Generations of innovation process models

2.1.1.1 Linear/sequential process models

The first category of linear innovation process models (Figure 1) featured an

‘essential’ presence of in-house R&D resources. The idea of R&D as a key contributor to innovation has held a central position when it comes to understanding innovation. The first linear process model emerged in the 1950s (Rothwell, 1994) which inspired a series of sequential models that introduced different elements into the linear process model subsequently. The linear process model was adopted in a period when industrialists, consultants, business schools, and economists believed strongly in R&D and how it enabled breakthroughs in technology (Kotsemir and Meissner, 2013). Although the linear innovation process model is now referred to as “something of a conceptual zombie” (Bender, 2008), there are still obvious remnants of the model having influence on current policy making, which continues to place an emphasis on support for R&D-specific industries (Hirsch-Kreinsen et al., 2005, Godin, 2006).

Innovation process models continued to metamorphose over the years to include new elements over time, always with some form of emphasis on the role of R&D, either as a crucial origin of innovation or an essential step before any innovative ideas can be commercialized. While this thesis recognizes the role R&D has played, especially in certain industries (such as life-sciences), this can also be attributed to the concentration empirical samples being drawn from large technology companies. These large firms are often equipped dedicated R&D departments. This is not the case for many companies, especially for microenterprises even though their business might be dependent on R&D-related innovation activities.

The linear process model has received its fair share of criticism for being too simplistic and not representing the complexity of the actual processes (Bender, 2008). As seen from Figure 1, R&D has been regarded as an

Basic research

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research Development

(Production and) Diffusion

Figure 1.

Linear process model (Godin, 2006).

important component and has constituted a type of resource in many innovation studies. It is often conceptualized as a precursor to the commercialization phase of an innovation,⁵ often mentioned as being combined with some form of innovation-related activity. There has been a neglect of the mention actors or other types of activities in these linear models, other than a focus on research as the prominent type of resource. This assumption implies that there is an ‘invisible mechanism’ connecting both actors and activities. This may be explained by the perception that innovation was seen as an internal development of a company’s competitive advantage that was kept within the walls of an organization, and thus actors and activities were taken for granted to be already connected internally.

A series of similar sequential-type innovation process models that subsequently emerged (Rothwell, 1994) included other components that were slightly “outward-looking,” which relate to companies recognizing the voice of the marketplace (customers and suppliers). These components can be seen in market-pull models (Berkhout et al., 2006) which introduced the element of external activities to understand market demands. This understanding of the demand from the market then dictates the types of innovation that should be developed for the target market. R&D activities are then customized to meet the demands of the market. While this model has the merit of including the market aspects (external actors) of an innovation process, it remained in principle a type of linear innovation process model. The components of these sequential innovation process models, like the linear innovation process model were mostly connected via one-directional linkages and ‘ignored’ the realities of both internal and external logistical considerations, as well as changes in demand and competition. As such, innovation projects based on this model tend to be short-term (Berkhout et al., 2006) projects and can be observed to be still for certain types of businesses.

5 The term "innovation" is used to describe all types of innovation products, processes, or services in this thesis.

2.1.1.2 Phased/coupling process models

The second category of innovation process models falls under the category of phased/coupling process models (Figure 2 and Figure 3). Like the name suggests, innovation processes are being grouped under different phases, proceeding in a sequential manner, but included some external components that differed from their predecessors. As illustrated in Figure 2, the coupling innovation model shows how the combination of new need, idea generation, and new technology brought forth the innovation concept to be further developed by the R&D department. Included in these models, unlike the linear process model, were innovation activities that describe the interaction of resources and activities to find new needs of the society and the marketplace.

The stage-gate process model in Figure 3 also illustrates this through an orderly evaluation of objectives after every stage of the innovation process, with inclusion of more customer involvement in the process. The inclusion of an external test with customers (external actors) is conducted only from stage 4 onward for the purpose of validation and commercialization, with most of the innovation activities evaluated in-house. This assumption implied that the organization should possess in-house capabilities to conduct these innovation activities. This indicated that this model might be more applicable to larger firms that would have the resources to ensure in-house capabilities to drive the innovation process.

Figure 2.

