Breakthrough Inventions and Migrating Clusters of Innovation
| Author: | William R. Kerr |
|---|---|
| Published: | September 30, 2009 |
| Paper Release Date: | September 2009 |
| Feature: | Working Papers |
In just a short period of time the spatial location of invention can shift substantially. The San Francisco Bay Area grew from 5 percent of U.S. domestic patents in 1975-1984 to over 12 percent in 1995-2004, for example, while the share for New York City declined from 12 percent to 7 percent. Smaller cities like Austin, Texas, and Boise, Idaho, seem to have become clusters of innovation overnight. Despite the prevalence of these movements, we know very little about what drives spatial adjustments in U.S. invention, the speed at which these reallocations occur, and their economic consequences. In this paper, HBS professor William R. Kerr investigates whether breakthrough inventions draw subsequent research efforts for a technology to a local area. Evidence strongly supports the conclusion that centers of breakthrough innovations experience subsequent growth in innovation relative to their peer locations.
Markets or Communities? The Best Ways to Manage Outside Innovation
| Q&A with: | Karim R. Lakhani |
|---|---|
| Published: | July 20, 2009 |
| Feature: | Research & Ideas |
No one organization can monopolize knowledge in any given field. That's why modern companies must develop a new expertise: the ability to attract novel solutions to difficult or unanticipated problems from outside sources around the world. A conversation with Harvard Business School professor Karim R. Lakhani on the keys to managing distributed innovation.
Principles that Matter: Sustaining Software Innovation from the Client to the Web
| Author: | Marco Iansiti |
|---|---|
| Published: | July 16, 2009 |
| Paper Release Date: | June 2009 |
| Feature: | Working Papers |
Despite the current strength and promise of the Internet software market, the future pace of growth and innovation is not assured. The principles of choice, opportunity, and interoperability were important in the growth of PC software and in the overall health of the information technology ecosystem, and these same principles will shape competition in Internet software, according to HBS professor Marco Iansiti. Given the unprecedented speed at which this industry is developing, consumers and the industry should watch carefully as different companies compete. Choice, opportunity, and interoperability should serve as an important lens, particularly when focused on companies with especially large footprints in the new markets.
Technology Innovation and Diffusion as Sources of Output and Asset Price Fluctuations
| Authors: | Diego A. Comin, Mark Gertler, and Ana Maria Santacreu |
|---|---|
| Published: | July 2, 2009 |
| Paper Release Date: | May 2009 |
| Feature: | Working Papers |
A central challenge to modern business cycle analysis is that standard macro models are unable to generate fluctuations in the stock market with the amplitude, persistence, and lead-lag pattern observed in the data. At the same time, standard macro models predict that good news about future, such as those received during 1994-1995 on the arrival of IT, lead to recessions rather than expansions. HBS professor Diego Comin and coauthors develop a model that overcomes these two problems by explicitly incorporating an endogenous speed of diffusion of technologies that is increasing in the resources spent in adoption. Revisions in beliefs about future profits generate fluctuations in the stock market with the amplitude and lead over output observed in the data. The firms' investment decisions in adoption leads to a shift in labor demand that increases hours worked and output.
Innovation Communication in Multicultural Networks: Deficits in Inter-cultural Capability and Affect-based Trust as Barriers to New Idea Sharing in Inter-Cultural Relationships
| Authors: | Roy Y.J. Chua and Michael W. Morris |
|---|---|
| Published: | June 17, 2009 |
| Paper Release Date: | May 2009 |
| Feature: | Working Papers |
What makes sharing new ideas across cultural lines so difficult? Given that disclosing new ideas makes one person vulnerable to the other, innovation communication requires trust. The literature on workplace relationships distinguishes affect-based trust—feelings of socio-emotional bond with the other—and cognition-based trust—judgments of the other's reliability and competence. Recent organizational psychology research on capabilities needed to work across cultures has also identified affect-relevant strengths such as confidence and nonverbal communication. HBS professor Roy Y.J. Chua and Columbia Business School professor Michael W. Morris survey a sample of business executives with diverse professional networks, assessing their inter-cultural capability and measuring both kinds of trust as well as idea sharing in their working relationships.
