Abstract This chapter details the author’s contribution to the development of innovation studies, moving them from largely ‘demographic’ (characteristics of products) and linear (design, production, diffusion) perspectives to a more dynamic model, through collaboration with Bill Abernathy. Their work drew attention to the process that led to an industry-wide solution—a ‘dominant design’. This process has major implications for understanding industry dynamics, since a period marked by the entry of many, often co-located firms will be followed, as the dominant design takes hold, by efficiency improvements and increasing consolidation. Industries differ in the speeds of entry and exit, as well as the height reached by their peak—with both movements largely dependent on the size of the market. This model highlights the importance of new entrants for innovation, while pinpointing to the reluctance of most incumbents to engage in product rather than process innovation.

Mature companies often lack the vision and resolve to fully commit to new technologies - even when consumers are ready for them. This leads companies to develop watered-down products with limited capabilities and leaves them exposed to upstart competitors.

The field of innovation studies is highly fragmented. It has not been adopted by any discipline as its own, and is in need of integration both with theory and other fields of study. A good deal of thought and effort is now under way to redefine and reformulate the field, through conferences and publications. No single set of variables will suffice to provide a workable model or a predictive understanding of innovation. A wider, more holistic appreciation is required of the phenomena involved. This requires moving beyond units of analysis such as the individual group, project or innovation to comprehend change at the level of the firm, and to encompass changes in software, services and management within the framework as well. It requires that we focus on interactions between firms and among collections of firms as our aim is to understand strategic points of leverage in the process, and it requires that we look at the changes in and interaction among variables over time. The purpose of this review is to identify the clusters of ongoing research and research issues in this new field which are most important with respect to the growth and development of industry in advanced economies such as Sweden and the United States. The most promising problems for further research will be discussed. This review is limited to the United States.

The confluence of nanotechnology and biotechnology provides significant commercial opportunities. By identifying, classifying and tracking firms with capabilities in both biotechnology and nanotechnology over time, we analyse the emergence and evolution of the global nanobiotechnology industry.

A confluence of technologies evolves when more researchers begin to work at the intersection of two or more technology streams, and when products based on this intersection of technology begin to emerge. Thus, a confluence of technologies is characterized both by the bringing together of formerly disparate fields of knowledge and by the creation of new product markets. This paper reviews the literature that proposes that radical innovation and the emergence of new industries are more likely at the confluence of technology streams. From this literature we develop propositions about opportunity creation from the confluence of technology. We refine these propositions to apply specifically to a predominant confluence of technologies: that of nanotechnology and biotechnology.

As scientists are able to understand and manipulate ever smaller scales of matter, research in the fields of biotechnology and nanotechnology has converged to enable such radical innovations as lab-on-a-chip devices, targeted drug delivery, and other forms of minimally invasive therapy and diagnostics. This paper provides a descriptive overview of the emerging bio-nano sector, identifying what types of firms are entering, from what knowledge base, where they are located, and their strategic choices in terms of technological diversity and R&D strategy. The firms engaged in bio-nano research and development span the range from start-up firm to multinational pharmaceutical, biotech, chemical, and electronics firms: two thirds of bio-nano firms are relatively young and relatively small. The United States dominates this sector, with more than half of all bio-nano firms located in the USA. Even within this sector which epitomizes the convergence of technology, there is a broad range of technological diversity, with the most diverse firms overall coming from a base in electronics, the most diverse start-up firms coming from a base in nanomaterials, and the most narrowly focused firms coming from a biotechnology/pharmaceutical base. We find that hybridization has been the dominant knowledge diversity strategy, with 93% of the bio-nano firms with nano-patents holding multi-class patents.

The following sections are included:Design as innovation of meaningsGiving meaning to designPursuing design-inspired innovationThe design discourseThe design discourse in the Milan systemInvolving designers as brokers of languagesEndnotes

