SEB711

SEB711:

Developing Innovation

Introduction

School of Engineering
Faculty of Science and Technology
Deakin University

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Why did you chose this subject ?

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What do you think is

Developing Innovation?

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Introduce yourself

Do you have an idea about an

Innovation ?

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What do you think is the biggest problem

when developing an innovation ?

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Topics
1. Introduction & overview
2.
3.
4.
5.
6.
7.

Business plan
Concept analysis (SWOT), Entrepreneurs,
IP protection and literature search
Market analysis including competitors, PEST, 5 forces
Financials
Financing sources, e.g. FFF, Awards, Grants, Angles, VC,
Equity,IPO, Croudfunding, Bank Loans etc.
8. Marketing strategies , e.g. How to find and approach customers etc.
9. Preparation for Investor Pitches
10. Valuations
11. Growth Strategies
12. Pitches

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Definitions
>
>
>
>
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Creativity
Invention
Patent
Innovation
Entrepreneur

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Creativity
> To bring something into
existence that would not
have occurred naturally
> Abstract form

Certainly creative but

is it anything else?

For example an idea, a concept, a

proposal

> Physical form

For example an object, drawing,
painting, thing

Not in this universe

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Invention
Similar to creativity in that it involves things that never
previously existed or would occur naturally
> Regardless of any value it creates or adds

The difference between a creation and an invention is:

> To be considered an invention you must be able to prove
the creation can be made, used, practiced, or expressed.
you have to prove that it can exist and perform as you claim

> You can seek legal protection for an invention

In most countries by applying for a Patent for your intellectual property

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Patent requirements (EPO June 2012)

(i) there must be an "invention", belonging to any field of
technology (see G-II);
(ii) the invention must be "susceptible of industrial application"
(iii) the invention must be "new" (see G-IV to VI); and
(iv) the invention must involve an "inventive step" (see G-VII). (not obvious for an
expert)
Additionally:
(i) the invention must be such that it can be carried out by a person
skilled in the art (after proper instruction by the application); this
follows from Art. 83. Instances where the invention fails to satisfy
this requirement are given in F-III, 3; and Art. 83
(ii) the invention must be of "technical character" to the extent that it
must relate to a technical field (Rule 42(1)(a)), must be
concerned with a technical problem (Rule 42(1)(c)), and must
have technical features in terms of which the matter for which
Protection is sought can be defined in the claim (Rule 43(1)) (see F-IV, 2.1).
http://documents.epo.org/projects/babylon/eponet.nsf/0/6c9c0ec38c2d48dfc1257a2
1004930f4/$FILE/guidelines_for_examination_2012_en.pdf

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Innovation
> Innovation like invention involves things that never previously
existed or would occur naturally
> But innovation must create or add value
> So lets define innovation as:

something new that creates or adds value

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Innovation
Something new that creates or adds value
> By definition, an innovation provides value
> A mix of elements may exist
Technology
Design
Invention
Marketing

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Creation, Invention, Innovation

Whats the difference between them?

Creation
something new
and may exist or function
and may provide value

Creations

Inventions

Invention
something new
and can exist and function
and may provide value

Innovation
something new
and does exist and function
and does provides value

Innovations

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Innovation versus Invention

> Its easy to develop something new
It may never be of any use
It may be immediately useful
It may be useful sometime in the future

> Its much harder to develop something new that is:

Practical
Is beneficial to use or apply
Provides value to someone
Such as:
Improved quality of life
Or increased profitability
Or monetary value

An iPod docking
station with
toilet roll holder

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Invention
> Something that never previously existed
Regardless of any value it creates or adds

> Immediate output is Intellectual Property

Protect by patents
Must be New and Novel
Not merely an obvious application or extension of prior art

> Although it is new it may have no value

Now or even in the foreseeable future

> It may be easy to copy or imitate

You can seek injunctions and monetary damages from infringers
through the legal system
But its generally an expensive and intensive process
You may lose the court might invalidate your patents

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Innovation versus Invention

Innovation
> Something new that creates or adds value
By definition, an innovation has value

> A mix of elements may exist

Technology
Design
Invention
Marketing

Apples 1st Generation

iPod released 2001

> Some protection possible under the patent system

Innovation patents

> Protection often more cost effective by

Design registration
Trademark registration
Being hard to imitate in its entirety

Innovation versus Invention

Innovation
> Research and Development (R&D)
Seek new knowledge (research)
Apply new knowledge (development)