Can a Continuously-Liquidating Tontine (or Mutual Inheritance Fund) Succeed where Immediate Annuities Have Floundered?
| Author: | Julio J. Rotemberg |
|---|---|
| Published: | June 4, 2009 |
| Paper Release Date: | April 2009 |
| Feature: | Working Papers |
The changeover from defined benefit to defined contributions retirement plans in the United States has created a vast group of individuals that faces (or will face) the difficult problem of using a lump sum of assets to provide consumption for a relatively long but uncertain number of years. Up to this point, however, consumers appear not to have embraced annuitization. HBS professor Julio J. Rotemberg suggests an alternative instrument that, like immediate annuities, provides longevity insurance and postpones income until old age. In the proposed Mutual Inheritance Fund (MIF), a pool is formed by having individuals of a particular age buy shares in a mutual fund. The income from the underlying assets in the mutual fund is reinvested in the fund so that the value of the shares in an individual's name (and possibly also the number of these shares) grows over time. The basic idea behind the MIF is that the shares of pool members who die are liquidated, and the proceeds are then distributed in cash to the remaining members in proportion to the number of mutual fund shares that are currently in their name.
The Challenges of Investing in Science-Based Innovation
| Published: | June 1, 2009 |
|---|---|
| Feature: | Executive Education |
Smart science-based businesses view today's economic turmoil as an opportunity to stoke up research and innovation for long-term competitive advantage, says professor Vicki L. Sato. How about your business?
The IT Leader's Hero Quest
| Q&A with: | Robert D. Austin, Richard L. Nolan, and Shannon O'Donnell |
|---|---|
| Published: | May 11, 2009 |
| Feature: | Research & Ideas |
Think you could be CIO? Jim Barton is a savvy manager but an IT newbie when he's promoted into the hot seat as chief information officer in The Adventures of an IT Leader, a novel by HBS professors Robert D. Austin and Richard L. Nolan and coauthor Shannon O'Donnell. Can Barton navigate his strange new world quickly enough? Q&A with the authors, and book excerpt.
Capitalizing On Innovation: The Case of Japan
| Authors: | Robert Dujarric and Andrei Hagiu |
|---|---|
| Published: | May 8, 2009 |
| Paper Release Date: | April 2009 (revised October 2009) |
| Feature: | Working Papers |
How can Japan create a better business environment for innovation? Japan presents a unique case of industrial structures that have produced remarkable developments in certain sectors but seem increasingly inadequate to do the same in modern technology industries, which rely on ecosystems of firms producing complementary products. Robert Dujarric and HBS professor Andrei Hagiu present three case studies of software, animation, and mobile telephony to illustrate potential sources of inefficiencies. Like all advanced economies, Japan faces two interconnected challenges. The first challenge is rising competition from lower-cost countries with the capacity to manufacture midrange and in some cases advanced industrial products. At the same time, Japan confronts changes in the relative weights of manufacturing and services, including soft goods, which go against the country's long-standing competitive advantage and emphasis on manufacturing. If Japan is to continue to prosper in a world where its ability to rely principally on manufacturing will diminish, its policymakers will need to capitalize on its untapped innovative power.
Do Innovation and Entrepreneurship Have to Be Incompatible with Organization Size?
| Published: | May 1, 2009 |
|---|---|
| Feature: | What Do YOU Think? |
| Forum: | closed | 81 Comments posted |
Like a good case study, this month's question divided respondents nearly down the middle, says professor Jim Heskett. Can managers lead both a large, established organization and encourage intrapreneurial effort inside it? Readers weighed in. (Online forum now closed. Next forum begins June 5.)
Building Businesses in Turbulent Times
| Q&A with: | Lynda M. Applegate |
|---|---|
| Published: | April 27, 2009 |
| Feature: | Research & Ideas |
An economic crisis is a charter for business leaders to rewrite and rethink how they do business, says Harvard Business School professor Lynda M. Applegate. The key: Don't think retrenchment; think growth.
Kind of Blue: Pushing Boundaries with Miles Davis
| Q&A with: | Robert D. Austin |
|---|---|
| Published: | April 13, 2009 |
| Feature: | Research & Ideas |
Since it hit the airwaves half a century ago, Kind of Blue by Miles Davis has influenced the hearts and minds of jazz fans everywhere. Its songs became instant classics, and it has also converted many a nonfan to appreciate the music's subtlety and complexity. In a new business case, HBS professor Robert D. Austin and Carl Størmer highlight the takeaways for thoughtful managers and executives from this story of creation and innovation.
How to Revive Health-Care Innovation
| Published: | March 9, 2009 |
|---|---|
| Feature: | Research & Ideas |
Simple solutions to complex problems lead to breakthroughs in industries from retailing to personal computers to printing. So let's try health care, too. According to HBS professor Clayton M. Christensen and coauthors of The Innovator's Prescription, such disruption to an industry might look like a threat, but it "always proves to be an extraordinary growth opportunity." Book excerpt.
