Are Innovation Models Ready For Mitigating VUCA In Startups?
There could be no specific innovation model to describe the process. But as said, it originates from the generation of new ideas, eventually manifested in the extraordinary achievements we encounter in any field of human activity. It challenges this proposition in all spheres of the firm’s existence. It is now a reverse process, the smaller firms, especially start-ups are vastly growing with the “innovation imbroglio”, challenging the existence of the large firms in tandem. The innate ability to create new and unique ideas leads to innovation. There are some models that entrepreneurs pursue. Let’s have a quick look from a business perspective.
Study on Innovation Models
Limited literature on this subject has been documented as of date but nevertheless, attempts have been made in researching in the very context of this present research. It may still be mysterious to bring all the efforts under one roof, as uncertainty always prevails.
This study draws from Rothwell’s framework in covering the six generations of innovation models as follows.
1. First generation: The black box model
2. Second generation: Linear models (including technology push & need pull)
3. Third generation: Interactive models
4. Fourth generation: Systems model
5. Fifth Generation: Evolutionary models
6. Sixth generation: Innovative milieu
A brief description of each model along with its applicability in launching and running a start-up has been described below:
First-generation: The Black Box
There was a first attempt in 1957 by Solow to incorporate technological progress in the economic equation of the country. He concluded that 90% of the per capita output could be attributed to the technological changes. This resulted in the visibility of investment in science and technology that gave rise to the black box model. Rosenberg said, that ‘the economics profession has adhered
rather strictly to a self-imposed ordinance not to inquire too seriously into what transpires inside that box’. The black box model states that the innovation process itself is not so important, what matters is the inputs and the outputs. Inmobi as one of the popular start-ups did adopt the black box model to innovate about Apps running on smart phones.
Second generation: Linear Model
The linear ‘need pull’ or termed as ‘market-driven’ was developed after the due recognition of the market place and the changing demands of the customer. It was clear that the ever-changing demands of the customer lead to the creation of the new product or services which in turn lead to a series of changes. They could be incremental or radical in nature. Schmookler, studied patterns in patents and investments. A related concept to the linear model is the ‘barriers to innovation’ or factors that impede the adoption of the new technologies. Ola Cabs took risks as a first mover in India and tapped unlimited potential for meeting the need of quality and safe taxi service.
Third generation: Interactive Models
The overall pattern of the innovation process can be thought of as a complex net of communication paths, both intra-organizational and external to organization. These are linked together to various in-house functions, connecting with the broader scientific and technological community and then with the market place. The business model adopted by the Indian start-up known as Quikr, is based on the principle that innovation is key to success and technology is only one of the means.
Fourth generation: Systems Model
The complexity of the innovation process termed by Marceau in 1992 as ‘the permeability of firms’ while Sako in 1992 acknowledges it to be the existence of dynamic, industrial, strategic or innovation networks. The model contemplates that firms do not possess large resources to develop innovation in-house, but can defend their relative position in the home markets by a pool of networks. Hobday in 1995 brought about few advantages of such firms engaged in innovation. According to him, these firms can hence maintain leading edge technologies by the back to back support. The Indian start-up Zomoto does not own a single restaurant yet it uses all the resources to supply fresh and hot food to every corner of each city of India.
Fifth Generation: Evolutionary Models
Saviotti in 1996 proposed the need for an evolutionary approach to economics, as the earlier concept failed to bring about the ability to deal with the quantitative and qualitative changes that technological innovation tended to do. It leads to the generation of variety, like mutation, new products, processes and forms and contributes as whole. Metcalfe acknowledges that imperfections are necessary conditions for technical change to occur in a market economy. Mu Sigma, as startup, realized the economics of data and its interpretation and they converted this into a profitable business.
Sixth generation: The Innovative Milieu
A business situation that remains the discussion for any firm to engage in business is the ‘location, location and location’. Research support and is evidence of the fact that regional clusters of innovation in the technological areas are far more than others. The mushroom at a place as a result of geographical advantage. In India, Bengaluru is located of the cluster of technological innovations and that is why it had maximum start-ups. Camagni and Capello 2000 have listed in the innovative milieu five components, i.e. a productive system, an active territorial relationship comprising different territorial socio-economic actors, a specific culture, a representation process and a dynamic local collective learning process.
The Indian start-ups are an apt example of using entrepreneurial models in their launching and transforming them into unicorns.
