Backing outsiders: selection strategies for discontinuous innovation

A key challenge in managing innovation is to explicitly identify ways to improve an organization's performance with regard to discontinuous innovation. However, discontinuous innovation does not fit the existing ‘frame of reference’ and hence requires a reframing of the traditional ways of innovating within the organization. More specifically, previous research shows that practices that work well in the context of incremental innovation do not work in the context of discontinuous innovation. Thus, the aim of this paper is to explore innovation practices that enable organizations to select innovation projects, which are ‘outside the box’ of its prior experience, i.e. are discontinuous in nature. Building on the experience of more than 150 firms across 12 countries, we have identified nine innovation practices for the selection of discontinuous innovation; these can be grouped into three clusters: enable, engage and experience. In sum, we identify that an organization needs to acknowledge that its choice to engage in discontinuous innovation will have consequences for the innovation practices chosen to select which discontinuous projects to carry forward.     

Economic Evaluation and Optimization of the Degree of Automation in Insurance Processes

In the context of value and customer orientation there are various requirements concerning the process – especially in insurance companies: processes are meant to be standardized, automated, and flexible. It is in question whether a fast and cheap automated processing is preferred to manual handling. For which claims and which process steps is it of economic value to have the flexibility and the competence and ability to solve problems of human operators at your disposal? Various combinations, representing different degrees of automation, are possible. The different degrees of automation for the processing of an insurance claims are compared and resulting cash flows are determined. It is essential to include all consequences that can be attributed to a single process and to consider customer reactions and restrictions to the capacity of processing. Instead of using heuristic rules to decide on automation in practice, here the decision is flexible and depends on the given situation. Viewing an aggregated number of insurance claims it is possible to deduce information about the performance of the process. The model is exemplarily illustrated with help of a part of the process for handling own damage glass claims.     

Elektromobilität braucht intelligente Förderung

Die EU-Kommission sieht in ihrer Roadmap 2050 vor, ab 2050 keine Fahrzeuge mehr mit Verbrennungsmotoren in den St?dten zuzulassen. Der Verbrennungsmotor als Antrieb für Kraftfahrzeuge muss entsprechend mittelfristig durch andere Antriebsformen abgel?st werden. Dies geschieht nicht reibungslos und macht eine intelligente F?rderung notwendig. Wie gro? die Bereitschaft in der Bev?lkerung ist, auf Elektromobilit?t umzusteigen, wird von den Autoren anhand eines Experiments gezeigt.     

Asymmetric Collusion with Growing Demand

We characterize collusion sustainability in markets where demand growth triggers the entry of a new firm whose efficiency may be different from the efficiency of the incumbents. We find that the profit-sharing rule that firms adopt to divide the cartel profit after entry is a key determinant of the incentives for collusion (before and after entry). In particular, if the incumbents and the entrant are very asymmetric, collusion without side-payments cannot be sustained. However, if firms divide joint profits through bargaining and are sufficiently patient, collusion is sustainable even if firms are very asymmetric.     

Enhancing teachers’ technological pedagogical knowledge and practices: a professional development model for technology teachers in Malawi

This paper reports on a professional development that was designed and implemented in an attempt to broaden teachers’ knowledge of the nature of technology and also enhance their technological pedagogical practices. The professional development was organised in four phases with each phase providing themes for reflection and teacher learning in subsequent phases. On-going support, reflection and feedback underpinned the professional development processes to enhance teachers’ prospects of putting aside old traditions and culture to implement new practices in their classrooms. The teachers collaboratively explored new concepts through readings of selected scholarly papers, making presentations of their views generated from the readings and engaging with peers in discussing learning, curriculum issues and concepts related to the nature of technology and technology education. A qualitative analysis of the teachers’ journey through the phases of the professional development showed the teachers’ enhanced knowledge of technology and technology education. However, their classroom practices showed technological pedagogical techniques that reflected their traditional strategies for teaching technical subjects. It is argued that although the teachers’ conceptualisation of learning in technology was still fragile at this point, attempts to shift teachers’ beliefs and practices require deep theoretical grounding and transferring that into technological practices. A professional development built on existing ideas and context helps expand the teachers’ views about the nature of technology and technology education.     

Human capital,diversity, and new firm formation

This paper analyses the role of human capital in determining regional variations in firm births. It is argued that both the level and heterogeneity of human capital are particularly important for services. This is confirmed by an empirical analysis of data for sub-regions of Great Britain from 2001 to 2007 utilising ordinary least-squares and maximum likelihood models incorporating spatial effects. Other variables found to impact on the creation of new service firms are related to labour market effects, agglomeration economies and competition; there are also significant differences in the impact of human capital between services and manufacturing.     

Heterogeneous beliefs and optimal ownership in entrepreneurial financing decisions

Our setting comprises one entrepreneurial firm with a growth opportunity seeking for external funding from a venture capitalist, where the entrepreneur and venture capitalist have homogeneous or heterogeneous beliefs about its growth prospects. We developed a real options model to determine the optimal ownership structure that triggers the simultaneous exercise of the growth option on the entrepreneurial firm by entrepreneurs and venture capitalists. Our results show that the more optimistic any of the parties is, the lower the post-money firm ownership that party will retain. However, optimism leads parties to delay their decision to invest in the entrepreneurial firm, by demanding higher profit triggers and investing only in more valuable entrepreneurial firms. The combination of these two effects leaves perceived returns on investment unchanged and not dependent on their own optimism.     

Free trade in Latin America: A successful way out of crisis?

Since the beginning of the 1990s almost all Latin American countries have begun to change their strategies from protectionism to free trade. Historically, plans for regional economic integration have a long tradition on this continent, but attempts to bring them to fruition have failed time and time again. This report surveys past developments and attempts to show the prospects of success for the current free trade strategies in Latin America.