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Home > Business > Special

Distributed innovation: The latest management trick

Surinder Kapur | May 09, 2007

Industries and businesses decline and thrive depending on the way they deal with the many and increasing challenges of innovation. The innovation process is generally complex, uncertain and changing.

An innovation process that successfully matches market demand with technological opportunity is a key source of sustainable competitive advantage.

Innovation has changed from era to era characterised by a movement from an individual to a corporate to a distributed model. Since the 1950s, there have been five generations of innovation, with the first three having highly linear models. The fourth generation model was an integrated model, and the elements of the fifth generation are still evolving.

The first generation innovation process, the science push model, evolved during the 1950s when the advocates of big scientific investments argued that large research investments would filter down to industrial innovation.

This process assumed that R&D was the prime source of innovation and thus pushed science in organisations. Examples of this model are evident in the search for a cure for cancer and space exploration projects. This linear model, however, soon began to be questioned for its efficacy.

With the emergence of large consumer-oriented companies in the 1960s, marketing strategies assumed importance for organisations. Thus the simple linear science push model gave way to another linear model - the market pull model, the second-generation innovation process.

The challenges in this process included predicting market demand, planning and allocating innovation investment. R&D was expected to respond to market demand and innovation opportunities were derived from curiosity-driven research.

The 1970s saw a far greater sophistication in the process of innovation with the importance of key individuals increasing. A great deal of attention was paid to information flow and feedback mechanisms between the market and research.

This third-generation innovation process, called the couple model, while emphasising complex communication paths, was still a linear model. The challenge here was for corporations and government research institutes to be aware of the need for technology and have good communication and feedback mechanisms.

During the 1980s, Japan's success in the area of innovation led to a primary change in the thinking about innovation. They used an integrated model for innovation, processing information in a parallel rather than in a linear fashion.

There was close integration between research, engineering, production and marketing and active involvement of customers and suppliers in new product development. The significant advantages of this thinking were visible in the gains reaped by Japanese car manufacturers.

This model focused on the complex task of business process reorganisation and building cross-functional teams. The involvement of the complex information flow and management of knowledge across stakeholders led to the development and use of Innovation Technology.

Over time, the complexities of this process have grown and given rise to the fifth generation innovation process, called the systems integration and networking model. This model, while still emerging, has greater appreciation for knowledge, learning and creativity as sources and outcomes of innovation. Innovation strategies are now better formulated and implemented.

The level of strategic networking is increasing due to globalisation of both markets and sources of technologies. In this model, the most important aspect is, not so much the ownership of assets, but the connectedness of those assets to networks.

The level of technological integration is increasing through a combination of different sets of knowledge. There is also in this fifth-generation process, an increased use of IvT. This era is characterised by the use of telecommunications and digital networks.

This innovation process is characterised by thinking, playing and doing, which are also described in the book, Think, Play, Do. And IvT forms an important tool in this process, providing the technological means to unite diverse range of inputs that go into the innovation process.

It impacts and supports all three - thinking, playing and doing - by creating a collaborative environment where ideas and knowledge can be effectively and economically represented and shared.

"Thinking" is facilitated by technologies that build virtual research communities; "playing" by simulation, modelling and visualisation technologies that build upon existing technology platforms such as CAD; and "doing" by rapid prototyping technologies that build upon existing design and manufacturing systems. These technologies could help firms do things differently (disruptive innovation) and also do existing things better (incremental innovation).

The current era of innovation has been described as that of "distributed innovation", having moved from individual innovation in the 19th century to corporate innovation in the 20th.

In line with the fifth generation innovation process, the Confederation of Indian Industry has launched the CII Raunaq Singh National Innovation Grid. This Grid will connect potentially a large number of users with an equally large number of sources of knowledge and expertise. It will provide innovators continuous access to outside domain knowledge and infrastructure for physical creation.

Dr Surinder Kapur is chairman, CII Mission for Manufacturing Innovation, and chairman and managing director, Sona Koyo Steering Systems

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