Economics and Management of Innovation



Master in General Management




Economics and Management of Innovation



Convenor Andrea Prencipe
Office hours after each class and/or by appointment


Tutor Luca Mongelli
Office hours after each class and/or by appointment



Aim of the course

The aim of this course is to provide students with theoretical and applied knowledge on the economics and management of innovation. Combining case studies and traditional lectures, the course addresses the economic, strategic, organizational, and operational dimensions of innovation with particular emphasis on innovative activities in technology-intensive firms.  The course also examines the challenge to building and maintaining an innovative organization, and how individuals can successfully innovate in organizations.


The key learning objectives are:

  • understanding the role and challenges of innovation across sectors and countries;
  • acquire tools to manage technology and innovation in dynamic markets;
  • identifying core problems that may impede innovative performance;
  • knowing how to manage groups that are innovating and how to develop and use firm’s capabilities to exploit innovative activities.



Rules of the game

I shall provide an overview of the topic using traditional lectures, mini case studies, and short movies.  This is going to last for about half of the overall session. The rest of the session is going to be dedicated to group discussion.  The discussion is going to be guided by the inputs provided by students through their active involvement, by which I mean that for each session (but the first one), students are expected to:

  1. Before each session, study the material – usually 1 paper and / or a case study – suggested in the reading list;
  2. During the session, actively discuss other students’ presentations and papers.


This is due to two related factors: (a) it is hard to teach an applied subject – such as Innovation – since it requires a certain amount of contextualization to specific organizations, sectors, or countries; (b) I believe in the old saying “tell me and I will forget, show me and I will remember, involve me and I will understand” (Confucius).



  • Class participation
  • Business case presentation
  • Written Exam


Written Exam

In the written examination students will receive selected open questions about all the topics covered during the course, based on all the materials listed in the syllabus and presented in class (theoretical papers, business cases ect.). These questions can be open or semi-open and students are expected to answer them in 60 minutes.

Students are supposed to formulate and write, in no more than 1 page, a full and extended answer to each question according to the related issue of course. This is the way to start: first read all the questions carefully. Then divide the remaining examination time and try to stick to it. Start with the answer you know best and write down the main key words or ideas on your scrap paper schematically. Avoid writing down things impulsively that only concern the question partially. In this way you are unlikely to forget parts of the answer or to answer extensively. Give your answer in a structured way by underlining the key thoughts and links. Mind your handwriting(!!!!) and spelling and read your text through 5-10 minutes before the end of session.



Since the material in this course builds session by session, attendance at each session is important. Please notify me before class via email if you are unable to attend a session due to illness, family emergency, or an unavoidable conflict. No compensatory work will be given for an absence. Excused absences will not directly influence your grade. Unexcused absences will influence your grade. More than three unexcused absences will result in a failing grade for the course.


Those students who are unable to attend the entire course for substantial reasons should contact me before the start of the course.


Laptop and Mobile Phone Policy

All laptops and mobiles should be down unless instructed otherwise by the convenor.




  • Innovation sources and processes
  • Taxonomy of innovation
  • Sectoral patterns of innovation
  • Geography of innovation
  • Social capital and innovation
  • Marketing innovation
  • Organizing innovation process
  • Implementation processes
  • Managing innovation in complex product industries
  • Building ambidextrous organizations





Preliminary Sessions I Prof. Rullani
September 19thSeptember20th This session offer a general overview of innovation landscape
Preliminary Sessions II Business Model Innovation
September 26 th September 27 th This session deal with the Business Model framework. A particular attention is dedicated to the consequences of Business Model Innovation and innovation in to the Business Model Canvas (Alexander Osterwalder & Yves Pigneur, 2010). The discussion session is centred on groups presentations of BMI cases.
Optional readings

  • Chesbrough, H. (2009) Business Model Innovation: Opportunities and Barriers, Long Range Planning
  • Zott C., Amit, R and Massa, L., (2010) The Business Model: Theoretical Roots, Recent Development, and Future Research, Working Paper, IESE WP-862


Session I Fundamentals of Economics of Innovation
October 3th 4th  This session illustrates the aims of the course and the learning approach adopted throughout. It then (a) introduces the basic concepts of the course – i.e. types of innovation (b) starts exploring the economic interpretations of innovation; (c) analyses patterns of industrial innovation.
Required readings

  • Dosi, G. (1988) Sources, Procedures, and Microeconomic Effects of Innovation, Journal of Economic Literature, 26, 3, 1120-71.
  • Malerba, F. and Orsenigo, L (1996) The Dynamics and Evolution of Industries, Industrial and Corporate Change, 5, 1, 51-87.


