PG DIPLOMA IN ENTREPRENEUR DEVELOPMENT :

ENTREPRENEURSHIP & INNOVATION

Prepared by
Mr. N.RAMESH KUMAR
 Syllabus
 Unit I :
Innovation and Innovation Management: The
evolution of innovation - levels of innovation
-myths of innovation - innovation models -
categories of innovation – innovation management
- main requirements - basic practices of
innovation management- barriers to innovation in
an organization -innovation in the future -
different ways to innovative - principle of good
innovation
Unit II :
Innovation Process: building the innovation
process - innovation diffusion – the
innovation: decision process- five stages of
the diffusion process - the new learning
about innovation
Unit III :
Innovation culture: introduction - innovation
system - community and social capital
-innovation culture - building innovation
culture- innovation climate
Unit IV:
Creativity and Innovation: Introduction - defining
creativity - the relation between creativity and
innovation - different ways of thinking - qualities of a
creative person the difference between creativity and
innovation — creativity, problem solving: guidelines

Unit V:
Innovators and Entrepreneurs: Social and cultural
context of entrepreneurs - processes encouraging and
discouraging entrepreneurship - Ethical social and
political issues of innovation -Innovation as a
personality, innovative process and entrepreneurship
 REFERENCES :
1. Jeffrey A. Timmons and Stephen Spinelli, "New
Venture Creation: Entrepreneurship for he 21st
Century," McGraw-Hill, 2004.
2. Malcolm Gladwell, "The Tipping Point: How
Little Things Can Make A Big Difference," title,
brown February 2000
3.Peter F.Drucker, INNOVATION AND
ENTREPRENEURSHIP PRACTICE AND
PRINCIPLES , West Press Limited
4. Keith Herndon, ENTREPRENEURS AND
INNOVATION: CREATING VALUE WITH
EMERGING TECHOLOGIES, Innovations
Publishing, Atlanda, Georgia
5. Clayton M. Christensen and Michael E.
Raynor, "The Innovator's Solution: Creating
and Sustaining Successful Growth," Harvard
Business School Press, September 2003
6. Geoffrey A. Moore, "Crossing the Chasm,"
Harper Business, August 2002
7. William A. Sahlman and Howard H.
Stevenson, ENTREPRENEURIAL VENTURE,
Harvard Business School Publications, 1992.
Introduction to
innovation
 What is innovation?
 Innovation is the process and outcome of
creating something new, which is also of
value.
 Innovation involves the whole process from
opportunity identification, ideation or
invention to development, prototyping,
production marketing and sales, while
entrepreneurship only needs to involve
commercialization (Schumpeter).
 What is innovation?
 Today it is said to involve the capacity to quickly
adapt by adopting new innovations (products,
processes, strategies, organization, etc)

 Also, traditionally the focus has been on new

products or processes, but recently new business
models have come into focus, i.e. the way a firm
delivers value and secures profits.
 What is innovation?
 Schumpeter argued that innovation comes
about through new combinations made by
an entrepreneur, resulting in
 a new product,
 a new process,
 opening of new market,
 new way of organizing the business
 new sources of supply
 Dimensions of innovation
There are several types of innovation
 Process, product/service, strategy,

which can vary in degree of newness:

 Incremental to radical,

and impact:
continuous to discontinuous
 Drivers for innovation
 Financial pressures to reduce costs,
increase efficiency, do more with less, etc
 Increased competition
 Shorter product life cycles
 Value migration
 Stricter regulation
 Industry and community needs for
sustainable development
 Increased demend for accountability
 Demographic, social and maket changes
 Rising customer expectations regarding
service and quality
 Changing economy
 Greater availability of potentially useful
technologies coupled with a need to
exceed the competition in these
technologies
 What is innovation?
 Gary Hamel argued that today’s market
place is hostile to incumbents, who now
needs to conduct radical business
innovation:
 Radically reconceiving products and services,
not just developing new products and services
 Redefining market space

 Redrawing industry boundaries

 New conditions for innovation
 Small start-up entrepreneurs increasingly
depend on large firms:
 as suppliers or customers
 for venture finance,

 for exit opportunites,

 for knowledge (production, markets and R&D)

 and for opening new markets.

