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Book Review: Exploring innovation, by David Smith, McGraw Hill Education

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 Copyright © eContent Management Pty Ltd. Innovation: Management, policy & practice (2011) 13: 134–140.
BOOK review
Exploring innovation
David Smith (2006)
ISBN 13-978-007710861-8; 315 pages +xvi;
McGraw Hill Education, Berkshire, UK
R E V I E W E R S
MYFANWY TRUEMAN
Bradford University School of
Management, Bradford,
West Yorkshire, UK
Kayhan Tajeddini
Department of Business Administration,
School of Economics and
Management, Lund University,
Lund, Sweden
F ierce competition in the global market has
made innovation and differentiation a neces-
sity for every company. Innovation is considered
to be a source of competitive advantage and
economic growth, and worthy of study under
the conditions of increased global competition,
technological change, fast-changing market situ-
ations and continuous customer/client demand
for quality services (Damanpour & Schneider
2006). Despite the importance of innovation,
Professor Smith points out, ‘there are not many
texts on innovation’ (p. IX). While there has been
much work on strategic management, technology
strategy, new product development or market-
ing which mostly aim at the postgraduate mar-
ket, most notably by Smith, this book is aimed at
the undergraduate market with an emphasis on
those who take degrees in Business Studies. The
author has rightly concluded that available books
provide a lack of familiarity with most aspects of
technology. Thus, according to Smith, this book,
designed specifically for those who have only
a limited familiarity with the subject and is an
134 INNOVATION: MANAGEMENT, POLICY & PRACTICE
attempt to respond to a long-standing need for
a textbook. David Smith’s Exploring Innovation
presents richly detailed examples, case studies and
processes that will help undergraduate students
to follow his logic to understand and explore
innovation.
STRUCTURE AND CONTENTS
This book contains of fourteen chapters, orga-
nized into four parts. The first part consists of three
chapters and begins with a conceptual discussion
of the nature of innovation including of type and
forms and it is followed by a contextual discussion
in relation to the wider subject of technological
change. The emphasis on the words of ‘exploit’
and ‘apply’ is used to distinguish invention from
innovation in the first chapter. The author states
‘Innovation involves exploiting inventions so that
they can be traded in a market place’ (p. 6). In
fact, he differentiates these terms from the point
of commercialization. Finally, when innovation
becomes widely used and in time spread to other
fields, the stage of diffusion appears. This chapter
continues discussing briefly about the innovators
including individuals and organizations. Finally,
the author exemplifies some failures of some com-
panies deliberately and comes to this conclusion
that the essential key of the success in innovation
is ‘to get the technology and the business function
correct’ (p. 13).
The second chapter deals with different cate-
gorizations, forms and types of innovation. ‘Form’
refers to the application of innovation which
consists of product, service and process innova-
tions. Similar to the type of innovation suggested
by Gopalakrishnan and Damanpour (1997)
which composed of product vs. process; radical
vs. incremental; and technical vs. administrative
innovation, the author classifies the type of inno-
vation based on the degree of novelty associated
Volume 13, Issue 1, April 2011

with innovations including incremental, radical,
modular and architectural. While incremental
innovation improves an existing design through
improvement in the components, radical innova-
tion deals with a fundamental designs, using new
configured components. Modular innovation uses
the architecture and configuration associated with
the existing systems of an established product,
employing new components with different design
concepts, whereas for architectural innovation,
the components and associated design concepts
remain unchanged, but the systems configuration
is changed.
Chapter 3 is devoted to technological change.
It attempts to explain the nature of technology, its
difference from science and its link to innovation.
This is followed by a discussion of the long wave
cycle (recovery, prosperity, regression and depres-
sion), and the connection with and implications
of technological change.
Part two focuses on the theories, sources, and
processes of innovation as well as intellectual
property organized into four different chapters.
Chapter 4 deals with four main theories associ-
ated with technological innovation. These four
theories include technology S-curve, punctuated
equilibrium, dominant design, and absorptive
capacity. The author identifies some influential
factors relating to inertia such as traditions, sunk
cost, internal political constrains and commit-
ment to outmoded technology. Finally, this chap-
ter attempts to describe the contributions of the
three innovation theories.
