Types of technological innovation

From company’s perspective it is classified as:

1. Radical vs. incremental innovation
- Based on degree of innovativeness

Radical Incremental

- It is new and different. - Relatively minor changes are

- Gives birth to new industries (or
swallows existing ones) and
involves creating revolutionary
technology.
- Eg: iPhone, Gears,
Airplane, was not the first mode
of transportation, but it is
revolutionary as it allowed
commercialized air travel to
develop and prosper.
made to existing ones.
- Utilizes existing technology and
increases value to the customer
features, design changes, etc.
within existing market.
- Involves improving efficiency
- Eg. iPhone 4, iPhone 5…
Cycles with gears

2. Architecture vs. modular/ component innovation

- Based on linkage with other components

Architecture Modular/ component

- Changes overall design of system.
- Existing knowledge or hardware
embodied in a product, is arranged
differently, creating a completely
different product and possibly a
different market.
- Eg. Digital photography,
LED lamp
- The overall configuration/ linkage
of system is not affected.
- It takes place in complex products
or processes with many sub units
and functions.
- Eg. New microprocessor in a
computer

3. Product/ Service vs. process innovation

- Based on kind of innovation

 Fluid phase: There is high uncertainty about market and technology, product innovation
occurs and new firms are usually better at it.
 Transitional phase: The focus shifts to improving the efficiency of manufacturing and
production of the product, and results in higher product innovation.
 Specific phase: Incremental product and process innovation occurs in this phase. It
involves specializing the product further with regard to customer needs or demands, and
effective and efficient production of design.
 Product/ Service
- New goods and services are sold,
(New Product Development)
- Forms the core of innovative
organization and offers incredible
competitive advantage in new as
well as established markets.
- Design and use (phone used for
mails, camera)
- Fluid phase
4. Competence enhancing vs. competent destroying innovation
- Based on impact on competence
Competence enhancing
- It builds on existing skills.
- Improvement in price,
performance, or efficiency that
builds on existing know-how
within a product or process class
- Eg. Intel’s microprocessors (e.g.,
286, 386, 486, Pentium, Pentium
II, Pentium III, Pentium 4)
Process
- Involves improving efficiency or
effectiveness.
- Implementation of a new or
significantly improved production
or delivery method.
- Eg. Just- in- time of Toyota
- Specific phase
Competent destroying
- Does not take advantage of old
technology and expertise
- Requires new skills, abilities, and
knowledge in the development and
production of a product relative to
those held by existing firms in an
industry
- Can render existing ones obsolete
- Either creates a new product class
(e.g., xerography or automobiles)
or substitutes for an existing
product (e.g., diesel vs. steam
locomotives; transistors vs.
vacuum tubes).