Transformative system innovation: Principles, processes, and organizational capabilities

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School of Business | Master's thesis

Date

2024

Major/Subject

Mcode

Degree programme

Creative Sustainability

Language

en

Pages

97+15

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Abstract

This thesis explores the implications of the normative turn in innovation, which en-compasses directional innovation, mission-oriented innovation, and challenge-driven innovation, for research and innovation practices. It investigates what this shift means for organizational innovation capabilities, addressing a gap in the literature predominantly focused on innovation policy. Using grounded theory methodology and qualitative case study approaches, this research examines capabilities for transformative system innovation, conceptualized as an innovation process contributing to sustainability transformations. Through a literature review and an empirical case study, the thesis constructs principles, processes, and organizational capabilities for transformative system innovation. The empirical case study was conducted within the Innovation Program iBEX at VTT Technical Research Centre of Finland in 2023, utilizing data from interviews, observations, and internal documents. The study combines two units of analysis to answer the primary research question: How can organizational capability for transformative sys-tem innovation be enabled beyond single processes? Sub-questions include: What elements constitute transformative system innovation? What are the organizational capabilities for transformative system innovation? Six principles for the transformative system innovation process emerged from interview data, highlighting distinctive elements from conventional research and innovation processes. The research and innovation process activities in the iBEX processes, described as differing from traditional practices, were cataloged. Context-specific opportunities, barriers, and enablers for organizational innovation capability were identified. Findings suggest that enhancing organizational capability for transformative system innovation entails a shift in knowledge types, supportive organizational structures, novel connections, effective resource allocation, and articulated directionality. These elements are essential for fostering transformative change within organizations and broader societal contexts.

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Thesis advisor

Halme, Minna

Keywords

transformative system innovation, directional innovation, challenge-driven innovation, normative innovation, organizational innovation capability, sustainability transformations, transformative research, innovation

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