ABSTRACT

This chapter addresses the key features of innovation and, in particular, business model innovation. The fi rst part of the paper addresses the general characteristics of innovation and concludes with an appreciation of the many factors or resources in innovation that affect a fi rm and its efforts to innovate. Particular attention will be given to business model innovation. While business model innovation lacks the near infi nite possibilities of research-based innovation, it can be as important to the success of a company. Although the possibilities are relatively limited, there are a number of resources, actors and exogenous effects which must be understood and managed effectively to achieve viable business models. Therefore, a methodology that exposes what is actually happening in fi rms is required; intellectual capital is a perspective based upon resources and their employment and so has the potential to facilitate this understanding. The second part of the chapter presents a simple review of the main features of intellectual capital and how it may be used as a practical diagnostic. The third and fi nal part of the paper brings the fi rst two parts together and shows how intellectual capital methodologies and their underlying discipline, the resource-based view of the fi rm, can examine innovation in fi rms.