point of first commercial introduction. 

Even this moment of achieving innovation is sometimes difficult to pinpoint in a particular case. The first

full-scale use of the electric lamp outside of the laboratory was in May 1880 when Edison installed 115 of

them on the new steamship Columbia at the suggestion of its owner, Henry Villard, who had become an

enthusiast for the electric light after seeing a demonstration at Menlo Park. The electric system was more

suitable than open-flame lighting in the confined spaces of a ship. It was so effective that it was 15 years

before it was replaced with more modern equipment. However it could be argued that this was not the

moment of innovation as there was an element of personal favour rather than it being a purely commercial

transaction. 

The first full-scale public demonstration of Edison's urban lighting system was along the Holborn Viaduct in

London. The first generator started up in January 1882 and the Holborn installation was a testing ground

for a number of key elements of his more famous installation at Pearl Street Station in New York, which

began service later that year. 

Finally, although innovations generally offer progress, some complement existing ways of doing things and

have a sustaining effect for a technology or an industry. Some innovations though are more disruptive and

can lead to significant changes in society. 

Product Life Cycle Products tend to go through a life cycle. Initially, a product is introduced. Since the product is not well known and is usually expensive (e.g., as microwave ovens

were in the late 1970s), sales are usually limited. Eventually,

however, many products reach a growth phase—sales increase

dramatically. More firms enter with their models of the product.

Frequently, unfortunately, the product will reach a maturity stage

where little growth will be seen. For example, in the United States,

almost every household has at least one color TV set. Some

products may also reach a decline stage, usually because the

product category is being replaced by something better. For

example, typewriters experienced declining sales as more

consumers switched to computers or other word processing

equipment.  

The product life cycle is defined as the period that starts with the

initial product design (research and development) and ends with

the withdrawal of the product from the marketplace. It is characterized by specific stages, including research, development, introduction, maturity, decline, and

finally obsolescence as the product is removed from the market (discontinued). Each stage is often linked with changes in the flows of raw materials, parts and

distribution to markets as production (input costs) is adjusted to face increasing competition. Conventionally, four main stages compose a product's life cycle: 

Introduction

This stage mainly concerns the development of a new product, from the time is was initially conceptualized to the point it is introduced on the market. The great

majority of ideas do not reach the promotion stage. The corporation having an

innovative idea first will often have a period of monopoly until competitors start to copy

and/or improve the product (unless a patent is involved as it is the case in industries such

as pharmaceuticals). Generally, associated freight flows take place within developed

countries and/or close to markets where to product is likely to be adopted. 

Growth

If the new product is successful (many are not), sales will start to grow and new

competitors will enter the market (by replicating the product or developing new features

on their own), slowly eroding the market share of the innovative firm. The product starts

to be exported to other markets and substantial efforts are made to improve its

distribution since competition mainly takes place more on the innovative capabilities of

the product than on its price. This phase tends to be associated by high levels of profits

and a fast diffusion of the product. 

Maturity

At this stage, the product has been standardized, is widely available on the market and its distribution is well established. Competition increasingly takes place over

cost and a growing share of the production is moved to low cost locations, particularly for labor intensive parts. Associated freight flows are consequently modified

to include a greater transnational dimension. 

Decline

As the product is becoming obsolete, production essentially takes place in low costs locations. Production and distribution economies are actively sought as profit

margins decline. Eventually, the product will be retired, an event that marks the end of its life cycle. 

Conventionally, as a product went through its life cycle the least profitable functions were relocated to lower costs locations, notably in developing countries. This

dichotomy is being challenged since it is becoming more common, even for high technology products, that the manufacturing of a new product immediately takes

place in a low labor cost location. Multinational corporations have global production networks that enable them to efficiently allocate design, production and

distribution according to global factors of production. This also relies on outsourcing and subcontracting. 

Diffusion of innovation The product life cycle is tied to the phenomenon of diffusion of innovation. When a new product comes out, it is likely to first be adopted by consumers who are

more innovative than others—they are willing to pay a premium price for the new product and take a risk on unproven technology. It is important to be on the

good side of innovators since many other later adopters will tend to rely for advice on the innovators who are thought to be more knowledgeable about new

products for advice. 

At later phases of the PLC, the firm may need to modify its market strategy. For example, facing a saturated market for baking soda in its traditional use, Arm &

Hammer launched a major campaign to get consumers to use the product to deodorize refrigerators. Deodorizing powders to be used before vacuuming were also

created. 

It is sometimes useful to think of products as being either new or existing. 

Many firms today rely increasingly on new products for a large part of their sales. New products can be new in several ways. They can be new to the market—no

one else ever made a product like this before. For example, Chrysler invented the minivan. Products can also be new to the firm—another firm invented the

product, but the firm is now making its own version. For example, IBM did not invent the personal computer, but entered after other firms showed the market to

have a high potential. Products can be new to the segment—e.g., cellular phones and pagers were first aimed at physicians and other price-insensitive segments.

Later, firms decided to target the more price-sensitive mass market. A product can be new for legal purposes. Because consumers tend to be attracted to “new and

improved” products, the Federal Trade Commission (FTC) only allows firms to put that label on reformulated products for six months after a significant change has

been made. 

