Google to open R&D facility in Taiwan

In the last post there was a video from the MIT on the internationalization of innovation. I used the term "transnational" to highlight that it's no longer about firms having a "global" R&D facility in which they design standardized products for mass consumption by the rest of the world.

For a variety of reasons, particular countries are exceptionally gifted at doing particular things. Geography, history, weather and language all play a central role in this in addition to the more obvious things, such as education. This, combined with the idea that people enjoy buying foreign goods (dreams), drives, and should continue to drive, global trade. The British buy their China-manufactured iPods while the Chinese buy Westlife, Coldplay, and Mozart CDs. (Give or take the odd copy!)

+ Nobody is exceptional at everything.

+ We love things that are foreign.

+ We are often constrained by our physical environment.

So when Google wants to master the art of searching Chinese text, why not come to Taiwan and tap into some of that expertise?






innovation management in Asia

Transnational innovation

Here's a video from the MIT.

Luxurious bargain seeking

The problem firms face when pursuing incremental product innovation is that a bulk of customers may not be willing to pay extra for those innovations.

Adner and Levinthal (2001) cover this in their paper, Technological Evolution and Demand Heterogeniety: Implications for product and process innovation. This paper takes a demand-side view on innovation.

innovation management in Asia

Branding innovation

Readers of this blog know that there are numerous types of innovation in addition to product innovation and process innovation. These additional types all describe where the innovation occurs in a business. One of these types is branding innovation. One critical question when choosing a brand name for a new offering (company perspective) is this one: Do we choose a new name or do we extend our existing brand name?

Anybody who is a fan of Al Ries will tend to go for a new name. Consumers buy brands not the companies behind the brands. Looks like Michael Dell supports this view as well: Dell will purchase Alienware Corp, a high-end PC producer popular with gamers. Rather than extend the Dell brand to include this high-end space, Dell has decided to keep Alienware and its brands separate. Al Ries will be applauding this move!

So we know what type of innovation it is: branding innovation, but is it an incremental innovation or is it a radical one? I'd say it lies more at the radical end of things, so you can expect that there will be some resistance to this within Dell. This decision is going to have to face Dell's "radical innovation antibodies," for want of a better phrase.

One of the great things about learning the "theory" of innovation is that it really does help people foresee and possibly overcome these problems as they implement innovations.









innovation management in Asia

China government says "No" to Skype

Skype is a classic example of a company pursuing a disruptive innovation strategy. Faced with Skype, incumbent telecom providers in the countries in which Skype is present are forced to flee up market in search of more demanding, higher-margin customers.

As with many companies pursuing disruptive innovation strategies, Skype offers a product that competes against non consumption. In the case of China, Skype has the potential to allow millions of people to make extremely cheap calls to other countries. But, as this article describes, it won't be happening just yet.





innovation management in Asia

Entrepreneurship

Donald Trump, the famous entrepreneur, was on the Oprah Winfrey show today (the show was a repeat) and he said something that interested me: He said that men are not created equal. This view, which is Neitzchean, is the same as Jospeh Shumpeter's.

Schumpeter was mentioned a couple of times in this week's Economist. This article closed by wondering why anybody would want to be an entrepreneur in the first place, given that financial rewards are not guaranteed. Here are some factors that drive entrepreneurs from various sources:

- a desire to prove that he is better than others

- a dissatisfaction with the world as it is (the entrepreneur can be described as a romantic type)

- a desire to form a "transgenerational dynasty" (Schumpeter)

- a desire to form a "private kingdom" (Schumpeter)

- a desire to free himself from the control of others

- psychic rewards

- prestige

- the prospect of success


innovation management in Asia

Blogging and innovation

"What's the benefit of having a blog?"

One of the great things about blogs is their ability to allow individuals to learn, teach and discuss a topic of interest. The benefits of blogs are often always indirect.

So, one answer could be: "They help me learn more about innovation management beyond what's in books and magazines."

OK! Back to innovation. Innovation, then, can be described by degree and type, from the firm's side or the market side. Degree is an important consideration because a firm may be better set up to handle "small" (incremental) innovations over "big" (radical) innovations. Small innovations and big innovations need to be managed differently. An ability to manage small innovations at the same time implies an inability to manage big innovations.

From the literature it's evident that there are a zillion "types" of innovation. They all describe where in the firm the innovation occurs, though. Basically, a course- or fine-grained view. When somebody talks of product innovation, he's being fairly broad. When he discusses brand innovation, he's zoomed in on that aspect of the firm's offering.




innovation management in Asia

Innovation spillovers

The following lengthy study by Joel Popkin and Kathryn Kobe for the U.S. Council of Manufacturing Associations and the Manufacturing Institute explains (in detail) how innovations spill over from one area to another, and eventually the whole nation. Interesting stuff!

Yet another definition of innovation in this report:

" . . . the process by which inventions are implemented." -- (p. 10)

This definition emphasizes the process that takes ideas to market.








innovation management in Asia

A common vocabulary II

Brent over at Brent Blog has been adding a few interesting suggestions for the vocabulary list. In addition to the terms in the previous post he suggests including the "types" of innovation (i.e. product, process, service, business model, market etc.) He also mentions an article (which I haven't read yet) that mentions firms' approach to innovation. This is really interesting as you can start to see that innovation can be viewed in terms of:

- From where: firm or customer viewpoint

- What: is it on the value-building side or the cost-cutting side?

- Where: is it only in one department/country-market or are we sharing the innovation?

- How much: is the innovation incremental or radical?

- How often: is this just a one-off, or is it part of the firm's general approach/attitude to innovation?

In terms of the difference between invention and innovation in a business context, there is usually commercial value associated with an innovation. It may not be immediately obvious, but it is usually there. In fact, an invention today may become an innovation years later. Don't write off the Segway just yet! This will probably take off when an unexpected market develops. (Interestingly, online university education is being adopoted not by students in far off lands, but on-campus students who prefer it.)

It's easy to see how difficult it can get when discussing innovation. Striking the right balance between clarity and oversimplification is tricky.



innovation management in Asia