What impact will innovation have in companies over the next 10 years? How will it be managed?
Five emerging trends in innovation management have been highlighted by Arthur D Little in their survey report: The Future of Innovation Management: The Next 10 Years. Here’s my brief summary:
1. Proactive business model innovation
Business model generation will become a commonly-seen company exercise, as companies feel mounting pressure to adapt to new markets and new BRIC competitors, and to provide stakeholders with lasting benefits and greater resilience.
2. Customer-based innovation
We’re already seeing the trend for greater customer involvement in new product development. This will bring a change in the basis of competition, with more emphasis on design and the customer’s emotional connection with a product (think Apple fans).
3. Frugal innovation
I’m glad they used ‘frugal innovation’ rather than the synonym ‘reverse innovation’, which always seems to me to have a whiff of colonialism about it. Increasingly we see global companies originating and developing innovations in lower-income markets – which can then be adapted and applied to developed markets. Everyone ends up with a product that’s cheaper to build or operate.
4. High speed/Low risk innovation
As innovation becomes more frequent within the company, the pressure to minimise risk will grow. The survey predicts the development of more management tools to support fast and de-risked innovation, such as virtual prototyping and gradual product roll-out.
5. Integrated innovation
As product and service blur together and customer involvement becomes more dominant, the traditional functions such as R&D, Marketing, and Manufacturing will find themselves sharing a more team-based approach to innovation, perhaps with R&D losing its crown as the default owner of new product development. And management tools used in innovation – such as idea management – will spread to other parts of the company.
Coming up in the next post – more on the future of innovation management, but this time outlining my own views on the future of Open Innovation.
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