Future Innovation Catalysts
As innovation continues to migrate across sectors, markets and technologies, companies are increasingly interested, not only in specific innovation opportunities, but also in the core drivers for future innovation. Moreover, as more organizations look to explore the potential to be gained from process and business model innovation, alongside the more traditional product and service innovation, they want to identify where and how these core drivers will have impact and how they can best be exploited. For some, these drivers are seen as potential catalysts for major innovations and are therefore topics that need to be understood so that the implications for their markets and evolving capabilities can be explored in depth.
The core catalysts for innovation today are easy to identify:
- Carbon and the broader green agenda can be seen to be driving innovation everywhere from cars and food to financial services and housing.
- Web 2.0 and the associated changes to internet content are at the forefront of many a media company’s innovation agenda;
- The end of oil and the rise of nuclear and bio-fuels is having impact not just in the energy field but also in land use for food production, chemicals development and government policy; and
- Wellness and the challenges of keeping an aging, more obese population active and healthy for longer is a key driver of new ideas across the food and beverage, FMCG, pharmaceutical, and broader healthcare sectors.
Although some organizations fail to fully understand the likely implications of these catalysts, most innovation directors have a good working knowledge of the potential innovation opportunities that they represent.
Here are three of the catalysts that may be key in the future, either in terms of probable mass impact on society or more as cross-sector drivers of innovation:
Foremost in many future agendas is the growing problem associated with global and regional water scarcity: As the demands of economic growth in India and China drives broader industrial growth and as average freshwater consumption per capita in Europe and the US also rises, it is clear that the current trajectory is not sustainable and radical changes are required. Recognizing the scale of this challenge, a number of insightful organizations are already examining what can be done to offset and exploit this problem by providing some new innovations.
On the supply side, key regions of the world such as Singapore and the UAE are investing heavily in economical water desalination technologies that can convert salt water to fresh water, while companies such as GE are examining new business models to create and deliver alternative water resources for agricultural and industrial use. On the demand side, future washing machines and dishwashers are being designed to run on a fraction of today’s water consumption; FMCG companies are looking at shipping smaller, more concentrated product; and architects are focused on grey water reutilization alongside rain harvesting techniques.
Knowing what is real and what is not, and so what has value and what does not, is an issue that will impact a wide range of sectors. Although the topics of counterfeiting and anti-counterfeiting detection have been main-stream in consumer areas for years, they are already a major concern in such diverse industries as pharmaceutical, aerospace, and paint manufacturers. Even as China and India start to align themselves with international intellectual property protocols, knowing which products are authentic in these countries and the wider marketplace is already a major issue.
However as we move forward, authenticity concerns will spread wider. For example, as user-generated content in mass media becomes the norm rather than the exception, who will we trust more for authentic information – audience input to BBC and CNN or Wikipedia? Vastly increasing speed and range of supply of information, opinion and supposition will make authenticity a core issue.
In terms of capital investments, what will have authentic value in the future? Many commentators have been surprised at the values companies have been attaching to islands in second life as major brands seek their own space in the virtual world. But there is a strong parallel happening in the real world – countries such as Dubai who are building multiple artificial islands are extending what was once a limited resource market of beachfront property into a manufactured product where another 1,000 properties can be created from scratch. In such a world what is an authentic piece of real estate, and what is not, will either become a source of distinction or else the values associated with them will have to stabilize. Some will not care what is real and what is not, but for many the authentic information, product or even space will be a much cherished item.
Lastly, we come to the increasing role of the healthcare insurance industry in setting the framework and defining the macro economics for a wide range of future business innovation. The ability to use insurance and associated premiums as both a carrot and a stick to drive customer behavior is not new; however, in the near future, healthcare insurance companies will become a major driver of other services. Close to the core, real-time health monitoring is a much discussed area of innovation opportunity, but many companies still see this as something that customers will either pay for directly or hospitals will provide.
For a few lead users this may be the case, but for the mass market it is not credible. Proactive consumer purchase and use of vital signs monitoring is a niche and will remain so, and few, if any, hospitals can afford post-therapeutic support of this order. It will be the healthcare insurance companies who will be able to drive mass adoption as they offer variable premiums to customers who firstly link into the system and secondly change their diet and exercise regimes to improve their health. Others see healthcare insurance companies as being key drivers of innovation in such varied areas as future food design and development – both in terms of composition and portion size – employee and consumer focused “eco-footprints,” and in-car driver alertness indication.
These and other key future innovation catalysts should be recognized and understood by all Innovation Directors. Whether core or peripheral to current areas of innovation focus, they are likely to impact many of today’s businesses – either directly or indirectly. Translating these into future growth strategies is an area where, to date, only a few leading companies, such as Shell, P&G, and Corus. However, as future innovation growth becomes increasingly linked to and driven by the understanding of key catalysts, more and more organizations will have to follow these companies’ lead.