Value innovation modelling: Design thinking as a tool for business analysis and strategy

This paper explores the use of multiple perspective problem framing (English 2008) as a tool to reveal hidden value and commercial opportunity for business. Creative thinking involves the interrelationship of parameters held open and fluid within the cognitive span of the creative mind. The recognition of new associations can create new value that can lead to innovation in designed products, intellectual property and business strategy. The ‘Ideas-lab’ process is based on the proposition that a company’s capacity for innovation is dependent on the way the business is able to see its problems and opportunities. In this process the attributes of a company and the experience of the researchers are considered as the parameters of a design problem. It is therefore important to acknowledge the commercial experience of the project researchers, all of whom have a proven track record in helping businesses develop, exploit and protect their know how. Semi structured interviews were carried out with key individuals in 34 companies. The resulting data was assessed on a company-by-company basis through a process of multiple perspective problem framing, enabling key nodes, patterns and relationships to be identified and explored. A ‘Cornerstones of Innovation’ report was prepared to inform each company of the observations made by the researchers. The paper describes the methods adopted and summarises the feedback from participating companies. Case studies are highlighted to demonstrate ways in which the process influenced the actions of particular businesses, and the commercial outcomes that resulted. Finally the researchers reflect on the structure of the Ideas-lab process

How can innovation economics benefit from complex network analysis?

There is a deficit in economics of theories and empirical data on complex networks, though mathematicians, physicists, biologists, computer scientists, and sociologists are actively engaged in their study. This paper offers a focused review of prominent concepts in contemporary thinking in network research that may motivate further theoretical research and stimulate interest of economists. Possible avenues for modelling innovation, considered the driving force behind economic change, have been explored. A transition is needed from the analysis in economics of the transaction to the explicit examination of market structure and how it processes, or is processed by, innovation.Network; statistics; economy; innovation; modelling

Shortcomings of a parametric VaR approach and nonparametric improvements based on a non-stationary return series model

A non-stationary regression model for financial returns is examined theoretically in this paper. Volatility dynamics are modelled both exogenously and deterministic, captured by a nonparametric curve estimation on equidistant centered returns. We prove consistency and asymptotic normality of a symmetric variance estimator and of a one-sided variance estimator analytically, and derive remarks on the bandwidth decision. Further attention is paid to asymmetry and heavy tails of the return distribution, implemented by an asymmetric version of the Pearson type VII distribution for random innovations. By providing a method of moments for its parameter estimation and a connection to the Student-t distribution we offer the framework for a factor-based VaR approach. The approximation quality of the non-stationary model is supported by simulation studies. --heteroscedastic asset returns,non-stationarity,nonparametric regression,volatility,innovation modelling,asymmetric heavy-tails,distributional forecast,Value at Risk (VaR)

Reflections on Multiple Perspective Problem Framing

The researchers have developed a system of value innovation modelling founded on the application of a multiple perspective problem framing theory (English 2008). This approach has been used to map the attributes of 43 businesses in order to reveal untapped value in these organisations, as described in a previous paper (2010). The system considers both the attributes of a company and the experience of the researchers as parameters in a design problem. This paper aims to show how the process can reveal value by taking the reader through a step-by-step guide, incorporating case studies to demonstrate the relationship between concepts and the development of the researcher’s awareness. An integrated mapping activity provides a clear overview of the company and describes relationships between technology, intellectual property and commercialisation. This mapping process is used to reveal patterns and disharmonies, enabling the researchers to identify gaps and make connections that can lead to new business opportunities. This paper describes the mapping process in detail and the researchers reflect on the way that insights have been revealed through their development of new perspectives on each company

Knowledge Diffusion and Innovation: Modelling Complex Entrepreneurial Behaviours by Piergiuseppe Morone and Richard Taylor: A Response to the Review

In this brief note we reply to C�sar Garc�a-D�az and Diemo Urbig who reviewed our book on Knowledge Diffusion and Innovation (Edward Elgar Publishing: Cheltenham, 2010). We take this opportunity to reaffirm our personal view on several relevant issues, such as the need for a holistic view in economics, the adoption of a pragmatic heuristic approach when dealing with complex socio-economic systems, the relevance of a \'prototype model\' to setting a rigorous conceptual framework and the proposition of a novel way of looking at knowledge and innovation.Knowledge Diffusion, Innovation, Agent-Based Model, Validation

Developing the PAGE2002 Model with Endogenous Technical Change

Presented research demonstrates the inclusion of endogenous technical change into the PAGE2002 integrated assessment model of climate change. The ‘experience curve’ or learning-by-doing concept, made popular by the Boston Consulting Group during the 1960’s provides a mechanism with which to describe cost reduction through experiential learning. The implementation of learning requires both a restructuring of the way costs are modelled as well as the inclusion of an explicit learning function with initial abatement costs and learning coefficients calibrated to historical renewable energy data. The discounted values for total abatement costs are calculated for both the standard PAGE2002 model without an explicit learning function and the modified PAGE2002 model. The results were found to be of a similar magnitude, partially due to the myopic effects of discounting, though the result was found to be highly sensitive to the learning rate used, which in our case was a conservative estimate

Design of an innovation platform for manufacturing SMES

This paper reports on the conception of a collaborative, internet-based innovation platform with semantic capabilities, which implements a new methodology for the adoption of a systematic innovation process in globally-acting networked SMEs. The main objective of the innovation platform is to stimulate the generation of ideas, the selection of good ideas and their ultimate implementation. The platform will support SMEs to manage and implement the complex innovation processes arisen in a networked environment, taking into account their internal and external links, by enabling an open multi-agent focused innovation system, facilitating customer, provider, supplier and employee- focused innovation. The solution is specifically focused on the needs of manufacturing SMEs and will observe product, process and management innovation. The paper presents the key elements of the innovation model and makes references to a novel approach concerning the development of a robust and flexible Central Knowledge Repository for the innovation platform

Driving forces for innovation: are they measurable?

This paper outlines a synthetic framework based on the concept of the learning process as a driver to redress stakeholders’ attitudes and strategic choices. The discussion is focused on the advantages that may result from institutional proximity, knowledge diffusion and coordination for the specific building up of a territorial knowledge base and the consequent achievement of sustainable regional development. This theoretical framework is applied to an empirical exercise identifying a number of variables supposed to be able to characterise firms and regional performances towards different forms of innovation. Modelling techniques are used to demonstrate that firms’ capacity to innovate is a complex attribute whose determinants change. The results permit to conclude causal links that may be useful for a better understanding of innovation and as support instruments for policy-makers which intend to search for specificities in the regional development process