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2017-89179

Part I: Essay

Innovation is proving to be crucial to firms in keeping up with the markets and building up its
competitive advantage. Innovation may be in the form of product, process, methods, business
practices, which can have a wide range of implications in the way business can be conducted.
Innovations generally require big investments, both in the form of cash, and even non-cash
items, such as time, effort, etc. With these considerations in innovation management, it is
important to measure how well the innovation process is being implemented and how effective
the results are.

There is a vast array of academic literature that aims to provide structure and frameworks on
how to measure innovation. Research shows firms that use predefined innovation metrics to
assess their innovation programs do better than ones who do not. The most commonly used
metrics are levels of profit from new products or percentage sales of new products. Many have
come up with their own indexes of best practices and comprehensive lists on the different
dimensions of innovation as well.

However, most of these metrics measure innovation in a way that is quite systematic, losing
sight of the fact that innovation is largely dependent on novelty. Thus, innovation entails leaps
and risks that may not be quantifiable at all times. Not to disregard these metrics entirely,
because these are valid measurements of innovation. Moreover, using these metrics measures
innovation in an almost fixed and automated way. But this must not be at the ignorance of the
fact that at large, innovation cannot entirely be calculable.

At this point, proponents of contingent measurements of innovation come into the discourse,
introducing metrics that adjust according to the nature of the innovation. Some frameworks view
innovation as a process and that metrics must be adaptive and constantly reevaluated,
depending on the project timeframe and the scale of innovation. Other proponents view
innovation as a relationship between inputs and outputs and that metrics on these must be paid
great attention to, while others focus on the research and development aspect of innovation.
Some argue that the essence of innovation is novelty and that a predetermined measure would
derail and limit its perceived effectiveness.

A metric that further moves the discussion forward is Shapiro’s (2006) proposed way of
measuring innovation beyond profit from an accounting perspective, integrating both a fixed and
a variable aspect in measuring innovation. Shapiro contests the idea of measuring innovation
solely as a percent revenue from new products, because it does not wholly represent
innovation. This metric merely shows the change in monetary value, or in financial terms
additional cash flow, but does not clearly reflect what “new” means, what scale or the quality of
“new”-ness, what the time frame is in which the “new”-ness can still be called so, and what kind
of innovation is actually being measured. Shapiro discourages relying too much on this metric
and suggests to simply think of it as just another metric.
With this, Shapiro proposed a new metric in supplementary of percent revenue from new
products, which introduces a variable and contingent aspect to measuring innovation. This new
metric is the percent revenue from new platforms. Although still a measurement in terms of
monetary value (i.e. revenues), it focuses less on the currency but more on the quality of
newness or innovation. In other words, it measures how much of the new revenues come from
platform innovation. This metric relies on the presence of new platforms that can dramatically
change and improve a business process is conducted. Platforms are powerful a way that it can
produce not just incremental improvements for the firm, but create a long-term source of
competitive advantage when executed and implemented well. Platforms can be in the form of
technologies, marketing strategies, operational processes, or even a business model. It is
contingent and up to the firm to fully define what platform innovation they are measuring. It
represents a new way of doing things at a groundbreaking level or a higher level. The extent of
its effects are wide and it produces growth and leverage for the firm.

Shapiro proposes to combine the two measures together, which provides deep and insightful
results. For instance, if a firm rates high in percent revenue from new products but low in
percent revenue from new platforms, it could mean that the firm may be responding well to
innovation from competition by introducing incremental improvements to products, however,
from a broader perspective, there is nothing radically innovative about the new product which
would have been brought about by a new platform. Another example is if a firm rates low in
percent revenue from new product, but rates high in percent revenue from new platforms, this
could be an alarming signal that the firm is not able to take full advantage of new platforms that
it has invested on. If a firm rates low on both metrics, then it is likely that the firm is not
innovating and might not be in a good long-term strategic position. Lastly, if both metrics are
high, it is also possible that new products are cannibalizing old products. Although this might not
necessarily be a bad thing, since at one point obsolescence is a possibility anyway, it is
important to identify how big of a concern this is for the firm. These are just examples of
possible interpretations of the result of combining both metrics. In actual business situations,
interpretations vary from firm-to-firm and depend on numerous factors, both internal and
external.