 New conditions for innovation
contd...
 Large firms increasingly depend on small
start-ups
 for NPD,
 as suppliers of new knowledge (which they cannot
develop themselves),
 or organizational renewal, for experimentation with
busienss models,
 for opening new markets, etc
 New developments in innovation
raises new issues and problems
 Greater emphasis on commercializing scientific
discoveries, particularly in IT and the bio-sciences
 Speed and potential value of scientific progress
leads to emphasis on solid and well-designed
portfolios of research projects
 Universites as active drivers of innovation:
Academic entrepreneurship and the
entrepreneurial university
 University-industry partnerships
 Increased search for radical innovation and top-
line growth.
 LEVELS OF INNOVATION
Managers and policy makers are increasingly
recognizing that the 'linear model' of innovation,
i.e. an orderly progression from R&D to
development to market exploitation, is over
simplistic.
In today's complex and changing business
environment Successful innovation is much more
iterative and interactive, involving many people
and processes. In short, commercial success
depends on effective Innovation networks.
Effective innovation networks bring the
following benefits:

. Faster development of new products and

services;
. Better optimization of R&D investment;
. Closer alignment with market needs;
. More successful product introductions; .
Better anticipation of customer needs; and .
Competitor differentiation.
 Levels of innovation

Level 1 -Technology transfer

Discrete movement of something from one
place to another - technology push or
demand pull. Something moves from lab to
production, from university to industry.
Most typically, information(e.g. reports) or
knowledge 'embedded' in prototype
product.
 Level 1 -Technology transfer
 Discrete movement of something from
one place to another - technology push
or demand pull. Something moves
from lab to production, from
university to industry. Most typically,
information (e.g. reports) or knowledge
'embedded' in proto type product.
 Level 2 -Knowledge exchange

Recognizes the role of people as a transfer

medium and of knowledge as information in
a context. Ideas flow between researchers
and users. Each informs the other. More of
a two-way dialogue, though, since it often
starts late in the innovation cycle, much
knowledge exchange has a one-way
emphasis
Level 3- Knowledge collaboration

Ideas are developed jointly. There is less

certainty at the outset of 'what' will be
developed. People from multiple disciplines
work together to solve a problem, as in
concurrent engineering processes. New
ideas and insight are gained as a result of
the interaction.
 Level 4 - Knowledge innovation
systems
There is too much at stake to be left to
serendipity. Management issues crone to the
fore. A more systematic and systemic
approach is adopted. Social-technical and
business systems are aligned; priorities are
continually reviewed in light of the progress
of the innovation and the developments in
the marketplace.
The innovation system is a learning system.
 Level 5 -Knowledge innovation
networks
Innovation is dynamic. Different strategic
business partners are needed as the
innovation moves into business
development. Several strategic business
networks (SBNs) Intertwine, each with a
different focus and purpose, though with
many common partners. Networks ebb and
flow. 'Knowledge flow‘ becomes the source
of collaborative advantage.
Principles Of Good Innovation
 Innovation starts when people convert
problems to ideas.
New ideas are born through questions, problems and
obstacles. The process of innovation is indebted to the
trouble that comes about when we are surrounded by
that which is not solved, not smooth and not simple.
Therefore, in order for the innovation process to
flourish, it needs a climate that encourages inquiry and
welcomes problems.
 Innovation needs a system.
All organizations have innovation systems.
Some are formal, designed by the leadership, and some
are informal, taking place outside established channels.
Informal channels are untidy and inefficient, yet
innovation is always associated with them.
 Passion is the fuel, and pain is the hidden
ingredient. Ideas do not propel themselves; passion
makes them go. Passion, in addition to talent and
skill, is a valuable company asset. Passion is what
transforms other resources into profits, but it never
shows up on a balance sheet. Unfortunately, there
seems to be some universal law that says when
pursuing a passion or following a dream, pain is
part of the process. Innovation leaders need to take
the pain with the passion and learn to manage both
effectively.
 Co-locating drives effective exchange.
Co-location refers to physical proximity between
people. It is a key for building the trust that is essential
to the innovation process. It also increases the
possibility for greater exchange of information, cross-
fertilization of ideas, stimulation of creative thinking in
one another and critique of ideas during their formative
stage.
 Differences should be leveraged.
The differences that normally divide people — such as
language, culture, race, gender and thinking and
problem solving styles — can be a boon to innovation.
When differences are used constructively and people
move beyond fear, suspicion, mistrust and prejudice,
differences can be leveraged to enhance and sustain the
innovation process.
Failure Of Innovation
 Innovations that fail are often potentially good
ideas but have been rejected or postponed due to
budgetary constraints, lack of skills or poor fit with
current goals. Failures should be identified and
screened out as early in the process as possible. Early
screening avoids unsuitable ideas devouring scarce
resources that are needed to progress more beneficial
ones. Organizations can learn how to avoid failure
when it is openly discussed and debated. The lessons
learned from failure often reside longer in the
organisational consciousness than lessons learned
from success. While learning is important, high
failure rates throughout the innovation process are
wasteful and a threat to the organisation's future.
 The causes of failure have been
widely researched and can vary
considerably. Some causes will be external
to the organisation and outside its influence
of control
 Poor Leadership
 Poor Organization
 Poor Communication
 Poor Empowerment
 Poor Knowledge Management
 Common causes of failure within the
innovation process in most organisations can
be distilled into five types:

