Types of Innovation
Rev: Aug, 2012
Euiho (David) Suh, Ph.D.
POSTECH Strategic Management of Information and Technology Laboratory
(POSMIT: http://posmit.postech.ac.kr)
Dept. of Industrial & Management Engineering
POSTECH
Contents
1.
Product vs. Process
2.
Radical vs. Incremental
3.
Competence Enhancing vs. Competence Destroying
4.
Architectural vs. Component
Product vs. Process
■ Product Innovation
– Embodied in the outputs of an organization
– In the outputs: Goods or Services
– Examples
Hybrid cars
Smart Phones
HD TV, 3D TV
■ Process Innovation
– Innovations in the way an organization conducts its business
– In Producing or Marketing goods or services
– Examples
• Redesign of Industry Value Chain:
 Customer Self Service (e.g. self-oiling service)
 Customer-to-customer (e.g. eBay)
• Redesign of Processes:
 Use of real-time and geographical information (e.g. Asiana Airlines Baggage handling system)
 Workflow management and document management (e.g. ERP)
3
Radical vs. Incremental
■ Radical Innovation
– New and different from previously existing products and processes
– Example
Film Camera  Digital Camera
■ Incremental Innovation
– Minor change from (or adjustment to) existing practices
– Example
Slimmer or Smaller
4
Competence Enhancing vs. Competence Destroying
■ Competence-enhancing Innovation
– Builds on existing knowledge and skills
– Example
Intel’s Pentium 4 built on the technology for Pentium III
■ Competence Destroying Innovation
– Renders existing competencies Obsolete
– Example
Electronic calculators rendered Keuffel & Esser’s slide rule expertise obsolete
5
Architectural vs. Component
■ Architectural Innovation
– Changes in the overall design of a system
– Example
High-wheel bicycle to Safety bicycle
■ Component Innovation
– Changes to one or more components
– Example
ABS of automobile
6