> R&D can be focused on solving defined problems

Curing diseases and ailments
Putting a man on the moon

> R&D can also produce by accident

3Ms Post-It note

> R&D must produce value to the organization

Otherwise it is simply a drain on resources

> Appropriate R&D can produce significant value

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Innovation versus Invention

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Innovation is the winner

> Invention is often the starting point
Development of new technologies

> But innovation is how the results of invention are put to use
Creating or adding value

In business the focus is (and should) be on innovation

Invention (by research) may be an important element
But it is not sufficient by itself for most companies

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Creative
A time and relative dimensions in
space machine

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Inventive

Practical?
Any value?
Source: http://www.littlecrazymonkey.com/funny_pictures/crazy_inventions.htm

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Inventive

Practical?
Any value?
Sound-muffler for covering the mouth
Patent no 4834212, issued 1989
From Optional Reading article, Top 10 Useless Inventions, The Times, 2008.
http://business.timesonline.co.uk/tol/business/entrepreneur/article3264420.ece

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Innovative

The wireless remote control for televisions

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Why Innovate?
The answer is simple:
> According to lifecycle theory, all
things must end
> Innovate to extend existing products
or services or to produce new
products or services
> Factors causing decline may include:

Market saturation
Competitive alternatives
Technology obsolescence

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Innovation for Survival

> Companies can seek to ensure their
survival and sustainability whilst also
seeking growth through:
Improving their operational effectiveness
Developing and implementing a
competitive strategy

> The most successful companies

usually apply both methods
For more on this: read the paper posted up on DSO by Michael Porter

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Innovation for Survival

> Operational Effectiveness
To perform similar activities better than your rivals
For example by

Cheaper cost of production

Lower defects in production
Developing products faster
Eliminating waste and overheads

The risk though is that competitors may similarly adopt the

improved effectiveness measures
The bar may be raised across the industry (everyone does it)
So differentiation between companies may not widen (or shrink)

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Innovation for Survival

> Competitive Strategy
Seeking to differentiate your company from the competition
For example by
Performing different activities
Performing similar activities in a different way

Seek to provide a unique blend of value to customers

Hard to imitate or copy
Considered more valuable by customers than competitors

Trade-offs are often needed

Cannot be all things to everybody at the same time

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> Companies that fail to continuously innovate will generally fail

and ultimately cease to exist
Unless they can obtain and maintain a competitive position through
operational effectiveness and that is extremely difficult to do

Image Source: http://blog.thomsonreuters.com/wp-content/uploads/2012/01/kodak-bankruptcy.jpg

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What is an Entrepreneur ?
> The word entrepreneur is derived from a French word
entreprendre
to undertake

> Dictionary meanings of entrepreneur are typically:

One who organises, manages, and assumes the risks of a business or
enterprise

> Generally we consider entrepreneurs to be individuals who

seek to obtain profits from business activities that involve significant
risks and challenges
and do so with as much independence from others as possible

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4 Key requirements to develop innovations

1.
2.
3.
4.

Interest
Focus
Persistence
Supporting environment

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Assignments

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Reference Materials
> No prescribed textbook
> Recommended books:
o Enterprise & Venture Capital, a business builders and investors
handbook, Christopher Golis
o Australian Venture Capital guide, Victor Bivell
o Finding the money: How to raise Venture Capital, Tom McKaskill
o The ultimate Deal: get an unbelievable price, Tom McKaskill
o The 5th discipline, Peter Senge
o Business Angels: Private capital for private companies, Chris Kane
> Useful resources
Daily newspapers and business magazines
Engineering and industry journals and publications
Management journals and publications
Corporate information for industry sector leaders
Industry associations and institutions
> Reading materials will be provided on DSO for each topic

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Assignments
> Submitting your written report assignments
Submitting online via DSO is easiest for most students
Dropboxes will be provided online on DSO for each assignment
Feedback and marks via DSO

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Lessons learned
> 4 key requirements to develop innovation
> Creativity, invention, patent, innovation,
entrepreneur

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Next Week
Business Plans
Howard Frederick
School of Management & Marketing