 Poor goal definition

 Poor alignment of actions to goals
 Poor participation in teams
 Poor monitoring of results
 Poor communication and access to
 information
 Myths of
innovation
 Myths of Innovation
 Myth 1 – Always keep your eye on the ball.
 “It’s really hard to notice other things if you keep
your eye on the ball. You need to focus to get your
work done. But you might miss things that come out
of left field. It’s really hard to balance that.”
 Myth 2 – Failure is not an option.
“We can be paralyzed by fear as well. Fear of failure
is probably the biggest impediment to innovation.”
 Message to newsrooms: “The culture needs to
embrace failure and trying.”
 Myth 3 – Everyone loves an innovator.
“They’re rebels, they’re difficult to deal with
sometimes. They’re not always fun to have around.”
Message to newspaper editors: “It’s important that you
as a leader embrace the irritant.”
 Myth 4 – “Innovators are problem solvers”
Actually, innovators ask “why?” In the music business,
people might ask “How do we sell more CDs?” The
innovator might ask, “how do we provide the best
music listening experience?” (and Napster did it.).
Myth 5 – Knowledge is Power.
Organizations may know too much. Funny example:
A remote with 52 buttons on it. The designer knew
how to use every one and thought you might want too
as well. Similarly, sometimes the customer knows too
much – think photographers who said the would
never want a digital camera and fast forward.
Myth 6 – Innovation can be predicted.
Measurement and management may spell death of
innovation. “When you try to manage it, you actually
kill it.”.
 Myth 7 – First place always wins.
“It’s not the person who comes up with the
idea first. It’s the one who delivers the
product, delivers the experience that the
market want it. Innovation build on the
successes and failures of the innovators
before.”
Example: iTunes didn’t invent mp3
 The Four Categories of Innovation
 Incremental Innovation – Doing more of the same things
you have been doing with somewhat better results.
 Additive Innovation – More fully exploiting already
existing resources, such as product lines extensions, and
can achieve good results. These opportunities should
rarely be treated as high priority efforts. The risks should
be small – and they should not take resources away from
complementary or breakthrough opportunities.
 Complementary Innovation – Offers something new and
changes the structure of the business.
 Breakthrough Innovation (Radical Innovation) –
Changes the fundamentals of the business, creating a new
industry and new avenues for extensive wealth creation.
 Future of Innovation
 Many changes are taking place in the way we discover new treatments
and cures for disease. Cancer, diabetes, heart disease, and other deadly
conditions affect millions of Americans. New medicines have led to
improved treatments of certain forms of breast cancer, hypertension,
and AIDS, while other drugs have slowed the decline of degenerative
conditions such as Alzheimer’s disease or arthritis.
As impressive as advances in biopharmaceuticals have been, our work
is far from over. Millions of Americans with serious diseases and
conditions, and a health care system struggling with rising costs and
gaps in quality, can benefit from new pharmaceutical discoveries.
Every day, nearly 80,000 researchers go to work seeking tomorrow's
medical miracles. Explore this section to learn about the tools they are
now using to better understand the mechanisms of disease, track
molecular biomarkers that signal the emergence of disease or its
response to treatment, and design drugs that are tailored to be safe and
effective for individuals based on a personalized approach.
 New Medicines in Development
Find out what's on the horizon of pharmaceutical innovation.
New medicines in the pipeline are targeting entirely new
pathways of disease. Search the database by disease, drug
name or company.
Next Wave of InnovationThe drug discovery toolbox has
become quite sophisticated in recent years. Automation,
robotics, and miniaturization are enabling millions of
candidate drugs to be tested within a matter of weeks;
