The early activities of front end of innovation in oem companies using a new fei platform as a framework for renewal

The main goal of this study is to create a seamless chain of actions and more detailed structure to the front end of innovation to be able to increase the front end performance and finally to influence the renewal of companies. The main goal is achieved through by the new concept of an integrated model of early activities of FEI leading to a discovery of new elements of opportunities and the identification of new business and growth areas. The procedure offers one possible solution to a dynamic strategy formation process in innovation development cycle. In this study the front end of innovation is positioned between a strategy reviews and a concept creation with needed procedures, tools, and frameworks. The starting point of the study is that the origins of innovation are not well enough understood. The study focuses attention on the early activities of FEI. These first activities are conceptualized in order to find out successful innovation initiatives and strategic renewal agendas. A seamless chain of activities resulting in faster and more precise identification of opportunities and growth areas available on markets and inside companies is needed. Three case studies were conducted in order to study company views on available theory doctrine and to identify the first practical experiences and procedures in the beginning of the front end of innovation. Successful innovation requires focus on renewal in both internal and external directions and they should be carefully balanced for best results. Instead of inside-out mode of actions the studied companies have a strong outside-in thinking mode and they mainly co-develop their innovation initiatives in close proximity with customers i.e. successful companies are an integral part of customers business and success. Companies have tailor-made innovation processes combined their way of working linked to their business goals, and priorities of actual needs of transformation. The result of this study is a new modular FEI platform which can be configured by companies against their actual business needs and drivers. This platform includes new elements of FEI documenting an architecture presenting how the system components work together. The system is a conceptual approach from theories of emergent strategy formation, opportunity identification and creation, interpretation-analysis-experimentation triad and the present FEI theories. The platform includes new features compared to actual models of FEI. It allows managers to better understand the importance of FEI in the whole innovation development stage and FEI as a phase and procedure to discover and implement emergent strategy. An adaptable company rethinks and redirects strategy proactively from time to time. Different parts of the business model are changed to remove identified obstacles for growth and renewal which gives them avenues to find right reforms for renewal.

Innovation process development and business process integration - a multiple case study

The main objective of this study was to find out the bases for innovation model formulation in an existing organization based on cases. Innovation processes can be analyzed based on their needs and based on their emphasis on the business model development or R&D. The research was conducted in energy sector within one company by utilizing its projects as cases for the study. It is typical for the field of business that development is slow, although the case company has put emphasis on its innovation efforts. Analysis was done by identifying the cases’ needs and comparing them. The results were that because of the variances in the needs of the cases, the applicability of innovation process models varies. It was discovered that by dividing the process into two phases, a uniform model could be composed. This model would fulfill the needs of the cases and potential future projects as well.

Gearing Towards Omnichannel Grocery Retail Through Business Model Innovation

Technological innovations and the advent of digitalization have led retail business into one of its biggest transformations of all time. Consumer behaviour has changed rapidly and the customers are ever more powerful, demanding, tech-savvy and moving on various plat-forms. These attributes will continue to drive the development and robustly restructure the architecture of value creation in the retail business. The largest retail category, grocery yet awaits for a real disruption, but the signals for major change are already on the horizon. The first wave of online grocery retail was introduced in the mid 1990’s and it throve until millennium. Many overreactions, heavy investments and the burst IT-bubble almost stag-nated the whole industry for a long period of time. The second wave started with a venge-ance around 2010. Some research was carried out during the first wave from a single-viewpoint of online grocery retail, but without a comprehensive approach to online-offline business model integration. Now the accelerating growth of e-business has initiated an increased interest to examine the transformation from traditional business models towards e-business models and their integration on the companies’ traditional business models. This research strove to examine how can we recognize and analyze how digitalization and online channels are affecting the business models of grocery retail, by using business mod-el canvas as an analysis tool. Furthermore business model innovation and omnichannel retail were presented and suggested as potential solutions for these changes. 21 experts in online grocery industry were being interviewed. The thoughts of the informants were being qualitatively analysed by using an analysis tool called the business model canvas. The aim of this research was to portray a holistic view on the Omnichannel grocery retail business model, and the value chain, in which the case company Arina along with its partners are operating. The key conclusions exhibited that online grocery retail business model is not an alterna-tive model nor a substitute for the traditional grocery retail business model, though all of the business model elements are to some extent affected by it, but rather a complementary business model that should be integrated into the prevailing, conventional grocery retail business model. A set of business model elements, such as value proposition and distribu-tion channels were recognized as the most important ones and sources of innovation within these components were being illustrated. Segments for online grocery retail were empiri-cally established as polarized niche markets in contrast of the segmented mass-market of the conventional grocery retail. Business model innovation was proven to be a considera-ble method and a conceptual framework, by which to come across with new value proposi-tions that create competitive advantage for the company in the contemporary, changing business environment. Arina as a retailer can be considered as a industry model innovator, since it has initiated an entire industry in its market area, where other players have later on embarked on, and in which the contributors of the value chain, such as Posti depend on it to a great extent. Consumer behaviour clearly affects and appears everywhere in the digi-talized grocery trade and it drives customers to multiple platforms where retailers need to be present. Omnichannel retail business model was suggested to be the solution, in which the new technologies are being utilized, contemporary consumer behaviour is embedded in decision-making and all of the segments and their value propositions are being served seamlessly across the channels.

