Title: Course Notes: Introduction to Innovation - Commercialisation and Entrepreneurship in Technology
Course: Worthington: Introduction to Innovation - Commercialisation and Entrepreneurship in Technology

Innovation requires the ability to recognise the opportunities provided by technology and know how to exploit them in business. The aim is more efficient and effective organisations, be they for-profit or not, existing or new start-ups. This requires documented investigation, analysis and review. A methodical investigation of functions and processes, requirements, costs, sustainability and business benefits is needed, with specifications and acceptance criteria.

Title: Introduction to Innovation - Commercialisation and Entrepreneurship in Technology

Copyright © Tom Worthington, 2015

Version: 0.1, March 2015

The purpose of this document is to provide an instructional unit to be offered on-line, for university students undertaking initially for students in the Australian Capital Territory (ACT), Canberra. The unit is designed for students in the third year of an undergraduate university STEM program (science, technology, engineering or mathematics), or advanced students undertaking a STEM component, such as those taking part in innovation competition.

The web version of these notes by Tom Worthington are licensed under the Creative Commons Licence: Attribution-NonCommercial 3.0 Australia (CC BY-NC 3.0 AU)

About the Course

These are the notes for a course in innovation, which requires the ability to recognise the opportunities provided by technology and know how to exploit them in business. The aim is more efficient and effective organisations, be they for-profit or not, existing or new start-ups. This requires documented investigation, analysis and review. A methodical investigation of functions and processes, requirements, costs, sustainability and business benefits is needed, with specifications and acceptance criteria.

Learning Objectives

At the completion of this course:

1. The learner will be able to prepare a plan (goal) to exploit business opportunities provided by IT, for more efficient and effective performance (conditions) of an existing or new businesses, at a skill level equivalent to SFIA Version 5, Level 5, "Innovation" INOV (Standard).
2. The learner will document an analysis of a business in terms of functions and processes (goal), by identifying and quantifying improvements to reduce costs and enhance sustainability (conditions) in accordance with the specifications and acceptance criteria for information and communications system, at a skill level equivalent to SFIA Version 5, Level 5 "Business analysis" BUAN (Standard).

Competencies

The Skills Framework for the Information Age (SFIA 2015) provides a common reference model for the identification of the skills needed to develop effective Information Systems (IS) making use of Information & Communications Technology (ICT).

This course targets SIFA Level 5 competencies: "ensure, advise ... Works under broad direction ... Influences organisation, customers, suppliers, partners and peers ... Performs an extensive range and variety of complex technical and/or professional work activities ... Advises on the available standards, methods, tools and applications ..." (SFIA, 2015).

Two skills have been selected, corresponding to the two learning objectives:

Skills from SFIA

Innovation

"The capability to recognise and exploit business opportunities provided by IT, (for example, the Internet), to ensure more efficient and effective performance of organisations, to explore possibilities for new ways of conducting business and organisational processes, and to establish new businesses."

From: Skill INOV, Category: Strategy & architecture, Subcategory: Business/IT strategy and planning, SFIA (2015).

Business analysis

"The methodical investigation, analysis, review and documentation of all or part of a business in terms of business functions and processes, the information used and the data on which the information is based. The definition of requirements for improving processes and systems, reducing their costs, enhancing their sustainability, and the quantification of potential business benefits. The creation of viable specifications and acceptance criteria in preparation for the construction of information and communication systems."

From: Skill BUAN, Category: Business change, Subcategory: Business change management, SFIA (2015).

Pre-requisites, Co-requisites

It is assumed that the learner is in the third year of an undergraduate university STEM program (science, technology, engineering or mathematics), gradute or advanced students undertaking a STEM component. It is assumed the learner is undertaking a project course, such as ANU TechLauncher (Australian National University, 2015), or is an entrant in an innovation competition, such as Innovation ACT (2014). Terminology from the innovation field is used (with a Glossary), but apart from this standard international English, as could be expected from a university student at IELTS 6.5 for Academic Reading and Academic Writing (IELTS, 2011).

Content

The course consists of two parts, corresponding to the skills:

Innovation

1. An Introduction to Innovation
2. Business Model Thinking^*
3. Stakeholder Engagement^*

Business analysis

1. Concept Generation^*
2. Value Capture^*

* Yet to be designed

Workload

To complete the subject the learner is expected to take 12 weeks, with eight to ten hours study per week. Self-instruction units in the course are each expected to take one to two hours. The upper limit is based on a reading speed of 80 words a minute for a student at IELTS 6.5 (McEwan, 2012, p. 80).

