Innovation Studies – Innovation and Commercialisation – Module II
Immersion in the dynamics of innovation
Introduction and reflection
Where Module I established language, concepts and a shared contract for learning, Module II represented a clear shift in both ambition and seriousness. It was no longer about understanding what innovation is, but about delving deeper into how innovation actually occurs – and why it so often fails. The perspective became more analytical, more demanding and at the same time more realistic.
Module II made it clear that innovation is not an idealistic project detached from power, interests and risk.
On the contrary, innovation is a process in which organizations must continually deal with uncertainty, resistance, and difficult priorities. It was also here that the study began to seriously challenge established notions of leadership, organization, and implementation.
Program overview
Module II was designed as a three-day session with clear academic progression. The emphasis was on in-depth study of key innovation models as presented in the main works of the study: Christensen, Utterback, Van de Ven and Afuah. The session combined lectures, group presentations, discussions and reflection, and was deliberately designed to force participants to apply theory to their own problems.
An important feature was that the participants themselves were responsible for presenting and discussing parts of the curriculum, with an explicit focus on relevance to their own work and project assignments. This meant that theory was continuously tested against practice, rather than treated as abstract knowledge.
Main academic topics
Innovation as a structural and organizational challenge
A central theme in Module II was the understanding of innovation as a structural challenge for established organizations. Based on Schumpeter and further developed through Afuah and Christensen, it became clear that innovation is not primarily inhibited by a lack of ideas, but by existing structures, routines and incentives.
Schumpeter's distinction between entrepreneurial innovation and capitalist operation was brought to life through the discussion of creative destruction. Innovation was presented as a force that radically changes economic structures from within – often to the disadvantage of those who have the most to lose from change. Thus, innovation also became a question of power and position, not just creativity.
Small versus large businesses
Another recurring theme was the tension between small and large enterprises as innovators. Schumpeter I and II represented two seemingly contradictory views: on the one hand, small, entrepreneurial actors as sources of radical innovation, on the other, large, resourceful enterprises with the capacity to invest heavily in research and development.
Module II nuanced this picture considerably. The empirical evidence showed no simple relationship between size and innovative capacity. The decisive factor was the type of innovation. Incremental innovations often favor established players, while radical innovations open up more space for newcomers – especially when new technology makes existing expertise redundant.
Radical and incremental innovation – two perspectives
The distinction between radical and incremental innovation was analyzed through two complementary perspectives: the organizational-based and the competitive-economic perspective. In the organizational-based perspective, radical innovation is about skill gaps – when new technology or new solutions require skills that the organization does not possess. In the competitive-economic perspective, innovation is radical when it makes existing products uncompetitive.
This dichotomy contributed to a more precise understanding of why established businesses often struggle with radical innovations, and why new players may have structural advantages – not because they are smarter, but because they are not bound by historical investments and routines.
Radical and incremental innovation – two fundamentally different forms of change
The distinction between radical and incremental innovation is one of the most central, and at the same time most misunderstood, concepts in innovation research. The difference is not just about the degree of novelty, but about how innovation affects organizations' knowledge base, competitive position, and ability to act.
Incremental innovation
refers to improvements that build on existing products, services, processes or technologies. Such innovations enhance the knowledge and capabilities that the organization already possesses. They often involve lower risk, are easier to plan and fit well into established management and reward systems. For established businesses, incremental innovation therefore appears to be both rational and desirable. Examples include gradual improvements in performance, cost-effectiveness or user-friendliness within a known business model.
Radical innovation
However, radical innovation represents a break with existing knowledge and established ways of doing things. It requires new skills, new organizational forms and often new business models. From an organizational perspective, radical innovation involves what Afuah refers to as competence-eliminating change: previous experiences and routines lose value, and can in some cases become a direct obstacle to further development. Radical innovation is therefore far more demanding to handle within established structures.
Research shows that there is no simple relationship between the size of a company and its ability to innovate, but that the outcome largely depends on the type of innovation involved. Established companies often have structural and economic incentives to prioritize incremental innovations, because these protect and develop existing revenue streams. Radical innovations, on the other hand, can be perceived as threatening, especially when they involve the risk of cannibalization of their own products or services.
New and smaller players are often freer to pursue radical innovations, not because they necessarily have better ideas, but because they have less to lose. The lack of established structures and investments can in such cases be an advantage, rather than a weakness.
The distinction between radical and incremental innovation thus highlights a fundamental tension in innovation management: what makes an organization effective today may make it less able to succeed tomorrow. Understanding this tension – and being able to navigate it – is a core competency for leaders who want to create lasting value.