A service perspective to digital innovation: exploring the emergence of autonomous shipping

Current research describes digital innovation largely similar to product innovation. Digital innovation is seen as an object of coherent activities, however in reality digital innovation results from convergence of variant technologies and those related actors with versatile business goals. To account for the dynamic nature of digital innovation, this study applies a service perspective to digital innovation. The purpose of the study is to understand how digital innovation emerges within a service ecosystem for autonomous shipping. The sub-objectives of this study are to 1) identify what factors motivate and demotivate actors to integrate resources for autonomous shipping, 2) explore the key technology areas to be integrated to realise the autonomous shipping concept, and 3) suggest how the technology areas are combined for mutual value creation within a service eco-system for autonomous shipping. Insights from autonomous driving were also included. This study draws on literatures on service innovation and service-dominant logic. The research was conducted as a qualitative exploratory case study. The data comprise interviews of 18 marine and automotive industry experts, 4 workshops, 4 seminars, and observations as well as various secondary data sources. The findings revealed that the key actors have versatile motivations regarding autonomous shipping. These varied from opportunities for single applications to occupying a central role in an autonomous technology platform. Thus, autonomous shipping can be seen as an umbrella concept comprising multiple levels. In technical terms, the development of the concept of autonomous shipping is largely based on combining existing technology solutions, which are gradually integrated towards more systemic entities comprising areas of the autonomous shipping concept. This study argues that a service perspective embraces the inherently complex and dynamic nature of digital innovation. This is captured in the developed research framework that describes digital innovation emerging on different levels of interaction: 1. strategic relationships for new solutions, 2. new local networks for technology platforms, and 3. global networks for new markets. The framework shows how the business models and motivations of digital innovation actors feed the emergence of digital innovation in overlapping service ecosystems that together comprise an innovation ecosystem for autonomous technologies. Digital innovation managers will benefit from seeing their businesses as part of a larger ecosystem of value co-creating actors. In orchestrating digital innovation within a service ecosystem, it is suggested that managers consider the resources, roles and institutions within the ecosystem. Finally, as autonomous shipping is at its infancy, the topic provides a number of interesting avenues for future research.

Design thinking framework of experience innovation

Innovation remains one of the key drivers of sustainable and successful business. The variety of innovation approaches such as open models, intersectional thinking and co-creation tackles the challenge of viable novel offerings across the world. These approaches have certain similarities and their elements constitute design thinking. Recent market and society trends such as technological advances and globalization have intensify companies’ interaction with customers. Emotional engagement, pleasing communication and delight have gained equal to functionality importance. The complex of these components constitutes consumer experience. Academic research conceptualizes these changes by introducing customer-centered innovation, which replaces product-oriented approaches. However, both methods omit experience concept and provide fragmented explanation of experience innovation. Experience is an essential process of offering perception, which drives customer decisions. Therefore, an agenda of experience innovation development can systemize and explain the mechanisms of experience innovation. The purpose of this study is to create and explain the stage process framework of experience innovation by the means of design thinking approach. The research proceeds in accordance with the following sub-objectives: 1. Conceptualization of consumer experience through customer value. 2. Creation of experience innovation framework by the means of design thinking. This study is conducted by the means of conceptual research methods. The main theoretical contribution of the study is creation of the integrated framework of consumer experience innovation. The elaboration of design thinking agenda and methods applied to experience design builds the guidelines of experience innovation development. This research synthesizes the conceptual elements of the framework that resolves inconsistencies and duplications of theories. This essential clarification simplifies application of the experience innovation agenda, which can be useful for the wide range of specialists, from marketing to strategists, and from managers to entrepreneurs, willing to offer compelling experience to customers. The study highlights the crucial role of consumer experience in maintaining customer loyalty and designs the roadmap of innovating experience through the communication with customers.

