Innovation Management

Innovation management studies how organizations generate, develop, and commercialize new products, services, and processes.

Scope

It covers the innovation process, R&D and absorptive capacity, diffusion of innovations, disruptive innovation, and open innovation.

Core questions

• How do organizations innovate?
• How is knowledge turned into new products and processes?
• How do innovations spread?
• Why do incumbents fail to innovate?

Key concepts

• Creative destruction
• Absorptive capacity
• Diffusion of innovations
• Disruptive innovation
• R&D
• Open innovation

Key theories

Creative destruction

Schumpeter cast innovation as the engine of capitalist dynamism and creative destruction.

Absorptive capacity

Cohen and Levinthal showed firms' ability to use external knowledge depends on prior related knowledge.

Diffusion of innovations

Rogers explained how innovations spread through populations over time.

History

Innovation management draws on Schumpeter's economics of innovation, absorptive-capacity (Cohen & Levinthal) and diffusion (Rogers) theories, and disruptive- and open-innovation frameworks.

Debates

Why do successful firms fail to innovate?

Whether incumbents fail due to capabilities, incentives, or disruptive dynamics.

Key figures

• Joseph Schumpeter
• Wesley Cohen
• Daniel Levinthal
• Everett Rogers

Seminal works

• schumpeter-1942
• cohen-levinthal-1990
• rogers-1962

Frequently asked questions

What is absorptive capacity?

A firm's ability to recognize, assimilate, and apply external knowledge, which depends on its prior related knowledge (Cohen & Levinthal).