Innovation and Ontologies

Types of Innovation 21
1.2.2.2 Radical Innovation
[…] extent to which the structural arrangement differs from existing ones […]
with products or services the amount of change in the physical design […] or
the design of the procedures involved in the service […]. (Knight, 1967)
Radical innovations are often induced by major technological, market or political shifts or
dynamism which transform prevailing knowledge and demolish existing market structures as well
as barriers to entry. Existing markets can be transformed or extended, new ones might be opened
up (Assink, 2006; Ettlie & Subramaniam, 2004). In this context, the terms of radical, disruptive,
discontinuous or ‘do different’ innovations coexist (Bessant, Birkinshaw & Delbridge, 2004;
Tidd, Bessant & Pavitt, 2005; Tushman & O'Reilly, 2002). These products, processes or services
have either unprecedented performance features or familiar features that offer significant,
unexpected improvements in performance or cost (Leifer, O'Connor & Rice, 2001). After their
introduction, rules of the game have shifted (DeTienne & Koberg, 2002).
Managing innovation has consequently increasingly become a process of exploration and coevolution
under conditions of unforeseeable uncertainty 21 , complexity 22 and high velocity
(Bessant, 2005; Bourgeois III & Eisenhardt, 1988; Phillips, Noke, Bessant & Lamming, 2004;
Sommer & Loch, 2004; Tidd, Bessant & Pavitt, 2005; Veryzer, 2005).
Unfortunately, wrong estimation of the degree of innovativeness (and the related risks) is the
rule, not the exception. This is especially frequent within small and medium sized enterprises
which have generally been found more innovative (proportionate to their size) (Ettlie, Bridges &
O'Keefe, 1984; Gassmann, 2001; Hauschildt & Salomo, 2004; Schlaak, 1999). To avoid surprises,
it is important to decide early on in the innovation process about the kind of innovation intended
– by determining systematically the degree of innovation and its consequences 23 (Ettlie &
Subramaniam, 2004; Hauschildt & Salomo, 2004; Hauschildt & Salomo, 2007; Horsch, 2003).
Radical innovation has the highest level of novelty to a firm. This induces changes which go
beyond the area of the innovative product or service. Due to its complex and discontinuous
nature, radical innovation changes the set of rules in a number of areas, as presented in figure 8
(Bessant, 2003; Hauschildt & Salomo, 2004; Herstatt, Verworn & Nagahira, 2004; Pleschak &
Sabisch, 1996; Phillips, Noke, Bessant & Lamming, 2004; Reichwald & Piller, 2006; Tidd, Bessant
& Pavitt, 2005; Utterback & Acee, 2005). No one knows what the configuration of technological
means and market needs will be after radical innovation, first inferior to the state of the art, but
with time, possibly able to replace it (Christensen, 1997).
21 Unforeseeable uncertainty is defined as the inability to recognize and articulate relevant variables and their functional relationships (Sommer &
Loch, 2004). Engineers refer to it as unknown unknowns, or ‘unk-unks’ (Widemann, 1998).
22 Complexity stems from “a large number of parts that interact in non-simple ways, [such that] given the properties of the parts and the laws of
their interactions, it is not a trivial matter to infer the properties of the whole” (Simon, 1998). Thus, complexity has two separate dimensions:
system size (number of variables which is large) and interactions (correlation of neighbouring points which is low)(Sommer & Loch, 2004).
23 Interesting with relation to the empirical field of SME is an empirical finding of Hauschildt and Walther that a relatively high degree of
innovation positively influences the innovation process and claims more resources – which, in turn, improves the success of innovation
(Hauschildt & Walther, 2003).