The Role of Design Practices and Tools for Technological and Managerial Innovation in Startup Firms

Abstract

Innovation is a critical factor through which organizations achieve and sustain competitive advantage in rapidly changing environments. This is true of both technological innovation – i.e. the development of new products and/or services – but also managerial innovation – as in, for example, the development of new business models. Design practices and tools as means to enhance innovation capabilities have become increasingly popular in recent years. However, little empirical research has shown whether and how they are used in the development of technological and managerial innovations. To address this gap we assessed the role design plays in the innovation development process focusing on startup entrepreneurial firms. We chose this context as design practices and tools are more likely to be at play in such organizations, as they have the flexibility “to do things differently” – thus face fewer obstacles in adopting such different approach to innovation – and have more to benefit in using them, as innovation is central to their existence. We conducted an inductive study of how startup entrepreneurs in Northern Italy incorporate design practices and tools in the development of innovative products and services and of business models. While results seem to point to a substantial role some design practices and tools play in product development, evidence of the use of design practices and tools in business model development is much sparser, indicating vast potential for further development when it comes to the use of design for innovation.