Dimensions of innovation space

I'm Joe Tidd and I'm Professor of Technology and Innovation Management at the Science Policy Research Unit at the University of Sussex, UK.

There are three aspects that we need to manage in an innovation strategy that are very different to a conventional strategy. The first is how we deal with complexity and uncertainty, the second is how these influence the type, degree and direction of innovation and finally, how we develop or acquire the resources and capabilities to actually implement the strategy that we've developed.

The second aspect of innovation strategy is having dealt with uncertainty and identified the sources and types, is to then how do we respond to those in terms of the types and degree of innovation?

Innovation contributes to value creation in a whole number of ways and if you look at these household examples: Apple, Amazon, Netflix, Ryanair, two things strike you. One is that they create value in different ways. Amazon - it's about things like choice, price. In terms of Netflix, it's availability, convenience, and scope. Apple, arguably, it's an integrated ecosystem with aesthetic design of its products and services. You see that innovation contributes to value creation in very different ways, so that's the first point. The second point is all of these examples demonstrate that there's not one single way to create value. Each of these companies combines different types of capabilities and resources to create some unique offering.

One way of trying to understand the opportunities for innovation and how you create value from innovation is the idea of innovation space. This is really a way of trying to understand the different options available in terms of innovating. The way that we try to think about it is to break it down into four dimensions or aspects. The first, which is probably the more familiar, is products innovation, changes in what something does. When we say product we include many services, particularly services that have some tangible core. The idea is how do we change what we offer? What the client or the customer values? That's probably the most familiar one. Then we move on to process innovation, changes in the way that we deliver, create those products or service offering. These are often invisible to the end user unless something goes horribly wrong. The idea about process innovation is to improve quality, reduce cost, or potentially to allow you to do things others can't do or can't do well. Process innovation is less well-managed in most cases. But it's a very powerful dimension in innovation space. And the last two will be even less familiar, I guess. One we call position, and that's really about trying to understand how the context of the application or adoption affects the focal innovation. For example, you might have a product or a technology that's applied, say, in a military context or a space context. You might say how might we reposition that focal technology or innovation in a consumer market or context? It's thinking about where else could you apply the focal technology to help to create value? Finally, paradigm really mops up the rest, and that's things like platform innovation, ecosystems and business models. It's not just looking at the focal innovation but looking at how the focal innovation fits in some sort of system to create and deliver value. The idea behind this innovation space is really to make you think about the degrees of freedom, the options available beyond simply if you like product development.