INNOVATION MICHAL JIRÁSEK (EVA ŠVANDOVÁ) Business Management in the Czech Republic ROADMAP OF THE LECTURE 1.Importance of innovations 2.Innovative thinking 3.Fundamentals of innovation theory 4.Typologies of innovations 5.Creation of the innovations (sources, innovation cycle) 6.Protection of innovations 7.Innovations in the EU 8.Innovations in the Czech Republic 9.Back to theory 10.Bonus: The most innovative companies IMPORTANCE OF INNOVATIONS Why are innovations important? In a galaxy long time ago… Source: Classification of common success factors (Lönnqvist, 2002), performance indicator JUST ONE OF THE SUCCESS FACTORS? ASK IN KODAK… INSIDE THE BOX “If I had asked people what they wanted, they would have said faster horses.” - Henry Ford IT IS A VALUE THAT MATTERS WHAT A CUSTOMER WANTS? TO THE THEORY WHAT IS INNOVATION Schumpeterian innovation innovation vs. imitation New combination of existing production factors (Schumpeter) Innovation according OECD (Oslo Manual): Product innovation Process innovation Organizational innovation Marketing innovation schumpet WHAT IS INNOVATION Innovation is the renewal and enlargement of the range of products and services and the associated markets; the establishment of new methods of production, supply and distribution; the introduction of changes in management, work organization, and the working conditions and skills of the workforce. (European Commission definition) WHAT IS INNOVATION Nice definition: Every change with a positive impact on a firm (Jirásek) TYPES OF INNOVATION Object of innovation (Oslo manual): Product innovation Process innovation Marketing innovation Organizational innovation Radicality of innovation Radical innovation Incremental innovation Christensen innovation – according impact on existing market Disruptive Sustaining Chesbrough: Open Closed INNOVATION LEVELS ACCORDING VALENTA Level What changes Example - N Degeneration Decrease of features Depreciation 0 Regeneration Recovery of features Servicing, repairs 1 Quantity Quantity of factors Additional manpower 2 Intensity Speed of operations Faster in one factor 3 Reorganization Distribution of operations Swap of operations 4 Adaptation Ties to other factors Design 5 Variant Partial quality Faster machine 6 Generation Design resolution Machine with electronics 7 Kind Design conception Nuclear power plant 8 Family Technology principle Non-woven textiles 9 Tribe Approach to nature Gene manipulation Image:Disruptivetechnology.gif MODEL OF INNOVATION PROCESS tiddbessant Source: Tidd and Bessant, 2009 goal Source: http://innovationcenter.deteconusa.com/articles/innovation-performance-measurement-assessing-and-dr iving-the-innovation-performance-of-companies/ KEY ACTIVITIES AND SUCCESS FACTORS OF THE INNOVATION Picture41 SOURCES OF INNOVATION Internal Own research and development Technical departments – projection, technology, construction Production Marketing and selling Logistics (purchasing and supply) Servicing Owners External §Customers §Suppliers §Competition §Consultants §Universities and other research institution §Expert publication §Internet §Exhibitions §Investors §….. BARRIERS OF INNOVATION § Motivational § Communication § Economical § Technological § Personal § Organizational § Ecological INTELECTUAL PROPERTY RIGHTS Patents Utility models Trademarks Industrial designs Geographical indications and appeallations of origins coca-cola EUROPEAN UNION INNOVATION AND EUROPEAN UNION Innovation and EU Lisbon strategy Adopted in Lisbon Golas translated into the Framework Programmes for Reserach and Technological development November 2009 – Wim Kok revised EUROPE 2020 Trendchart EIS Innobarometr CIS EU EU MEMBER STATES’ INNOVATION PERFORMANCE, 2013 Source: Eurostat CZECH REPUBLIC Source: Český statistický úřad (Czech Statistical Office) CZECH NATIONAL INNOVATION SYSTEM National Policy of Research, Development and Innovation in the Czech Republic for 2009–2015 appoved by the governmental resolution no. 729 No legally defined institution responsible for innovation that prepares and implements innovation policy. MIT, MRD, ME Innovation governance system: Governmental bodies: The Ministry of Education, Youth and Sports (MEYS), The Research and Development Council (R&D Council), The Ministry of Industry and Trade (MIT), National Economic Council (NEC), Technology Agency of the Czech Republic. Bodies responsible for implementation of policies: CzechInvest , Czech-Moravian Guarantee and Development Bank, Czech Science Foundation , The Technology Centre of the Academy of Sciences of the Czech Republic , The Association of Innovation Entrepreneurship of the Czech Republic , The Czech Chamber of Commerce INSTITUTIONS Development: §Excellence centres, Business incubators, Research and science parks, universities §Industrial Property Office §Grant agency (primary research) §Ministries (applied research) – especially MIT, MEYS Realization: §Czech Trade §Czech Export Bank §Export Guarantee and Insurance corporation §Czech Confederation of Commerce and Tourism Companies with innovative activities in the Czech Republic in 2010–2012 Indicator Companies with innovative activities Indicator Companies with innovative activities Number % Number % Czech Republic 9 765 43.9% Ownership Size Local 7 122 41.0% Dmall /10-49 