In order to support small and medium Vietnamese enterprises to learn from German and EU experience in innovation, VGU together with Leipzig University and VCCI-HCMC co-organised the workshop “Innovation Management in SMEs - A Practical Approach” on Friday, 24th of July, 2015 at VCCI conference hall in HCMC.
The presenter was Mr. Alfredo Suvelza, a lecturer from Leipzig University. He is also a visiting lecturer at HUST in Hanoi and VGU. His expertise areas as consultant including innovation management, SME development, business planning and technology transfer.
At the beginning of the workshop, the international project in4in (intelligence for innovation - website http://in4in.net) was introduced. The project aims to stimulate innovation culture and strengthen innovation management through promoting entrepreneurship in universities, consulting, training and research in the field of innovation and entrepreneurship.
What is innovation?
An innovation is an invention/idea of new products, processes, production methods, organizational forms or an elementary improvement of a system and its successful realization.
But real innovation is a challenge. It is not just new but also should have positive impacts. Innovation is a process, which starts with the invention of a new element that leads to its practical development for commercial use. Thus, it has to be both practically useful and profitable.
Why to innovate?
Innovation can make impacts on economic development that can change the world. Innovation can make impacts on firm performance. It is important for SMEs to understand the state-of-the-art of their field.
The innovation impulse can come from Technology Push or Market Pull.
Technology Push: “What is technically doable?” (What possible to do in the world?) Innovation may create a demand that did not exist before.
Market Pull: “What do the customers/users want?” Marketing acts as a catalyst, and the R&D as facilitator of innovation.
Radical and Incremental Innovations
Radical innovations (‘a Quantum Jump’) require a sharp breach with conventional routines and traditional knowledge. It is typical for new technologies such as software, biotechnology, new services, etc. It is strong in USA, UK.
Incremental innovations (‘one step forward’) are further development and improvement of already established products and production processes. It is typical for established industries, such as mechanical, chemical engineering, etc. It is strong in Germany, Sweden, Switzerland.
Stages of innovation
First stages of innovation are typically carried out by public and private R&D laboratories and universities, including basic research and generic technology research. Basic research is original experimental or theoretical research that advances the knowledge in specific fields. Generic technology research is that generates generic technologies which are not specific to a product or a process.
Later stages involve applied research, development and commercialization which is typical product development process in a company.
10 types of Innovation
Innovation is more than just a new product. Beside product innovation, we can also have process innovation and service innovation.
Fig.1 Ten types of Innovation (Source: https://www.doblin.com/tentypes/)
There are also three different innovation concepts from three different actors: entrepreneur (entrepreneur concept of innovation), scientist (technology concept of innovation) and manager (strategy concept of innovation).
Innovation Management
Decisions on the implementation of innovations often deal with complexity, orientation towards future, uncertainty and risk, creativity. Innovation management is a process-oriented work, being responsible for a unifying and integral task because it involves different stakeholders/departments. Thus, interdisciplinary work is one of the key success factors for innovation.
Challenges in innovation management include high failure rates in innovation projects (up to 90% in radical innovations and 50% in incremental innovations). Challenges for innovative companies include new technologies permit the development of new products/services, shortening of product life cycles, globalization and competition, fast changing buying behavior.
Success factors of innovation management include idea, customer integration, time-to-market and price-to-market. The time of launching a product to the market has a high influence on the company’s success. Customer integration minimizes risk, creating synergy between supplier and demander and developing services that fit the customer’s needs.
Fig. 2 summarizes stages of innovation management process.
There are tools for each stage which can be listed as following:
For idea management, the tools are intuitive techniques, analytical techniques, TRIZ (?).
For idea evaluation, the tools are prioritization, scoring.
For decision making, the tools are portfolio analysis, quality function deployment, market research, service blueprinting, product clinic and benchmarking, road mapping, etc.
For project planning, the tools are GANTT chart, responsibility matrix, key person planning, information matrix, etc.
For feasibility evaluation, the tools are technical feasibility, cost planning, etc.