The diffusion of innovation refers to the tendency of new products,

practices, or ideas to spread among people. Usually, when new

products or ideas come about, they are only adopted by a small group

of people initially; later, many innovations spread to other people.  

The bell shaped curve frequently illustrates the rate of adoption of a

new product. Cumulative adoptions are reflected by the S-shaped

curve. The saturation point is the maximum proportion of consumers

likely to adopt a product. 

In the case of refrigerators in the U.S., the saturation level is nearly one

hundred percent of households; it well below that for video games that,

even when spread out to a large part of the population, will be of

interest to far from everyone. 

Several specific product categories have case histories that illustrate important issues in adoption. Until some time in the 1800s, few physicians bothered to scrub

prior to surgery, even though new scientific theories predicted that small microbes not visible to the naked eye could cause infection. Younger and more

progressive physicians began scrubbing early on, but they lacked the stature to make their older colleagues follow. 

ATM cards spread relatively quickly. Since the cards were used in public, others who did not yet hold the cards could see how convenient they were. Although

some people were concerned about security, the convenience factors seemed to be a decisive factor in the “tug-of-war” for and against adoption. 

The case of credit cards was a bit more complicated and involved a “chicken-and-egg” paradox. Accepting credit cards was not a particularly attractive option for

retailers until they were carried by a large enough number of consumers. Consumers, in contrast, were not particularly interested in cards that were not accepted

by a large number of retailers. Thus, it was necessary to “jump start” the process, signing up large corporate accounts, under favorable terms, early in the cycle,

after which the cards became worthwhile for retailers to accept. 

Rap music initially spread quickly among urban youths in large part because of the low costs of recording. Later, rap music became popular among a very different

segment, suburban youths, because of its apparently authentic depiction of an exotic urban lifestyle. 

Hybrid corn was adopted only slowly among many farmers. Although hybrid corn provided yields of

about 20% more than traditional corn, many farmers had difficulty believing that this smaller seed

could provide a superior harvest. They were usually reluctant to try it because a failed harvest could

have serious economic consequences, including a possible loss of the farm. Agricultural extension

agents then sought out the most progressive farmers to try hybrid corn, also aiming for farmers who

were most respected and most likely to be imitated by others. Few farmers switched to hybrid corn

outright from year to year. Instead, many started out with a fraction of their land, and gradually

switched to 100% hybrid corn when this innovation had proven itself useful. 

Several forces often work against innovation. One is risk, which can be either social or financial. For

example, early buyers of the CD player risked that few CDs would be recorded before the CD player

went the way of the 8 track player. Another risk is being perceived by others as being weird for trying a “fringe” product or idea.  

Other sources of resistance include the initial effort needed to learn to use new products (e.g., it takes time to learn to meditate or to learn how to use a computer)

and concerns about compatibility with the existing culture or technology. For example, birth control is incompatible with strong religious influences in countries

heavily influenced by Islam or Catholicism, and a computer database is incompatible with a large, established card file. 

Innovations come in different degrees. A continuous innovation includes slight improvements over time. Very little usually changes from year to year in

automobiles, and even automobiles of the 1990s are driven much the same way that automobiles of the 1950 were driven. A dynamically continuous innovation

involves some change in technology, although the product is used much the same way that its predecessors were used—e.g., jet vs. propeller aircraft. A disruptive

innovation involves a product that fundamentally changes the way that things are done—e.g., the fax and photocopiers. In general, discontinuous innovations are

more difficult to market since greater changes are required in the way things are done, but the rewards are also often significant. 

Several factors influence the speed with which an innovation spreads. One issue is relative advantage (i.e., the ratio of risk or cost to benefits). Some products,

such as cellular phones, fax machines, and ATM cards, have a strong relative advantage. Other products, such as automobile satellite navigation systems, entail

some advantages, but the cost ratio is high. Lower priced products often spread more quickly, and the extent to which the product is trial able (farmers did not

have to plant all their land with hybrid corn at once, while one usually has to buy a cellular phone to try it out) influence the speed of diffusion. Finally, the extent

of switching difficulties influences speed—many offices were slow to adopt computers because users had to learn how to use them. 

Cultural Adoption Some cultures tend to adopt new products more quickly than others, based on several factors:  

Modernity:

The extent to which the culture is receptive to new things. In some countries, such as Britain and Saudi Arabia, tradition is greatly valued—thus, new products

often don’t fare too well. The United States, in contrast, tends to value progress. 

Homophily:

The more similar to each other that members of a culture are, the more likely an innovation is to spread—people are more likely to imitate similar than different

models. The two most rapidly adopting countries in the World are the U.S. and Japan. While the U.S. interestingly scores very low, Japan scores high. 

Physical distance:

The greater the distance between people, the less likely innovation is to spread.  

Opinion leadership:

The more opinion leaders are valued and respected, the more likely an innovation is to spread. The style of opinion leaders moderates this influence, however. In

less innovative countries, opinion leaders tend to be more conservative, i.e., to reflect the local norms of resistance. 

It should be noted that innovation is not always an unqualifiedly good thing. Some innovations, such as infant formula adopted in developing countries, may do

more harm than good. Individuals may also become dependent on the innovations. For example, travel agents who get used to booking online may be unable to

process manual reservations. 