What makes products great? What is the role of design firms in creativity and innovation, and how is this role changing? What accounts for design firms’ successes? How is the process of innovation and design changing? Does this differ between products and services? This paper reports the results of a study undertaken by the author and six others to address such questions, and is based on interviews of the founders of nearly one-hundred design firms in four countries and several industries. The sample ranged from three divisions of the largest international design firm to some of the smallest and newest ones. Manufacturers are responding to changes in technology and market demands by trying to introduce new products into the market more rapidly. They are struggling with new technologies and converging technologies that are creating opportunities for development of whole new product categories and for the entry of new types of competitors. While larger firms enjoy great resources in technology and science, these resources seem to be growing more available and open to all. There is also a growing richness of variety in the component supply environment, which enables greater creativity, combination and variety at the system level, but at the same time also widens competition; doubly so when new materials and software capabilities are considered. The innovation process seems to be becoming more networked, involving a greater number of actors including users, design firms and suppliers. The spread of roles across boundaries appears to be aided and abetted by open standards and increasing use of open source innovation processes. There is greater availability of a widening variety of sophisticated design tools such as computer aided design, simulation and visualization techniques, conferring innovative capabilities on smaller groups and organizations. In addition to the industrial design services they historically offered, many design firms are now providing turnkey services for new products and even entire product lines. That is they are more actively providing material and component choices and sources and marketing concepts to manufacturers in addition to product designs. We conclude that to be successful today products must be distinguished by more than sufficient function, consistent quality and low costs. A few of the welter of products in the market seem to account for the bulk of sales and profits in many categories. We believe that these examples emphasize customer delight, elegance and enduring value. They may even acquire increasing value over time. Our findings and examples imply that much competitive advantage might be gained by reconsidering traditional products with a fresh eye and approach using newer materials and design techniques. This paper is the first chapter of a book titled Design-Inspired Innovation by the same authors to be published later this year by Imperial College Press-World Scientific Publishers. What Makes Products Great? A design-inspired product delights the customer. The product emphasizes sophisticated simplicity and economy of means and low impact. If a product’s use is apparent, simple, and clear, it will stand out from all those that compete for our attention. Great products are those that have grown in meaning and value over their—and generations of users’—lifetimes. They capture our hearts and make our lives easier, better, or more interesting. Elegant products live on long after trivial variations have been relegated to the trash heap. Design-inspired innovation requires creativity of a higher order, whether the products are professional tools, machinery for production, consumer goods, or services. It is, in essence, a synthesis of technology and users’ experiences—boundaries that we observe blurring. Increasingly, products succeed because they have associated software and services that enhance their value. In the end, what the user remembers is a delightful experience with the entire package, and not whether that experience was provided or enabled by any particular aspect of the design. Most innovation improves products along accepted trajectories of higher performance and lower cost. By contrast, strikingly innovative products broaden and change the boundaries of performance, usefulness, and meaning. Few designs result in products that create such dramatic market success that they drive a company’s overall competitive strategy. People today hunger for products that offer more than sufficient function, high quality, and low cost. Even superb functionality no longer assures success for a new product. To achieve inspired designs and innovations, the aspiration must be for excellence and elegance. Excellence is achieved when a product is eminently good. Elegance—the tasteful richness of a product’s design—is achieved when a product is neat and simple. Customers do not necessarily want a wide variety, but they do want what is exactly the right choice for them. There is also a growing richness of variety in the component supply environment, which enables greater creativity, combination, and experiment at the system level, but at the same time also widens competition; doubly so when new materials and software capabilities are considered. Modularity means that we have the growing ability to design and produce products for small markets or even for a single customer. An example, a new concept for a riding saddle, is explained in detail below. Design-inspired innovations seem to be aimed primarily at elite consumers in highly developed economies, but we believe that there is no reason to maintain such an excessively narrow focus. Design-inspired innovation creates products that have meaning. Many people strive toward a world of greater beauty, humanity, and ethics, as well as one that provides basic necessities—and we sense a rapidly growing wave of interest in creating more meaningful products that also reduce waste and reside easily in our natural and cultural environments. In the developing world, greater numbers of people aspire to have the goods and services enjoyed in developed economies, while even greater numbers aspire simply to have basic products and services. More products seem to emphasize sophisticated simplicity rather than just a welter of features, and more products seem to emphasize economy of means and low impact rather than simply economy alone. For example, Tim Brown, head of IDEO, noted his company’s success in developing a disposable injection pen for providing insulin inexpensively to help diabetics. Examples in later chapters include a simple and effective emergency shelter and less wasteful designs for food packaging. Groups such as Britain’s Sorrell Foundation and MIT’s Age Lab are searching for approaches to provide better experiences and products for younger and older clients. Our thesis is that design-inspired products, those with both excellence and elegance, will be both more profitable and enduring. Of course, there are worries. Christopher Lorenz, in his seminal 1986 work on corporate use of design, warned that, “the trouble is that right does not always triumph, and principles are not always borne out in practice. Existing deterrents against the fully-fledged use of industrial design in many companies could take on new significance if globalization is managed badly. Design would then be pushed back to the dark ages of skin-deep styling, and the companies would be deprived of that ‘meaningful distinction’ which, as Theodore Levitt rightly argues, is so crucial to the creation of competitive advantage in an era of crowded markets and global competition.” Ironically, the best products may be the ones that almost disappear entirely: the human light, the music library, the wheelchair, a waste handling system. All of these, and other examples, are presented in detail in subsequent chapters, where we put what makes them “best” in the context of excellence and elegance. Design, especially its integration with other functions of a firm and its strategy, has received less emphasis in previous research than is merited by its importance to success in a competitive environment. For example, as Procter & Gamble CEO, A.G. Lafley, says “I’ve been in this business for almost thirty years, and it’s always been functionally organized. So where does design go? We want to design the purchasing experience—what we call the ‘first moment of truth’; we want to design every component of the product; and we want to design the communication experience and the user experience.” Where, indeed, does design go? We will argue that it must constitute the beginning of the innovation process and consider the totality of a product’s use and life rather than the design process being one in which the product is just conceived as an artifact or an implement. What is design-inspired innovation? How does it lead to competitive advantage? A growing number of companies recognize the importance of design-inspired innovation, especially those that aim to strengthen and maintain high product value. These companies are willing to take the large risks associated with this quite complex and uncertain approach. To answer the questions above requires taking the widely acknowledged definition of design as the integrated innovation of function and form and adapting it further to the framework illustrated in Exhibit 1-1. INSERT EXHIBIT 1-1 HERE The Exhibit shows graphically that three types of knowledge are essential to the innovation process: knowledge about user needs, technological opportunities, and product languages. The latter concerns the signs that can be used to deliver a message to the user and the cultural context in which the user will give meaning to those signs. The classic dialectic of function versus form leads designers to relegate the latter to the aesthetic appearance of products. Indeed, the debate often focuses simplistically on the contrast between functionalism and styling—parti

