The course fits into the overall program curriculum pursuing some of the defined general learning goals. In particular, the course contributes to the development of the following capabilities:

• • Understand context, functions, processes in a business and industrial environment and the impact of those factors on business performance;
  • Design solutions applying a scientific and engineering approach (Analysis, Learning, Reasoning, and Modeling capability deriving from a solid and rigorous multidisciplinary background) to face problems and opportunities in a business and industrial environment.

• Understand context, functions, processes in a business and industrial environment and the impact of those factors on business performance:
  • Understand economic models and factors that drive firm innovation of products, processes and organization, thus determining their success, so as to acquire the capability of interpreting firms’ decisions relating to innovation investments [EI: Written Exam];
  • Analyze case studies in detail, applying theory and empirical evidence on innovation to real cases and communicating the key concepts of the analysis in a written document as well as in a public context [EI: Case Study].
• Design solutions applying a scientific and engineering approach (Analysis, Learning, Reasoning, and Modeling capability deriving from a solid and rigorous multidisciplinary background) to face problems and opportunities in a business and industrial environment:
  • Understand and exploit technological and socio-cultural trends, explicit and latent user needs, together with a capability to interpret competitive dynamics in industries [DS: Individual Written Exam];
  • Generate and develop design and innovation strategies based on a deep understanding of the future dynamics of competition, society and technology [DS: Team-Based Design Project].

1. Introduction

Overview of the Course

Firms are recognizing that in today’s business dynamics, where design and innovation have become the basic rules of competition, the core capability of managers is their attitude to design new scenarios and master the processes of innovation. Strategic thinking, generation and management of innovation in highly uncertain environments, integration of networks of internal and external resources, teamwork and creativity are the core skills of tomorrow’s top managers. The course has been designed around two modules:

1. Design Strategy module aims at enriching the capabilities to design and effectively manage innovation teams and processes. Design is increasingly becoming a major competitive weapon in today’s competition. In this context, design culture is deemed to make a strong contribution in shaping these skills. An approach to design that is abductive, interactive and intrinsically oriented to change and to envision new possibilities may indeed provide the fundamental basis for the competence of managers in strategy making and management of innovation. An increasing number of firms in fact have recognized the importance of design and design driven innovation as a mean to achieve a sustainable competitive advantage. The strategic relevance of design, its emergence as a core tool for managers, and the setting of management as a core tool for designers, are all factors that are placing design management high in the agenda of management education. The module explores different and emerging approaches in the Design Management field (from User-Centered Design to Participatory Design, from Design Thinking to Design-Driven Innovation), provides tools and frameworks that support the development of the Design Strategy, highlights principles and models in developing creative businesses and organizational units, suggests collaborative practices between managers and designers, applies creative tools adopted in the design process.
2. Economics of Innovation module aims at understanding factors that favor innovation of products, processes and organizations, and determine its success. Innovation is a key weapon for firms to obtain a sustainable competitive advantage. Firms encounter serious obstacles to innovation investments and the generation of successful innovation. The course addresses this dilemma. In particular, it illustrates economic models relating to innovation of products, processes and firm organization and their application. These models help students understand firms’ decisions relating to innovation investments, the development of innovation capabilities, the effects of these decisions on firm performance, and the design and impact of innovation policy schemes. Topics covered by the courses include the relation between market structure, appropriability regimes and innovation investments; imperfections in capital markets that hinder innovation financing; policy measures to support innovation investments; the economics of intellectual property rights; the open innovation paradigm: use of alliances and acquisitions to foster innovation; innovation policy approaches and the design of effective support schemes.

Faculty

Design Strategy: Claudio Dell’Era (claudio.dellera@polimi.it; +39 02 2399 2798) and Silvia Magnanini (silvia.Magnanini@polimi.it)

Economics of Innovation: Massimo Gaetano Colombo (massimo.colombo@polimi.it; + 39 02 2399 2748) and Paola Rovelli (paola.rovelli@unibz.it)

Course Scheduling

The table below shows the classrooms and the class scheduling for each section.

2. Material

Slides / Case Studies / Videos

Slides, case studies and videos will be made available through the course website on BeeP.

