An innovation model can be defined as a construct or framework to represent the dynamic of the innovation process in order to understand the activities, attributes or the contributions from the different players involved. Innovation models have not been always the same; they have changed over the years (Table 1.8). Early models considered innovation as a linear sequence of functional activities [86], [97], [98], which starts from i) basic research, ii) applied research, iii) experimental development, iv) initial production and v) diffusion [98]. During the first 20 years following the Second World War, there was an economic growth of advanced market economies as a result of a rapid industrial expansion and the emergence of new industries based largely on new technological opportunities. This first generation, or the Technology-Push concept of innovation assumed that more R&D generates more successful new products [99].
Towards the second half of the 1960s, while manufacturing output continued to grow, and a general prosperity perception remained high, levels of industrial concentration increased with more importance were being placed on static scale economies. Innovation process began to change with a marked shift towards emphasizing demand side factors, as for example the market place. This resulted in the emergence of the second generation or Market-Pull model of innovation in which the market was the source of ideas for directing R&D, which had a merely reactive role in the process [86], [99].
The third generation began at the early 1970s and middle of 1980s, a decade of severe resource constraint. Thus, it became increasingly necessary to understand the basis of successful innovation in order to reduce the incidence of wasteful
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failures. This was the origin of the Coupling Model, which states that the successful innovation process could be modelled on the basis of a portfolio of wide-ranging and systematic studies covering many sectors and countries. Technology-Push and
Market-Pull models of innovation were extreme and atypical examples of a more
general process of interaction between, on the one hand, technological capabilities and, on the other, market needs. However, innovation was not considered a linear path anymore [94].
Figure 1.5 exposes a more recent conception of a nanotechnology innovation pathway that considers technology-push and market pull. The model is based on the design of nanoparticles and nanostructures, considered the building blocks of product design. In this model, understanding process improves optimal manufacturing process design. Following, product design needs to be conceived to understand the value chain and customer needs. Then understanding the value chain, it the particle design can be tested again [100].
Subsequently, in a fourth generation period, a crucial feature was the recognition in the West that the remarkable competitive performance of Japanese companies in world markets was based on considerably more than the combination of technological imitation, relationships with primary suppliers and efficient, quality- oriented production procedures. In the fifth-generation innovation process, strategy trends established during the 1980s continue, with some intensifying in importance.
Table 1.8. Progress in conceptualizing innovation models.
Generation Period Key Features
First 1950s - Mid 1960s The linear models: linear progression from scientific discovery, through technological development in
firms, to the marketplace. Technology push.
Second Mid 1960 - Early 1970s Market Pull: processes change with a marked shift towards emphasizing demand side factors.
Third Early 1970s - Mid 1980s Interaction between different elements and feedback loops between them. The coupling model.
Fourth Early 1980s - Early 1990s
The parallel lines model, integration within the firm, upstream with key suppliers and downstream with demanding and active customers, emphasis on linkages and alliances.
Fifth 1990s - 2000s Systems integration and extensive networking, flexible and customized response, continuous
innovation.
Sixth? Post - 2000
Efficient R&D with a global marketing research (Market globalization). Open Innovation and social entrepreneurship.
Source: Adapted from [74].
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Figure 1.5. Nanotechnology innovation roadmap based on technology-push and market- pull (Source: adapted from [100]).
Leading companies remain committed to technological accumulation, strategic networking continues, speed to market remains of importance, firms are striving towards increasingly better integrated product and manufacturing strategies, greater flexibility and adaptability are being sought; and product strategies are more strongly emphasizing quality and performance features. In addition, growing concern over the degradation of the physical environment, which is resulting in intensifying regulatory activity, is once again placing regulatory issues firmly on the corporate strategy agenda [99].
As shown before, innovation is a process of endless transition [94]. This can be also evidenced by the indicators of innovation measurement that have evolved from R&D expenditures (1950s-60s), patents/publications and quality change (1970s- 80s) indexing and benchmarking (1990s) to networks, clusters, and management techniques (>2000) [92]. Is in this context that we are probably facing the sixth- generation model based on marketing research with high significance in open translation of technology including open-source innovation and social entrepreneurship. However, these alternative innovation models are still “marginal” [101]. At the industrial level, Joseph Schumpeter, an outstanding economist and political scientist, brought up two new patterns of innovation and he classified as radical or Resources & Cost Kn ow le d ge In te n si ty & V al u e Cr ea ti on Particle Design • Nanoparticles • Nanostructures Process Design • Process efficiency • Integrated manufacturing Product Design • High performance • Knowledge intensity Value Chain Design • Consumer benefits • Value in use
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incremental. The first one shapes big changes, while the second one fills in the
process of change continuously. At a firm level, Nelson and Winter (1982) and Kamien and Schwartz (1982) introduced the labels Schumpeter as Schumpeter Mark
I and Schumpeter Mark II to characterize synthetically the theoretical models of
innovative activities proposed by Schumpeter.