Sometimes innovations are disadopted. For example, many individuals disadopt cellular phones if they find out that they don’t end up using them much.In one of

the standard works in this field, Everett Rogers (2003) identifies five characteristics of an innovation that affect how quickly and to what extent it will sell: relative

advantage, compatibility, complexity, observability and trialability.  

Relative advantage

In order to succeed, an innovation has to be perceived as offering advantages relative to

existing comparable products or services. For example, it has more chance of selling if it is

cheaper to make and buy, does the job better or does something previously not possible,

offers more features, is easier to use, or is reliable and safe. Relative advantage is sometimes

called competitive advantage. 

A good example is how the steady reduction in size and increase in efficiency of the electric

motor encouraged the development of a range of labour-saving domestic appliances with

rapid growth in the 1960s and 70s. Devices such as washing machines, vacuum cleaners and

food mixers at first offered an obvious advantage to users in reducing the effort involved in

carrying out domestic chores and they diffused widely. Each new generation of machines

offered an advantage over the previous generation.  

Once the market was established the advantage of these products turned to offering more features for the same price. So there were, say, more wash programmes

or greater temperature control or higher spin speeds for the money. And more recently attention has turned to washing machines that offer more energy efficiency

in operation and reduced environmental impacts in manufacture, use and disposal. In order to maintain an advantage it's necessary to continuously improve the

product. 

Compatibility

An innovation that is compatible with the experiences, values and needs of its potential buyers will be adopted more rapidly than one that isn't compatible. For

example mobile phones have spread rapidly because they are compatible with social and cultural trends towards faster communications, increased personal mobility

and the desirability of high-tech gadgets. However the car seat belt, patented in 1903, wasn't adopted on any significant scale until the 1970s. It took decades of

increasing traffic and growing casualties in road accidents for safety to become a pressing concern, government to pass legislation and the seat belt to become a

newly compatible innovation. 

Complexity

If an innovation is perceived as difficult to use it will diffuse more slowly than one that is easy to understand. For example users of early personal computers

needed an understanding of a programming language in order to use their machines. For most potential PC users this made the innovation too complex to consider

buying. Then a graphical user interface was developed and incorporated by Apple Computer into the Lisa computer in 1983 and more successfully into the

Macintosh computer in 1984. Users could control their computer by using a mouse to point at visible icons on a virtual desktop and software became simpler to

use. This approach was taken up by newly emerging PC manufacturers and the rate of diffusion of the personal computer increased. Of course, other factors

contributed to the spread of the PC, such as falling cost, improved performance and more powerful software, but reduced complexity for users was a significant

factor. 

Observability

The easier it is for people to see an innovation being used the more likely they are to consider buying it themselves. Examples include types of motor car, mobile

phones and computers. Less obviously, products such as solar panels in domestic housing can sometimes be found in clusters on a housing estate. Innovations that

are harder to see tend to diffuse more slowly, though there may well be other factors involved. 

Trialability

It helps to be able to try innovations before buying. While this isn't common for most innovations it can reduce any uncertainty the buyer might have about

committing to a purchase and can increase the speed of diffusion. Buying a car usually involves a test drive that, although it probably isn't a fair reflection of the

range of conditions under which the product will eventually be used, is better than nothing. 

In general, innovations that are perceived as having relative advantages, being more compatible, less complex, observable, and trialable will diffuse more rapidly

than other innovations. 

The 5 Customer Segments of Technology Adoption  

Back to Rogers’ research, we see that not everyone will immediately adopt a disruptive idea despite obvious benefits. Over years of research, Rogers identified

some fascinating personality traits that help us organize how people

will accept a new innovation. It turns out we approach innovations

in the following ways. (From Diffusion of Innovations) 

Innovators (2.5%)

Innovators are the first individuals to adopt an innovation.

Innovators are willing to take risks, youngest in age, have the

highest social class, have great financial lucidity, very social and have

closest contact to scientific sources and interaction with other

innovators (Technophile) . Risk tolerance has them adopting

technologies which may ultimately fail. Financial resources help

absorb these failures. (Rogers 1962 5th ed, p. 282) 

Early Adopters (13.5%)

This is the second fastest category of individuals who adopt an innovation. These individuals have the highest degree of opinion leadership among the other

adopter categories. Early adopters are typically younger in age, have a higher social status, have more financial lucidity, advanced education, and are more socially

forward than late adopters. More discrete in adoption choices than innovators. Realize judicious choice of adoption will help them maintain central communication

position (Rogers 1962 5th ed, p. 283). 

Early Majority (34%)

Individuals in this category adopt an innovation after a varying degree of time. This time of adoption is significantly longer than the innovators and early adopters.

Early Majority tend to be slower in the adoption process, have above average social status, contact with early adopters, and seldom hold positions of opinion

leadership in a system (Rogers 1962 5th ed, p. 283) 

Late Majority (34%)

Individuals in this category will adopt an innovation after the average member of the society. These individuals approach an innovation with a high degree of

skepticism and after the majority of society has adopted the innovation. Late Majority (Techno-cautious) are typically skeptical about an innovation, have below

average social status, very little financial lucidity, in contact with others in late majority and early majority, very little opinion leadership. 