Chapter 5 deals with the sources of innovation.
Similar to Kurzman (2004, p. 94), who believes
that ‘innovation is a very messy process that
thrives in what can only be called the gaps’, the
author has rightly pointed out that ‘innovation
is generally less structured and idea generation is
more likely to take the form of a sudden insight’
(p. 86), following a lot of painstaking research.
This chapter identifies some patterns that form
the basis of insight (central to the inspiration at
the heart of an innovation), such as association,
adoption, analogy and serendipity (chance). The
Volume 13, Issue 1, April 2011 INNOVATION: MANAGEMENT, POLICY & PRACTICE
Book review
author outlines a diverse range of possible sources
of innovation and narrows them down to mainly
people and organizations including corporate
undertakings, users, outliers, spillovers, and pro-
cess needs.
Chapter 6 focuses on the innovation process. It
explores the nature of various activities that have
to be undertaken in order to turn and exploit an
invention into a commercial product or service.
This chapter also provides several different models
showing the fact that there are distinct and dif-
ferent approaches to carry out innovation in each
organization. A generic model of innovation points
to seven stages within two main parts; research
and development (R&D) and commercialization.
Commercialization embraces design, production
engineering, pilot testing, full-scale manufacture
and market lunch. Five other innovation models
of innovation process also are presented. They
include, ‘Technology Push and Demand Pull’,
‘Coupling’, ‘Integrated’ and ‘Network’ model
process. Smith notes, ‘Armed with models of the
innovation process, it is possible through careful
analysis to unpick the process, identify the stages
and get a clear and detailed picture of the nature
of the process of innovation’ (p. 131). The last
chapter of part two deals with intellectual prop-
erty in general and intellectual propriety rights
(IPR) in particular. IPR are outlined in ‘Patents’,
‘Trademarks’, ‘Passing off ’ and ‘Copyright’.
Part 3 of the book consists of four chapters
about innovation management: namely technol-
ogy strategy; technology entrepreneurs; fund-
ing innovation; and organizing for innovation.
In Chapter 8 the author discusses the nature of
strategy that underpins the success of a company,
and points out that there is little agreement on
what a strategy really is (Markides 1999). Smith
simplifies the concept of business strategy by
answering the question: ‘how does the busi-
ness compete?’ (p. 157), and is inspired by the
concepts of Ansoff ’s product–market matrix
and Porter’s generic strategies. He observes
that a strategic business is inevitably concerned
with the long-term future (p. 158). Next the
135
 Book review
technology strategy and its determinants (selec-
tion, acquisition, development and exploitation)
are discussed in some detail. The last section of
this chapter is devoted to product/innovation
strategy. Strategic innovation is ‘a fundamen-
tal reconceptualization of what the business is
all about that, in turn, leads to a dramatically
different way of playing the game in an exist-
ing business’ (Markides 1998, p. 32). Similarly,
he points out that ‘innovation is all about com-
mercialization of new inventions and technolo-
gies’ (p. 172). He simply recognizes two distinct
innovation strategies: the first mover and the
follower/imitator. The difference between these
two strategies is all about being ‘first to the mar-
ket’ or taking a ‘wait-and-see’ approach (p. 173).
Many scholars (e.g., Deshpandé et al. 1993;
Capon et al. 1998; Deshpandé & Farley 2002,
2004) describe the first strategy as innovative-
ness. Unlike Meybodi (2003) who suggests that
to stay ahead of competition firms must develop
competencies to innovate, and introduce new
products to the market quickly. To this end
Smith states that a surprising number of success-
ful innovations have resulted from a wait-and-
see approach (p. 173). He argues that the there
are four circumstance when the follower/imita-
tor strategy has attractions. There circumstances
are: free rider effects, imitation costs, scope
economies and learning effects.
Chapter 9 is concerned with the nature of
entrepreneurs and their role in contribution to
innovation process. Firstly, the author attempts
to identify a large number of entrepreneurs and
their common features, concluding that all of
them are technical entrepreneurs. However, he
rightly states that not all businesses created by
technical entrepreneurs grow and many of them
remain small businesses. Interestingly, he also
discusses the role of size as an effective factor in
innovation in large corporations and small firms.
