2) The intellectual father of the system of innovation perspective was German economist Frederic Lest.

He argued that his assumption was that of Germany to become a major world power. A national program could be required to improve the system of production. The basic assumption was, the innovation by itself cannot impact much unless a convenient eco-system is implementing around us. In this type of system two approaches are being followed: Institutional approach: - Ex:- Setting up a R&D expenditure, laws associated with government, tax and government bodies etc. It examines relationship between the national institutition of finance, education, law, science and technology, corporate activities (research oriented and government policy and their influence on propensity for innovation. Relational approach: - Ex- This type of approach exist between firm and associated alliances. ExSupplier, wholesale distributor, etc. This analysis the nature of business and social relationship in nation. Example in the way links between supplier and user of technology encourages shared learning. This approach focuses on importance on socially embedded knowledge and learning

Patel and Pavitt define NIS as the national institution, their incentive structure and their competencies that determine the rate and direction of technological learning in a country The NIS approach suggest that technological innovation is more frequent and better managed leading to more substantial national competitive advantage when the elements of the broader environment surrounding firms activities of well-articulated into a system than in situation where each element works largely in isolation. 3) Regional system of innovation was formulated by Alfred Marshall. The importance of regional system of innovation exists for a country like India, which is very large in geographical area. This type of system is applicable in India because the idea generation can be easily transmitted in the define geographical area. This type of system follows symbiotic relationship. In case of regional system of innovation the possibility of uncertainty is also reduce to an extend. Alfred Marshall showed the importance of industrial district, in providing various support and synergy for firm. ( An industrial park (also known as industrial estate, trading estate) is an area zoned and planned for the purpose of industrial development.). The innovation promotion potential of firm working and competing together in close geographical proximity. Cook and Morgan defined two define two ways that technological innovation may be stimulate by geographical proximity, Information knowledge and best practice are rapidly diffuse throughout the local milieu raising the, creative capacity of both firm and institution. Uncertainty is reducing through having a better understanding of the result of the decision.

These environments may also provide opportunity for individual to gain status and recognition for the achievement and in the process of doing so allow them to capture great returns from the knowledge or expertise. Tacit knowledge can easily be diffuse because they are living in close geographical area. 5) Technological system:- This type of approach have develop in parallel with geographical and sectorial perspective Technological innovation is rarely a discreet atomistic event. The system is defined by technology rather than national boundary and all do they are affected by national or regional culture and institutional. This system emphasizes technology diffusion. In this type of system geographical area is not considerable. It depends on the type of product align in a particular area. Here particular product

becomes important because of the regional boundary. Ex: - France is number one in nuclear energy. 70% of its electricity is generated via nuclear energy. Japan is strong in electronics and relatively weak in pharmaceutical. European countries are good in pharmaceutical. On the contrary Britain is opposite. 7) Managing incremental and radial innovation:-Radical innovation is more disruptive in nature than incremental innovation. Hence the different correlates associated with a business or corporate context will be much easier to plan and forecast in case of incremental innovation as suppose to radical innovation. Example of incremental- Amazon selling DVD. Example of radical:- Development of float glass making by Pilkington Brother in 1950. It was 10 times more productive than previous method of continuous grinding. It includes breakthrough that change the nature of product and services such as synthetic materials and may contribute to technological evolution. Incremental innovation involve minor changes to existing products which will cumulatively improve the performance of product and services Extending this assumption further it can be safely inferred that in incremental innovation are synonyms with already predicted finance other organizational institutional factors. In case of radical innovation it is very difficult to forecast on financial parameter. Thou the organizational structure may or may not remain the same. Incremental is stable whereas radical is disruptive in nature Planning is easy in incremental whereas planning is difficult in radical Forecasting possible in incremental whereas forecasting not possible in radical Organization structure remain same in incremental but in radical organization structure may or may not remain same Incremental innovation can be measure whereas radical innovation cannot be measured Incremental mechanistic structure whereas radical in organic structure Incremental- It is the most common form and tends to reinforce the position of established firm allowing them to exploit what they know to help them to do things better. Radical- Radical innovation are critical events that reshape design knowledge and the nature of the competition in the product market Radical requires greater investment in basic research than incremental changes