Laggards (16%)

Individuals in this category are the last to adopt an innovation. Unlike some of the previous categories, individuals in this category show little to no opinion

leadership. These individuals typically have an aversion to change-agents and tend to be advanced in age. Laggards typically tend to be focused on “traditions”,

likely to have lowest social status, lowest financial fluidity, be oldest of all other adopters, in contact with only family and close friends, very little to no opinion

leadership. 

Technophobe

1. (Sociology) someone who fears the effects of technological development on society and the environment 2. someone who is afraid of using technological devices, such as computers  

Dominant design In most examples of evolving technological innovation there is a period when rival

designs are competing to outperform each other, both in what they do and how well they

appeal to the consumer. Certain features of a product or process come to be recognised

as meeting key needs and they are incorporated in subsequent improved versions of the

design. Other features might meet too narrow a set of needs to be economical and are

dropped. 

Gradually what emerges is a dominant design, which is the product whose form and

function have evolved to become the accepted market standard. 

The dominant design defines the expected appearance of a particular innovation and how

it is meant to work. A dominant design is not necessarily the one with the best

performance but its performance will be good enough so that, together with its other

desirable features, it will meet the needs of many different types of user  

‘The dominant design in a product class is, by definition, the one that wins the allegiance

of the market place, the one that competitors and innovators must adhere to if they hope

to command significant market following’ (Utterback, 1995).

A dominant design is often the norm within the market which creates difficulties in other similar

products to compete for market share. This often creates a monopoly over alternatives, whereby

the only means of competing is to imitate or expand upon the concept.  

There are often factors that lead to a design becoming the dominant force: 

• Economies of Scale

• Market entrance time

• Product standardizing

• Distribution networks

• Market segmentation

• Advertising

• Networks

Interestingly, dominant designs can link to diffusion theory portrayed by Rogers. Getting your

product to market as quick as possible may mean it diffuses quicker than competitors and

reaches the majority of users faster. If this occurs; a business may experience ‘buyer loyalty and

brand retention’ (Constantinos et al, 2005). The product or design may become the dominant

design and be hard to dislodge by competitors and alternatives. 

Robust design and lean design

Robust Design - Flexible designs that can be adapted to changing

technical and market requirements.

Many different terms as e.g. “flexibility”, “changeability”, “versatility” and “adaptability” are used in

literature to describe similar, but not identical aspects of the product development process (PDP) and

properties of technical products. In following the terms “flexibility” and “flexible” are used as generic

terms, which include the above mentioned terms and their underlying ideas. Flexibility can be defined to

be the incremental time and cost of modifying a design as a response to changes exogenous (e.g. shifting

customer needs) or endogenous (e.g. the discovery of a better solution approach) to the design process

[Thomke 1997].  

Following this definition flexible products are here defined as products, which can be adapted to changed

need and requirements with little amount of time and costs within the development phase as well as

during the rest of the product life cycle. Thus a product contains highest flexibility, if it does not have to

be adapted at all when changes occur, because the new requirements are covered by the original product.

The examples of flexible products, which can be adapted to new conditions easily with little amount of

time and costs. The examples demonstrate the wide range of products to be considered flexible.  

The 606 Universal shelf system is defined as flexible, because it can easily be adapted

to changed requirements. It built up and dismounted several times in its life cycle.

New shelves can be added. It can be extended horizontally and vertically. It can be

added to. The system is modular and built from standard parts. The user can develop

their own system to suit their needs. 

The images below show the housing of a desktop PC. It can easily be opened, so that

the PC can be adapted and additional components (modules) can be added later,

when requirements of the user have changed. The standardised slots, plug-in positions

and connectors allow easy (dis-)assembling as well during production as for the user. 

Further, a new product is more likely to be commercially successful if it is a robust design

and suitable for different uses. A new product is likely to be less successful it if is a lean

design, too highly optimized and only suitable for specific uses. 

Radical innovation and incremental innovation The electric car might be said to be an example of a radical innovation – a new product, process or system resulting from a technological breakthrough, or an

application of a technology having a far-reaching impact. Introduced more than 100 years ago, electric cars are seeing a rise in popularity today for many of the

same reasons they were first popular. 

Radical innovations can have a widespread and sometimes revolutionary impact on our lives and are said by some to account for technological progress. Most

radical innovations are actually an accumulation of much smaller improvements, often carried out by many different individuals and organisations over time. It’s

hard to pinpoint the invention of the electric car to one inventor or country. Instead it was a series of breakthroughs -- from the battery to the electric motor -- in

the 1800s that led to the first electric vehicle on the road. 

As electric vehicles came onto the market, so did a new type of vehicle -- the gasoline-powered car -- thanks to improvements to the internal combustion engine in

the 1800s. While gasoline cars had promise, they weren’t without their faults. They required a lot of manual effort to drive -- changing gears was no easy task and

they needed to be started with a hand crank, making them difficult for some to operate. They were also noisy, and their exhaust was unpleasant. Electric cars

didn’t have any of the issues associated with steam or gasoline. They were quiet, easy to drive and didn’t emit a smelly pollutant like the other cars of the time.

Electric cars quickly became popular with urban residents -- especially women. They were perfect for short trips around the city, and poor road conditions outside

cities meant few cars of any type could venture farther. As more people gained access to electricity in the 1910s, it became easier to charge electric cars, adding to

their popularity with all walks of life. 