nanotechnology promises to enhance the ability to detect,
deliver and treat disease with unprecedented precision; and the
tools of genomics and proteomics are revealing the mechanisms
of disease, and the molecular markers used to track its
emergence and treatment. See how pharmaceutical innovation
is expanding the frontiers of science.
Future of Health Care
Providing high-quality, affordable health care for a growing
and aging population is a daunting challenge. What role will
pharmaceutical discovery play in finding new solutions, and
what dynamics will shape our health care system as a whole?
Challenges in Innovation
Management
 Challenges in Innovation
Management
Innovation represents the core renewal process in any
organization. If an organization want to survive in today's
turbulent (unstable) environment he should have to
prepare for renewing the offerings and its delivery process
to their stakeholders. Innovation gives two distressing
(difficult) conclusions- first, that most innovations which
destroy the existing order originate from newcomers and
outsiders to a particular industry, and second, that few of
the original players survive such transformations. So, here
the question is not to innovate but how to implement the
innovation successfully. Managing innovation becomes one
of the key strategic dimensions for organization of all the
size and from all the sectors.
 The word innovation originally comes
from Latin word 'innovare' that means "to
make something new". The most exhaustive
definition is presented by the innovation
unit of the U.K. department of trade and
industry who see it simply as 'the successful
exploitation of new ideas".
 Every organization have to manage four different
phases in the process of turning ideas into successful
reality; scanning the environment, strategic selection of
Key, Selecting most feasible and profitable option,
implementing  the innovation to ensure success from
idea generation to final launch of the product. 
Innovation management is about learning to find the
most appropriate solution to the problem of
consistently managing this process, and doing so in the
ways best suited to the particular circumstances in
which the organization finds itself. There is not a single
best way to do this as there are some challenges which
are involved in innovation management. There will
always be a need to develop new approaches to meet
new and emerging challenges.
Challenge 1: why change? As we know that we
are living in the doubtful world where the only
certainty is that simply sitting also carries high
risk. Change is necessary for every organization
if they are willing to stay in the market for long
term. Agile firms constantly re-invent
themselves to solve the puzzle posed by the
threat and opportunities in their environment by
adopting new technology and other novel way
to do the things. It may involve reconfiguring
products, processes or markets. And in each
case it involves learning and unlearning and it
requires strategic direction to focus this process.
Challenge 2: what to change?
Even if firms can recognize and accept the need
for continuous innovation they may find
difficulties in framing an appropriate innovation
agenda. Different agenda may be in the area of
product, process, market positioning and
underlying business model. After selecting a
feasible agenda attempt is made for continuous
and radical improvement to ensure success.
 Challenge3: understanding innovation
There is often considerable confusion between
'invention' and 'innovation'. Invention describes about the
moment of creative insight which first opens up a new
possibility as Edison is said that "it is 1% inspiration, 99%
perspiration!". There are lots of examples in the history
that distinguish invention from innovation. As, Spengler
invented the vacuum sweeper but Hoover innovate it.
Howe developed the first sewing machine but singer took
from invention to widespread acceptance means he
innovates the product at large. Sometime it is thought that
innovation is all about science and technology creating new
