The following Harvard Business School paper of 33 pages  "The Evolution of Science-
Based Business: Innovating
How We Innovate"

describes how innovation has always required creating new intangible capital (IC) which includes both new products or services but also a new form of organization for generation and delivery especially in science-based business such as those in biosciences. The innovation process must discover and validate the new IC, as targeted market/brand,  products and services and the business model. The normal linear "waterfall" process is not effective in this expanded discovery and validation which must be iterative in the front-end of innovation. However, the fourth generation (4G) of innovation theory and practice does provide the right iterative process for discovery and validation.  

The beginning of the paper states "Alfred Chandler taught us that organizational innovation and technological innovation are equal partners in the process of economic growth. Indeed, one often requires the other."

In 4G, organizational and technological innovation is driven by new capabilities (people with knowledge, tools, technology and processes) plus the revised organization (architecture) of that capability which includes new business models, new platforms, new partnerships and new supply and new distribution chains. Open innovation is one way to augment the acquisition of new capabilities.  


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The attached HBS paper is a bit long, but a very interesting read!


Thanks for sharing it, William.

Abhijit - The linear model of innovation assumed by this paper is false and ineffective. The linear model has a linear process that begins with invention of technology and a prototype in R&D followed by an attempt to find a a market, customers and a profitable business model for commercialization. Steve Blank (at Stanford and for NSF iCorps) has augmented the linear model after invention in R&D with a 4G innovation iterative process to find a market, customers and a profitable business model. That's still the linear model. The best strategy and innovation model is nonlinear that begins with finding a core problem with 4G methodology that constrains productivity, quality and cost in industries or markets and then continues to apply the 4G methodology and process to iteratively and simultaneously find and validate the market, the customers, the business model and the technology in a package of products and services offered by a collection of companies that 4G calls a "galaxy" and is intended to be a new dominant design as a solution. Apple with its partners is a 4G "galaxy".

William, what you are saying makes sense. If there is a paper that compares the linear model of innovation to the 4G model that you can share here, it will help my understanding further.

Abhijit -
Basic reference for the linear model -
Early reference for one of the published origins in 1985 of an iterative process similar to the one in 4G -
I applied 4G with open innovation first in 1978 as a corporate veture capitalist to create a strategic supplier of what is now known as modern software engineering. The supplier was Whitesmiths, spun out from Bell Labs.
The 4G spiral process used the "daily build" of software prototypes under version control provided in UNIX.
Since 1995, I have authored several papers, co-authored a book, Fourth Generation R&D and wrote Chapter 21 in the Wiley Encyclopedia of Technology and Innovation Management. The book begins to describe 4G.
The Chapter gives a more complete description. Recent books by Steve Blank compare the linear model to the spiral model used in 4G. These are
Paul Romer describes what's wrong with the linear model. He said
“If this (linear) model were correct, physicists would have developed the basic science of thermodynamics and used it to show that, in principle, heat could be converted into motion. Applied scientists would then have used the laws of thermodynamics to highlight the factors that determined the efficiency of this conversion process. Engineers and product designers would have used these results to develop practical devices like the steam engine. In fact, the sequence was precisely the reverse. The people facing practical problems in the marketplace developed the steam engine first. As they studied the efficiency of different engines, they uncovered basic principles. These eventually lead to the development of the basic science of thermodynamics.”
Bottom line - The linear model is not open innovation and it requires about 3000 starting ideas that all have to be tested, inventions have to be created, and lucky market guesses and a business model have to hit the target to get one small commercial success whereas the 4G model applies open innovation and typically requires less than 5 starting ideas to produce a commercial success because it begins with a perceived core problem in an industry and iteratively finds a solution rather than beginning with R&D to produce a portfolio of scientific or technological discoveries and inventions that then have to be tested in assumed product or service configurations with only one assumed business model to find a possible market and a commercial success.

Abhijit -
You might also want to read papers and a book by G. Pascal Zachary.
Zachary rejects the linear model of innovation and explains his reasons.
He wrote a book about Vannevar Bush, science chief for FDR in WWII, who essentially created the linear model after WWII that led to the creation of the National Science Foundation (NSF) and the use of the linear model as a justification to fund research at universities and National Laboratories.

Abhijit -
My statement that Bush created the linear model is contested by Godin in his paper,
and Godin's paper is referenced by Ken Jarboe on his website
Most experts in innovation now say the linear model is ineffective and should be replaced with a nonlinear model with an iterative process at the core and feedback loops.

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