Central academic directions in innovation studies
The study of innovation is not based on a single unified theory, but on several complementary academic disciplines. Each of the main works represents a distinct perspective on innovation – what it is, how it occurs, and why it succeeds or fails.
Case studies
The cases and examples used in Module II served primarily as analytical mirrors. They illustrated how innovation always unfolds in concrete organizational and market contexts. The discussions around technological cannibalization, market uncertainty, and organizational inertia made it clear that even successful businesses often become victims of their own successes.
In particular, the issues surrounding internal innovation projects in large organizations were highlighted: how new initiatives are often hampered by existing measurement parameters, profitability requirements, and governance models. This provided a natural transition to later discussions about incubators, corporate venturing, and alternative organizational forms.
Reflections and discussion:
Reflection and discussion were not an addition to the teaching in Module II, but the very core. Participants were continuously challenged to consider their own role in innovation processes. Where is the line between rational management and necessary risk? When does loyalty to existing business models become an obstacle to future value creation?
The discussions also revealed an important tension between leadership and entrepreneurship. Innovation requires freedom, but freedom without direction rarely yields results. Thus, leadership of innovation was presented as a balancing act between control and trust – a theme that would become even clearer in the encounter with the American innovation communities later in the study.
International perspectives
Module II was deliberately built around an international perspective. Through literature, lectures and preparations for the study stay in California, it became clear that many of the challenges associated with innovation are universal. At the same time, it became clear that context matters: access to capital, attitudes to risk and the pace of decision-making processes vary significantly between countries and markets.
This perspective served as a necessary corrective to both Norwegian complacency and uncritical Silicon Valley romanticism. Innovation cannot be copied – it must be adapted to institutional and cultural frameworks.
Insights taken further in the study
The most valuable thing from Module II was not individual models, but a sharpened analytical eye. The ability to identify what type of innovation one is facing, what structural barriers exist, and what organizational measures are necessary, became a recurring theme throughout the study.
This insight became particularly important in the work on the project paper and in the preparations for San Francisco, where theory would meet practice in its most concentrated form.
Relevance today
Seen through today's eyes, Module II appears strikingly relevant. Many of the same challenges still characterize both the private and public sectors: established organizations struggle with radical change, while new players challenge existing structures through technology and new business models. Digitalization, artificial intelligence and the platform economy have not made innovation easier – only more demanding.
Module II provides a language for understanding why execution capability is often the real bottleneck in innovation work. It is rarely about a lack of knowledge or capital, but about the ability to change structures, incentives and mental models.
From studies and seminars to today's professional universe
The studies, seminars and field trips documented on this page are part of the knowledge base behind The Invisible Capital. Topics such as customers, technology, innovation, digitalization and value creation have followed developments over several decades – but the disciplines have also continued to develop.
At The Invisible Capital, we are therefore continuing to work on these questions in our own subject series. Here, we connect previous theory, research and experiences with newer knowledge, new technologies and today's challenges for people and businesses.
Innovation
Innovation is not just about new ideas. Value is created when knowledge, technology and ideas are developed into products, services, processes, organizational forms and business models that are actually used. The series on innovation goes from Schumpeter to modern innovation research and covers, among other things, incremental, radical, disruptive, open and user-driven innovation.
→ Explore the Innovation Series
The customer
The customer is not just the recipient of what the business produces. In a competitive market, the customer is a crucial determinant of whether the business actually succeeds in creating value. The series about the customer goes deeper into customer orientation, customer insight, customer experience, satisfaction, loyalty, trust and the encounter between people.
→ Read the customer series
Value creation
What does it really mean to create value – and who creates it? The series on value creation moves from economic theory and key researchers to a broader understanding of how people, expertise, institutions, businesses and the public sector contribute to value creation.
→ Read the series on value creation
Digitization
Digitalization has evolved from stand-alone technologies to a fundamental part of how businesses work and create value. The Digitalization from A–Z series follows the development through internet, web, e-commerce, search, UX, social, mobile, omnichannel, cloud, data, platforms and digital transformation – up to today’s AI First development.
→ Read the series Digitization from A–Z
Artificial intelligence
Artificial intelligence represents the next chapter in digital evolution. In our own AI universe, we investigate how artificial intelligence works, how AI finds and uses information, how it evaluates sources and websites, and what the development can mean for people, businesses, and value creation.
→ Go to the articles about artificial intelligence
Recommended literature
Sustainable Innovation
A book about how innovation can be developed long-term through collaboration, organizational culture, and sustainable thinking. Andrew Hargadon explores how businesses build environments that stimulate continuous learning, creativity, and innovation over time.