opportunities. Sometime it is also viewed that 'necessity is
the mother of invention' may sound persuasive- but a
totally marketing led approach to innovation may miss
some important tricks.
Challenge4: building an innovation culture
Building an innovative culture is not a small task
and it requires heavy effort from the organization.
Sometime copying may simply make the problem
worse. Research suggests that the task of managing
innovation is all about creating firm specific routines -
repeated, reinforced patterns of behavior - which define
its particular approach to the problem. 'Routine' in this
sense does not mean  robotic but it does mean an
established pattern-'the way we do things around here' -
which represents the approach a particular organization
takes to dealing with the innovation challenge
 Challenge 5: continuous learning
Continuous learning is necessary for the development of
every organization and for this they have to develop some
'good practice' model. In the good practice, we know how an
organization can create and deliver a stream of new products
and services. There are some key features of emerging 'good
practice' model- systematic process for progressing new
products, early involvement of all relevant functions,
overlapping/parallel working, appropriate project management
structures, cross-functional team working, advanced support
tools, learning and continuous improvement. If we consider
about the trouble with innovation, as we have already seen, is
that it is not a static problem to which we might try and find a
particular solution, which fits. Instead, it is a mutating and
shifting set of puzzles that shift and change over a period of
time.
 Challenge 6: high involvement innovation
We know that traditionally innovation has been the
area of the specialist who often works apart from the
mainstream (normal) of the organization's operations.
Innovation is fundamentally about creative problem-
solving and as environments become more turbulent
and uncertain, so the requirement for this capability
increases. With uncertain markets, rapidly changing
technological threat and opportunities, increasing
regulatory pressures, shifting customer and competitive
requirements, and a host of other variables to deal with
the likelihood of getting the 'right' innovation response
is low. Organization need to increase their innovative
capacity, and one powerful mechanism for doing so is
to extend participation in the process to a much wider
population.
 Challenge7: dealing with discontinuity
Much innovation can be seen as a 'steady
(stable) state' activity. Of course it is about
change, but it takes place within a framework
which is relatively consistent. Most change
happens as incremental developments of what
is already there-'doing what we do better'.
 Challenge8: managing connections
Inter-organizational networking is becoming an
issue of considerable interest amongst researchers,
policy-makers and practitioners. In part this reflects
the perception of advantages of networking over
traditional transactional models of organization, in
which there is often a trade-off between modes of
interaction and in part it acknowledges the impact of
technological and market changes which have blurred
the boundaries between enterprises and opened up the
arena in which new forms might emerge. 'virtual
enterprises', 'boundary-less organizations' and 
'networked companies' are typical examples of the
thinking and experimentation which is going on to try
and establish different approaches to the problem of
inter-organizational relationships.
 Conclusion:
From all the above discussion we can say that if once
the firm has mastered the basic 'skills' of innovation, it
needs to look at how well it can involve the full range of its
staff, how well it can manage to operate in networks rather
than on its own, how well it can handle continuous and
discontinuous changes, etc. this makes the management
task not simply one of building and sustaining routines for
innovation but also-and most importantly- one of creating
the underlying learning routines, which enable the
organization to do so.
 UNIT-II

