Academic journal article Research-Technology Management

Managing Open Innovation in Biotechnology: Intersection of Customer Insight and Comprehensive Technology Assessment Defines the Front End of Innovation Management

Academic journal article Research-Technology Management

Managing Open Innovation in Biotechnology: Intersection of Customer Insight and Comprehensive Technology Assessment Defines the Front End of Innovation Management

Article excerpt

Although innovation has emerged as a defining term in business through numerous management texts and consultant discourses, and while most corporate executives would agree that it is essential to maintain a competitive edge as well as long-term business viability, there is often debate regarding the definition and real-world manifestation of innovation. Webster's New Collegiate Dictionary simply defines innovation as the introduction of something new, perhaps adding to the often blurred distinction between invention and innovation. Moreover, characterization of the key elements comprising innovation seems intangible. Innovation has even been defined as a frame of mind: "Though you can't touch it, smell it, hear it, see it, or taste it, you can sense, think, and feel innovation" (1).

This elusive conceptualization is primarily due to looking at innovation exclusively from the perspective of inventiveness. While the need for invention (be it technology, process, application, or thought) is certainly key to innovation, equally important is the need for commerce. This led Abernathy and Clark to classify the constituent knowledge required for innovation into two groups: technological and market related (2). Building on this concept, we define innovation as the commercialization of a novel technology that provides the customer with new capability. As such, there are three key components to this definition: 1) enabling technology, 2) customer utility and 3) commercialization.

This model enables one to recognize when and where innovation takes place, i.e., when an emerging unmet customer need is matched uniquely with an enabling technology resulting in a commercial product. In this sense, technology push and market pull have equal roles in defining the innovation process, which can be referred to as the Innovation Space. This is schematically represented in Figure 1. Managing open innovation refers to the process through which a corporate entity can utilize external resources for addressing one or more of the components of this innovation space.


Drivers of Innovation

As product innovation is the result of matching customer need with unique technology solutions, it follows that customer insight is the first requisite for innovation. Although many companies strive to understand their customers through direct interviews, the voice of the customer doesn't always enable sufficient understanding to fulfill the need of the Innovation Space. According to Anthony Ulwick (3), there are three distinct inputs that lead to customer insight: 1) what job the customer is trying to do, 2) what outcome the customer is trying to achieve, and 3) constraints that may block the adoption of a different approach.

Similarly, the second requisite for innovation, at least in the context of product innovation, is a thorough understanding of respective technology solutions in order to understand the appropriateness and uniqueness of each relative to respective jobs and objectives. In this regard, the relative innovativeness is the extent to which the respective technology is unique to the respective job, accomplishes the specified job, enables the desired outcome, and is available to the customer. Consequently, an innovation driver can be thought of as any force that links customer needs uniquely with technology solutions.

We have described innovation as a simple process of linking customer need with novel technology or novel application of an existing technology. However, this approach is greatly oversimplified and there are many subprocesses and iterations required to define, develop and commercialize truly innovative products. We shall now describe parts of the innovation space that exist outside of larger corporations and how companies can use this potential competition to their own advantage.

Knowledge Diffusion

Open Innovation, as defined by Henry Chesbough, occurs through exploitation of knowledge diffusion outside corporate R&D (4). …

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