Session II The Management of Innovation Processes:
October 10th October 11th Interpretative models of innovation and their evolution.  The discussion session is centred on the open innovation paradigm as adopted across sectors.
Required readings

  • Dodgson, M, Gann, D, Salter, A, (2008) Managing Technological Innovation, Oxford University Press, ch. 3
  • Chesbrough, H., (2003) The Era of Open Innovation, MIT Sloan Management Review, 44, 3, 35–41


Session III Market & Innovation
October 17th October 18th This session analyses the market/innovation interfaces.  It deals with the types of market research that can be useful or misleading for different types of innovations.  The class discussion focuses on two cases wherein the interface marketing/innovation was differently in totally different ways and led to different outcomes.  It underlines the contingent nature of the innovation process in relation to the market dimension.
Required reading

  • Learning from the market, ch. 7, Leonard-Burton, D. (1998), Wellsprings of Knowledge, Harvard Business School Press.
  • Case: Prestel & Minitel


Session IV Market & Innovation: a rejoinder
October 24th October 25th The session deepens the market/innovation interface to highlight the limits of customer involvement.  It illustrates the concept of disruptive technology – where the pace of technological progress easily exceeds the rate of performance improvement that customers in a market demand.  The case discussion highlights the implications of such innovation on the firms’ strategy.
Required reading

  • Bower, J. and Christensen, C. (1995) ‘Disruptive Technology: Catching the Wave’, Harvard Business Review, 43-53
  • Case: Eli Lilly and Company


Session V Organizing Innovation I
October 31th This session introduces the concept of ambidextrous organization – as an ideal type of an organizational form that may help firms introduce both incremental and radical innovations.
  • Video/case: Bug’s Life


Required reading

  • O’Reilly, Charles A., III, and Michael L. Tushman (2004) ‘The Ambidextrous Organization’ Harvard Business Review, 82, 4, pp. 74-81
Session VI Organizing Innovation II
November 7thNovember 8th This section covers the key aspects and stages of the organization of the innovation process.  It introduces and analyses the organizational forms that may improve or hinder a firm’s likelihood of innovating. Specifically, it focuses on new product development teams in terms of composition and structure in order to identify the range of factors that impact the creative and innovative performance of teams.
Required reading

  • Schilling M (2005) ‘Managing New Product Development Teams’, chapter 12, Strategic Management of Technological Innovation, McGraw-Hill.
  • Video/Case: IDEO Product Development
Session VII Organizing Innovation III
November 14th November 15th The first part of this session identifies innovative ways to manage new product development projects.  Specifically it singles out (a) the role of information and communication technology tools for innovation and (b) the importance of project-based learning tools.  The second part focuses on the origin and relevance of social networks – or informal organization – in innovative activity.
Required reading
  • Thomke, S (2006) ‘Capturing the Real Value of Innovation Tools’, Sloan Management Review, 46, 7.
  • Thomke, S and Fujimoto, T (2000) ‘The Effect of Front Loading Problem Solving on Product Development Performance’, Journal of Product Innovation Management, 17, pp. 128-142.
  • Testimonial: Francesco Rogo (Finmeccanica): Community of Innovators: The Case of Mindsh@re


Session VIII Platform Innovation
November 21th November 22th This session illustrates the concept of product architecture to highlight the relevance of product design approach for firm’s innovation strategy.  Building on literature on architecture, it also introduces the concept of platform innovation to illustrate how firms may leverage their product knowledge to shape and govern the industrial sector wherein they operate.
Required reading

  • Ulrich, K. (1995) ‘The Role of Product Architecture in the Manufacturing Firm’, Research Policy, 24, 419-440
  • Gawer, A. & Cusumano, M. (2002), The Elements of Platform Leadership’, Sloan Management Review, Spring.
  • Case: itunes


Session IX
November 28th  Testimonial: Roberto Gazzara (Authentic Brands): Innovation in Sport Equipments
Session X Students’ seminars
November 29thDecember 5thDecember 6th TBDTBCTBC


Syllabus for non antendees : SyllabusEMI non attendees

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