INNOVATION PROCESS
Unit II :

Innovation Process: building

the innovation process -
innovation diffusion – the
innovation: decision process-
five stages of the diffusion
process - the new learning
about innovation
 What is an Innovation Process?
Any process of innovation must define and describe
the actions and outcomes that result from the
application of specific methods and tools (and the
reasons behind these methods and tools). The actions
of people following the process take place over time
and, therefore, have a time linear nature that, if
described strictly by a linear sequence of activities
and events, belies one of the most important aspects
of the innovation process itself - it is not linear!
 The process of innovation relies on the non-
linear methods of iteration and abstraction.
Iteration because that is how we learn things and
obtain new knowledge, by going back, refining
and maturing what we know to gain insight and
understanding of the things we see and learn.
Abstraction because that is how we synthesize
knowledge, see patterns and make connections to
new things. Both of these activities, iteration and
abstraction, are inherently non-linear, yet must
necessarily take place over time as a series of
concrete actions by people using a process for
innovation.
THE INNOVATION PROCESS
CYCLE
 The Challenge
The cycle starts with a problem or goal which needs to be
formulated into an innovation challenge. Once this is done, the
challenge is presented to the problem solving group. This may
be done in the form of a brainstorming event, ideas campaign
or other activity. The group problem solving group may be a
team, all employees in the firm, the public or any other group
of people.
 Collaboration
In order to maximize the creative potential of the problem
solving group, the idea generation activity should be
collaborative in nature. This can be accomplished in many
ways. Idea management and innovation process management
software often provides on-line collaboration tools, while
facilitators of brainstorming and other ideation events should
promote collaborative idea development.
 Combination
Because an innovation process cycle starts with a challenge,
ideas tend to be interrelated and many are complementary.
Hence, before going further, it is best to combine such
complementary ideas into larger, more sophisticated ideas so
that they can be handled as a single package. This makes the
next steps in the cycle more efficient.

 Scientific Peer Review Evaluation

Here is where a lot of innovation initiatives break down:

choosing the best ideas. Many poorly thought out approaches
use voting, which is a good way to identify the most popular
idea, but an appallingly ineffective method for identifying the
most potentially innovative idea. I have also seen organisations
put a great deal of effort into idea generation, leaving the final
decision to a manager who basically picks out her favourite idea.
Assuming the manager has suitable business expertise, such an
approach is better than voting – as it is based on expertise rather
than popularity – but it is typically far from perfect.
 Testing and Development
Ideas identified as being potential innovations are
now ready to be tested and developed. Here is where
typical business tools come in useful. A business case
is a useful means of hypothetically implementing an
innovative idea and projecting the potential results.
Of course it is not perfect, but it indicates possible
issues in the implementation of the idea, as well as
benefits that may not have been obvious to the
original idea developers.

 Implementation
Ideas that make it through testing and development
are ready to be implemented. Unless the idea is a
radical change from your usual activities, you don't
need me to tell you how to do this!
 Review
Once ideas have been implemented, they need to be
reviewed, probably against an ongoing series of
milestones. If an implementation does not achieve a
milestone, it needs to modified or killed. Moreover,
even the most spectacularly effective and profitable
breakthrough innovations need to be improved on a
regular basis.
 New Needs and Inspiration
Hence, reviewing the implementation of new ideas
should indicate new needs which can be transformed
into challenges which, in turn, start a new innovation
process cycle. Likewise, implementations can inspire
new corporate goals. Again, these can be turned into
new challenges and new cycles.
 INTEGRATED
INNOVATION
PROCESS
MANAGEMENT
INTEGRATED INNOVATION PROCESS
MANAGEMENT
An innovative company, however, should not
have a single innovation process cycle in
operation. Rather it should have many of them!
Large cycles are suitable for enterprise-wide
innovation. Meanwhile, business units can run
somewhat smaller innovation process cycles in
order to manage their own ideas (although it
should be noted, collaborative groups need not be
limited to employees of that business unit). Teams,
departments and any other group can also run
their own innovation process cycles.
 Diffusion (distribution) of
Innovations
Diffusion of Innovations is a theory of
how, why, and at what rate new ideas and
technology spread through cultures. The
concept was first studied by the French
sociologist Gabriel Tarde (1890) and by
German and Austrian anthropologists such as
Friedrich Ratzel or Leo Frobenius.
 History
The origins of the diffusion of innovations
theory are varied and span across multiple disciplines.
Rogers identifies six main traditions that impacted
diffusion research: anthropology, early sociology,
rural sociology, education, industrial, and medical
sociology. The diffusion of innovation theory has been
largely influenced by the work of rural sociologists.