Assessment Methods

There are two areas of assessment in the course:

- Quizzes/Forums:

1. Quiz questions, which are automatically assessed,
2. Contributions to weekly discussion forums, peer assessed,

- Project assignments, tutor assesed.

The final mark is made up of 10% for the Quizzes, 20% Forums and 70% assignments. To pass overall, it is necessary to pass in both areas of assessment: quizzes/forums and project assignments. Note that the weighting of the assessment items and pass level is set by the particular educational institution offering the unit. Check the instution's policy for details.

Instructional strategy

The course has been designed using the instructional strategies outlined in Smith and Ragan (2005), for delivery via computer, using a web browser. They are designed to be delivered in non-real time (asynchronous) mode for distance education. The course includes self-instructional units, with automated quizzes. However, the project assignments are expected to be assessed by a human tutor. Also legal and ethical considerations may require those offering this course to have a human tutor overseeing the self-instructional units, to ensure the learners are safely and correctly instructed.

Specialist Features or Equipment

The materials for this course have been designed to be efficiently encoded so they can be used over a low bandwidth Internet connection on a tablet device or smart phone for remote users in developed nations and in developing nations with limited infrastructure (at dial-up 48.8 kbps). The course uses HTML web-based content for a learning management system (LMS), however, the materials are designed to be about to be printed for delivery on paper for use in a classroom.

Course Designer

Tom Worthington is a private computer consultant, who also does some part time teaching at tertiary institutions. He started as a computer programmer and later IT policy writer in the Australian government. I then left to be an independent consultant and teach computer students part time. As well as being an Certified Computer Professional (equivalent to the Canadian CPIS Information Systems Professional), he has a Graduate Certificate in Education from an Australian university and an Australian Certificate IV in Training and Assessment. Tom's liability is limited by a scheme approved under Australian Professional Standards Legislation.

References

The notes for this course are to be published on paper and electronic formats as "Introduction to Innovation - Commercialisation and Entrepreneurship in Technology". Further readings, most of which are available on-line, are detailed in the notes. Learners may be provided with a copy of the notes via a Learning Management System.

Changes from Previous Version

This is the third pre-release version of the notes (version 0.3). Version 0.1 was a draft describtion of the course. Version 0.2 provided details of just the introducty unit. Version 0.3 has more course level details.

Corrections, suggestions for improvement and comments to the author would be welcome.

Innovation

"An innovation is the implementation of a new or significantly improved product (good or service), or process, a new marketing method, or a new organisational method in business practices, workplace organisation or external relations." From OECD/Eurostat (2005, p. 46) emphasis added.

An Introduction to Innovation

About the Unit

This is the first unit of a course in "Commercialisation and Entrepreneurship in Technology".

Learning Objectives

At the completion of this unit:

1. The learner will document an analysis of a business in terms of functions and processes (goal), by identifying improvements (conditions), at a skill level equivalent to SFIA Version 5, Level 5 “Business analysis” BUAN (Standard).

This objective is based on the skill "Business Analysis" (BUAN) from the Skills Framework for the Information Age (SFIA 2015). See "About the Course" for further details.

Workload

To complete the unit the learner is expected to take on to two hours:

1. Read: An Introduction to Innovation (15 minutes)
2. Take the quiz (20 Minutes)
3. Watch and read: The Readings (25 minutes)
4. Answer two questions: Discussion Forum (20 minutes)
5. Rate forum answers other students (15 minutes)
6. Reply to students in the Discussion Forum (154 minutes)
7. Check your grade (5 minutes)

Assessment Methods

There are two areas of assessment in the unit:

1. Quiz questions, which are automatically assessed, for half the assessment total,
2. Contributions to a discussion forum, peer assessed, for half the assessment total.

Introduction

To be able to innovate, you need to first know what innovation is, what types of innovation there are and where they can be applied. Here you will learn some international definitions of forms of innovation.

