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
The course topics are introduced through lectures and video material, student
presentations, and visits by industry guest speakers.