flashcards based on exam recap document

Comprehensive vocabulary flashcards covering technological innovation, value creation, R&D management, industry dynamics, and finance based on the lecture review topics.

Technological innovation

A process that combines technical knowledge with market needs to create value for customers, firms, and countries.

Value creation

The generation of benefits for stakeholders including customers, firms, and whole countries, often weighed against negative externalities.

Negative externalities

Harmful or unintended side effects of innovation that affect third parties not involved in the original transaction.

Planned innovation

The result of deliberate, strategic R&D efforts aimed at achieving specific technological or market goals.

Accidental innovation

Unforeseen breakthroughs or discoveries that occur by chance rather than through intentional planning.

Radical innovation

A significant technological breakthrough that fundamentally changes existing market structures or creates entirely new ones.

Incremental innovation

Minor improvements or adjustments made to existing products, processes, or services over time.

Product innovation

The development of new or improved goods or services to meet customer needs.

Process innovation

Improvements in the methods or equipment used to produce goods or deliver services.

R&D intensity

A metric used to measure innovation, often calculated as \text{R&D Intensity} = \frac{\text{R&D Expenses}}{\text{Total Revenue}}.

Basic research

Experimental or theoretical work undertaken primarily to acquire new knowledge of the underlying foundations of phenomena without any particular application or use in view.

Applied research

Original investigation undertaken in order to acquire new knowledge directed primarily towards a specific, practical aim or objective.

Appropriability problem

The challenge firms face in capturing the full economic returns of their R&D investments due to knowledge spillovers to competitors.

Internal R&D

Research and development activities performed within the firm to build proprietary knowledge and capabilities.

External R&D

Innovation activities sourced from outside the firm, such as through collaborations, licensing, or acquisitions.

Absorptive capacity

A firm's ability to identify, assimilate, and exploit knowledge from the external environment for commercial ends.

Not-invented-here-syndrome

An organizational culture or bias that leads to the rejection of ideas or technologies developed outside the firm.

Technology push

A model where innovation is driven by scientific discovery and new technological capabilities.

Market pull

A model where innovation is driven by identifying and responding to specific customer needs or market demands.

Technology S-Curve

A graphical representation showing the relationship between cumulative R&D effort and the resulting performance improvements of a technology.

Abernathy-Utterback model

A framework describing the shift from product innovation to process innovation as an industry moves toward a dominant design.

Dominant design

A single product architecture that wins widespread market acceptance and establishes the standard for an industry.

Disruptive innovation

An innovation that initially targets niche or low-end segments but eventually displaces established market leaders.

Diffusion

The process and rate at which a new technology or innovation spreads through a population of potential adopters.

Technology adopters

Different categories of users classified by their timing of adoption, such as innovators, early adopters, and the late majority.

The chasm

The significant gap in the adoption curve between early adopters and the early majority that many startups fail to cross.

Adoption S-curve

A curve representing the cumulative percentage of a market that has adopted an innovation over time.

Innovators (Bass model)

Individuals who adopt an innovation based on external signals like mass media, rather than the influence of previous adopters.

Imitators (Bass model)

Individuals who adopt an innovation based on internal influence or word-of-mouth from those who have already adopted it.

Technological standards

Uniform specifications that allow different products and systems to be compatible and work together.

Network externalities

A situation where the value of a product or service increases as the total number of users grows.

Complementary products

Assets or services that enhance the utility of a technology, such as software for a computer or charging stations for electric cars.

Patent system

A legal framework that grants inventors exclusive rights to their inventions for a limited time in exchange for public disclosure.

Paradox of disclosure

The dilemma where an innovator must reveal their idea to prove its value to a buyer, but doing so allows the buyer to steal the idea.

Inventing around

A competitor's strategy of designing a new product that provides similar functionality to a patented invention without infringing on its legal claims.

Trade secret

Information that is kept confidential to provide a competitive advantage, protected by law as long as it remains secret.

Trade secret infringement

The unauthorized acquisition, use, or disclosure of confidential business information through improper means.

Trademark

A legal protection that confers exclusive rights to a recognizable sign, design, or expression identifying a specific source of goods.

Strategic barriers to imitation

Non-legal mechanisms such as lead time, complexity, or scale that prevent competitors from copying an innovation.

First-mover advantage

The competitive edge gained by being the first significant occupant of a market segment, often driven by brand loyalty or preemption of assets.

Learning curve

The gain in efficiency and cost reduction achieved through the repeated production and experience with a new technology.

Scale economies

The cost advantages that a firm obtains due to the size and volume of its operations, which can deter late entrants.

Late mover advantages

Benefits such as lower R&D costs and the ability to learn from the pioneer's mistakes that accrue to firms entering the market later.

Complementary assets

Necessary resources like manufacturing, distribution, and marketing needed to successfully commercialize and profit from an innovation.

Centralized R&D

An organizational structure where R&D activities are concentrated in a single location to maximize coordination and scale.

Decentralized R&D

An organizational structure where R&D is spread across different units to stay closer to specific market needs and customers.

Spin-offs

New, independent companies formed to commercialize technologies or ideas originally developed within a parent organization.

Venture capital

A form of financing provided by professional funds to small, early-stage, high-potential companies in exchange for equity.

Corporate venture capital

The investment of corporate funds directly into external startup firms to gain strategic or financial benefits.

Crowdfunding

A method of raising capital for a project or venture by collecting small amounts of money from a large number of people, usually via the internet.