2 - Why Is Innovation Difficult?

Summary

Chapter 1 should have left you with an understanding that innovation is absolutely central to the functioning of the modern economy and a key strategic concern for companies. In this chapter, we will examine why innovation is also inherently difficult. We will begin with a very material understanding of this challenge, as Abernathy lays out how the nature of the production process that enables short-term competitiveness can be anathema to the development of innovation. To nuance what Abernathy calls the Productivity Dilemma, we then move on to March’s analysis of how different modes of organizational learning and managerial decision-making can lead to a similar trade-off between short-term and long-term competitiveness. Finally, we emphasize the ways that innovation is made still more difficult by its inherent uncertainty.