Suggested Textbooks, Papers and Case studies

There is not a unique reference textbook, but rather a collection of textbook chapters / papers / case studies from different sources that complement an active participation during classes. Material is available at http://www.biblio.polimi.it/.

Design Strategy

• Dell’Era C and Verganti R (2007). Strategies of Innovation and Imitation of Product Languages. Journal of Product Innovation Management, Vol. 24, Pp. 580-599.
• Dell’Era C and Verganti R (2009). Design Driven Laboratories: Organization and Strategy of Laboratories Specialized in the Development of Radical Design Driven Innovations. R&D Management, Vol. 39, No. 1, Pp. 1-20.
• Dell’Era C and Verganti R (2010). Collaborative strategies in design-intensive industries: knowledge diversity and innovation. Long Range Planning, Vol. 43, Pp. 123-141.
• Verganti R (2009). Design Driven Innovation: Changing the Rules of Competition by Radically Innovating What Things Mean. Harvard Business Press.
• Verganti R (2017). Overcrowded – Designing Meaningful Products in a World Awash with Ideas. MIT Press.
• Verganti R and Dell'Era C (2014). Design-Driven Innovation: meaning as a source of innovation (Pp. 139-162), in Dodgson M, Gann D and Philips N (eds.), The Oxford Handbook of Innovation Management, Oxford University Press (ISBN: 978-0-19-969494-5).

Economics of innovation

• Aghion P, Bloom N, Blundell R, Griffith R, and Howitt P (2005). Competition and innovation: An inverted-U relationship. The Quarterly Journal of Economics, Vol. 120, Pp. 701-728.
• Cohen WM and Levinthal DA (1989). Innovation and learning: The two faces of R&D. Economic Journal, Vol. 99, Pp. 569-596.
• Colombo MG (2003). Alliance form: a test of the contractual and competence perspectives. Strategic Management Journal, Vol. 24, Pp. 1209-1229.
• Diestre L and Rajagopalan N (2012). Are all ‘sharks’ dangerous? New biotechnology ventures and partner selection in R&D alliances. Strategic Management Journal, Vol. 33, Pp. 1115-1134.
• Graebner ME, Eisenhardt KM and Roundy PT (2012). Success and failure in technology acquisitions: Lessons for buyers and sellers. Academy of Management Perspective, Vol. 24, Pp. 73-92.
• Katz ML and Ordover JA (1990). R&D cooperation and competition. Brookings Papers: Microeconomics, Pp. 137-203.
• Levin RC, Klevorick AK, Nelson RR and Winter SG (1987). Appropriating the returns from industrial research and development. Brookings Papers on Economic Activity, Pp. 783-820.
• Spence MA (1984). Cost reduction, competition, and industry performance. Econometrica, Vol. 52, Pp.101-121.
• Nelson RR and Winter SG (1982). Chapter 5: Organizational capabilities and behavior (Pp. 96-136), in Nelson RR and Winter SG (eds.), The evolutionary theory of economic change, Belknap Press of Harvard University Press.
• Zahra SA and George G (2002). Absorptive capacity: A review, reconceptualization, and extension. Academy of Management Review, Vol. 27, Pp. 185-203.

Section 5 provides with more information regarding the specific textbook chapters / papers / case studies.

3. Educational Process

Premise

Both modules will actively engage students in an experiential learning process: in addition to conceptual inputs, the faculty will use case study discussion, workshop, teamworking sessions and team presentations. Both modules require that participants:

• Attend class regularly and contribute to class discussions;
• Be fully prepared for class (by accomplishing the pre-assigned tasks);
• Actively participate in team projects and activities outside of class, and contribute to team learning.

The main educational process is thought for students who will actively participate in class and who will engage in team-bases activities. The course allows some students, who are not able to provide this form of active participation, an alternative educational process.

Attending Students

Both modules, Design Strategy and Economics of Innovation, are based on individual and team activities.

Design Strategy

The lectures of the Design Strategy module manly aim at illustrating and sharing frameworks, models and tools. In order to facilitate the understanding, case studies are presented and discussed along the lectures. The Individual Written Exam, scheduled at the beginning of the off-term period, is composed by small case studies and open questions.