Aggregations and Marginalization of GARCH and Stochastic Volatility Models

The GARCH and Stochastic Volatility paradigms are often brought into conflict as two competitive views of the appropriate conditional variance concept : conditional variance given past values of the same series or conditional variance given a larger past information (including possibly unobservable state variables). The main thesis of this paper is that, since in general the econometrician has no idea about something like a structural level of disaggregation, a well-written volatility model should be specified in such a way that one is always allowed to reduce the information set without invalidating the model. To this respect, the debate between observable past information (in the GARCH spirit) versus unobservable conditioning information (in the state-space spirit) is irrelevant. In this paper, we stress a square-root autoregressive stochastic volatility (SR-SARV) model which remains true to the GARCH paradigm of ARMA dynamics for squared innovations but weakens the GARCH structure in order to obtain required robustness properties with respect to various kinds of aggregation. It is shown that the lack of robustness of the usual GARCH setting is due to two very restrictive assumptions : perfect linear correlation between squared innovations and conditional variance on the one hand and linear relationship between the conditional variance of the future conditional variance and the squared conditional variance on the other hand. By relaxing these assumptions, thanks to a state-space setting, we obtain aggregation results without renouncing to the conditional variance concept (and related leverage effects), as it is the case for the recently suggested weak GARCH model which gets aggregation results by replacing conditional expectations by linear projections on symmetric past innovations. Moreover, unlike the weak GARCH literature, we are able to define multivariate models, including higher order dynamics and risk premiums (in the spirit of GARCH (p,p) and GARCH in mean) and to derive conditional moment restrictions well suited for statistical inference. Finally, we are able to characterize the exact relationships between our SR-SARV models (including higher order dynamics, leverage effect and in-mean effect), usual GARCH models and continuous time stochastic volatility models, so that previous results about aggregation of weak GARCH and continuous time GARCH modeling can be recovered in our framework.

The relationship between product design and business models in the context of sustainability

Dans les sphères du développement durable, des modèles d’affaires et du design de produit, certains leviers rendent le croisement de ces trois sphères de plus en plus pertinent. Au croisement de ces trois sphères se trouve une opportunité de comprendre les relations existantes entre le design de produit et les modèles d’affaires afin d’aider les décideurs à développer des solutions davantage durables. L’approche méthodologique de cette recherche utilise un système complexe et est basée sur un paradigme pragmatique. En vue de répondre à la question « Dans quelle mesure des modèles d’affaires et le design de produit sont liés dans un contexte de développement durable? », cette recherche a soigneusement analysé trois cas: Better Place, une compagnie californienne ayant développé une infrastructure permettant le chargement des voitures électriques; Interface Inc., un manufacturier mondial de tuiles de tapis commerciales établi à Atlanta; et Métacycle, un concept d’entreprise développé par une équipe de chercheurs en design à Montréal. Chaque cas a été analysé en corrélant des aspects du design de produit à des éléments de leur modèle d’affaires. Les résultats montrent que dans le contexte du développement durable, le design de produit et les modèles d’affaires sont interdépendants. Les résultats peuvent être résumés en six points: il existe des relations applicables universellement; les innovations de design substantielles jouent un rôle important dans le développement durable; la « durabilité » peut être une qualité émergente d’un modèle d’affaires; les partenariats peuvent être vitaux pour l’intégration des systèmes; un modèle de services a des bénéfices et des limitations considérables; le design peut agir comme levier à l’utilisation d’énergies renouvelables. Pratiquer simultanément l’innovation du modèle d’affaires et du produit peut apporter une valeur ajoutée, susciter des opportunités et augmenter l’efficience sur plusieurs facettes. Toutefois, les risques et les coûts de tels procédés sont souvent très élevés. En aidant à comprendre et définir comment les trois sphères mentionnées plus tôt sont interdépendantes, cette recherche pourrait idéalement inspirer des recherches supplémentaires sur le sujet. L’application par des organisations de la méthodologie et des apprentissages résultant de cette recherche peut permettre à d’autres d’utiliser le croisement entre l’innovation de produit et l’innovation du modèle d’affaires afin de résoudre des enjeux sociaux et environnementaux complexes.

