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Innovation Strategy (AEM 437)

Prof. Aija Leiponen

Applied Economics and Management

This course for juniors and seniors explores firm strategies related to innovation and technological change. We focus on how the success of technological innovations—new products, processes, and services—depends on the firm’s business model. Other key topics include intellectual property rights and the management of technological uncertainty through organizational arrangements such as corporate venturing, spinoffs, and alliances.

Technological change is a fundamental driver of economic development and performance, not only at the level of firms and industries but also economies. Innovation is the organizational process through which new technologies are created. In this course we begin by exploring technological dynamics in economies and industries. Next, we examine the processes of innovation in firms. In particular, we focus on how successful commercialization of new technologies—products, processes, and services—depends on organizational arrangements. Without a good fit between a new technology and the business model in which it is embedded, the innovation is likely to fail in the markets. An overarching theme of the course is the management of technological uncertainty. We explore organizational arrangements intended to mitigate the effects of uncertainty: alliances, spinoffs, corporate venture programs, and the like. Effective management of intellectual property is a requisite for success with these arrangements.

An important element of the course is the final project, where students work in teams to study and analyze innovation activities in local high technology startup firms, in collaboration with the top managers or entrepreneurs in these organizations. In the first half of the semester, we build a conceptual framework for these case studies, and in the second half of the semester, we execute the projects. These projects take several weeks to complete and require very high professional standards and conduct.

The objective of the course is for students to understand how technological change shapes economies and industries and to develop an ability to design business models that can successfully take advantage of innovation opportunities. These are essential skills for students who are interested in careers in general management, consulting, R&D management, and/or public policy. The course topics are introduced through lectures and video material, student presentations, and visits by industry guest speakers.


Students will need the following materials:

Course packet, available from the campus store, and also on reserve in Mann Library.

Melissa A. Schilling: Strategic Management of Technological Innovation, McGrawHill, 2006 (2. edition).

Henry W. Chesbrough: Open Innovation: The New Imperative for Creating and Profiting from Technology; Boston MA: Harvard Business School Press, 2003.

Newspaper and business magazine articles will supplement the readings. Links to many of these readings will be available on the course website on Blackboard (click through

We will use the internet extensively for communicating during the semester. Enroll as a user on the course website as soon as possible to make sure you will have access to all the requisite postings and materials.

Class time: Tuesdays, Thursdays 1:25-2:40 p.m. in 201 Warren Hall.

Instructor: Prof. Aija Leiponen, e-mail

Office hours: TR 3-4pm in WN 251, or by appointment.

Teaching assistant: Frank Peña, e-mail

Office hours: By appointment in WN 47.

Administrative assistant: Nancy Trencansky,, WN 102



1. Introduction to innovation and technology (Jan 22)

• E-clips: James Jorasch (Walker Digital), Elizabeth Ryan (Breeze Hill Orchards), Kevin McGovern (McGovern and...
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