This is a more effective indicator because the variable aspect of this metric takes into account
management of innovation considerations, strategic innovation planning contexts, and the
quality of the innovation’s impact to the firm. It includes external-related factors and considers
innovation from a broader perspective and thus, can provide deeper insight into the
measurement of innovation beyond the internal limitations of a firm. The impact of the
innovation may be attributed and traced back to its real source, providing valuable information
that firm will benefit from.

As previously mentioned, it is widely recognized that in management of innovation, especially


managing highly innovative products, the numerical figures cannot always be fully quantifiable.
This is why it is often difficult to defend innovation projects to executive management. However,
similar to a lot of other business and financial projections that a firm deals with, the numbers are
not always guaranteed with accuracy. What is unique about Shapiro’s proposed metric is that it
can bring the projections closer to a calculated risk, more than other best practice indexes. This
is precisely because it considers in its computations factors beyond fixed measurements and
brings out other facets on innovation that may have been previously gone unnoticed.

This is reflected in the fact that it is not a simple feat for a firm to define what a new platform is
and to measure revenues from new platforms. There is no strict definition of what a platform is,
therefore the firm has to decide for itself what can be considered as a new platform and what
that means for their firm. In short, measuring this requires deep knowledge and insight on the
firm and the industry it is working in. It also requires someone with a high level of analytical and
managerial skill to make the correct assessments and strategic decisions.

Furthermore, the metric also provides insights on the company’s implementation of its strategies
and other operational concerns. When a company creates and implements a strategy, it is
essential that all of its different units are working together towards a singular goal and
undertaking a single strategic position. It cannot be taken away then that the actions of one are
highly likely to affect other units. Thus, lower than expected results may be due to an
inefficiency stemming from another internal unit, or externally from market conditions and
technological progression. With this, Shapiro’s metric could be a very useful tool to evaluate
how well the firm as a whole is executing and implementing its innovation efforts. This
strengthens the idea that innovation cannot be done just for the sake of innovating, but because
it is in line with a firm’s corporate strategic thrusts.

Lastly, Shapiro’s metric may help firms easily identify if the innovation is incremental or radical.
The metric provides insight on the scale of the effect that the innovation has brought to the firm
and how the that is translated to the product and the costumers. For example, if a firm rates
high in percent revenue from new products but low in percent revenue from new platform, the
increase in revenues may be attributed to new products. However, there is no platform
innovation behind it that may evidence an innovation substantial enough to signify radicalness.
The market may simply be responding well to the new product improvements, or perhaps the
market pull is strong enough to have that significant positive effect on revenues. However, there
is no evidence that just because a lot of consumers are buying the new or improved product, it
can immediately be considered a radical innovation.

At the end of the day, there is not one all-encompassing metric for assessing innovation.
However, a lot would agree that it can be looked upon in a contingent and systematic way,
wherein metrics must be aligned with internal and external conditions of the firm and must be
banded together with the firm’s top corporate objectives. This provides a more holistic and
effective approach in measuring innovation, which has become essential in sustaining long term
competitive advantages for firms.
References:

Bachmann, Rüdiger, et al. “Surprise, Surprise – Measuring Firm-Level Investment


Innovations.” Journal of Economic Dynamics and Control, vol. 83, 2017, pp. 107–148.,
doi:10.1016/j.jedc.2017.07.009.

Brattström, Anna, et al. “Can Innovation Be Measured? A Framework of How Measurement of


Innovation Engages Attention in Firms.” Journal of Engineering and Technology Management,
2018, doi:10.1016/j.jengtecman.2018.04.003.

Shapiro, Amram R. “Measuring Innovation: Beyond Revenue From New Products.” Research-
Technology Management, vol. 49, no. 6, 2006, pp. 42–51.,
doi:10.1080/08956308.2006.11657407.

Tohidi, Hamid, and Mohammad Mehdi Jabbari. “Providing a Framework for Measuring Innovation
within Companies.” Procedia Technology, vol. 1, 2012, pp. 583–585.,
doi:10.1016/j.protcy.2012.02.127.
Part II: Movie

The Imitation Game was a stirring historical drama film about mathematician and cryptanalyst,
Alan Turing, and his work for the British government of decrypting German intelligence codes
during World War II. The Enigma was the machine used by Nazis in communicating to their
various units everything from weather reports to military intelligence, such as the location of
their next attack. Given Turing’s obsession with analyzing extremely difficult puzzles, he sought
to take a crack at solving the most difficult puzzle at the time, the Enigma. What was especially
difficult with the Enigma is that it is reprogrammed every 24 hours, thus any progress at
cracking the code today is no longer applicable tomorrow. Despite this challenge, Turing was
able to think of and to create a machine called Christopher that would would decrypt all coded
messages received from the Enigma, helping Britain win the war against Germany. A machine
with such computing capabilities and sociopolitical impact did not come often, especially during
the 1950s, and the invention was considered to have helped pave the way to what we know
now as the computer. Thus, in retrospect, the machine played a pertinent role in the progression
of human creativity and computing technology to where we currently are. This, then, demands
that we explore its innovational properties.

