Download Lecture 3 17. November 2016 File

Innovation Processes in Transition
Large Corporations
by Erkki Ormala
Professor of Practice, Innovation Management
Aalto University, Business School
Innovation process
1. Mapping the future business environment
– Extensive mapping covering key areas
2. Innovation strategy/business strategy
3. Implementation of the strategy
4. Expanding the markets and ecosystems
Mapping the future business environment
• Changing political, economic and regulatory landscapes,
technology developments, global and regional markets and
value chain analyses, competitor and competing ecosystem
evolution, changes in customer preferences in terms of
functionality, design and usability, etc.
The macro-forces: Shaping our world
and driving trends bigger and further
Finance: Existing players keep the
lid on imbalances as the centre of
financial gravity shifts to fast growth
economies
Technology: Interconnectivity
intensifies and application of
technology is seen as a solution to
many problems
Urbanisation: big cities – and
their problems - grow unchecked
but are seen as the cutting edge
development
Governance: most effort goes into
making the existing governmental
functions run more efficiently
Globalisation: Western consumerism
spreads but cultural products from fast
growing countries eclipse Western ones
Life-balance: The cut and thrust of
modern life makes it hard to switch
off, and play only slowly gains a
place in work
Demographics: A gradual flow of
immigration continues to palliate the
impact of demographic shifts
Business firms from high-growth
markets globalise, setting new rules
of play, forcing older players to
innovate or die
Resources: The feeling sets in that
we are running out, encouraging
aggressive rivalry to secure a
resource base
Belief: Ever more people aspire to
Western values, but this also
produces a aggressive backlash in
many cultures
4
Connectivity Scorecard
Canada
USA
Austria
Belgium
Czech
Denmark
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Netherlands
Norway
Poland
Portugal
Spain
Sweden
UK
Bangladesh
China
India
Indonesia
Malaysia
Philippines
Sri Lanka
Thailand
Vietnam
Iran
Pakistan
Syria
Argentina
Brazil
Chile
Colombia
Mexico
Egypt
Kenya
Nigeria
South Africa
Tunisia
Innovation economies
Russia
Ukraine
Turkey
Resource & Efficiency economies
Connectivity Scorecard 2011 May 2011
Australia
Japan
Korea
Singapore
New Zealand
2010 returned the TCO development back on track
after negative development in 2009
14.00
12.00
tax 15%
tax 14%
USD
10.00
tax 14%
tax 17%
service 79%
service 76%
-4%
8.00
service 74%
service 78%
6.00
- 12 %
4.00
2.00
0.00
handset 11%
2005
handset 8%
handset 7%
2007
handset 7%
2008
2010
2009
unpublished
results
6
NOTES
- 43%
2009 was the first
year since 2005
that witnessed
increase in TCO as
an aftermath for the
financial crisis.
2010 put the
development to the
right track and
overall TCO has
decreased by 14%
between 2005 and
2010.
Bangladesh
Sri Lanka
China
Pakistan
India
Uzbekistan
Kenya
Egypt
Vietnam
Sudan
Iran
Ethiopia
Cambodia
Thailand
Ghana
Uganda
Tanzania
Haiti
Indonesia
Algeria
Philippines
Tunisia
Bolivia
Guatemala
Mozambique
Nigeria
Senegal
Syria
Honduras
Côte d'Ivoire
Kazakhstan
Ecuador
Dominical
Republic
Guinea
South Africa
Madagascar
Zimbabwe
Burkina Faso
DRC
Colombia
Zambia
Malawi
Chile
Cameroon
Morocco
Turkey
Chad
Argentina
Peru
Brazil
US dollars
TCO < USD 5 enables the majority of the lowerincome consumers to use mobile communications
25
20
7
Eleven countries 2011 reach the
monthly TCO target of 5USD or
less.
From regions APAC is most
affordable with average TCO with
less than 5USD monthly.