This chapter provides some valuable insights
into the role of the entrepreneurs and views
entrepreneurship as stemming from three main
sources:
136 INNOVATION: MANAGEMENT, POLICY & PRACTICE
1. An economic approach that stresses the role
of entrepreneurs in economic development.
This distinguishes entrepreneurs from others
in terms of risk taking and bearing uncer-
tainty. Such people identify and exploit
opportunities for profit.
2. A psychological approach that focuses on the
personality traits of entrepreneurs (e.g., a
need for achievement; a high internal locus
of control; a willingness to take risk and a
need for autonomy and independence). It
explains that certain individuals have ‘a par-
ticular aptitude for entrepreneurship by vir-
tue of certain distinctive personality traits’
(p. 188).
3. A behavioral/process approach that stresses the
influence of the social and cultural environ-
ment on entrepreneurs.
This chapter has a special emphasis on the
technical entrepreneurs who are associated
with technology-based ‘spin-off ’ businesses, by
applying technology to innovations. Based on
the typology of Jones-Evans (1995), technical
entrepreneurs are identified into four categories
(research, producers, users and opportunities)
and each is described in detail. Based on Autio’s
(1995) work, technological novelty (the degree of
technological intensity, ranging from established
to breakthrough) and market novelty (finding or
creating a new market for exploiting commer-
cially the outcomes of technology–development
processes) have been identified as two crucial
aspects of the entrepreneurial context. Finally,
the author synthesizes a composite picture of the
three main influential factors on technical entre-
preneurship. These include ‘antecedents factors’
(personality, home context and background);
‘paternal experience’ (work and institutional sup-
port) and ‘environmental factors’ (technology
and market).
Chapter 10 deals with resources and inno-
vation funding. During the process of innova-
tion, firms encounter various obstacles. For
example, Galia and Legros (2004) find that if
Volume 13, Issue 1, April 2011

firms postpone projects they are more likely
to face obstacles such as economic risk, lack of
skilled personnel, innovation costs, lack of cus-
tomer responsiveness, lack of information on
technologies and organizational rigidities. From
a financial perspective, this chapter examines
the general perception of funding barriers and
highlights the most important sources of capi-
tal available for innovation. Among the usual
innovation funding sources, venture capital is a
controversial issue in cross-cultural businesses.
For example, Krasna (2003) notes that it is eas-
ier to launch a business in the English-speaking
world, where there is a strong tradition of entre-
preneurship and willingness to take a risk. She
argues that the English phrase ‘venture capital’
is linked with ideas of adventure and explora-
tion, while this phrase in Switzerland means
‘risk capital’ with regard to money invested in
new businesses. Interestingly, the author has
rightly exemplified venture capital as a signifi-
cant source of funding in both the UK and
the US. One of the notable perspectives of this
book is to devote a chapter (11), for organiz-
ing and funding of innovation. This discusses
organizational ‘perceptions’ designed to facili-
tate and foster successful innovation (p. 245).
It covers three interrelated, yet different aspects:
corporate culture, architecture/structure and
roles. The first two aspects refer to ‘macro level’
arrangement or ‘organizational arrangement
designed’ (p. 242), and the third one points
out the ‘micro level’ or ‘people-related arrange-
ments’ that facilitate innovation.
