The Faces of Innovation

Abstract

Innovation is a highly diversified phenomena. A survey of innovation strategies in over 1000 firms and research organizations allowed the authors to identify six very different innovation archetypes, each characterized by a basic strategy or innovation game. The games are defined by two dimensions, whether the innovation is incremental or market-creating and whether it is associated with a stand-alone product or with a product that is part of an open or of a closed system. Each of the six games (Eureka!, System breakthrough, Battle of architectures, New and improved, Pushing the envelope, and Mass customization) is characterized by a specific ecosystem. Preliminary findings also suggest that incremental innovations have an economic contribution significantly bigger than market-creating disruptive innovations. At any given time, an industry is dominated by a particular game, although it can change games from time to time. The ability to execute a game and the ability to recognize the salient game are critical competitive skills. From a public policy perspective, the breakdown of innovation into six different games, has significant implications, for the effectiveness of specific policies will differ greatly from one game to another.