15
Average 11.47 US dollars
10
5
0
NOTES
Innovation strategy
• Involves the SWOT analysis of the company capabilities with
respect to the changing global competition and defines the
key objectives and actions required to achieve them.
• Integration with the business strategy; In house v.s.
Partnering; Open innovation; IPR solutions, Public/private
partnership, Crowd sourcing,
Open Innovation
Engaging the World’s Leading Institutions
• Access and drive global intellectual vision
and insight
• Form strategic
collaborations with world-leading institutions
to multiply our efforts
• Build global test beds to learn from broader
audiences
Open Innovation
Research
University
Knowledge
sharing
EO.PPT /Lund 7-8.7.2009
Education
Open Innovation/Knowledge Sharing
•
Complementary competence and excellence
•
Genuine commitment for knowledge sharing/trust
•
Collaboration platforms/joint campus presence
•
Mobility of research personnel
•
R&D/recruitment/education all involved
•
Transparent management and collaboration rules
•
Fair rules for IPR ownership and use
•
Reformed reward and incentive systems
EO.PPT /Lund 7-8.7.2009
IPR solutions
• Full ownership – open access
• How to manage the IPR portfolio: Licensing, (FRAND
principles) sharing, free access
• Joint ownership
• Right to use
• Foreground, Background Sideground
• International consortiums
IPR Guidelines
1) Foreground: all parties have access right royalty-free to all
foreground generated in the project
2) Background:
•
•
•
A) parties shall grant access right to background if it is needed for
the project work (royalty free)
B) parties shall grant access right to background if it is needed for
the commercialization of foreground (FRAND)
C) each consortia decides if they will create inclusion lists or
exclusion lists
3) Ownership: Joint ownership is not preferred
Implementation of the strategy
Involves resource allocation, product and service specifications,
milestones and progress approval decision
Project
Launch
Control point 1
Decision go/no go
Phase 1
Phase 2
Control point 2
go/no go
Phase 3
Issues to be followed in addition to the progress: business environment,
competition, markets, opportunities for partnering/outsourcing etc.
Time
Control point 3
To the market
Absorptive Capacity of firms
Five Key Principles
•
•
•
•
•
•
Personal motivation and incentives
Enabling mangement system
Efficient use of web tools
Extensive collaboration with external partners
Stimulating corporate culture
But these are not enough, as …
Expanding the markets and ecosystems
• Expanding the market prospects of the new innovation
Innovation networks
enable new ways of knowledge creation and utilization
with orchestration capability
to extended enterprise
Demand
orchestration
Demand
orchestration
Architecture
orchestration
From traditional large
enterprise
Architecture
orchestration
Supply
orchestration
Innovation
orchestration
Supply
orchestration
Innovation
orchestration
Demand
orchestration
Partners
Demand
orchestration
Architecture
orchestration
Core
Supply
orchestration
Innovation
orchestration
Core
Architecture
orchestration
Supply
orchestration
Innovation
orchestration
Innovation
orchestration
Demand
orchestration
Demand
orchestration
Architecture
orchestration
Architecture
orchestration
Supply
orchestration
Demand
orchestration
Innovation
orchestration
Architecture
orchestration
Supply
orchestration
Demand
orchestration
Innovation
orchestration
Architecture
orchestration
Architecture
orchestration
Innovation
orchestration
Supply
orchestration
Demand
orchestration
Innovation
orchestration
Supply
orchestration
Supply
orchestration
Crowdsourcing
Open Innovation
Co-Creation
User Innovation
Social media
Source: Modified from Schenk and Guittard, 2009
Concluding remarks
• Innovation processes are in transition; Network collaboration,
open innovation, public/private partnerships; crowd sourcing;
social media; etc.
• Respect the new innovation paradigm
• Innovation processes are complex and systemic; not linear
• Will challenge the innovation policy intrument portfolio
• A joint R&D program with Aalto, TEKES, Technology
Industries and the Federation of the Finnish Industries
• A wider European study in preparation in collaboration with
the OECD and the ERT
Thank you