Many scholars (e.g., Deshpandé et al., 1993;
Hurley & Hult, 1998; Calantone et al. 2002,
2003), view innovation from a cultural perspec-
tive that encourages the introduction of new pro-
cesses, products, and ideas. For example Avlonitis
et al. (1994, p. 12) suggest that the behavioral
dimension of the firm should reflect the ‘sus-
tained behavioral change’ of the organization
towards innovations, i.e., behavioral commit-
ment. Because of the impact and importance of
corporate culture on the internal context of an
Volume 13, Issue 1, April 2011
Book review
organization, it describes different perspectives
of corporate culture suggested by Handy (1993)
which consists of power, role, task and personal
cultures as well as Miles and Snow’s (1978) types
of culture including prospector, defender and
analyzer. Smith notes ‘organizations do not select
a particular culture-typically it just emerges over
time’ (p. 232). He outlines the main influential
corporate culture in ‘history’, ‘size’, ‘technology’
and ‘leadership’. This chapter also claims that
the architecture/structure of an organization can
assist and facilitate innovation. While three main
type of organizational structure entailing ‘func-
tional’ (e.g., mechanistic), ‘M-form’ and ‘matrix
structures’ (e.g., organic organization) are illus-
trated, network structure and strategic alliances
structure as well as corporate venturing are dis-
cussed. In this sense, corporate venturing refers to
‘attempts by large organizations to establish con-
ditions conductive to innovation’ (p. 239). Finally
the roles of people both formal and informal on
innovation are discussed. The roles include: ‘proj-
ect leader’ (i.e., as a figurehead person), ‘product
champion’ (i.e., as a man willing to act an advo-
cate), ‘gatekeeper’ (i.e., a man acting as a conduit
to facilitate knowledge transfer) and ‘godfather’
(i.e., a top level man who provides support for
innovation).
Part 4 deals with how the organizations fos-
ter innovation. It consists of three chapters
entitled ‘innovation policy’; ‘innovation clusters’
and ‘national innovation system’. Chapter 12 is
devoted to innovation policy that most govern-
ments employ to foster innovation. Since innova-
tion is closely associated with economic growth
through the creation of new ventures and new
jobs, most governments are favorably support
innovation. This chapter provides some details
of policy measures relevant to innovation and a
summary on the wide range of different support-
ive agencies available. The author has outlined
the rationality of the government intervention
to facilitate innovation. In order to appreciate
this sort of policy, the UK government policy
initiatives are reviewed together with ‘technology
INNOVATION: MANAGEMENT, POLICY & PRACTICE 137
 Book review
forecasting’, knowledge transfer’, ‘location’,
‘research and development’, ‘exploitation/licens-
ing’, and ‘lead user’.
Apart from intellectual curiosity, the renewed
interest in the relationship between innovation
and regional development has also arisen due to
the performance of a few key industrial clusters,
so called new industrial districts (Scott 1988). In
this regard, chapter 13 is devoted to ‘innovation
clusters’ to describe clusters of high-technology
firms or ‘innovative milieux’ and the link between
innovation and such clusters. Clusters are defined
as geographically proximate groups of intercon-
nected companies and associated institutions in
a particular field, linked by commonalities and
complementarities (Porter 1998, p. 78). Clusters
are important, because on the one hand they
allow companies to be more productive and inno-
vative than they could be in isolation and on the
other hand they reduce the barriers to entry for
new business creation relative to other locations.
Consequently, the author analyzes the nature of
these clusters and identifies the factors to contrib-
ute to innovation.
A number of important ideal types have been
identified by Markusen (1996), each of which
manifests a certain type of economic logic. Here
Markusen’s typology differentiates clusters accord-
ing to: (1) Firm size, reflecting available econo-
mies of scale and scope; (2) The extent to which
firms, suppliers and customers are connected
within the cluster; (3) The extent to which the
cluster’s orientation is internal or external; and (4)
The extent to which economies of agglomeration
(reductions in cost that arise from the geographic
concentration of economic activity) are present.
Four distinct types of clusters differentiated by
Markusen (1996) are explained in this chapter.
These four types consist of
1. ‘Neo-Marshallian industrial district (NID)
cluster’ (i.e., access to a pool of skilled staff
and a knowledge community comprising
inter-firm link that facilitates knowledge gen-
eration and diffusion leading to a high rate of
innovation).
138 INNOVATION: MANAGEMENT, POLICY & PRACTICE
2. ‘Hub-and-spoke cluster’ (i.e., regional struc-
ture revolves around one or several major
corporations in one or a few industries. The
presence of large firms reflects available econ-
omies of scale and scope).
3. ‘Satellite platform cluster’ (i.e., a congregation
of branch facilities of externally-based multi-
plant firms often attracted to the location by
government inducements on tax and rents.