Coupling innovation model (Rothwell, 1994).

This generation of innovation process models possessed characteristics that were more inclusive, such as the chain-linked model (Kline and Rosenberg, 1986) that emerged in the late 1980s and incorporated R&D, market activities and feedback loops. The main feature that differentiates this generation of innovation process models as compared from earlier generations of innovation process models was that feedback loops were coupled with the interaction aspect between the research and the knowledge bases (Gadrey et al., 1995).

There is also an element of interaction where the entrepreneurs engage with external sources of knowledge for identifying potential markets. There are limitations as acknowledged by Kline and Rosenberg (1986) in that these type of phased or coupling models were visualized as macro-level process models that may neglect the intricacies of innovation processes as acknowledged today.

Visualizing the innovation process in phases helps to reduce some form of uncertainty in the innovation process and holds a degree of predictability in its sequences. Cooper (1990) described the stage-gate model as one used by firms when developing new products to help “manage, direct and control” the innovation process when developing a new idea to a product. However, the applicability of this type of innovation model is limited for microenterprises, as it would be more structurally unlikely for microenterprises to effectively segregate the innovation process into piecemeal phases to be handled by

Figure 3.

Stage gate process model (Cooper, 2008).

dedicated groups of resources due to the common organizational structure of owner-manager. The recognition of interactivity and an awareness of the interaction component in the innovation process can be seen in the third generation of innovation process models under integrated or distributed processes of innovation.

2.1.1.3 Integrated or distributed processes of innovation

The last category of innovation process models under integrated or distributed process of innovation placed emphasis on the role of multiple actors within and external to the firm that can be relevant to the study of the innovation process of microenterprises. In these models, “systems integration and extensive networking, flexible and customized response, continuous innovation integration and parallel development” (Tidd, 2006) are emphasized. In Figure 4 which shows the integrated innovation model, bridging the “internal functions of a firm to the external knowledge pool” (Bernstein and Singh, 2006) can be observed in how the internal components of the company functions are integrated to address the external demands.

Figure 4.

Integrated innovation process model (Bernstein and Singh, 2006).

The open innovation and user innovation process models are referred by Bogers and West (2012) as a “distributed process of innovation.” The increased participatory nature of innovation is observed not just from the connection of nodes in a network (Kotsemir and Meissner, 2013) but in these interactions,

“links and connections become as important as the actual production and ownership of knowledge” (Tidd, 2006) in the innovation process. The open innovation model (Figure 5) proposed by Chesbrough (2006b) viewed the innovation process as continuous “purposive inflows and outflows of knowledge to accelerate internal innovation, and expand the markets for external use of innovation, respectively” (Chesbrough et al., 2006). Open innovation has also received criticism for being seen as ‘more applicable’ to high-tech industries and larger firms (Chesbrough et al., 2006) based on the application of the model on such industries. However, more recent studies have acknowledged the use of open innovation process models for small firms.

Gassmann et al. (2010) noted, for instance, the development of open innovation being used by LMT sectors and small firms “opening up” their innovation process by reaching out externally for collaboration to overcome the liability of smallness. The liability of smallness suggested by Freeman et al.

(1983) is related to Stinchcombe (1965) concept of the liability of newness, which suggested that new (and likely small) organizations were more likely to

Figure 5.

Open innovation model (Chesbrough, 2006b)

fail compared to organizations that were established. These discussions will be further elaborated in relation to microenterprises in section 2.2.

User innovation has been described as a form of “democratized innovation” (Von Hippel, 2005) or distributed process of innovation in that it allowed the users a role in the development of the innovation process, even if they may hold different profile. The role of the user is thus not only having a need, but having the ability to “combine and coordinate innovation-related efforts via new communication media such as the Internet” (Von Hippel, 2005). These users have the mentality and ability to want and buy a product that exactly fits their needs. This allows the benefits from the innovation outcome to be received directly to those who were involved in it. This user-centered innovation process model differentiates itself from previous generations of innovation process models not just through having more user input, but also through showing less inclination to keep the innovation process closed and protected (Von Hippel, 2005). The feedback or suggestion from others is considered as being more valuable to the innovation process than what patents can offer in terms of protection in this type of innovation process.