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Home > Business > Columnists > Guest Column > Atul Khekade


Automated innovation, next BIG thing

February 14, 2007

The world is facing the next major transition: this will mean opportunity for some and extinction for others.

History clearly shows that there have been several significant industrial transitions that created new technologies, products, companies, modes of organisation, and in the process transformed society and human behavior. Early in the twentieth century, automation not only accelerated the speed of production and the relationship of the worker to the product, it also brought untold access to convenience and prosperity to a huge number of people.

Late in the twentieth century, the information revolution changed the nature of production again. Information came to command tremendous value -- often in excess of tangible products -- resulting in the massive expansion and globalisation of the workforce.

Access to knowledge has become almost universal and at very low cost, spawning a new multimedia culture enabled by vast information repositories and the near instantaneous delivery of that information.

Dan Pink's book A Whole New Mind argues that the next transition will be from our information age to a 'conceptual age.' People whose right brains are dominant will gain ascendancy in the world. They will earn more and exercise disproportionate influence compared to people with more of a left brain or analytical nature.

How will such a transition affect the global industry? We at BrainReactions, along with some expert practitioners set out to tour America to find out how the next industrial transition is already coming to pass.

We discovered that some of the leading organisations have already started adapting to right brain thinking and have established 'automated innovation' -- in other words, innovation as a self sustaining, predictable and repeatable process. (Excerpt taken from The secrets of American Innovation).

Just as only two of the top US companies in 1900s are still on the list, we can expect that it will not be long before this transition hits the global market, creating a new group of Fortune/Global 100 winners and a host of also-rans.

Technology and consumer demands are changing at such a rapid pace that organisations have to innovate faster than ever. Constant innovation around products, services and overall business models has become essential for survival. It is about this time that corporations have started realising that innovations can no more emerge from heroics of select individuals: this has to be automated, it has to become a process.

We have already known high predictions for global knowledge process outsourcing market. But that is not everything of it. There are tons of opportunities coming out of organisational needs for rapid innovation. We identified the following key processes within organisations which are seeking increased automation, perfection and improvement.

1. Innovation in business strategy and management level decision-making:

At the root of all innovation spectrums, managements are looking to increase their innovation awareness by following the latest trends in fast-paced innovation.

2. Rapid customer-centric innovation

Organisations are appreciating techniques that help them understand needs of their customers in the near future. Ethnographic research and rapid prototyping are one of the key growing services worldwide.

3. Setting sources for raw innovation

Raw innovation means a product at its birth stage, simply an 'idea.' Traditionally, ideas have always evolved within the brainstorming sessions of top management. However, organisations now prefer a broader perspective and bigger world understanding for their brainstorms. One such technique called 'Open Innovation' is gaining wide importance.

4. Protecting innovation

News of organisations paying hundreds of millions of dollars in settling lawsuits are not new. Innovation and intellectual property laws existed since long. But, growing applications of innovations are making organisations focus more on legal work in the innovation area. There is increased spending in legal services and automated systems that manage innovation portfolio.

5. Culture of innovation and motivation

It is well accepted that for innovation to really work, the culture within an organisation matters. HR practices, executive education and overall training that set up the culture are seeing very high growth.

6. Use of innovation/idea management systems

There has been rapid growth in the use of idea/innovation management systems within organisations. Corporations need systems that help them filter a bunch of ideas and focus only on those that are do-able and worth investing in.

7. Acquisition of high growth and high potential small businesses

We all know about the $1.65-billion acquisition of Youtube by Google. Youtube is a business that was started just 17 months before it was sold for such a high price. Corporations are looking for companies in high growth areas. Organisations are paying a very high price for consultants that identify such high potential businesses in growing industries.

Call it '360 degrees of innovation' within Procter & Gamble or 'managed innovation' within 3M, 'open innovation' within Google or 'top down innovation' inside GE; companies want to make innovation a self sustaining, predictable and repeatable process. We call it 'automated innovation.'

Here are some numbers on how much these top corporations are spending on 'automated innovation':

Company

Spend on automated innovation

GE

$2.3 billion

Apple

$600 million

Google

$700 million

Virgin

$800 million

Microsoft

$6 billion

3M

$1 billion

SAP

$1 billion

Global opportunities:

What does this transition to 'automated innovation' mean to the world? There are a lot of new opportunities to be captured. There has been growth in innovation consultants and facilitators. The challenge, however, lies in identifying big opportunities coming out of this transition. The real markets would be future versions of current markets that companies spend money in.

1. Original Innovation Manufacturers (OIM)

Organisations are already spending in speeding production of innovation. Opportunity is to invent new products taking specifications from big organisations, some of which are filtered and approved for final production.

These products are then launched under brand of these big organisations who also own an intellectual property for it. Quite like Original Equipment Manufacturers, right?

2. Innovation management/legal systems

Companies need to own what they make. This important niche is a multi-billion dollar industry in itself. Organisations need to protect their inventions and effectively manage it.

3. Research

Research is a first step in innovation. You need to know what you need to invent. With their armoury of products and services growing, companies need to find new needs of customers very rapidly. Ethnographic and customer-centric research are key opportunities.

4. Innovation training and management consulting

Traditional training in industries will include right brain shift. Every training program in the market needs to be aligned towards high automation.

5. Start ups in high growth markets

The market for acquisitions worldwide has expanded. It is a new strategy for companies to maintain high growth with an acquisition of high potential small corporations in growth areas. Till this time, this market existed in limited geographies. But with the growth of the Internet and advancement in search technology, identifying such companies anywhere in the world has become easier.

This has been a very common strategy of earning cash from start-ups in high tech areas like Silicon Valley. Automation will thus eventually transform a little known invention into a process, the opportunity only lies in capturing the opportunity first and not opposing to this change.

The author is the chief operating officer (COO) of BrainReactions LLC, that recently published a report called The secrets of American Innovation.

http://www.automatedinnovation.com / http://report.innovationtrip.com




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