Many innovators at the time took note of the electric vehicle’s high demand, exploring ways to improve the technology. For example, Ferdinand Porsche, founder

of the sports car company by the same name, developed an electric car called the P1 in 1898. Around the same time, he created the world’s first hybrid electric car

-- a vehicle that is powered by electricity and a gas engine. Thomas Edison, one of the world’s most prolific inventors, thought electric vehicles were the superior

technology and worked to build a better electric vehicle battery. Even Henry Ford, who was friends with Edison, partnered with Edison to explore options for a

low-cost electric car in 1914. 

Yet, it was Henry Ford’s mass-produced Model T that dealt a blow to the electric car. Introduced in 1908, the Model T made gasoline-powered cars widely

available and affordable. By 1912, the gasoline car cost only $650, while an electric roadster sold for $1,750. That same year, Charles Kettering introduced the

electric starter, eliminating the need for the hand crank and giving rise to more gasoline-powered vehicle sales. 

Radical innovations are often incremental in terms of their scientific and technological development but radical in their application and ultimate impact on society.

Also the early, often unreliable, examples of an innovation might not seem to be a significant improvement on existing technology until improvements in

performance encourage more people to buy the innovation, which increases its impact.  

Categories of Innovation As it's sometimes difficult to say whether a particular innovation is radical or incremental, a useful distinction made recently is between sustaining innovations and

those that are disruptive.  

Briefly, a sustaining innovation is a new or improved product that meets the needs of most current customers and serves to sustain leading firms in their market

position. So in this context improvements to gas lighting, say, would be sustaining innovations. By contrast, a disruptive innovation is a new or improved product or

technology that challenges existing companies to ignore or embrace technical change. 

There are three categories of innovation. • Sustaining innovation: A new or improved product that meets the needs of consumers and sustains manufacturers

• Disruptive innovation: A product or type of technology that challenges existing companies to ignore or embrace technical change

• Process innovation: An improvement in the organization and/or method of manufacture that often leads to reduced costs or benefits to consumers

Sustaining innovations

Sustaining innovations are those that improve the performance of established products so they meet the needs of most current customers – perhaps making the

products more reliable, faster or cheaper.  

Such innovations can be incremental or radical in their nature but usually have a sustaining effect for leading firms in a given industry. For example successive

innovations in the provision of conventional telephone equipment and services served to sustain the major players – such as British Telecom and Cable & Wireless

in the UK – in their market position. However the arrival of mobile telephones proved to be a disruptive innovation in the field of telecommunications and younger

companies – such as Motorola, Ericsson, Nokia – exploited this new market. 

Disruptive technologies usually introduce a new way of operating in a particular market sector that challenges existing companies to decide whether to ignore or

embrace such new developments. Compared with conventional mature products they may seem unpromising to existing companies. However such innovations can

have other features that some existing and many new customers value. Christensen (2003, p. xviii) put forward the view that, Products based on disruptive

technologies are typically cheaper, simpler, smaller, and frequently more convenient to use. 

Sometimes these disruptive innovations go on to capture new as well as current customers to the extent that they rival or in some cases surpass the market for the

existing technology. Examples include photocopying (compared with carbon paper copying), digital photography (compared with chemical film processing), online

retailing (compared with face-to-face shopping) and even distance learning (compared with classroom-based learning). 

Companies regularly listen to their best customers and tend to develop new products based on the immediate promise of profitability and growth. These

companies are often not able to build a case for investing in disruptive technologies until it's too late because: 

Disruptive innovations

Disruptive innovations are simpler and cheaper, promising lower profit margins. Disruptive innovations are usually first commercialised in emerging markets that

are often perceived as insignificant. Leading firms’ most profit-conscious customers are generally tied in to existing successful products and don't want that

disrupted. 

According to Christensen the ‘innovator's dilemma’ is that outstanding companies can do everything right – such as listen carefully to their customers or invest

heavily in new technologies – but still lose their market leadership. They miss ‘the next great wave’ unless they know when to abandon traditional business

practices in the face of certain types of market and technology change. For example, IBM dominated the mainframe computer market but missed the emergence

of the simpler minicomputer. A company called DEC created the minicomputer market (Figure 76) along with Hewlett-Packard and others but they all missed the

desktop personal computer market that was captured by Apple, Commodore, Compaq and IBM's new, independent PC division. For many years Xerox dominated

the market for large-volume photocopiers used in copy centres but missed out on the huge market for small tabletop office photocopiers, ending up as only a

minor player.  

Strategies for innovation  

Act of insight: Often referred to as the “eureka moment”, a sudden image of a potential solution is formed in the mind, usually

after a period of thinking about a problem.

Post-it notes

Post itThe 3M Company, formerly known as the Minnesota Mining and Manufacturing

Company, is a US based multinational conglomerate, known for its superior product

innovation capabilities. One such innovation was created by Dr. Spencer Silver who spent

years trying to get his colleagues excited about his low-tack, pressure-sensitive adhesive. The

world yawned. But one day another 3M scientist, Arthur Fry, was in church, not a bad place

for a eureka moment, and came up with a use for Dr. Silver’s glue. Arthur Fry was annoyed

that the bookmarks in his hymnal wouldn’t stay put. He thought adding Dr. Silver’s adhesive

to some paper might do the trick. Not only was he right, but people have been coming up

with uses for the Post-Its ever since. 