OECD Taxonomy of Innovation

The Oslo Manual (OECD/Eurostat, 2005) provides a useful set of definitions of innovation:

"An innovation is the implementation of a new or significantly improved product (good or service), or process, a new marketing method, or a new organisational method in business practices, workplace organisation or external relations." From OECD/Eurostat (2005, p. 46) emphasis added.

"Innovation activities are all scientific, technological, organisational, financial and commercial steps which actually, or are intended to, lead to the implementation of innovations. Some innovation activities are themselves innovative, others are not novel activities but are necessary for the implementation of innovations. Innovation activities also include R&D that is not directly related to the development of a specific innovation." From OECD/Eurostat (2005, p. 47) emphasis added.

Four types of innovation: The OECD/Eurostat (2005, pp. 47-51) identify four types of innovations (emphasis added):

1. “A product innovation is the introduction of a good or service that is new or significantly improved with respect to its characteristics or intended uses. This includes significant improvements in technical specifications, components and materials, incorporated software, user friendliness or other functional characteristics.
2. A process innovation is the implementation of a new or significantly improved production or delivery method. This includes significant changes in techniques, equipment and/or software.
3. A marketing innovation is the implementation of a new marketing method involving significant changes in product design or packaging, product placement, product promotion or pricing.
4. An organisational innovation is the implementation of a new organisational method in the firm’s business practices, workplace organisation or external relations.”

While the OECD likes to collect statistics for these neat categories, in order to innovate it is likely that your innovation will fall into several categories. As an example an organizational innovation which gives more workplace autonomy for decision making might be implemented through software and an on-line forum, making it a product innovation as well.

One point of difference is that OECD/Eurostat (2005, p. 56) argues that "It is not an innovation to stop doing something, even if it improves a firm’s performance.". However, removing unnecessary work practices and processes can be a significant innovation.

Novelty versus diffusion

OECD/Eurostat (2005), points out that innovation requires some degree of novelty and distinguishes three categories:

1. New to the firm: "A product, process, marketing method or organisational method may already have been implemented by other firms, but if it is new to the firm (or in case of products and processes: significantly improved), then it is an innovation for that firm." From OECD/Eurostat (2005, p. 57)
2. New to the market: "Innovations are new to the market when the firm is the first to introduce the innovation on its market. The market is simply defined as the firm and its competitors and it can include a geographic region or product line." From OECD/Eurostat (2005, p. 58)
3. New to the world: "An innovation is new to the world when the firm is the first to introduce the innovation for all markets and industries, domestic and international. New to the world therefore implies a qualitatively greater degree of novelty than new to the market." From OECD/Eurostat (2005, p. 58).

Disruptive innovation

Disruptive or Radical innovation is "an innovation that has a significant impact on a market and on the economic activity of firms in that market." (OECD/Eurostat, 2005, p. 58). The impact of innovation may be great even where it is not very novel. As an example, the effect of the use of on-line social media tools have on the way organizations are managed is still being worked out today, even though such tools are not new. Schubert and Williams (2013) trace the use of social media in business over the last six years and comment that so far 'the most popular usage scenarios of the software are not very “social” but support people in their daily joint work with a focus on getting the job done', so there is scope for further disruptive innovation.

The innovative firm

The (OECD/Eurostat, 2005, p. 58) define the innovative firm as one which "... has implemented at least one innovation ...". They go on to characterize innovation activities for a period as being:

- "Successful in having resulted in the implementation of an innovation (although the innovation need not have been commercially successful).
- Ongoing, for work in progress which has not yet resulted in the implementation of an innovation.
- Abandoned before the implementation of an innovation., while a product or process innovator is defined as a firm that has implemented either a product or a process innovation."

From OECD/Eurostat (2005, p. 58)

The Cambridge Phenomenon

King's College Chapel, Cambridge, by Andrew Dunn (http://www.andrewdunnphoto.com/) [CC BY-SA 2.0], via Wikimedia Commons

Thousands of high technology businesses have started in the area around the City of Cambridge (UK) in the last fifty years, these employ approximately 40,000 staff (Cotton & Kirk, 2012). The process of its formation of these companies fostered by Cambridge University is referred to as "The Cambridge Phenomenon" (Segal Quince & Partners, 1985). The process continues with the area sometimes referred to as "Silicon Fen" (Kirk & Cotton, 2012), who attribute the success of Cambridge to three factors:

1. Allowing academics to pursue non-academic roles,
2. Overcoming the fear of failure, and
3. A willingness to collaborate across organisational boundaries.