When an innovation is inspired by design, it transcends technology and utility. The design delights the user, seamlessly integrating the physical object, a service, and its use into something whole. A design-inspired innovation is so simple that it becomes an extension of the user. It creates meaning and a new language.

In honour of the late Keith Pavitt, we introduce this Special Issue of International Journal of Innovation Management. We discuss the impact of Pavitt's work in technology and innovation on the management field. He showed empirically a number of core principles of technological change and knowledge, and how these affected managerial and organisational tasks. His influence is indicated by his publication channels, citations to his work and the other authorswithwhom hewas cited. Pavitt had signalled several themes for future research in themanagement of technology and innovation. This introduction explains howthe articles of this special issue make contributions to all these ongoing research agendas.

This work captures and analyzes the fundamental dynamics of innovative industries with a System Dynamics model. We selectively reviewed the innovation literature, identified the dynamics to be modelled, formulated a conceptual model of these dynamics, and then developed the initial simulation model. By design the conceptual model is simple and generic. It is intended to apply to a broad range of products and services - assembled and process-based, complex and simple, physical and digital, business and consumer, early stage and mature, 19th century and 21st century. That is what we mean by the "fundamental dynamics" of innovative industries. In many variations and combinations they can explain the evolution of most markets. The initial simulation model was developed from the conceptual model. It represents products based on two generations of technology. At this stage the simulation model does not represent a specific market or industry. It is quantified with hypothetical inputs, parameters, and cause/effect relationships. The simulation model recreates well- documented reference modes of market evolution. We currently are building the information base which will enable the initial model to be applied to the photography and display markets.

The term "disruptive technology" as coined by Christensen (1997, The Innovator's Dilemma; How New Technologies Cause Great Firms to Fail. Harvard Business School Press) refers to a new technology having lower cost and performance measured by traditional criteria, but having higher ancillary performance. Christensen finds that disruptive technologies may enter and expand emerging market niches, improving with time and ultimately attacking established products in their traditional markets. This conception, while useful, is also limiting in several important ways. By emphasising only "attack from below" Christensen ignores other discontinuous patterns of change, which may be of equal or greater importance (Utterback, 1994, Mastering the Dynamics of Innovation. Harvard Business School Press; Acee, 2001, SM Thesis, Massachusetts Institute of Technology). Further, the true importance of disruptive technology, even in Christensen's conception of it is not that it may displace established products. Rather, it is a powerful means for enlarging and broadening markets and providing new functionality. In Christensen's theory of disruptive technology, the establishment of a new market segment acts to channel the new product to the leading edge of the market or the early adopters. Once the innovation reaches the early to late majority of users it begins to compete with the established product in its traditional market. Here we present an alternative scenario in which a higher performing and higher priced innovation is introduced into the most demanding established market segments and later moves towards the mass market.