The first label is also known as “creative destruction” pattern where innovations are introduced by firms that did not innovate before, which is called “widening”. Schumpeter Mark I industries are characterized by turbulent environments with relatively low entry barriers where innovations are mostly generated and developed by new “entrepreneurial” firms. Accordingly, technological competition among firms in Schumpeter Mark I industries assumes the form of “creative destruction” with successful innovating entrants replacing the incumbents. Vice versa, Schumpeter Mark II industries are characterized by stable environments with relatively high entry barriers in which innovations are generated and developed by large established firms. In Schumpeter Mark II industries technological competition is related to a creative accumulation pattern where innovations are introduced by firms that innovated before: it is called 'deepening' [102], [103]. In 1934 in the “The Theory of Economic Development”, Schumpeter proposed a list of various types of innovations:
• Introduction of a new product or a quantitative change in an existing product; • New process of innovation to an industry; • The opening of a new market; • Development of new sources of supply for raw materials or other inputs; • Changes in industrial organisations [88]. On the other hand, in 1982, Freeman proposed a classification system based upon degrees of innovation: revolutionary and radical or incremental. Many have drawn on this typology to describe pharmaceutical innovations. The term “revolutionary” innovations can be used to describe major conceptual advances such as the identification of microbes and classes of anti-infection agents (Microbiological Revolution of late 19th & early 20th century). Alternatively, the distinction between
radical and incremental innovations offers a convenient approach to making more subtle distinctions. For example, a new understanding of a disease mechanism and a new mode of action, which interferes with the disease process at a molecular levels can be described by the term radical innovation. Within this envelope, however, alternative molecules developed with different attributes, which offer value in treating particular disease variants or patient segments, can be referred to by the term “incremental” innovation [86].
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A radical innovation could be considered the first product in a new class to market, while all those following are labelled incremental innovations. Alternatively, the term radical might be used to describe the class as a whole, reflecting the collective effort of the range of players involved in the process, and all the products would be referred to as “incremental” alternatives. The term radical is thus reserved for the process, while the term “incremental” is used for individual products. The majority of the innovation models used are based on assembled products or service products [28]. However, early models of the innovation process are not suitable enough to capture the complexity of innovation in the life sciences sector. In particular, narrow classifications which describe innovations as radical or incremental are not particularly useful when considered in the context of the complex patterns of interrelated innovations observed in practice [86].
Another perspective of innovation models is based on the term Open Innovation
(OI), defined by Henry Chesbrough (2003) as “a paradigm that assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as the firms look to advance their technology” [104] (pp. xxiv). It is
also defined to be a process of innovating with partners with whom risks and rewards are being shared [104], [105]. This model stresses the importance of new business models, other than traditional company-held intellectual property protection, for knowledge and for being connected to global and multiple diverse knowledge sources [106].
The OI model involves two way flow of intellectual property and human capital between firms and the transfer of intellectual property and people from universities and research labs to large and small companies [105]. Additionally, this model eliminates the need for vertical R&D organisations spanning the whole spectrum of discovery and research, eliminating costly infrastructure duplications and saving significant funds [107]. In this context it could be said that organisations involved in this model are Universities, Scientific Parks, Research Labs, startups, SMEs and large firms. In particular, Scientific and Technological Parks (STPs) are natural candidates to become multi-way connectors for OI. It has been mainly started in the high-tech sector, but there is a new trend for the low-tech sector to exploit the potentials of opening up their innovation process [108]. In this context, this model has also gained importance in the nanotechnologies industries [109]
More recently, new innovation models approximations are emerging. For instance, Clausen et al., (2013) defined a new taxonomy of innovation based on four modes ‘‘open exploration’’, ‘‘closed exploration’’, ‘‘open exploitation’’ and ‘‘closed exploitation’’. This type of classifications combines in a new way two well-known theory streams: closed/open innovation and exploration/exploitation [110].
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