Velcro

VelcroVelcro is a company that produced the first commercially marketed fabric

hook-and-loop fasten. It was invented in 1948 by the Swiss electrical engineer George

de Mestral. One day George de Mestral took his dog for a walk in the woods, also a

good place for a eureka moment. When he and the dog got back, Mestral noticed burrs

all over his pants. The tricky little devils would not come off. Looking at the burrs under

a microscope, he saw that they had tiny hooks that had attached themselves to the

loops of thread in his pants. De Mestral patented Velcro in 1955.  

Due to the simple lack of aesthetic appeal, Velcro was used only with athletic

equipment. Starting in 1968 and on into the 1980s, shoe companies like Puma, Adidas

and Reebok integrated Velcro straps onto children’s shoes. By this point, the patent on

the hook-and-loop technology had expired and many imitators began to crop up

throughout the world. Many of these were cheap and low-quality versions, which

forced Velcro to begin a lifelong battle of maintaining the integrity of its product’s

name to prevent it from becoming a generic term, much like aspirin, which was

originally a brand name. 

Velcro gained popularity in many new styles of use when, a 1984 interview between

David Letterman and Velcro’s USA director of industrial sales ended in Letterman jumping off a trampoline onto a wall while in a Velcro suit. This prompted many

companies to find innovative and versatile methods of using Velcro, from attaching electronic devices to car seats to toys with Velcro materials for catching balls.

Adaptation: A solution to a problem in one field is adapted for solving a problem in another field.

Technology transfer: Technological advances that form the basis of new designs may be applied to the

development of different types of products/systems, for example, laser technology. 

The invention of the laser grew from the interest of two researchers in studying the structure and

characteristics of a variety of molecules. During the Second World War, Charles H. Townes worked on

developing radar navigation bombing systems. After the war he had the idea of modifying the radar

techniques and using microwaves to study molecular structure. Subsequently he and Arthur L. Schawlow

collaborated at Bell Labs in the USA on using the shorter wavelengths of infrared and optical light to develop

an even more powerful tool – the laser (short for light amplification by stimulated emission of radiation).

They were granted a patent in 1960. However they had no thoughts about any applications of their invention

other than its use in their scientific research. Schawlow recalled: We thought it might have some

communications and scientific uses, but we had no application in mind. If we had, it might have hampered us

and not worked out as well. (Bell Labs, 1998) It was left to others to devise ways of exploiting this invention

in a commercial product. Although initially perceived by some as a weapon (a death ray), one of the first

practical applications was in medicine for eye surgery. Lasers have gone on to have widespread use in industry

for cutting and welding, in commerce for bar code readers, at home for entertainment (CD players, DVD

players), in data storage and retrieval in computers, and so on. The world market for laser technology is now

over $100 billion a year. 

Analogy: An idea from one context is used to stimulate ideas for solving a problem in another context.

Cats Eyes

The transfer of an idea from one context to another. Odd,

remote or strange analogies help to stimulate the mind in new

ways, e.g. “cat’s eyes” in the middle of the road or sonar based

on communication between marine animals. Drawing on a

similar situation for solutions. 

The cat's eye is a retroreflective safety device used in road

marking and was the first of a range of raised pavement

markers. It originated from the UK in 1934 and is used all over

the world. 

It consists (in its original form) of two pairs of reflective glass

spheres set into a white rubber dome, mounted in a cast iron

housing. This is the kind that marks the centre of the road,

with one pair of cat's eye showing in each direction. The

“Catseye” insert incorporates a self-wiping action which is

automatically performed by vehicle tyres depressing the centre

part of the rubber insert causing the reflectors to be wiped against the outer stationary wiper parts of the insert. 

Chance: An unexpected discovery leads to a new idea.

Teflon

Teflon was invented by chance. In 1938, 27 year old Dr. Plunkett and his assistant, Jack Rebok,

were experimenting with one such potential alternative refrigerant, tetrafluorethylene (TFE).

Dr. Plunkett subsequently created around 100 pounds of TFE and stored the gas in small

cylinders. On April 6, 1938, upon opening the valve on one of the supposedly full pressurized

cylinders of TFE that had previously been frozen, nothing came out, even though by its weight,

it seemed to still be full. The two then decided to investigate further by cutting the cylinder

open. Once they managed to get it open, they discovered that the TFE gas inside had

polymerized into a waxy white powder, polytetrafluoroethylene (PTFE) resin. 

Plunkett then proceeded to run tests on this new substance to see if it had any unique or useful

properties. Four of the most important properties of this substance discovered were that it was extremely slippery (one of the slipperiest substances known to

man), non-corrosive, chemically stable, and that it had an extremely high melting point. 

Three years later, the process and name of Teflon were patented and trademarked. Four years after that, Teflon first began being sold, initially only used for

various industrial and military applications due to the expense of producing TFE. By the 1960s, various forms of Teflon were being used in a variety of applications,

such as stain repellant in fabrics, electrical wire insulation, and the like. Today, Teflon or other brands of the same product are also used in windshield wipers;

carpets and furniture (as a stain repellant); light bulbs; coating on glasses; in various hair products; used in semiconductor manufacturing; automotive lubricant;

igniters for solid-fuel rocket propellants; and in infrared decoy flares, among other things. 