From evolution to co-evolution – An empirical study of the role of innovation, policy and public research in industrial dynamics

In the past decades since Schumpeter’s influential writings economists have pursued research to examine the role of innovation in certain industries on firm as well as on industry level. Researchers describe innovations as the main trigger of industry dynamics, while policy makers argue that research and education are directly linked to economic growth and welfare. Thus, research and education are an important objective of public policy. Firms and public research are regarded as the main actors which are relevant for the creation of new knowledge. This knowledge is finally brought to the market through innovations. What is more, policy makers support innovations. Both actors, i.e. policy makers and researchers, agree that innovation plays a central role but researchers still neglect the role that public policy plays in the field of industrial dynamics. Therefore, the main objective of this work is to learn more about the interdependencies of innovation, policy and public research in industrial dynamics. The overarching research question of this dissertation asks whether it is possible to analyze patterns of industry evolution – from evolution to co-evolution – based on empirical studies of the role of innovation, policy and public research in industrial dynamics. This work starts with a hypothesis-based investigation of traditional approaches of industrial dynamics. Namely, the testing of a basic assumption of the core models of industrial dynamics and the analysis of the evolutionary patterns – though with an industry which is driven by public policy as example. Subsequently it moves to a more explorative approach, investigating co-evolutionary processes. The underlying questions of the research include the following: Do large firms have an advantage because of their size which is attributable to cost spreading? Do firms that plan to grow have more innovations? What role does public policy play for the evolutionary patterns of an industry? Are the same evolutionary patterns observable as those described in the ILC theories? And is it possible to observe regional co-evolutionary processes of science, innovation and industry evolution? Based on two different empirical contexts – namely the laser and the photovoltaic industry – this dissertation tries to answer these questions and combines an evolutionary approach with a co-evolutionary approach. The first chapter starts with an introduction of the topic and the fields this dissertation is based on. The second chapter provides a new test of the Cohen and Klepper (1996) model of cost spreading, which explains the relationship between innovation, firm size and R&D, at the example of the photovoltaic industry in Germany. First, it is analyzed whether the cost spreading mechanism serves as an explanation for size advantages in this industry. This is related to the assumption that the incentives to invest in R&D increase with the ex-ante output. Furthermore, it is investigated whether firms that plan to grow will have more innovative activities. The results indicate that cost spreading serves as an explanation for size advantages in this industry and, furthermore, growth plans lead to higher amount of innovative activities. What is more, the role public policy plays for industry evolution is not finally analyzed in the field of industrial dynamics. In the case of Germany, the introduction of demand inducing policy instruments stimulated market and industry growth. While this policy immediately accelerated market volume, the effect on industry evolution is more ambiguous. Thus, chapter three analyzes this relationship by considering a model of industry evolution, where demand-inducing policies will be discussed as a possible trigger of development. The findings suggest that these instruments can take the same effect as a technical advance to foster the growth of an industry and its shakeout. The fourth chapter explores the regional co-evolution of firm population size, private-sector patenting and public research in the empirical context of German laser research and manufacturing over more than 40 years from the emergence of the industry to the mid-2000s. The qualitative as well as quantitative evidence is suggestive of a co-evolutionary process of mutual interdependence rather than a unidirectional effect of public research on private-sector activities. Chapter five concludes with a summary, the contribution of this work as well as the implications and an outlook of further possible research.

Moderating effects of management control systems and innovation on performance. Simple methods for correcting the effects of measurement error for interaction effects in small samples

In the accounting literature, interaction or moderating effects are usually assessed by means of OLS regression and summated rating scales are constructed to reduce measurement error bias. Structural equation models and two-stage least squares regression could be used to completely eliminate this bias, but large samples are needed. Partial Least Squares are appropriate for small samples but do not correct measurement error bias. In this article, disattenuated regression is discussed as a small sample alternative and is illustrated on data of Bisbe and Otley (in press) that examine the interaction effect of innovation and style of use of budgets on performance. Sizeable differences emerge between OLS and disattenuated regression

Simultaneous estimation of indirect and interaction effects using structural equation models

Interaction effects are usually modeled by means of moderated regression analysis. Structural equation models with non-linear constraints make it possible to estimate interaction effects while correcting for measurement error. From the various specifications, Jöreskog and Yang's (1996, 1998), likely the most parsimonious, has been chosen and further simplified. Up to now, only direct effects have been specified, thus wasting much of the capability of the structural equation approach. This paper presents and discusses an extension of Jöreskog and Yang's specification that can handle direct, indirect and interaction effects simultaneously. The model is illustrated by a study of the effects of an interactive style of use of budgets on both company innovation and performance