During the Design Strategy module, participants develop Team-Based Design Projects adopting the Design Driven approach in collaboration with an industrial partner. Each participant is assigned by the faculty to a self-managed design team at the beginning of the module (Design Strategy teams and Economics of Innovation teams are different in terms of composition; teams are averagely composed by 4-6 members). Team-Based Design Projects are composed by four main sections:

• Sensing New Meanings: the development of this section is based on desk analysis autonomously developed by each team;
• Envisioning New Meanings: the development of this section is supported by the organization of the Envisioning Factory (three dedicated course slots: see Section 5). The workshop is facilitated by the faculty and teams are invited to propose their vision;
• Re-Interpreting New Meanings: the development of this section is based on two interviews autonomously developed by each team and supported by a single team-working session (see Section 5) where the faculty reviews the results achieved by each team;
• Probing New Meanings: the development of this section is supported by the organization of the Probing Factory (see Section 5). The workshop is facilitated by the faculty and teams are invited to propose their probes.

Team-Based Design Projects are presented on 17th and 19th December 2018 (TBC). Teams have to upload the reports on BeeP [TBDProjects/ProjectReports] no later than 11th January 2019 h22.00 (TBC) the report (maximum 8.000 words) adopting the following agenda as a guideline:

SECTION 1: SENSING NEW MEANINGS

• Competitive analysis of the addressed industry (market, competitors, offerings and positioning)
• Emerging lifestyles about the addressed experience

SECTION 2: ENVISIONING NEW MEANINGS

• Changes of Meaning
• Description of the selected Changes of Meanings
• Metaphors
• Preliminary solutions associated to each Change of Meaning
• Selection of most relevant Interpreters

SECTION 3: RE-INTERPRETING NEW MEANINGS

• Biography of 2 Interpreters
• Interview of 2 Interpreters
• Re-interpretations

SECTION 4: PROBING NEW MEANINGS

• The user and the context of use
• Positioning (why your products is different than those of competitors)
• Uniqueness (why your product is better than those of competitors)
• Explaining the probe: storyboard, billboard, moodboard, etc.

Economics of Innovation

Based on the course material (slides and the suggested reading lists) a written exam is designed to assess the students’ ability to solve mini cases by using theories and conceptual frameworks provided during the lectures. In the course there is a patent laboratory for the students to gain a deeper knowledge about the patents and available patent databases. The lecture sessions of Economics of Innovation module aims at providing the students the models and theories to understand firms’ decisions relating to innovation, the effects of these decisions on firm performance, and the design and impact of innovation policy schemes on encouraging the firms to innovate. The fundamental contribution of the lecture sessions is teaching the students how to apply theoretical models to solve real life problems. In order to facilitate the understanding and highlighting practical relevance of theories and model, brief cases will be presented and discussed during the lectures. The aim of the case study sessions is to discuss details of real case studies relating to industries, firms and innovations, and learn how to use economic theories to solve managerial problems related to innovation. In analyzing cases students have to apply theories and models that were previously illustrated during lectures. During the course each case study is assigned to a self-selected group of students (Design Strategy teams and Economics of Innovation teams are different in terms of composition; teams are averagely composed by 4-5 members), together with a list of key issues necessary to be addressed during the presentation. Each group needs to prepare a brief report and (eventually) a presentation to use during class discussion. In the report, groups must highlight the contribution of economic theories and models to “solving” the practical problems involved in the case. Detailed guidelines of case studies sessions will be provided on Beep.

Not-Attending Students

Not-attending students are those who—for some major constraints[1] that should be clearly explained to the faculty by email—are not able to participate to more than 30% of classes and/or team activities. Students with overlapping classes should commit in participating to Design Strategy and Economics of Innovation activities within the abovementioned limit or follow the course as not-attending students.

