Innovation is a word which has crept into the lexicon of modern society. Whereas 'invention' is the creation of an object, process or idea which is new to the world, innovation "...is an idea, practice or object that is perceived as new by an individual or the unit adopting it.” (Rogers, 1995, p.11 )
There are three parts to this definition:
- Firstly, innovation can relate to an idea, practice or object. This may seem obvious but there is a temptation to slip away from this understanding and to start considering only innovation relating to product development.
- Secondly, innovations need only be perceived as new. This is important as it is the first point which helps us distinguish between innovation and invention.
- Thirdly, implicit to innovation is the process of adoption.
 Types of innovation
We can broadly break innovation into three categories:
- Product innovation.
- Process innovation.
- Service innovation.
Products and processes can be considered to have life lifecycles. Typically at the start of a product's life there is a proliferation of designs and approaches. Over time the variation in product or approach narrows and standards emerge which are refined slowly over time. This approach allows us to classify in terms of its 'radicalness'.
Radical innovations are those that open up new markets. They change the 'rules of the game' and create the opportunity for a large number of approaches to be developed. This type of innovation often makes existing skills and competencies obsolete.
In contrast, incremental innovation comprises small changes in design and performance. This type of innovation tends to improve the performance of existing products or processes and strengthens the position of incumbent firms. Incremental innovation often builds upon skills that already exist strengthening or enhancing existing capabilities. This type of innovation closes markets and makes it harder for new firms to enter.
 Why innovate?
Firms are constantly striving for competitive advantage; to eke out some way of establishing a lead over their competitors. It is true that this type of advantage can be created through size, resources and other attributes of a firm. However, it is increasingly becoming apparent that the ability to take knowledge and resources and mobilise these with the correct technical skills leading to the creation of new products, processes and services is critical in establishing and maintaining a competitive advantage.
The speed with which a firm can innovate is also important. Product lifecycles are shortening; firms are able to get more and more new products to market more quickly. This places pressure on firms to not only innovate, but to do so speedily. The ability to innovate quickly increases the agility of a firm.
In our discussions we must not forget processes. Being able to make something that no one else can, or in a way that nobody else can provides a significant competitive advantage. The success of Toyota, and other Japanese firms, is often attributed to the way in which they manufacture their products. This approach has been made famous worldwide as the Toyota Production System.
The vast majority of new concepts and ideas do not make it through into production and then to successful market launch. This can pose significant organisational risk, particularly if the firm is relying on new products or processes to change the direction of the firm.
To mitigate risks in the innovation process it is important to learn as an organisation. Organisational learning is distinct from individual learning. The knowledge that an individual has leaves the organisation when they do. Organisational learning is a way of capturing this individual knowledge and learning in order to make it available to others in the firm.
Studies have revealed that the majority of new ideas that open a market up and undermine existing skills and capabilities, do not come from firms that have dominant positions within the market. Radical innovations not only have the potential to cause difficulty for individual firms but for whole sectors.
 Innovation management
The temptation is to think of innovation a sequence of functions either from research into the market (technology push) or from the market through to research (market pull). The process of innovation is actually about the interplay between these two forces. Rothwell produced an interesting historical summary of the way in which the management of innovation has developed.
 Technology push – 1st Generation (1G)
This approach dominated from the 1950's through to the mid 1960's. A fast-growing economy allowed for a strong focus on science, research and development. This resulted in an approach with a very strong characteristic of 'technology push'. Basic science was conducted, new technologies where developed and these were offered to the market with very little attention paid to what the market wanted. The attitude was often that the market didn't know what was possible and that demand could be created through supply.
 Market pull – 2nd generation (2G)
The 1960's and 70's witnessed and increase in competition for market share. This triggered a re-orientation of the innovation process to focus more strongly on market demand. The stronger focus on market needs was coupled with a need to drive down costs. Often individual innovation projects were subject to cost-benefit analysis in a structure of controlled and managed resource allocation.
From the 1970's into the 80's difficult economic condition resulted in a consolidation of product and project portfolios. Companies moved away from individual research & development projects to a much more corporately controlled research programme approach. Marketing and research and development became much more tightly coupled through defined innovation processes. An emphasis was placed on feedback loops and the interface between the push and pull.
 Integrated business processes – 4th generation (4G)
As the economy recovered through the 1980's and 90's a time-based race began to develop new products and services as lifecycles shortened. The shortening of product lifecycles led to an increased focus on integrated innovation processes and total solutions. Unlike the 3G model, this approach required parallel activities rather than activity shifting from one function to another. This approach began to recognise that innovation is not a simple process to manage, and developing the 4G approach began to provide a suitably flexible approach.
