Externalities innovation

Commercial pharmaceutical companies frequently use pay-as-you-go strategies. Examples include buying R8rD ideas from biotech companies ( external innovation ) and paying outside contractors to conduct experiments and cHnical trials. Some virtual pharma companies purchase almost all of their R8rD from outside vendors (see Maurer [2005] for a detailed description.)... 

Thus, the use-related cognition of embedded lead users may foster their ability to recognize and explore external innovation opportunities. This will alleviate the problem of local search within firms and add to the firm s ability to sense new innovation opportunities from a user perspective. On organizational level, embedded lead users will strengthen an organization s ambidexterify, as they combine their user-driven explorative roles with their day-to-day jobs in the firm. 

Johnson, J. D. and Chang, H. J. (2000), "Internal and external communication, boundary spanning, and innovation adoption An over-time comparison of three explanations of internal and external innovation communication in a new organizational form," Journal of Business Communication, 37 (3), 238-63. 

West, J- and Bogers, M. (Forthcoming, "Profiting from External Innovation A Review, Synthesis and Future Directions for Research on Open Innovation, SSRN. 

Those inventions that are valuable for society, which include innovative pharmaceuticals, generate positive externalities, that is, the benefits falls to society at large. The sum of these benefits gives the social benefit or value of the invention. In this way, patents represent the appropriation of part of this social value. Naturally, when businesses decide to undertake a project they do so with their own benefit in mind. Some research, particularly basic research, might not be undertaken in these circumstances, and therefore governments decide to invest to fill the gap that may be left by the patent system. Basic research allows the development of multiple applications and the discovery of scientific principles. The field of genetics is a prime example of this. 

Cockbum and Henderson17 showed that the positive externality effect is stronger than the patent race. Although their results are not conclusive and they state clearly that it is impossible to say whether there is an excess or a shortage of research, this is an interesting example of analysis of competition in innovation and its effects on ten major US pharmaceutical corporations. 

Chemat and his coworkers [92] have proposed an innovative MW-UV combined reactor (Fig. 14.7) based on the construction of a commercially available MW reactor, the Synthewave 402 (Prolabo) [9[. It is a monomode microwave oven cavity operating at 2.45 GHz designed for both solvent and dry media reactions. A sample in the quartz reaction vessel could be magnetically stirred and its temperature was monitored by means of an IR pyrometer. The reaction systems were irradiated from an external source of UV radiation (a 240-W medium-pressure mercury lamp). Similar photochemical applications in a Synthewave reactor using either an external or internal UV source have been reported by Louerat and Loupy [93],... 

Another way to achieve high detergency performance while keeping environmental impacts low is by making intelligent products with built-in sensor functions. In these applications, the products can respond to external stimuli and fulfil their task. The inherent sensoric principles of two recent innovations, detergent tablets and dishwashing tablets with built-in rinse aid, will be discussed. 

Although the technical feasibility of a 2000 Watt per capita society in the second half of this century has been clarified and its economic feasibility is likely to be achievable at present energy price levels, its practical realisation remains an open question. The external cost of fossil-fuel use and many obstacles at sectoral and technology levels still hinder a fast implementation, as do a limited perception of the motivation and opportunities of possible first movers and supporting actors and a limited understanding of the innovation system. 

Increased external capacity Reduced cycle time Accelerating the learning curve Economies of scale Rapid go / no-go decisions Innovation... 

UPS did not stop with its synchronized commerce initiative, which, in my judgment, was more revolutionary then evolutionary. Chairman Eskew also codified and explained to UPS employees and to Wall Street, UPS s new organic growth strategy. And Eskew named this strategy the Four Quadrant model based on the University of North Carolina basketball team s use of the four-quadrant offense. As he stated, We will call our offense for innovation The Four Quadrants which focuses on innovating existing business operations internally and externally and, likewise, focuses innovation on new entrepreneurial ventures both internally and externally. ... 

The behaviour of the individual actors in the chain is in turn affected by both internal and external structures and factors. For example employers, employees, purchasing departments for substance input and waste management for output as well as the various specialised divisions in companies using chemical products thus pursue entirely different interests and strategies. A central concern of the SubChem project was how the interaction of all actors inside and outside the supply chain can accelerate or hamper innovations. 

A closer examination of the case studies reveals the extreme complexity and inter-hnked nature of the processes in an innovative system. Determining, which were the decisive factors that were manifest by a particular example of substitution, tended to be irresolvable in view of this complexity. A top-down analysis of the systems view of the simple model assists in orientation. In addition, some phenomena that are important for iimovation processes can only be revealed from a systems view, e.g. system inertia and system ambience , which is frequently referred to as the innovation chmate . Decisively, phenomena such as emergence are only discemable at a systems level. Emergence is of central importance for the comprehension of innovation processes, where development of a new element is the core feature. Emergence means that a novel, impredicted and usually complex feature is produced in the system (or by the system) which no individual contributor had planned or could conceivably plan. In most cases, new elements can neither be commanded externally nor can they be negotiated in a discourse between the participants from their estabhshed interests. Creativity is required here. 

The SubChem project has produced numerous interesting scientific perspectives which require further examination. In the area of framework conditions, questions arise relating to the quality of markets or the type of competition as the main driving forces of innovation. An increased comprehension of the markets where companies (or supply chains) operate also reveals a novel appreciation of their scope and restrictions for action as well as their vulnerability towards other external influences. For example, market research explicidy devoted to the types of competition would be beneficial and provide comparative observations for a more precise classification than we have been able to discern with our resources. 

In Chapter 1, we discussed historic product innovations, both motivated by external market-pull and by internal technology-push motivations. Figure 12.1 shows a quadrant that was popularized by the Boston Consulting Group as the stars and dogs chart, and later popularized by Donald Stokes as Pasteur s quadrant. The horizontal axis shows the strength of external market-pull, and the vertical axis shows the level of... 

The starting point for this study of British defence policy between 1904 and 1969 is the tendency for the costs of new weapons systems to rise more rapidly than the national income/ Three main insights are offered. First, British defence policy was based upon technological innovation. Second, reductions in the size of the armed forces to accommodate new weapons systems in defence budgets were not evidence of a decline in power. Third, British grand strategy, incorporating economic as well as military responses to external threats, was much more ambitious than is commonly believed. 

All this wasted a tremendous amount of coal. Actually, only 1 to 2 percent of the energy of the coal was converted into useful work. Quite suddenly, the steam engine was revolutionized. Its efficiency was increased by a factor of 10. This was all due to the innovations of James Watt, who invented the external barometric condenser, in the late 1760s. 

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