Source: Innovation & Technology Transfer. Published by the European Commission, DG for Enterprise

European business needs to adapt if it is to compete in an increasingly knowledge-driven global economy. A Spanish-led consortium aims to help firms by using an analysis of innovation management techniques (IMTs) based on relational tools that promote the diffusion of novel ideas and technologies. IMTs are about understanding how an organisation works and then improving it.

A study by the European Commission's Directorate-General for Enterprise, 'Innovation management and the knowledge-driven economy', aims at a comprehensive review of available management methodologies designed to support innovation, known as innovation management techniques (IMTs). The study is being led out by the Universidad Politecnica de Madrid.

Complementary Techniques

Special criteria are employed to assess each of 26 IMTs with respect to its focus on knowledge economy drivers – the consideration that lies at the heart of the study. The analysis permits the most relevant IMTs to be grouped in ten different categories:

• knowledge management
• market intelligence
• co-operative and networking
• human resources management
• interface management
• creativity development
• process improvement
• innovation project management
• design management
• business creation

The practical application of the IMTs requires a careful mix that takes into account the individual circumstances of each firm, however. "It is very difficult to use any single IMT in isolation," explains Antonio Hidalgo, the study's co-ordinator. "This is because of the way knowledge spreads around a company – in marketing, networking, and creative problem-solving, for example. You have to identify the different knowledge assets available to an enterprise in order to evaluate which IMTs it should apply. We might select a range of business creation tools to define a specific business plan for a company. That same company can use creativity development techniques to come up with ideas, but it then has to implement them, convert them into specific products or services for the market. At that stage it will need to apply other, complementary, IMTs.

"There are several IMTs to help raise creativity levels amongst employees," he continues. "A firm could conduct brainstorming sessions to identify the most promising ideas and then set up teams to develop specific projects. Human resources management is also critical to the innovation process, and closely related to creativity development. Diagnostic IMTs can be used to identify new market opportunities. Companies need to reduce the time lag between spotting a gap in the market and actually exploiting it."

Making It Happen

The introduction of IMTs requires investment of time and management commitment, more than additional finances. Nevertheless, firms are often reluctant to change. "It is crucial that they understand the advantages of applying these techniques, which are often long-term, and not immediately obvious," says Hidalgo. The study singles out four agents as the main drivers of the innovation management culture - academic centres, business schools, consultancy firms and business support organisations (BSOs).

These agents are found to be largely responsible for promoting and developing innovation management methodologies. For instance, the Belgian BSO, EFQM, promotes a specific model of management and innovation through its 'EFQM Excellence Model'. This provides firms with a platform of good practice and benchmarking tools to facilitate self-assessment and the discovery of creative approaches to management problems. Another example from Scotland's Glasgow Business School helps companies to apply IMTs that produce measurable results – which typically means more customers and greater profits. It applies different tools to meet different needs,

particularly brainstorming and benchmarking, and teaches its client how to apply them properly.

"The results of implementing IMTs are difficult to measure, but some mechanisms do exist," says Hidalgo. "Impacts usually take the form of improved financial results, such as a better return on investment. More new products may also be brought to market in a shorter time.

The study's final report published in January 2004 covers:

1. Innovation management in the knowledge-driven economy: the issues. Setting a conceptual framework.
2. Analysis and review of selected methodologies to facilitate the exploitation of innovation in firms.
3. Innovation management drivers: major actors in the development of methodologies.
4. Business relevance of innovation management methodologies.
5. Conclusions and outlook.

The study will also include a series of illustrative case studies.

Contacts

• A. Hidalgo, Universidad Politécnica de Madrid
  Tl. +34 91 556 24 95
  Fax. +34 91 556 60 11
  a.hidalgo@ingor.upm.es

• J-R. TМscar, European Commission
  Enterprise DG, Innovation Policy Unit
  Fx. +352 4301 34129
  jose.tiscar@cec.eu.int
  http://www.cordis.lu/innovation-smes/src/policy.htm