ARM processor, photo by Socram8888 (Own work) [CC BY 2.0], via Wikimedia Commons, 26 August 2008

Kirk and Cotton (2012) also point out the value of "Soft-starts, where technology is developed within a company before being spun-out, has also successfully de-risked technology for many investors". One of the most successful Soft-startsat Cambridge has been microchip designer Advanced RISC Machines Ltd (ARM Ltd).

Acorn Computers Ltd. researched the use of RISC technology for low cost, low power, home computers (Garnsey, Lorenzoni & Ferriani, 2007,  pp. 125-127). Acorn's home computer market seemed assured by winning the contract to provide the BBC Micro, a computer for home education, but sales declined from the mid 1980s. ARM Ltd was formed to exploit the work on RISC technology for portable devices and now powers many of the world's smart phones and tablet computers.

Raspberry Pi Computer, photo by By Ayaita (Own work) [CC BY 3.0], via Wikimedia Commons

A more recent Cambridge start-up is the Raspberry Pi Foundation, a non-profit foundation which has designed a new low cost education computer, the "Raspberry Pi", using the ARM technology (Garnsey, Lorenzoni & Ferriani, 2007,  pp. 132-133). Unlike Acorn, which sold computers through retailers, or ARM which licences intellectual property to chip manufacturers, the Raspberry Pi is sold on-line.

Canberra Start-up Business Boomerang

Canberra Start-up Business Boomerang, map by Tom Worthington [CC BY 3.0], via Google Maps

Many cities have attempted to emulate Cambridge's success in fostering new technology companies. The most recent is Canberra (Australia) with the Canberra Innovation Network (CBRIN, 2014). CBRIN is a non-profit organisation sponsored by the Canberra local government and universities to support entrepreneurs, start-ups, accelerator programs, venture capital and co-working spaces. CBRIN's office is located in the Canberra CBD. adjacent to the campus of the Australian National University (ANU), with a high concentration of technology companies (Worthington, 2015). The office provides:

- Co-working space: with open plan office space for 35 people (Entry 29, 2012). This allows a new start-up to to have room for a small number of employees and also call on the skills of others in the space. This includes the Public Sector Landing Pad program (PSLP) for former government employees to start a new business.
- Accelerator: business advice and staff training usually given in return for a share of the start-up business equity (GRIFFIN Accelerator, 2014).

CBRIN is aimed at creating new private for-profit and not-for profit organisations. However, the Australian Government, based in Canberra also has initiatives to create an innovation culture in the organisation and amongst the organisations it works with:

- innovationXchange: for innovation in the delivery of international aid (DFAT, 2015), with five principles:
  - "Openness - We work in the open, sharing learnings broadly to support participation in innovation and drive new, better thinking.
  - Leadership - We demonstrate and influence change towards new ways of working.
  - Collaboration - We co-create with a range of partners.
  - Agility - We are problem solvers in the business of funding trials. A cycle of iteration, adaptation and learning will be the foundation for our progress.
  - Engagement with Risk - We look at risk differently. We don’t think of risk as something to be avoided or mitigated at all costs. We recognise the upside of risk and that innovation offers the potential for reward and big impact. Taking risks is essential to pioneering new approaches. We strive to achieve transformational" From DFAT (2015)
- Digital Transformation Office: The Digital Transformation Office (DTO) in the Australian Department of Communications (2015):
"The DTO will comprise a small team of developers, designers, researchers and content specialists working across government to develop and coordinate the delivery of digital services. The DTO will operate more like a start-up than a traditional government agency, focusing on end-user needs in developing digital services." From Department of Communications (2015).

Conclusion

To innovate you will need to implement new or improved products, services, processes, marketing or organizational structure. The innovation can be new to the firm, market or the world. Innovation can be disruptive (radical), but does not need to be. The implementation of an innovation can be successful, ongoing or abandoned. The area around the City of Cambridge (UK), "Silicon Fen", shows an example of where such innovation has developed. Acorn Computers Ltd, ARM Ltd and the Raspberry Pi Foundation show how innovations can build on each other, with research, education, innovation and commerce flourishing, even when not all the companies involved survive.

Quiz

Before the readings, attempt the quiz.

