Department of economics couse work from innovation economics theme: models of innovation processes

Sixth-Generation Innovation Model (6G) – Open Innovation Model

As Chesbrough defines, “Open innovation is the use of purposeful inflows and outflows of knowledge to accelerate innovation internally while also expanding the markets for the external use of innovation.”

3. The main concepts of the development and models of innovation processes.

It looks out for technological advancements by combining internal and external ideas. The funnel representation shows- Initiating with a large pool of ideas to narrow down later at the best choice of the idea. 

The 4 Main Types of Innovation:

There are various types of Innovation. Most often the characteristics of each innovation type make them overlap. The following types are the most common and basic forms of innovation.

So here goes the 4 main types of innovation or innovation matrix…

1. 
   Incremental Innovation
   

As the word says, Incremental innovation is increasing the current value of the product. It makes the product a better version than the previous one. So, it can be about improving efficiency while retaining the core features. It focuses on improving the experience of the current customer market. 

2. 
   Disruptive Innovation
   

Disruptive innovation is a market disruptor. They blow away the existing market or industries. This innovative power makes a non-customer into their customer. It set forth the failure of traditional business models which require a new variation for survival.

3. 
   Sustaining Innovation
   

Sustaining innovation is more or less like Incremental innovation. It grows its existing market while focusing on current customers. They take small steps of innovation to grow their business.

4. 
   Radical Innovation
   

Radical innovation is similar to Disruptive innovation. This takes an extensive length of time to make disruptive changes. Thus making it a rare innovation type. It brings transformations that were previously unknown to the world. Innovations for example computers, mobile phones, and the internet. So, these innovations have completely changed the way of communication in the entire world. 

• 
  Innovation Strategy
  

An innovation model can adopt any of the Innovation strategies. Innovation strategies determine the intensity of the innovation process. Here are some of the innovation strategies:

• 
  Proactive Innovation Strategy
  

Proactive innovation is an outcome of rapid technological development and shorter economic cycles. It focuses on creating a new market niche and customer. They are their competitors. Therefore, they step in the market intending to create disruption. For eg: Apple.

• 
  Active Innovation Strategy
  

Active Innovation is a defensive strategy against competitors. It’s mainly upgrading current technology to respond to rapid market changes. The innovators drive for medium to low risk. So, the companies invest a good deal in research and development. For Eg: Microsoft

• 
  Reactive Innovation Strategy
  

Reactive Innovation is a wait-and-see approach. They need not proactively seek to evolve the product. They wait to get evidence of the product’s success from the market. So, they duplicate proven market innovation. Instead, they are operationally focused to adapt to business pressure. Thus, paving their way to survive in the market. 

• 
  Passive Innovation Strategy
  

Passive innovators are ‘chillers’ of the market. They wait for a demand to arise. So, they don’t act until the customers demand changes in current products.

Their core approach is to produce as per customer’s reviews and expectations. Whereas Proactive innovator searches for hidden expectations and responds to the market.

• 
  Process of Innovation Model
  

The Innovation Model process is the method of bringing an idea or invention into reality as a product. The innovation model should make the process economical and great value driver.

In this we will go through the steps in the Innovation Model process:

1. 
   Idea Generation
   

The first step is choosing a concept to develop. At the organizational level, it involves taking into account the customer’s and employees’ opinions. Before considering an idea, answering the reasons to develop the idea will give clarity in vision. Therefore, along with internal advice, opinions of customers, partners, and suppliers will give direction to your Innovation process.

2. 
   Screening
   

One can get a bunch of ideas. Will you implement them all? No, That’s impossible! Thus, screening of ideas will help to make the right choice of ideas. So, measuring the benefits and potential risks of ideas while screening will determine the Business idea viability. 

3. 
   Experimentation
   

As the right idea is selected. All these questions will be answered when you do a pilot test in your target market. If the idea is too complex or too early for the current market, the implementation should be dropped. 

Even if the target market accepts your product, one should not haste to release the product immediately. Instead waiting for the right time to launch the project will increase the chances of winning in the market. 

4. 
   Commercialization
   

If you reach here, that means you have survived all the previous battles. Here your focus is to increase product awareness. Product awareness should be accompanied by a persuasive approach. Most often, customers are not even aware that they needed this innovation. Thus, demonstrating its benefits and being specific about its usage will attract the customers. 

5. 
   Implementation
   

Here the focus is to build the reality of the idea. It includes production, operation, logistics, marketing, selling, and taking consumer feedback.

Hence, building relations with investors, suppliers, customers, government, etc. to implement the innovation.