Correcting Measurement Error Bias in Interaction Models with Small Samples

Several methods have been suggested to estimate non-linear models with interaction terms in the presence of measurement error. Structural equation models eliminate measurement error bias, but require large samples. Ordinary least squares regression on summated scales, regression on factor scores and partial least squares are appropriate for small samples but do not correct measurement error bias. Two stage least squares regression does correct measurement error bias but the results strongly depend on the instrumental variable choice. This article discusses the old disattenuated regression method as an alternative for correcting measurement error in small samples. The method is extended to the case of interaction terms and is illustrated on a model that examines the interaction effect of innovation and style of use of budgets on business performance. Alternative reliability estimates that can be used to disattenuate the estimates are discussed. A comparison is made with the alternative methods. Methods that do not correct for measurement error bias perform very similarly and considerably worse than disattenuated regression

How can strategic philanthropy contribute to innovation for companies

This investigation proposes to explore the existing link between a strategic conception of philanthropy and innovation. Indeed, the nature of the research question relies on an unexplored field in the CSR and Innovation management academic literature. It starts with the interest to know which the benefits are for a firm encouraged to invest strategically in philanthropy. In this regard, the analysis contributes in fitting this gap by following different objectives in an exploratory perspective. Throughout the research it will be analyzed the concept and the current and past contributions on the different branches of innovation (product innovation, managerial innovation, technological innovation), to accentuate the relation between an accurate strategic approach to philanthropy and the impact on the organizational value. Indeed, analyzing philanthropic innovation may provide insights about business opportunities and notions related to social investments and profit. That aspect includes the link between those strategic decisions that a firm can use to maximize those investments as it was part of their core business. It also proves the existing link between CSR and innovation, and the possibilities that the enterprises have towards this subject.

Technology trajectories, innovation, and the growth of biomimetics

Publication rate of patents can be a useful measure of innovation and productivity in science and technology. Patenting activity in new technological fields follows a sigmoid (S-shaped) path. Qualitative and quantitative models in management and economics literature explain why such patterns of productivity may occur. TRIZ analysis suggests that patents are generated in bursts during the evolution of a product and that they are at different levels of inventiveness. The tendency is for the inventiveness to reduce as the product is more mature. This makes it possible to guess at the lifetime stage of a product and gauge its maturity and profitability. An analysis of patenting activity and other measures of inventiveness in the emerging field of biomimetics was presented, and future trends in biologically-inspired innovation was discussed.

Establishing a connection between knowledge transfer and innovation diffusion

Successful innovation diffusion process may well take the form of knowledge transfer process. Therefore, the primary objectives of this paper include: first, to evaluate the interrelations between transfer of knowledge and diffusion of innovation; and second to develop a model to establish a connection between the two. This has been achieved using a four-step approach. The first step of the approach is to assess and discuss the theories relating to knowledge transfer (KT) and innovation diffusion (ID). The second step focuses on developing basic models for KT and ID, based on the key theories surrounding these areas. A considerable amount of literature has been written on the association between knowledge management and innovation, the respective fields of KT and ID. The next step, therefore, explores the relationship between innovation and knowledge management in order to identify the connections between the latter, i.e. KT and ID. Finally, step four proposes and develops an integrated model for KT and ID. As the developed model suggests the sub-processes of knowledge transfer can be connected to the innovation diffusion process in several instances as discussed and illustrated in the paper.

Social innovation and social entrepreneurship a systematic review

Corporate social responsibility (CSR) literature suggests CSR initiatives extend beyond meeting the immediate interests of stakeholders of for-profit enterprises, offering the potential to also enhance performance. Growing disillusionment of for-profit business models has drawn attention to social entrepreneurship and social innovation to ease social issues. Adopting a systematic review of relevant research, the article provides collective insights into research linking social innovation with social entrepreneurship, demonstrating growing interest in the area over the last decade. The past 5 years have seen a surge in attention with particular focus on the role of the entrepreneur, networks, systems, institutions, and cross-sectoral partnerships. Based on the findings of the review, the authors synthesize formerly dispersed fields of research into an analytical framework, signposting a “systems of innovation” approach for future studies of social innovation and social entrepreneurship.