Innovation Models

Innovation Models

Paper 1
Professor Joe Tidd Science and Technology Policy Research Unit University of Sussex

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A Review of Innovation Models

© Imperial College London 2006

Professor Joe Tidd Professor of Technology Innovation and Management and Deputy Director, Science and Technology Policy Research Unit, University of Sussex

DISCUSSION PAPER 1 / 1
A Review of InnovationModels

Abstract
Innovation is central to the policy debate on how to maintain strong economic growth in an era that is increasingly being defined by the globalization of competition, as well as major fiscal and demographic challenges. However, attempts to systematically draw on the concepts, theories and empirical evidence accumulated over three decades of innovation studies to inform this policydebate have been limited. In this paper we review models of the innovation process and the empirical evidence for them. We discuss the early linear, push-pull models, which still influence much practice and debate, and identify their many limitations. We track the evolution of more realistic dynamic models of innovation, which involve complex systems of disruptive and discontinuous events thatinvolve networks of actors and sources. This latter perspective reveals some of the bottlenecks and unintentional dysfunctional implications that accompany partial views of the innovation process. In particular, we propose that preoccupation with the science base and novel inventions is insufficient, because commercial success is highly dependent on the later stages of the innovation process, namely,development and diffusion. Next, we consider appropriation, or sharing of the benefits created by innovation, as well as the incentives and constraints that influence this process at the level of the firm and of society. We consider a range of factors that influence this process and the implications for the rate, type and direction of future innovation. In particular, we discuss the concepts ofradical and incremental innovation and their interpretation in the biopharmaceuticals sector. We suggest a number of ways to improve the dialogue between stakeholders to achieve a more balanced view of the whole innovation process, which includes the mechanisms for the development, diffusion and appropriation of the benefits of innovations in the biopharmaceutical field.

DISCUSSION PAPER 1 / 2A Review of Innovation Models

Introduction
Technological and commercial innovation is central to the policy debate on the future of Europe in an era of globalization and fiscal and demographic constraints. Little attempt has been made in the business and policy communities to systematically draw on the concepts, theories and empirical evidence that have been developed over the past threedecades of innovation studies in order to improve the overall climate for innovation. In this paper we review the different models of the innovation process. We draw heavily upon recent reviews of technological innovation (Tidd, 2006), organizational innovation (Isaksen and Tidd, 2006), and attempts to synthesize technological, organizational and commercial aspects of the innovation process (Tidd,Bessant and Pavitt, 2005). We begin with an assessment of the limitations of the more conventional linear technology-push models, and track the evolution to the more recent and realistic dynamic models of innovation that feature a network of actors, sources and constraints. This latter perspective more readily reveals some of the negative implications of a partial, disaggregated view of theinnovation process. In particular, it suggests that a focus on improving the science base and novel technological innovation is insufficient, because many problems occur during the later stages of the innovation process, in terms of development and diffusion. Next we consider ways to apportion the costs and benefits of innovation, and the incentives and constraints that exist at the level of the firm and...