The Supply Side of Innovation: H-1B Visa Reforms and US Ethnic Invention
| Authors: | William R. Kerr and William F. Lincoln |
|---|---|
| Published: | January 21, 2009 |
| Paper Release Date: | December 2008 |
| Feature: | Working Papers |
The H-1B visa program governs most admissions of temporary immigrants into the U.S. for employment in patenting-related fields. This program has become a point of significant controversy in the public debate over immigration, with proponents and detractors at odds over how important H-1B admission levels are for U.S. technology advancement and whether native U.S. workers are being displaced by immigrants. In this study, Kerr and Lincoln quantify the impact of changes in H-1B admission levels on the pace and character of U.S. invention over the 1995-2006 period.
Is the World Really Flat?
| Published: | January 7, 2009 |
|---|---|
| Feature: | What Do YOU Think? |
| Forum: | closed | 41 Comments posted |
A provocative new book, The Venturesome Economy, argues that the world isn't flat at all, says HBS professor Jim Heskett. But in supporting innovation, does flatness even matter? Readers around the world weighed in with a constellation of viewpoints. (Online forum now closed; next forum begins February 5.)
Published in 2008
The Sciences of Design: Observations on an Emerging Field
| Authors: | Sandeep Purao, Carliss Y. Baldwin, Alan Hevner, Veda C. Storey, Jan Pries-Heje, Brian Smith, and Ying Zhu |
|---|---|
| Published: | November 26, 2008 |
| Paper Release Date: | October 2008 |
| Feature: | Working Papers |
This paper examines the sciences of design as an emerging field of study that cuts across disciplinary boundaries. The paper summarizes and synthesizes the positions, reflections, opportunities, and challenges expressed at the first doctoral consortium to explore the topic, held in 2008. It thus provides a useful agenda for clarifying and articulating important strands of this nascent field.
Parallel Search, Incentives and Problem Type: Revisiting the Competition and Innovation Link
| Authors: | Kevin J. Boudreau, Nicola Lacetera, and Karim R. Lakhani |
|---|---|
| Published: | November 14, 2008 |
| Paper Release Date: | September 2008 |
| Feature: | Working Papers |
The innovation process is fraught with uncertainty. Managers often do not know ahead of time the ideal mix of individuals and skills needed to solve innovation-related problems. One way around this uncertainty is to have multiple paths, approaches, or designs explored at once. The "parallel search" principle can be used inside the firm just as it may be used more generally by pursuing "open innovation". However, having too many searchers attempting to solve the same problem can undercut the benefits if it leads to less effort and investment. The authors study the outcomes of 645 software development contests, conducted by a software outsourcing vendor, involving over 9,000 coders, to understand the relationship between parallel search and increasing competition and innovation.
Social Media Leads the Future of Technology
| Published: | November 10, 2008 |
|---|---|
| Feature: | HBS Business Summit |
From Facebook to smartphones, advances in technology are changing the way we work and communicate. Professor David Yoffie led three experts in a recent panel discussion on "The Technology Revolution and its Implications for the Future" at the HBS Centennial Business Summit.
The Litigation of Financial Innovations
| Author: | Josh Lerner |
|---|---|
| Published: | November 5, 2008 |
| Paper Release Date: | September 2008 |
| Feature: | Working Papers |
The past 10 years have seen a profound change in the conditions under which financial innovations are pursued. Because patents fundamentally alter the way in which innovations can be used, assessing the impact of patenting is critical to understanding the future of financial innovation. Litigation is crucial to delineating the boundaries of patent awards, and this paper examines the litigation of such financial patents to gain insights into the future of financial innovation. This paper seeks to understand the litigation of financial innovations, an area where patents have only recently been granted.
How Disruptive Innovation Changes Education
| Q&A with: | Clayton M. Christensen, Michael B. Horn, and Curtis W. Johnson |
|---|---|
| Published: | August 18, 2008 |
| Feature: | Research & Ideas |
HBS professor Clayton M. Christensen, who developed the theory of disruptive innovation, joins colleagues Michael B. Horn and Curtis W. Johnson to advocate for ways in which ideas around innovation can spur much-needed improvements in public education. A Q&A with the authors of Disrupting Class: How Disruptive Innovation Will Change the Way the World Learns.
