Sunday, April 6, 2008

Democratization of Innovation

Schumpeter model of Innovation states that . ‘a disruptive innovation is a technological innovation, product, or service that uses a “disruptive” strategy, rather than a “revolutionary” or “sustaining” strategy, to overturn the existing dominant technologies or status quo or products in a market’.

In many ways innovation is the single most important building block of competitive advantage… giving a company something unique that its competitors lack.

Innovations can be thought of as falling onto a continuum from evolutionary to revolutionary and therefore categorised into two groups:(1) Incremental or evolutionary innovations that improve the performance of established products, services or business models; or(2) Disruptive breakthroughs which lie at the core of entrepreneurial activity and serve as the basis of future technologies, products, services and industries.

Examples of Disruptive innovations are galore…IPod , Google , Mobile Phone , Post IT (3M) etc. similarly Incremental innovations through … ITouch , Google-finance , Mobile Phone with camera/FM etc.
Organizations do realize that ‘innovation’ is not just limited to developing new products and services but, more fundamentally, about discovering new ways to create value’

Coming back to the node of collaborating and leveraging social networks to create value , organisations will have to look at democratization of innovation.

I recently read somewhere that , Nokia - collaborates with local universities and technology institutes to facilitate exchange of ideas . And in order to manufature its highly differentiated range of premium A8 cars , Audi worked closely with Alcoa to learn how to use aluminium instead of steel in its cars.

Some of you might also want to check American Express Labs! - an interesting framework to understand the trends and develop new products.
think about it..

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