Modes and dynamics of innovation differ depending on firm an

Modes and dynamics of innovation differ depending on firm and industry characteristics. Several of the articles discuss, directly or indirectly, that the ability of firms to innovate is affected by (depends on or is constrained by) firm size and/or age, and how firms may deal with the liabilities of age and size.

What is the differences between large/small and old/young firms’ when it comes to innovation. Reflect on both positive and negative effects of firm size and age, and strategies to deal with liabilities of age and size

Solution

Large and small companies usually take different path when it comes to innovation, I will elaborate with examples or processes that are done on both type of organizations, and this also applies to old and new firms

When it comes to large or big companies, the time they take to make a decision is long because of the bureaucratic levels, some decisions need at least 3 signatures for persons who are in different cities or even countries. Small companies usually don’t have this problem and they take decisions much faster.

The attitude towards risks is also significant different, for large companies who have been on business for many years the executives avoid the risk are try to keep business as usual, however for a small company that is starting and basically all of the business is at risk this is something they live by every day and it’s what motivates them to keep pushing harder.

Many large or old companies see innovation as a breakthrough of something that is already invented, they are doing it an upgrade and this is a way of innovation but young and small companies see innovation as the creation of a product or service that no one had before, that it was invented by them 100%

For example a large company may see an innovation when their product adds new feature, for example smartphones, every year something new is added, many years ago when the camera was added to the first cellphone it was a major innovation because no other cell phone had camera, eventually most of the smart phones we use today have camera with better resolution.

The creator of Waze (the application that helps you navigate and avoid traffic) sold it to Google for $966 million dollars, according to him it took him 8 algorithms to create the application which changed the way we drive, there were other GPS but none of them would give you traffic and ETA and this is done by the members of the app who update it each time they see an accident or traffic