Articulation on the concept using events


Concept Explanation of Concept
shown in the movie

Christopher was clearly an innovation because


it was a technological development that not only
simplified the difficult task of decrypting German
codes, but proved that the machine could do it
better and more efficiently than a human mind
could ever do. The value that Christopher
created even extended outside the British
Ministry of Defence’s operations and processes
to securing a pivotal role in acquiring military
An innovation is the intelligence to help Britain win the war.
Schumpeterian ability of a firm to Moreover, the machine was not just an
View on produce change and invention, but an innovation because of the
Innovation results by developing economic and political benefits it created
new ideas (1:46:15 - 1:47:35). Christopher was not only an
innovative output, or a machine that could
decrypt German codes, but also an innovative
process because of the way it undertakes the
process of analyzing information to produce
results. It was mentioned in the film that
Christopher was not created for just one specific
purpose, which was to acquire war intelligence.
It was actually intended to be a universal
computing machine that could solve all kinds of
problems. Christopher was built in a way that it
was reprogrammable to allow different
constraints and assumptions that unique
problems present (43:51 - 44:40).

Although the initial intended benefit was


achieved, along with it came an unexpected
drawback that resulted from the success of the
project, that eventually changed the situation.
Turing realized that once they start taking action
on the information from Enigma and, for
example, evacuate people from all Nazi attack
locations, the Germans will soon enough realize
that the Enigma has been compromised. If that
happens, all their hard work for years would
have gone down the drain. Thus, they opted for
a more strategic route, statistically deriving
possible outcomes and choosing only which
attacks they can prevent from intervene with,
without the Germans realizing they have
cracked the code. This raised ethical questions
as the knowledge of German attacks before
they could happen gave them unearthly power
on who gets to live and who does not (1:18:50 -
1:26:05).
The main sources of this innovation were not
only through the mathematical ingenuity and
problem solving creativity of Turing, but also
through his colleagues and to a certain extent,
the government through its funding. Turing
possessed incredible mathematical genius as
seen by his accomplishments and published
works at a young age of 23. But more
importantly, he possessed incredible creativity,
which is the ability to use one’s intellect to
Where innovative ideas
create new ideas and valuable works, in solving
are generated or where
the most difficult problem there was during that
they come from; may be
Sources of time, the Enigma (19:10 - 20:18). The
in the form of individuals,
Innovation innovation would not have been possible as well
organizational
without Turing’s colleagues. Although Turing
contributions, and other
was difficult to work with at first, he was able to
collaborative networks
befriend his team mates into helping him work
on his machine. Eventually, their contributions
proved to be valuable as something big as
Christopher was not something Turing could
work on alone (47:42 - 48:18). Lastly,
Christopher was funded by the British
government for £ 100,000 (21:11 - 23:30).
Without these resources, the innovation would
not have been possible.

The innovation came in the form of a product


innovation, wherein the innovation stems from
the technical specifications and the tangibility of
the product, due to the radical improvement the
machine brought to the process of decryption.
Decryption was previously done manually and
human efforts have been futile as the Germans
Output of an innovation, are smart enough to change Enigma’s settings
Type of may be in the form of a every time the clock strikes midnight. The
Innovation tangible product, Enigma’s settings allowed for more than 19
process, or service million unique configurations and the probability
of finding the right one by for each and every
day was close to zero (14:57 - 16:46). Thus,
having Christopher to do that for them was a
huge improvement in the decryption process.
This can also be considered as a process
innovation because of the amount of efficiency
brought to the decryption process.
Innovation that is highly Christopher was a highly novel machine as it
Radical novel, competence- was a completely new invention that provided a
Innovation destroying, and very powerful weapon against the Germans.
technology-oriented, as
opposed to an The technology adapted was the first of its kind
incremental one during the time and few were able to replicate it.
There was high risk involved because the
Enigma was deemed so difficult to solve that it
was close to impossible. It was also an
expensive venture and thus, many were
reluctant to support Turing and were skeptical of
Turing’s invention (54:02 - 57:23).
A noteworthy aspect of the research and
development of Christopher was that it was a
skunk work, even before the term was coined in
the 1950s. The group that developed
Christopher was a team specially hired and
formed by the Ministry of Defence solely for the
A group of highly skilled
purpose of cracking the Enigma. The team was
individuals formed and
deliberately separated composed of top brilliant minds, cryptographers
from the rest of the and mathematicians, in Britain during that time.
Skunk Work organization whose task They were expected to work on the Enigma
is to come up with new under an aggressive timeline as people were
innovations, usually dying each minute they have not solved the
working under problem. They were extremely secretive,
aggressive timelines
disguised as working inside a radio
manufacturing company, and separated from
the rest as they worked in seemingly
inconspicuous stable yard cottages (10:37 -
14:55).