The exam is oral and scheduled in the off-lectures period. Not-attending students will not be included in teams and have to produce two individual outputs:

• Individual Design Project: this activity substitutes the Team-Based Design Project that attending students accomplish in teams. The Individual Design Project is about the same brief proposed to the teams along the semester. Individual Design Projects are presented during the oral exam. Not-attending students have to send one week before the oral exam (claudio.dellera@polimi.it) the report (maximum 6.000 words) adopting the following agenda as a guideline:

SECTION 1: SENSING NEW MEANINGS

• Competitive analysis of the addressed industry (market, competitors, offerings and positioning)
• Emerging lifestyles about the addressed experience

SECTION 2: ENVISIONING NEW MEANINGS

• Changes of Meaning
• Description of the selected Changes of Meanings
• Metaphors

SECTION 3: RE-INTERPRETING NEW MEANINGS

• Biography of 2 Interpreters
• Interview of 2 Interpreters
• Re-interpretations

• Individual case study: This activity substitutes the team-based case study analysis and presentation to the class of the Economics of Innovation module. Non-attending students must prepare an individual case study. The case contains a relevant current issue that the student has to analyze. Non-attending students are expected to prepare a max. three pages report (single spaced) explaining and analysing the case with respect to the theories and conceptual framework presented during the course. Students should send an email to inform the faculty members about their status as non-attending no later than 1^st of December. The report should be sent one week before the oral exam (paola.rovelli@unibz.it). We encourage the students to inform the faculty member sooner to have more time to prepare the report.

The faculty of the course strongly suggest to attend classes and to engage in team activities. An active participation to the course not only improves the effectiveness of the learning process, but also reduces the overall effort that the student has to put in the preparation of the final exam characterising the course.

[1] E.g. Interns, Erasmus, etc.

Students are required to know the basics of business administration, organizational design and innovation.

4. Evaluation

The final evaluation of the course is different for attending and not-attending students.

Attending Students

The evaluation is based on the following elements:

• Design Strategy
  • Individual Written exam: open questions about case studies and theoretical contents; the written exam is based on the content included in the course slides, case studies, guest speakers’ presentations and class discussion;
  • Team-Based Design Project: report sent before 11th January 2019 (TBC) and presentation delivered on 17th and 19th December 2018 (TBC).
• Economics of Innovation
  • Written exam: It is based on closed questions to 28 small case studies in multiple choice format and it is organized before the end of the semester. Students are expected to solve the mini cases by applying theories and conceptual frameworks presented during the lectures. Use of any written material including text books, cases, slides, papers and notes is permitted during the exam. Any electronic devices which are potentially connected to the internet such as laptops, iPad, and cellphones are prohibited during the exam. Out of the four solutions of each mini case one is correct answer (bonus), two are wrong and one is extremely wrong (disaster decision leading to malus). The exam is scheduled on January 2019 (TBD).
  • Case study: each individual group member is evaluated on the basis of the quality of the report and the presentation of the group in the assigned time slot according to schedule and of her/his active participation in the discussion.

The specific elements in the grading system and the points assigned to them are depicted in the following table.

In order to pass the exam:

• Sum must be >= 18;
• Design Strategy module >= 8;
• Economics of Innovation module >= 8.

Attending students can “save” only ONE of the following alternatives:

1. Design Strategy module (Written Exam + Team-Based Design Project);
2. Economics of Innovation module (Written Exam + Case Study);
3. Team-based activities (Team-Based Design Project + Case Study).

The remaining exam elements MUST be faced during the off-lectures period (only during winter session: February) according to the rules defined for not-attending students (see next paragraph). The participation to the exams during the off-lectures period implies the cancellation of the associated marks obtained during the lectures. Receiving a negative mark (< 18) or refusing a positive one (>= 18), attending students must take the exam according to the rules defined for not-attending students (see next paragraph).

Not-Attending Students

The evaluation is based on the following elements:

• Design Strategy
  • Oral exam (scheduled in the off-lectures period): open questions about case studies and theoretical contents; the oral exam is based on the content included in the course slides and case studies;
  • Individual Design Project: report sent one week before the oral exam (claudio.dellera@polimi.it; maximum 6.000 words) and presentation delivered during the oral exam.
• Economics of Innovation
  • Oral exam (scheduled in the off-lectures period): it includes a mini case study that the students must analyse with the theories and conceptual frameworks presented in the course;
  • Individual Case Study Assignment: a max. three pages report of a case sent to the faculty (paola.rovelli@unibz.it) one week before the oral exam.

The specific elements in the grading system and the points assigned to them are depicted in the following table.

In order to pass the exam:

• Sum must be >= 18;
• Design Strategy module >= 8;
• Economics of Innovation module >= 8.