emp./ 6 466 38.2% International 2 643 54.1% Medium /50-249 emp./ 2 402 57.6% Sector Large /250+ emp./ 897 78.7% Mining and drilling 27 23.2% Regions (NUTS 2) Manufacturing 5 516 48.3% Prague 2 269 45.1% Utilities (power, water,…) 97 35.5% Central Bohemia 892 42.6% Water and waste 182 34.0% South-west 992 43.1% Wholesale, excl. Automotive 1 970 42.3% North-west 621 38.7% Logistics 426 19.2% North-east 1 296 43.3% ICT 788 64.8% South-east 1 613 44.4% Banking and insurance 188 55.9% Central Moravia 1 222 47.4% Engineering, R&D, Marketing 571 38.9% Moravia-Silesia 860 42.6% BARIERS FOR INNOVATIONS IN THE CZECH REPUBLIC 2010-2012: 1.Lack of financial resources in a company (56 %) 2.Too high costs of innovations (52 %) 3.Uncertain demand for innovated products/services (43 %) 4.Lack of qualified personnel (34 %) 5.Innovations not required (33 %) 6.Market controlled by established companies (32 %) 7.Lack of financial resources outside a company (24 %) 8.Not necessary to innovate due to previous innovations (20 %) 9.Difficulties to find a partner for cooperation (18 %) 10.Lack of information about a market (14 %) 11.Lack of information about a technology (8 %) EXPENDITURES ON INNOVATIONS IN THE CZECH REPUBLIC 2012: 1.Purchase of machines, tools, software (48 %) 2.Research & Development (26 %) 3.Purchase of R&D services (18 %) 4.Other expenses… INNOVATION ENVIRONMENT IN THE CZECH REPUBLIC Weaknesses Low number of students studying technical studies and science Lower support of innovation by national institutions Low number of innovative companies low support of spin-off firms Low emphasis on patents Bad experience with realization of research results in practice Low volume of risky capital Absence of the innovation law Insufficient innovation infrastructure INNOVATION ENVIRONMENT IN THE CZECH REPUBLIC Strengths Tradition of industrial production and traditional innovative potential of workers Growing interest of Universities to cooperate with industrial companies Development of science and technology parks Programmes supported by government Interest of the public in innovation issue SUM IT UP AND MOVE FURTHER WHY ARE INNOVATIONS IMPORTANT (ACADEMIC RESEARCHES) AND FACTORS INFLUENCING THEM? Increase in customer value, starting the growth Relationship between country employment and radicalism of the innovation Traditional companies which have survived, are those employing qualified personnel, being less bureaucratic, investing more in flexible production Decentralized companies within uncertain environment were more innovative than centralized one (Russel, 1990) Innovative industrial companies = higher level of formalization x innovative service companies = lower level of formalization (Damanpour 2007) Successful innovation is normally a source of temporary market power, eroding the profits and position of old firms, yet ultimately succumbing to the pressure of new inventions commercialised by competing entrants. TOOLS TO INFLUENCE INNOVATIONS Systematic innovation management Corporate strategy Collection of innovative incentives Stipulate the priorities of innovation topics Seeking for innovation ideas and creation of innovation specification Discussion on the specification Feasibility study Decision Processing of the project Realization of innovation Innovation work evaluation Investment into the R&D? higher R&D spending does not guarantee "more creativity, higher profit or a greater market share Cooperation q BONUS: THE MOST INNOVATIVE COMPANIES THE MOST INNOVATIVE COMPANIES 2008 THE MOST INNOVATIVE COMPANIES 2015 What do you think? ACCORDING TO FORBES… More on: http://www.forbes.com/innovative-companies/ Alternatively: http://www.fastcompany.com/section/most-innovative-companies-2015 MOST INNOVATIVE COMPANIES SURVEY OF SENIOR EXECUTIVES 2007 Source: BusinessWeek-Boston Consulting Group What are the biggest obstacles to generating a return on your investments in innovation? How does your company measure its success with innovation? If your company is planning to increase its R&D investment in low-cost regions this year, in which of the following regions will you focus your attention? If your company is planning to increase its R&D investment in low-cost regions this year, which of the following types of investment will you make? BONUS 2: VIDEOS Short videos on Youtube: §https://www.youtube.com/watch?v=I9ykkOA1mJw (1:20) §https://www.youtube.com/watch?v=IiyMkOfycOg (2:19) § The Simpsons, 26x12, The Musk Who Fell to Earth TEDx speech (on Youtube): §The art of Innovation | Guy Kawasaki: https://www.youtube.com/watch?v=Mtjatz9r-Vc (21:15) § THANKS! SOURCES (PICTURES) S4: Earth: https://pt.wikipedia.org/wiki/Terra S5: iPhone: http://cdn.macrumors.com/article-new/2013/04/iphone.jpg?retina S6: Robots: https://www.flickr.com/photos/jurvetson/7408451314 S8: Kodak: https://www.flickr.com/photos/pranavbhatt/7324849448 S10: https://en.wikipedia.org/wiki/Royal_Mews#/media/File:Royal_mews_brougham.jpg https://commons.wikimedia.org/wiki/File:Grandpa%27s_first_car,_Model_T_coupe,with_artillery_wheels _Edward_a_O%27D.jpg http://www.beyond.ca/bmw-shows-off-435i-coupe-with-m-performance-parts/28243.html https://www.jtp.io/res/js1k_2015/0_inspiration_3.png S11: Hamburger: https://www.organicconsumers.org/sites/default/files/bnt.png