This type is less important cluster in terms of
performance and sustainability).
4. ‘State-anchored cluster’ (i.e., a major govern-
ment tenant anchors the regional economy).
Lastly, four main features of the clusters con-
ductive to innovation are outlined: networking
(a panacea for innovation), specialization, easy of
entry and exit, and resource mobility. Although
the author notes that specialization helps to
stimulate innovation, it should be noted that
hyper-specialization might also stand in the way
of breakthrough innovation. First, most break-
through innovations increasingly happen at the
confluence of multiple disciplines, not at one
level of specialization. Second, focusing attention
on a very little scope of information niche and
neglecting to understand what happens in adja-
cent spaces can lead the organization into stuck
to the old behavior. Innovations have constantly
moved forward the technological frontier and
have generated opportunities for new firms to
enter and challenge the existing leadership. In
this sense, due to the lack of involvement with
old technology, providing rapid decision mak-
ing (less paperwork procedure) and having easy
circulation of knowledge, the author argues and
concludes that small firms are able to provide an
innovative environment.
Chapter 14 dwells upon national innova-
tion systems. The innovative performance of a
country depends to a large extent on how differ-
ent actors interact to each other as elements of
a collective system of both the creation of new
knowledge and existing knowledge as well as the
technologies they use. These actors are primarily
Volume 13, Issue 1, April 2011

governance mechanisms (e.g., corporate, politi-
cal and network); institutions (e.g., industrial,
science and technology, financial; educational)
and the people within them.
PEDAGOGY
Each chapter begins with learning objectives
that set the agenda, what to look for in chap-
ter and also an expectation of what needs to
be achieved after going through the chapter.
A number of figures and tables is provides in
each chapter to help students to visualize the
various models, and to illustrate, compare, and
summarize important concept. This provides
an integrative productive thinking approach
throughout which encourages critical thinking
and analysis helps students develop the ability
to problem solve.The inclusion of a large case
study and assignments at end of every chapter
together with related questions for discussion
provides an opportunity to students to examine
how various chapters concepts are presented in
the chapters are interrelated and linked with
each other in real life. In addition, the inclusion
of mini cases within each chapter provides the
students with the opportunity to understand
and apply innovation concepts and processes in
real world. At the end of each chapter, descrip-
tive resources provide students opportunities
for further investigation. In some chapters,
these resources include printed resources, web-
sites and also videos as well as films. Last, but
not the least, two types of questions: concept
review questions and critical thinking questions
for discussions are given in each chapter to
facilitate review of students’ learning and inte-
gration of the same with their past learning and
understanding. A Guide tour is also available,
along with power point slides to help teachers
deliver the innovation course in an effective
manner.
OVERALL EVALUATION
The book fulfils its objective of an explorative
approach for innovation for those who have
Volume 13, Issue 1, April 2011
Book review
only a limited acquaintance with the subject in
general, and at the undergraduate market (i.e.,
scientists, engineers and technologies) with
experience of technology-based firms in particu-
lar. The treatment of the subject is quite com-
prehensive and practical. The framework of the
book; the nature of innovation, the involvement
of innovation, the management of innovation,
and the foster innovation has been able to inte-
grate the chapters meaningfully. Many chapters
like Technological change, Source of innovation,
Technology strategy, Technical entrepreneurs,
Funding innovation, and National innovation
systems provide a fresh perspective to the subject.
The author has put in his vast experience and
deep understanding of the subject in the book
and, therefore, needs commendation. There is
nothing against the book, although a chapter on
Stages and Levels of innovation may be added in
future. The text is reader friendly and written in
clear, straightforward language, avoiding jargon
and technical terms, making it relatively easy
for students to read and enjoy. We fail in our
duty if we don’t appreciate models, mini cases,
and appropriate examples used in the book,
which make the reading more comprehensible
and lively. The reviewers strongly recommend
the book for undergraduate Business Studies
students and as well as an introductory text for
those who seek to understand and obtain famil-
iarity with this topic. We agree with the author
that chapters can provide the basis for lectures
and the case studies can be used for a series of
seminars.
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