Technology push and market pull

Two models

There are two general drivers of invention: • One is the scientific and technological knowledge and skills that can be applied to invent a new product or process - Technology Push

• The other is the recognition of a need or a potential market for an invention - Market Pull

Technology push - Scientific research leads to advances in technology that underpin new ideas.

 An example of Technology Push is the hovercraft. Inventors don't always foresee the ultimate commercial

applications of their invention. However more often nowadays the starting point is basic scientific research

or applied research and development (R&D) in organizations. This proceeds through design and

development into a product that can be manufactured effectively and economically and then sold on the

market. 

Christopher Cockerell was an electrical engineer who decided to become a boat builder. He developed an

interest in increasing boat speed by reducing friction between the hull and the water. He had the idea of

supporting a craft on a low-pressure cushion of air contained within a high-pressure curtain of air. He built

a mock-up (model) to test his idea using a small food tin inside a larger coffee tin connected to a vacuum cleaner reversed to blow, all mounted above a set of

kitchen scales to measure the pressure exerted. It was three times the pressure of the blower than without the tins and confirmed his theory. There had been

previous attempts to build a vehicle that floated on air but Cockerell was the first to devise a way of containing the air cushion. 

The technology push model is a simple linear model that suggests that the innovation process starts with an idea or a discovery – it is sometimes called ‘idea push’.

Sometimes this is by a creative individual who has the knowledge and imagination to realise its significance and the practical skills to transform the idea or

discovery into an invention. 

The market is seen as a receptacle for the output of scientific research and invention; therefore an increase in basic and applied R&D should lead to an increase in

innovation. In the past government support for innovation in many countries consisted of bolstering science and the R&D supply aspect. 

An R&D team assumes it knows enough about the users’ needs to develop a new product without involving them in its specification or design. The team simply

develops the product and tosses it ‘over the wall’ to users in the belief that there's a need for it, the technology is complete and ready to use, and users are

technically skilled enough to use it without help. 

Now there are times when this approach can work. For example Sony's development of the Walkman personal stereo cassette player was not in response to any

need identified by market research. 

One of the co-founders of the company was using a Sony portable stereo tape recorder and standard-size headphones to

listen to a cassette. He complained about the weight of this system to the president Akio Morita. Morita ordered his

engineers to remove the recording circuit from one of their small cassette recorders (the Pressman) and replace it with a

stereo amplifier. In addition he asked for lightweight headphones to be developed. The headphones turned out to be the

biggest technical challenge in the project and were the most innovative component – everything else was a new

application of existing technology. 

Proposed in 1979 and manufactured from 1980, Sony was first to market with this innovative product There was skepticism within the firm as to the market appeal of a cassette player without a recording facility but Morita

– acting as a product champion – pushed through the idea. Almost from its launch the Walkman was successful. As with

many innovative products no amount of market research would have identified a specific need because one did not exist.

Success came from encouraging a latent need by providing people with an innovative product they hadn't known they

wanted. 

But such instincts on the part of a manufacturer as to what might make for a successful product are not always right. For

example Morita had assumed it was less antisocial to include a second headphone socket so that two people could share

their listening experience. He had also included a button-activated microphone so that the two listeners could talk to

each other over the music on a ‘hot line’. When this idea didn't catch on and it became clear that the early users really

valued this product as a personal device, those extra features were removed. 

But though the technology push model might describe the innovation process for some products, it only tells part of the story. There are numerous examples of

inventions that are good ideas, scientifically or technologically sound and available to the market, yet fail to become successful innovations. The notion that if an

idea is good enough, technology push will help it to overcome all obstacles to its innovation is a romantic one, but unrealistic. 

Technology push doesn't always work – the Dvorak keyboard

The QWERTY keyboard layout was developed by Christopher Latham Sholes to slow down the typist. The mechanical typewriters of the time often jammed if two

adjoining keys were struck rapidly in succession. Sholes rearranged the keys so that the most commonly used letter sequences were spread out, slower to find and

would converge from opposite sides of the machine. When typewriter mechanisms became more efficient the original justification for the QWERTY arrangement

disappeared. 

In 1932 Professor August Dvorak of the University of Washington used time-and-motion

studies to create a more efficient keyboard layout. The most frequently used letters in

English – A, O, E, U, I, D, H, T, N, S – were placed on the central, home row that could

then account for around 70 per cent of the typing, compared with 32 per cent of the

QWERTY keyboard's home keys. Dvorak also altered the balance of keys controlled by the

normally weaker left-hand from 57 per cent with the QWERTY layout to 44 per cent. 

However by this time there was significant vested interest in keeping the dominant design,

both for manufacturers and users trained on the QWERTY layout. Dvorak's keyboard was

not taken up and the QWERTY standard still dominates the market. 

Market pull - A new idea is needed as a result of demand from the marketplace.

The alternative market pull model suggests that the stimulus for innovation comes from the needs of society or a particular section of the market. These might be

needs perceived by an entrepreneur or manufacturer like Shaw and his cat's-eyes or they might be clearly articulated by consumers. According to this model a

successful approach to innovation would be to research the market thoroughly first, assess what needs exist, how far they are met by existing products and

processes and how the needs might be met more effectively by means of a new or improved innovation. The theory then is that once the appropriate technology is

developed a receptive market is assured because the innovation process has been tailored to meet a definite need. 

