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Posts Tagged ‘disruptive’’

One big open innovation square dance…

fredag, maj 6th, 2011

Innovation is a way of getting competitive advantage which is well known and documented since ancient times, ranging from machinery, war equipment to the beauty industry and all trial building the perpetuum mobile. What´s happened lately is the paradigm shift of opening up the innovation process from being secret and closed towards inviting for collective wisdom and creativity. We call it open innovation or sometimes Innovation 2.0.

Open innovation, is a way to forge closer relationships, gain access to the best thinking and to quickly disseminate ideas and trends by ambassadors are on the rise. In recently blog posts, by me and other bloggers, you have seen examples with Google, Apple and Nintendo. In a recently published MIT article by the Open Innovation guru Henry Chesbrough, he states that Porter’s Value chain need to be extended; as the service interaction (Service Value Web) and innovation taking place between producer and consumer must be taken into account in a greater deep than just  been seen as logistics.

Another interesting innovation observation is that there seems to be a dualistic relationship between profitability and innovation; characterized by kind of market structure.

In a market with perfect competition player gain the benefits of the innovations as following;

  • if there is technological leap (so-called disruptive technologies), it can revitalize an entire industry such as the iPhone and Windows did,
  • but if it is about improvements, such as streamline or added features, the innovation only provide short-term benefits as the competitors will respond with lower price, imitations or substitutes.

However, if there is an oligopoly, i.e. few players who compete in the market space, innovations tend to very quickly imitated by competitors, sometimes even gets launched before, often leading to long-term reduction in profitability as research and development budgets get astronomically high.

Now, if we add to this trend Open Innovation, say the mobile phone industry which is an oligopoly market structure, already suffering from shrinking margins and increasing R&D costs, it will be very interesting … in an open approach ideas and concepts will move fast between communities, so-called leakage between communities, that in turn means that knowledge, ideas and opportunities move even faster than before when the innovation space was closed. Oligopolistic players now not only has an eye on each other but also dancing with each other’s customers in one big open innovation square dance…

Right or wrong, opportunity or threat, but the world has changed and we with it …

Is the Indian IT miracle over?

lördag, augusti 14th, 2010

Driving back and forth to you job in Munbai is like smoking a packaged of cigarettes, and nothing become better. Indian government spend 17 dollar per capita and year in infrastructure while China spend 116 dollar. The Indian mentality is pretty much having a back-up plan for the back-up plan while China is straighter forward, which both impact business life as well as infrastructure and the sociality in general. In an interview, published in CIO.com, we could read the other day that a director from AT Kearney’s predict that Most Indian providers will be sidelined or subsumed while the fate of seemingly stalwart U.S. players will hang in the balance.

At the end of the day it will be about innovations and disruptive technologies, like Scott Anthorny writes on his Harvard Business review blog yesterday; The ease with which a company’s core business grows can mask the need to invest in innovation. Growth inevitably slows. Indian companies should be investing in innovation now, even though they appear not to need it. If they don’t, they will ironically leave themselves open to disruption from Western companies who find disruptive ways to compete domestically.

The winner of the global war for wealth will be the most innovative companies in the most well structured and supportive environment, the long term moment of the winner will most likly be:

bureaucracy and corruption => transparency

too low tax and quick fix => sustainability in environment

cost cutting => innovation

transaction => relation