Without a doubt, Christopher was an innovation that radically changed the odds of Britain
winning the fight against the Germans, through both its intended and unintended consequences.
When viewed from wider lenses, the product impacted not just the course of the war, but
technological progress as a whole. Turing’s innovation was one of the earliest forms of
reprogrammable computing devices and fast forward to now, what we know as our the gadgets
we use daily. Indeed, albeit a long and difficult process, innovation needed to happen as there
was nowhere else to go but to explore and to maximize growth opportunities for a greater future
impact on the human race.
Bonus:
Based on your collaboration experience with your startup partner team, what are your insights
and realizations on technopreneurship? What does it take to be a successful Filipino
technopreneur?

The concept of a startup company is not new and has been quite a buzzword in the recent
years. Upon working with Doc KM and the rest of the Veris team, some of my realizations on
technopreneurship in the Philippines are as follows.

There is no lack of highly skilled individuals who have good ideas and possess the capabilities
to implement new technologies, especially from the context of a third-world country like the
Philippines. However, it is also because of the state of our economy that there exists numerous
hurdles that hinder startups from fully realizing their products’ commercial potential. This is not
to say that startups abroad do not experience hurdles, but startups here experience a unique
set specific to the Philippines economy. With these, the main hurdles stem from weak
government systems, poor infrastructure, and slow adaptiveness of consumers.

It is also true when they say that the Philippines has low ratings in ease of doing business due
to factors that hinder foreign investors from doing business here. The innovation ecosystem
exists, but lack sufficient support from private and public sectors. Limitations and inefficiencies
are further presented by the government and other institutions on issues such as licensing
rights, regulatory concerns, and other systematic inefficiencies.

While the mentioned concerns are beyond the control of startups, another crucial element in
surviving the first few years of operations that is also partly within their control is fundraising.
There are institutions that provide support to tech startups, but there is a general perception that
it is not enough in proportion to the demand. Although this may not be unique to the Philippines,
it is indeed a challenge to look for equity investors who will believe in your business idea.
Although money is not the one determining factor that creates a successful tech startup, it is
quite an important element, as these funds fuel initial operations and move startups forward.

On the flipside, conducting technopreneurship in a third-world country also has good points.
One of these is that there are more opportunities to use technology to provide solutions to
actual problems, precisely because the country is falling behind its more progressive peers like
Singapore or Taiwan. Thus, there is a wealth of pressing problems that can be provided tech
solutions to, addressing long-standing concerns such as garbage, pollution, poverty, and so
much more.

Creating one or working for startups is not an easy feat. There are numerous risks involved and
returns may not always be in the form of money. However, being exposed to such a community
is only telling that there is big potential for these startups and that there are people who are
working very hard to realize this potential. But more importantly, a central theme that integrates
all of these, is the role that technology and innovation plays in creating solutions to problems,
which will push the country and its citizens forward to a more progressive future.
Final Exam additional bonus #1
This Hollywood Golden Age actress produced several inventions, and has worked on research
that would later help in the development of Wi-Fi, CDMA and Bluetooth technologies. Name this
actress (stage name only).
- Hedy Lamarr

Final Exam additional bonus #2


In 2003, this doll was sold by Dubai-based NewBoy FZCO as an alternative to Barbie in Islamic
and Middle-Eastern countries. It was different from Barbie in terms of lifestyle and appearance,
and was supposedly designed to promote Muslim values and be a role model for Muslim girls
worldwide. Name this doll.
- Fulla

Final Exam additional bonus #3


Despite its popularity, Disney never copyrighted this song, which was originally written for one of
Disney's attractions in its theme park. What is the title of this song?
- It’s a Small World

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