ABSTRACT
New product development increasingly involves the concurrent designing of physical and digital artefacts. Successful product innovation requires integration with digital innovation, which can be difficult. This chapter examines the inherent tensions between product innovation and digital innovation. The authors review the relevant literature and compare digital and product innovation, to identify three arching dimensions: organising logic; market dynamics; and architectural composition. They consider these dimensions as paradoxes which produce the frictions between product innovation and digital innovation. The authors suggest ways to achieve what they call digital product innovation, based on three organisational capabilities that managers must develop to overcome these paradoxes. These organisational capabilities are ability for self-organised exploration, horizontal diversification and open-ended design.