 System integration and networking – 5th generation (5G)
Entering the 1990's resource constraints became a priority. In addition the 90's witnessed an increase in technology-enabled communication and strategic partnering. The key development in focus here is a significant shift towards being a 'fast innovator'. Firms focused on the capability to deliver new products to the market quickly. 5G innovators embrace the multi-firm, multi-actor, non-linear nature of innovation to emphasise the vertical integration present in the 4G firm and to involve key suppliers and customers early in the process.
 Innovation frameworks
So far the perspective offered has been managerial. That is that we have talked about what innovation is from the point of view of the new product, process or service and we have discussed different approaches that have been taken to managing the innovation process. Both of these are internal to the firm and innovation process. There are a great number of factors that are external to a firm which play a part in ultimately deciding if an innovation is going to be successful or not.
 Socio-technical perspective
A socio-technical perspective seeks to understand the successful diffusion, or not, of an innovation not just in terms of the technical features of an innovation, or how the innovation process is managed, but in terms of the myriad different social influences that bear upon the innovation process. Users and society play an active part in 'socialising' a technology. This can be particularly important for the construction industry. For example, the performance of buildings which are designed to have high degrees of air tightness can be hugely compromised by the installation of a cat flap. User's behaviours and routines have a key role to play in how a technology is used and therefore if it is successful or not.
First we start by saying that on an innovation journey not every option is a possibility. For example, a car manufacturer, like a builder, has strong legislation and regulation to adhere to. There are formal rules which dictate what can and cannot be developed. There are also informal rules. Professions such as engineers, architect and surveyors are taught particular approaches to problem solving, they use a common language and often have a clear idea of what is expected of them professionally. These informal rules shape problem solving approaches, or heuristics, which guide the innovation process as strongly as the formal rules. Groups who share the same heuristics, are referred to as technological regimes. These technological regimes guide and shape the innovation process in a particular direction; giving the regime a momentum which we call a technological trajectory.
However, the regime does not operate in a vacuum. It is not immune to influence from a wider group which includes users, policy makers, societal groups, suppliers, scientists, investors and others. This wider group, which is often guided by a looser set of 'guidelines', is what we refer to in our framework as a socio-technical regime. We represent a regime using six criteria which are market, science, culture, users, policy and industry.
 The framework
The framework helps us to make sense of socio-technical transitions. Socio-technical transitions are changes in the way in which major societal functions, such as housing or energy, are delivered.
We have three layers in the framework:
- Landscape level – These are deep-seated trends that change slowly over time. Changes in landscape often take decades or more to manifest. Examples include religious, economic and political ideologies, structural relationships between cities and/or nations and environmental conditions.
- Socio-technical regime – as discussed above this is the loose group of actors that come together to stabilise and shape the technological trajectory of a particular sector. Socio-technical regimes have stable patterns of interaction but change on a timescale shorter than that of the socio-technical landscape.
- Niche innovations – Niches are spaces protected from the pressures exerted by the socio-technical regime. Innovations from niches 'bubble up' to either enter the socio-technical regime and alter its trajectory or they are rejected and have no effect.
Socio-technical regimes have a structural element which reproduces itself. This is caused by the formal and informal rules discussed above. Due to this, the regime is far more likely to produce incremental innovations. This is no surprise as the common problem solving approaches of those in the regime are likely to produce innovations which build upon the regimes current design and production approaches.
Radical innovations are far more likely to originate at the niche level. The actors in the niche level are not bound by the same rules as those in the socio-technical regime, leaving them free to explore more alternatives. However, the products and process produced by radical innovations are likely initially to have drawbacks in terms of efficiency and effectiveness. Most radical innovation leads to novelties that if subjected to the full competitiveness of the regime would not be able to compete. An example of a niche is formula one. Many road going technologies can trace their origins to motorsport. In motorsport technologies are developed and trialled away from the mainstream regimes by a group of experts who have a different set of 'rules'. Many of the technologies such as ABS, traction control and variable valve timing may not have had the opportunity to develop if they had not had the protective niche of motorsport.
This article is a shortened version of a paper available from Open Resources in Built Environment Education. OBREE offers a collection of free, high-quality teaching and learning materials. The original paper was written by Dr Tim Lees from the Innovative Construction Research Centre in the School of Construction Management and Engineering at the University of Reading.
You can access the full paper by clicking here.
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