A manufacturing optimization strategy is developed and demonstrated, which combines an asset utilization model and a process optimization framework with multivariate statistical analysis in a systematic manner to focus and drive process improvement activities. Although this manufacturing strategy is broadly applicable, the approach is discussed with respect to a polymer sheet manufacturing operation. The asset utilization (AU) model demonstrates that efficient equipment utilization can be monitored quantitatively and improvement opportunities identified so that the greatest benefit to the operation can be obtained. The process optimization framework, comprised of three parallel activities and a designed experiment, establishes the process‐product relationship. The overall strategy of predictive model development provided from the parallel activities comprising the optimization framework is to synthesize a model based on existing data, both qualitative and quantitative, using canonical discriminant analysis, to identify main effect variables affecting the principal efficiency constraints identified using AU, operator knowledge and order‐of‐magni‐tude calculations are then employed to refine this model using designed experiments, where appropriate, to facilitate the development of a quantitative, proactive optimization strategy for eliminating the constraints. Most importantly, this overall strategy plays a significant role in demonstrating, and facilitating employee acceptance, that the manufacturing operation has evolved from an experienced‐based process to one based on quantifiable science.

Technology strategy variables tend to predominate as predictors of survival in the fast-changing rigid disk drive industry. Building on these previous studies, we here test the hypothesis that the technological and market strategies of a new entrant are highly interrelated and that their joint effect plays an important role in a firm's probability of survival. In particular, we propose that firms that target new market segments with an architectural innovation will tend to be more successful than those that target existing markets or innovate in component technology, even after controlling for all the competing predictors of survival.This paper advances the existing literature on innovation by tracing the main technical elements of a dominant design in the rigid disk drive industry over time, and provides a much more rigorous definition of the concept of a dominant design than we have had in the past. We find the notion of first-mover advantage is not applicable in the rigid disk drive industry. Instead, we propose the idea of an entry-window tightly linked to the emergence of the dominant product design as defined.

A firm's local environment can constitute a source of national or regional cornpetitive advantage. An important question, therefore, is how these environments come about and how they can be lost. In this paper, we argue that a local environment is a function of the process of technological evolution. It is a function of how certain initial and prevailing conditions, the type of innovation, and chance events, influence the processes of uncertainty resolution, capabilities building, and survivor selection that are characteristic of technological evolution. We also argue that a region can lose its advantage when a dominant design emerges or when a technological discontinuity obsoletes the localized technological capabilities of not only manufacturers, but also of their suppliers, customers and related industries. The environment is dynamic as firms and nations, in response to their performances, also influence it by changing their strategies or policies.

Technological innovation is manifested in the development of new products, processes and techniques such that emerging technologies often substitute for more mature technologies. The interaction between technologies is typically referred to as competition, implying a confrontational interaction. The setting of technology strategy is thus often concerned with issues relating to the competition between emerging technologies and the response of mature technologies to the offense from emerging technologies-strategies for attack and defense. In this paper it is argued that the interaction between technologies should be viewed in a broader sense than mere competition, and it is suggested that a multi-mode framework provides a much richer setting for assessing the interaction of two or more technologies. This concept has been successfully applied in biological and organizational ecology, and it is shown that it can be equally useful when applied to the dynamics of technological interaction. It is proposed that the effect that one technology has on another's growth rate be taken as a classification criterion. Examples are given to illustrate that three major modes of interaction exist, namely pure competition, symbiosis and predator-prey. In addition, the notion that the interaction between technologies can in general shift temporally from one mode to another is motivated. It is suggested that, since the characteristics of the three modes differ from one another, it is appropriate to develop managerial strategies that apply specifically to each of the three modes, instead of just applying generic ‘competition’ strategies.

The paper proposes methods to measure the performance of research and development in new product development. We frame these measures in the context of evolving product families in the technology-based firm. Our goal is to more clearly understand the dynamics of platform renewal and derivative product generation and their consequences for long-term success. We explore the utility of the proposed methods with data gathered from a large measurement systems manufacturer. We find that the methods and measures can help management assess the technological and market leverage achieved from the firm's present and past product platforms. This provides a foundation for transforming single-product, single-period planning processes into a multi-product, multi-period form that embraces the product family and the renewal of product architecture. The research also shows the need to integrate data from engineering, manufacturing, and sales organizations to produce information for managing the growth of the firm's product families.