Large companies need to embrace new approaches to drive growth
Innovation business models have undergone huge transformations in recent years. Four major trends will impact the future of corporate innovation and will force large companies to embrace new approaches to drive growth.
In line with our first trend … let’s cut to the chase:
1. Speed to market dramatically increased
Product development cycles have dramatically decreased in the past years. It took Arizona-based car company Local Motors mere 18 months to design their first model Rally Fighter … industry average for developing a new car model is around 7 years. They managed this by relying on crowed sourced designs harvested from their 25,000 strong community of designers, engineers and enthusiasts called “the Forge”. After this impressive feat, car manufacturers aren’t ignoring Local Motors any longer. BMW is the first to have announced a collaboration and is planning to crowd-source designs for future car series.
2. Decline in value of traditional IP
Traditionally companies have been very protective of their process and secret recipes. This is changing. Albeit the predominant secretiveness of the car industry, aforementioned BMW car designs will be published through a creative commons licenses and be made accessible to the public. Open source is becoming more common place … companies are no longer relying on owning the secret recipe. Today it takes more to be successful: business models, partnership and networks are taking centre stage. This is what gives companies sustainable competitive advantage … It’s much harder to copy a successful business models and that is why knock-offs and lookalike products will never pose a real threat to market leaders.
3. Prolonged recession
The recession is putting everyone under pressure. Companies are scrutinising over R&D spend and are stock-piling cash, because it is hard to get loans. At the same time consumers’ budgets are tighter than ever. Budgets will need to be allocated carefully to create the biggest market impact and to entice consumers to spend.
4. Rise of celebrity entrepreneurs
Despite Kim Kardashian’s milkshakes bringing nothing but tear gas to the yard, celebrity entrepreneurs are on the rise. Not only are they masters of publicity, they are building vast business empires. Mary-Kate and Ashley Olsen’s business is famously worth over $1 Billion. But fame isn’t the only ticket to entrepreneur stardom: Popularity of reality TV shows such as The Apprentice and Dragon’s Den are proving that the public is becoming more and more interested in the profile and lifestyle of an entrepreneur. This means that not only celebrities are becoming entrepreneurs, high profile entrepreneurs like Mark Zuckenberg and Jack Dorsey have become media stars in their own right. One more reason to play up entrepreneurship in your own company …
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