Now Read

1. How Innovation is Changing in Europe: an interview with OECD's Andrew Wyckoff (2013).
2. Viewpoint: The Cambridge Phenomenon, five decades of success (Cotton & Kirk, 2012).
3. Case Study 2: The Rise and Fall of Acorn Computers Ltd, (Garnsey, Lorenzoni & Ferriani, 2007,  pp. 125-127)
4. Case Study 10: The Raspberry Pi Foundation (Garnsey, Lorenzoni & Ferriani, 2007,  pp. 132-133)

Forum Discussion Questions

1. OECD Definitions Suitable for Business?: The OECD definitions of innovation are used by government agencies collecting statistics. Are these definitions suitable for use by business. Select one definition, say if it is suitable, or not, and justify your answer. Cite at least one source to support your argument.
2. Innovation in Cambridge and Canberra: Many cities have tried to emulate "Silicon Fen", the high-tech start-up area around Cambridge University UK. What does Canberra's attempt have in common with Cambridge? What is different?

Post an answer to each question in the forum. After answering each question, rate and reply to an answer from another student for each topic.

Appendixes

Supplementary material.

Assessment

The weighting of the assessment items and criteria are set by the particular educational institution offering the module. Shown here are those for a typical vocational course:

Read the course notes  and the additional readings before attempting the assessment.
- Quiz: Five automatically scored multiple choice questions.
- Contributions to discussion forum: peer assessed by your fellow student for half quarter of the assessment total.

Quiz

You can have three attempts  at the quiz, with the best result recorded. Questions are selected at random from a question bank, with each learner receiving a different quiz, on each attempt.

Forum

Submit an answer of no more than 140 words, to each of the discussion questions in the Discussion Forum, before reading the answers from other students. Read the answers from at least one other students, rate them (either "Competent" or "Not Yet Competent") and submit at least one reply to a posting your fellow students in the Discussion Forum.

Glossary

These terms are from OECD/Eurostat (2005), except where otherwise indicated.

C

Cambridge phenomenon

Growth of the high technology industry around Cambridge University, UK. (Segal Quince & Partners, 1985)

D

Disruptive innovation

"... an innovation that has a significant impact on a market and on the economic activity of firms in that market." (OECD/Eurostat, 2005, p. 58)

I

Innovation

"An innovation is the implementation of a new or significantly improved product (good or service), or process, a new marketing method, or a new organisational method in business practices, workplace organisation or external relations." From OECD/Eurostat (2005, p. 46) emphasis added.

Innovation activities

"Innovation activities are all scientific, technological, organisational, financial and commercial steps which actually, or are intended to, lead to the implementation of innovations. Some innovation activities are themselves innovative, others are not novel activities but are necessary for the implementation of innovations. Innovation activities also include R&D that is not directly related to the development of a specific innovation." From OECD/Eurostat (2005, p. 47) emphasis added.

Innovative Firm

"... has implemented at least one innovation ...". From OECD/Eurostat (2005, p. 58)

M

Marketing Innovation

"A marketing innovation is the implementation of a new marketing method involving significant changes in product design or packaging, product placement, product promotion or pricing." From OECD/Eurostat (2005, p. 46) emphasis added.

N

New to the firm

"A product, process, marketing method or organisational method may already have been implemented by other firms, but if it is new to the firm (or in case of products and processes: significantly improved), then it is an innovation for that firm." From OECD/Eurostat (2005, p. 57)

New to the market

"Innovations are new to the market when the firm is the first to introduce the innovation on its market. The market is simply defined as the firm and its competitors and it can include a geographic region or product line." From OECD/Eurostat (2005, p. 58)

New to the world

"An innovation is new to the world when the firm is the first to introduce the innovation for all markets and industries, domestic and international. New to the world therefore implies a qualitatively greater degree of novelty than new to the market." From OECD/Eurostat (2005, p. 58).

P

Process Innovation

"A process innovation is the implementation of a new or significantly improved production or delivery method. This includes significant changes in techniques, equipment and/or software.A process innovation is the implementation of a new or significantly improved production or delivery method. This includes significant changes in techniques, equipment and/or software." From OECD/Eurostat (2005, pp. 47-51)

Product Innovation

“A product innovation is the introduction of a good or service that is new or significantly improved with respect to its characteristics or intended uses. This includes significant improvements in technical specifications, components and materials, incorporated software, user friendliness or other functional characteristics." From OECD/Eurostat (2005, pp. 47-51)

R

Radical innovation

See: Disruptive Innovation.

