How+industry+searches+for+new+product+ideas


 * Module 2**


 * How industry search for new ideas**

In its very nature innovation means change, doing something differently than well established ways of doing. However the point is not to be different, but to be better than competitors and for firms “the change” makes sense if it is something good to make improvement. In order to keep up the pace in nowadays dynamic and competitive environment, firms are in permanent search for new ideas and product improvement.

http://www.stanford.edu/dept/MSandE/cgi-bin/people/faculty/katila/pdfs/KatilaNewtime.pdf

Extensive study how and where firms search for new ideas. Searched knowledge is evaluated through firms patenting behavior, while the innovativeness through product innovation.

In space domain firms search for new ideas in their own knowledge base in competitors' knowledge base and in the knowledge base of the other industries.

In time domain firms use their old knowledge as well as new knowledge as innovative resource. The question is which knowledge is more relevant and add more value to company innovativeness, the old knowledge or the new knowledge. There are lot of pro and contra arguments leading to general conclusion that it depends of the area where the firm operates and search for new ideas. For instance in semiconductor industry the new knowledge is more relevant than the old knowledge. The interesting finding was that a company using old knowledge of some other industry can foster its own innovativeness.

Thus if one wants to examine firms behavior in exploring new ideas and searching for new products he/she cannot do that in time or space isolation but considering them as mutually dependent parameters.

[]

The authors examine how the firm's openness toward the external sources of innovations influence its innovative performance. The research is focused on the search channels, such as universities, suppliers, users, that firms use in their search for innovative opportunities. The way of communication differ among the different partners in terms of contractual rules, norms of disclosure and cultural attitude. In the early stage of life cycle of the innovative product companies rely on the knowledge of limited number of external suppliers like universities or research centers, while in the mature stage more players enter the knowledge network. The main finding is that more open companies are more innovative and the intensity of internal R&D activities are complimentary to the openness of the company.