8) Product life cycle is quiet an important theory for understand the concept of innovation. It actually encompasses or engulf expect from other subject like microeconomics, econometrics, innovation management, organization structure generic strategic, etc, that primarily helps the firm assess the changing nature of innovation where the industry has witnessed in order to help them, how to invest. They are basically three stages in theory. 1) Fluid: - In the first stage market and institution knowledge are both more or less in the primary stage, where knowledge relating to innovation is often embedded with universities and other research centers. No specific product is arrived at with a result that new design is found in the market with different functional specialties. (Radical innovation) Customer expectation also not codified and understood. Huge scope for radical innovation. An optimization structure associated with the firm, generic tend to be flexible. 2) Transitional: - In the second stage the product design is normally arrived at demand for products also tends to increase. Industry gets define by product stereo type with increasing innovation resulting

additional more features to the product. Equipments and roles are more general in nature. Innovation tends to become more incremental and hence organization structure tends to be more hierarchal (Incremental innovation) 3) Specific: - In the third stage there is a propensity to decrease the cost of production by using economies of scale. Instead of new innovation and design cost consideration is most important factor for a firm to dominate the market. Radical changes or innovation becomes more or less extinct. Tacit knowledge gets well- entrenched. Organizational structure also at this stage becomes more predictable. 12) Types of innovation strategy: - There are basically three types of innovation strategy. Particular research portfolio is taken into consideration: - R&D is one particular product. Ex: Viagra done by Pizer. We assort our R&D expenditure on different portfolio:- Cost and expenditure is mitigated here. Ex Saint Gobin is French company:- Silica new glasses. Use of silica new concept In this type of innovation strategy first we buy the patented product then there is minor modification is done and a new product is formed. In this type of strategy incremental change take place. Ex: - Cadialla Pharmaceutical company.

Courtney, Kirkland, and Viguerie (1997) offered three basic position that firms might adopt in certain uncertain condition. This may occur in emergent technology where there are very high level of uncertainty or where an existing firm has strong technological leadership and wishes to capitalize on first mover or very fast follower advantage This may occur in firm operation in relatively stable market. Able to benefit from fast follower position. Risk is minimized if we focus on different portfolio instead of focusing on single product. This option is usually taken by firm that follows behind industry leader and fast followers but have the ability to benefit by delivering cost saving by producing cheaper goods and services.

6) Type and Extend of innovation:- Researcher have analyze extend and type of innovation according to whether it is : Radical or incremental:- The extent to which a technology has changed or degree of novelty of an innovation Continuous or discontinuous Modular or architectural

Modular- Innovation takes in a part of a system. Occurs in components and subsystem without addressing the system of which it is a part Architecture takes place in whole or entire system. It attempts systemic improvement without great attention to its component part 11) Diffusion of innovation: - Diffusion is the process by which innovation get adopted and use by people and organization. The most influential model of the diffusion process was develope by Everett Rogers in the 1950-60. His model of diffusion has become a key analytical tool in marketing organization and

innovation studies. It is general model of diffusion of new ideas, practices and habits. Roger defines the innovation decision process as the way in which an individual or other decision making unit passes from first knowledge of innovation to forming an attitude towards it, decide to adopt or reject it, implementing and using it and confirming the decision. It involves fives stages Knowledge (KPDIC) Persuasion Decision Implementation Confirmation

Roger emphasizes social factor. Social processes including the cognitive and psychological attitude of individual and groups- shape the willingness to choose to adopt an innovation. Roger model highlight how social networks, persuasion and word of mouth all influence choices. The decision to use a new technology or innovation can be determine by factor such as individual sense of well-being or status within a community and the ways they act within institution. Rogers model contain a description trades of adopters, dividing individual and organization into five categories Innovators Early adopter Early majority adopters Late majority adopters Laggards

1) Technological changes (1772-1990)- In the 1930s Jasph Schumpeter noted that technological innovation were not evenly distributed over time or across industries, but appear in periodic cluster. According to one analysis, since the industrial revolution it has been possible to identify historical waves of intense technological change characterized by Rapid economic growth opportunities Rapid social changes

These revolutions depend upon clusters of mutually supporting technological innovation being accompanied social innovation in areas ranging from organization and management to taxation and employment law. According to this theory we are presently in the fifth wave of technological development, the ICT (Information Communication Technology) wave, with micro-electronic being the major factor industry. Some speculate that we are entering a sixth wave the life sciences wave with bio-technology the key factor. Example- Economic growth of East-Asian economies such as Korea and Taiwan has been based on the development of the technological capabilities. Thus The first wave, the industrial revolution in the late 18 centutry was followed by recession.

The second wave beginning in the 1830s-40s (Victorian prosperity) was followed by deep recession. The third wave in the late 19th century, the Belle Epoque, was succeeded by Great Depression The fourth wave with the post second world war (1945) economic growth and full employment was followed by crisis of structural adjustment and high unemployment. The fifth or future wave will be followed by downswings as severe as those experiences in the past.