In the book Diffusion of Innovations, Rogers

synthesizes research from over 508 diffusion studies
and produces a theory for the adoption of innovations
among individuals and organization.
 DEFINITION

Diffusion of Innovations (Rogers 1962). He

defines diffusion as "the process by which an
innovation is communicated through certain
channels over time among the members of a
social system."
The diffusion of innovations according to Rogers.
With successive groups of consumers adopting the
new technology (shown in blue), its market share
(yellow) will eventually reach the saturation level.
 Elements of diffusion of
innovations
The key elements in diffusion research are:
 The innovation,

 Types of communication channels,

 Time or rate of adoption, and

 The social system which frames the

innovation decision process.
 Types of innovation-decisions

There are three types of innovation-

decisions within diffusion of innovations. An
individual or an organization/social system
bases the type of decision on whether an
innovation is adopted/rejected. The three
types of innovation-decisions are: Optional
innovation-decisions, collective innovation-
decisions, authority innovation-decisions
 Optional Innovation-Decision
This decision is made by an individual who is in
some way distinguished from others in a social
system.
 Collective Innovation-Decision
This decision is made collectively by all
individuals of a social system.
 Authority Innovation-Decision
This decision is made for the entire social system
by few individuals in positions of influence or power.
 The adoption process

Diffusion of an innovation occurs

through a five–step process. This process is
a type of decision-making. It occurs through
a series of communication channels over a
period of time among the members of a
similar social system. Ryan & Gross first
indicated the identification of adoption as a
process in 1943 (Rogers 1962, p. 79).
 Rogers categorizes the five stages (steps)
as: awareness, interest, evaluation, trial, and
adoption. It should be noted that an individual
might reject an innovation at anytime during or
after the adoption process. In later editions of the
Diffusion of Innovations Rogers changes the
terminology of the five stages to: knowledge,
persuasion, decision, implementation, and
confirmation. However the descriptions of the
categories have remained similar throughout the
editions.
Five Stages Of The Adoption
Process
 Knowledge
In this stage the individual is first exposed
to an innovation but lacks information about
the innovation. It should be noted that during
this stage of the process the individual has not
been inspired to find more information about
the innovation.
 Persuasion
In this stage the individual is interested in
the innovation and actively seeks
information/detail about the innovation.
 Decision
In this stage the individual takes the concept of the
innovation and weighs the advantages/disadvantages of using the
innovation and decides whether to adopt or reject the innovation.
Due to the individualistic nature of this stage Rogers notes that it
is the most difficult stage to acquire empirical evidence (
Rogers 1964, p. 83).
 Implementation
In this stage the individual employs the innovation to a
varying degree depending on the situation. During this stage the
individual determines the usefulness of the innovation and may
search for further information about it.
 Confirmation
Although the name of this stage may be misleading, in this
stage the individual finalizes their decision to continue using the
innovation and may use the innovation to its fullest potential.
The New Learning About
Innovation
 INTRODUCTION

Our knowledge of innovation at the

national, industry and individual company
level has increased substantially over the past
20 years. Research into innovation has placed
particular emphasis on its multi-actor nature.
This chapter examines the interplay of
different institutions and firms and its
consequences for innovation at a macro level,
and also examines recent analysis of
innovation at the level of the firm.
 Research has shown the importance of structural
factors, such as
 the number and size of firms in an industry,
 competitiveness and innovation
Others highlight the importance of institutional factors
influencing ‘national systems of innovation’
At the same time, increasingly sophisticated models of the
innovation process within the firm are being developed. These
build upon earlier models by emphasizing:
 inter-functional and inter-organizational structures,
 Iterative (translation) activities,
 strategic decision-making, and
 enhanced use of electronic media.
Furthermore, greater attention is being paid to ‘pre
innovation’- and the sources of creativity, on the one hand and
‘post- innovation’ or ‘re-innovation’.
 Carlsson’s research into four technology systems
in Sweden–factory automation, electronics and computers,
pharmaceuticals (especially biotechnology) and powder
technology - led to the identification of ten dimensions of
technology systems:
 present development phase;
 future potential;
 buyer competence;
 buyer-supplier collaboration;
 supplier competence;
 industrial R&D;
 academic infrastructure;
 government policy;
 bridging institutions;
 holes/weaknesses;
 compensating mechanisms.