S

Silicon Fen

High technology industry around Cambridge University, UK.

Soft-starts

"... where technology is developed within a company before being spun-out, has also successfully de-risked technology for many investors" (Kirk & Cotton, 2012)

Bibliography

Australian National University. (2015). TechLauncher. Retrieved from http://cs.anu.edu.au/TechLauncher/

CBRIN. (2014). Canberra Innovation Network: Who We Are. Retrieved from http://cbrin.com.au/#weare

Cotton, Charles & Kirk, Kate. (2012). Viewpoint: The Cambridge Phenomenon, five decades of success. BBC News UK. Retrieved from http://www.bbc.com/news/technology-17982595

Department of Communications (2015). Establishment of a Digital Transformation Office, Malcolm Turnbull, Minister for Communications, Australian Department of Communications. Retrieved from http://www.minister.communications.gov.au/malcolm_turnbull/news/joint_release_with_the_hon_tony_abbott_mp,_prime_minister_establishment_of_a_digital_transformation_office#.VRnQrcvhntS

DFAT (2015). innovationXchange - Australia’s new aid paradigm. Minister for Foreign Affairs, Australian Department of Foreign Affairs, Canberra. Retrieved from http://foreignminister.gov.au/releases/Pages/2015/jb_mr_150323.aspx

Entry 29. (2012). Co-working at Entry 29, Retrieved from http://cbrin.com.au/#weare

EurActiv. (2013). How Innovation is Changing in Europe: an interview with OECD's Andrew Wyckof. EurActiv. Retrieved from https://youtu.be/m4kM7ocL6fA

Garnsey, E., Lorenzoni, G., & Ferriani, S. (2007). Speciation through Entrepreneurial Spin-off: The Acorn-ARM story. Retrieved from http://www.researchgate.net/profile/Elizabeth_Garnsey/publication/222423713_Speciation_through_entrepreneurial_spin-off_The_Acorn-ARM_story/links/0deec52945dd7279bf000000.pdf

GRIFFIN Accelerator. (2014).  GRIFFIN Accelerator: About Us. Retrieved from http://griffinaccelerator.com.au/about-us/

IELTS. (2011). IELTS band scores. Retrieved from http://www.ielts.org/institutions/test_format_and_results/ielts_band_scores.aspx

Innovation ACT. (2014a). Innovation ACT: History. Retrieved from http://web.archive.org/web/20131030170036/http://www.innovationact.org/about/history/

Kirk, Kate & Cotton, Charles & Gates, Bill, 1955- (2012). The Cambridge Phenomenon : 50 years of innovation and enterprise. Third Millenium, London

McEwan, M. (2012). Evaluating and enhancing the feedback process: an international college case study. Practice and Evidence of Scholarship of Teaching and Learning in Higher Education, 7(1), 79-95. Retrieved fromhttp://community.dur.ac.uk/pestlhe.learning/index.php/pestlhe/article/viewFile/131/244

OECD (2011), Charting innovation. OECD Publishing, Paris.
Retrieved from http://www.oecd.org/site/innovationstrategy/chartinginnovation.htm

Organisation for Economic Co-operation and Development (2005). The measurement of scientific and technological activities Oslo manual : guidelines for collecting and interpreting innovation data (3rd edition). OECD, Paris. Retrieved from http://ec.europa.eu/eurostat/documents/3859598/5889925/OSLO-EN.PDF/60a5a2f5-577a-4091-9e09-9fa9e741dcf1?version=1.0

SFIA Foundation Ltd, (2015). The purpose of SFIA. [online] Skills Framework for the Information Age. Retrieved from https://www.sfia-online.org/v501/en/index.html

Segal Quince & Partners (1985). The Cambridge phenomenon : the growth of high technology industry in a university town. Segal Quince & Partners, Cambridge

Smith, Patricia L. (Patricia Lucille) & Ragan, Tillman J (2005). Instructional design (3rd ed). Hoboken, N.J. John Wiley & Sons

Worthington, Tom. (2015). Canberra Start-up Business Boomerang. Retrieved from http://blog.tomw.net.au/2015/03/cambridge-phenomenons-fifty-years-of.html#cbb