Therefore this model adds a stage of exploring market need before the invention stage of the technology push model. This approach might be characterised by the

classic saying, ‘necessity is the mother of invention’. 

Critics of the market pull explanation point out that because an important need exists it is no guarantee that an invention will emerge to meet that need.  

It is true that fulfilling human needs is an important incentive for inventors and innovators. This is especially so for improvements to existing products and

innovations aimed at obvious needs, such as safety (car airbags), health (new medicines), productivity (process innovations), food supply (new strains of wheat and

rice). So there is some truth in the view that necessity is the mother of invention; but this is only part of the story. Consumers cannot demand products that have

not yet been conceived but needs can be created by the emergence of an innovation. 

Coupling model There are examples where either technology or

the market appears to be more significant in

stimulating invention but the majority of

innovations involve a creative coupling of

technological and market factors.  

In some respects successful innovation is a case

of the survival of the fittest. Failure can come

both from not getting the technology right and

from misjudging the market. Success is more

likely if the focus is not too one-dimensional

but rather a balance between technology and

market considerations. But a key challenge with invention and innovation is that both technology and the market are changing constantly. What is technically unachievable today may be

possible in a few years time due to scientific advances, sometimes in an unrelated field. Likewise what cannot be sold today may come to be regarded as a

necessity by future consumers. 

The relationships between advancing science and technology and a changing market are complex. The skill of the companies and the people operating at the

interfaces between these areas is to make the connection between technological and market possibilities. It can be a creative process similar to the associative

thinking involved in the original invention itself, and is often the province of the entrepreneur. 

This coupling between technology and market needs is important at every stage of the innovation

process, from the first flash of inspiration, through the entire research, design and development

work to the introduction of the new product or process onto the market. 

Although the innovation process clearly contains both technology and market elements, any model

of the process has to introduce some sense of interaction and growing complexity. It must have

feedback loops and a variety of links both between science, technology and the market place, and

between innovating firms and the outside world. Rothwell's coupling model starts to suggest this

complexity. 

Overcoming obstacles to innovation

Getting the technology to work

A fundamental requirement for successful innovation is that the invention must work. It mustn't violate any scientific laws and it must be capable of being

transformed into a working prototype. In addition to getting the technology to work it must be designed to be easy to use and reliable, attractive, safe and

environmentally friendly. It must also be designed so it's capable of being manufactured on a scale that makes it economic to produce and to buy. Sometimes an idea for an invention is ahead of the technology, materials, components or knowledge needed to deliver it. The idea for television was suggested in

1877, almost 50 years before its actual invention. While the basic principles that were to lead to television were understood by the scientific community, these

hadn't yet been translated into the practical working components required – cathode ray tubes for example. Furthermore even the idea needed further time to

develop. At first it was perceived as a two-way interactive device for talking to others on screen – the ‘telephonoscope’.  

Getting finance and organizational backing

Like talk, ideas are cheap. Even generating a prototype of an invention can be cheap compared with the resources needed to produce and market an innovation.

The independent inventor or designer is likely to have to rely on family and friends for financial backing, particularly in the early stages. Seed capital is sometimes

available in the form of innovation grants from government bodies, such as the Department for Trade and Industry in the UK, which offers development funding to

individuals and small businesses. Eventually, however, most inventors need to access the sort of funds only a company or a venture capitalist can provide. Some

inventors decide to go into business for themselves because they distrust organisations or because they failed to persuade an organisation to take up their

invention.  

Choosing appropriate materials and manufacturing process

The choice of materials and manufacturing process for a particular new product is an important aspect of the innovation process. It is not necessarily the case that

the materials chosen for the early prototypes of an invention are those best suited for the larger-scale manufacture of the innovation. Choice of materials can

affect the performance, quality and economic manufacture of most new products, so it's important to choose wisely. While inventors and designers usually need to

seek specialist assistance when it comes to choosing materials, it helps to inform their choices if they have a broad overview of the main types of material and their

properties.  

In the same way that inventors and designers need knowledge of the range of materials available, they equally need to know the strengths and limitations of a

range of manufacturing processes. As with the choice of suitable materials for a product there will often be a number of feasible processes. The following are the

different criteria that can be applied to identify an optimum process in a particular case. • Cost – the capital cost of new equipment, the cost of dedicated tools such as moulds, the labour costs of setting up and operating the process, and the

assumed rate of depreciation for tools and equipment.

• Cycle time – how long it takes to process one item (part, component or product).

• Product quality – the standards required in terms of performance properties, surface finish and dimensional tolerances, and maintaining quality over time.

• Flexibility – how easy it is to produce different designs on the same equipment.

• Materials utilization – the amount of waste material generated during processing.

The relative importance of these criteria will vary depending on the volume to be produced and on whether the products will be identical or the same equipment

will be used to manufacture different designs. 

The basis of mass production is the complete interchangeability of components and the simplicity of attaching them to each other. With this increasing reliance on

interchangeability in a world dependent on mass-produced products, it becomes more important than ever to know that products are being manufactured

accurately to common standards and that their performance can be relied on.