Did Motorola’s DynaTac, RCA’s Television, or IBM’s 5MB hard disk weighing 1 ton create instant success? For sure, No. But each of those innovations has succeeded in creating a large industry. Like those, many other innovations such as digital cameras, microwave ovens, automobiles, airplanes, etc. emerged in a feeble form. Innovation success is not about hitting the luck as a Eureka. Irrespective of the greatness of ideas, all innovations appear in primitive form. Evolution of innovation is at the core of success—creating Eureka moment turn by turn. But that requires a systematic flow of ideas. What are the driving forces and how do keep consistently generating ideas to support the evolution of innovation?
First of all, innovations appear in an embryonic form. In the beginning, their abilities in helping us get jobs done are very little. They are expensive too. For example, Motorola’s mobile handset DynaTAC 8000x, unveiled in 1984, weighing 2 pounds was priced at $3,995 (about $10,400 in 2021). This bulky machine could support only 30 minutes of talk time, before getting charged. Like this mobile handset, many other great innovations were primitive at the beginning of their lifecycles. As a result, only a handful of customers showed interest to pay for them.
Some of the forces contributing to the evolution of innovations are (i) the urgency of making them better and cheaper so that both revenue and profit keep growing, (ii) dealing with the competition force, (iii) leveraging externalities, (iv) attaining market power for monopolization, and (v) reinventing at the saturation of the current wave. Enabling factors for the evolution of innovation are design thinking and the progression of relevant technologies in supporting ideation.
Contents
Driving forces of the evolution of innovation:
- Creating growing appeal and reducing cost through Incremental advancement
- Responding to competition force for sustaining innovation in the market
- Creating and leveraging externality factors
- Gaining market power for attaining price setting capability for monopolization
- Creating next waves of growth through reinventions
The two most important enabling factors for driving the evolution of innovations are:
- Design thinking
- Technology advancement
Driving forces of the evolution of innovation
Creating growing appeal and reducing cost
At the beginning of the lifecycle, innovations are not only primitive but are also highly expensive. Ironically, despite the high price, innovators fail to produce profitable revenue. Hence, innovators feel the urgency of upgrading existing features so that cost keeps falling and quality starts getting better. They also focus on process innovation for addressing cost and quality issues. Furthermore, they start adding new features so that innovations keep evolving to support the growing number of tasks.
For example, the continued advancement of the battery unit has been reducing the weight and cost of mobile handsets. Similarly, the advancement of sensor modules has been increasing the appeal of digital cameras. The reduction of weight by as much as 70 percent has been the underlying success factor of the microwave oven. Hence, for creating growing appeal and reducing cost, incremental advancement resulting in iterative redesign has been playing a vital role in the evolution of innovation.
Responding to competition force through releases of successive better versions
Once an innovation shows the prospect of profitability, competition responds. To take a market share or create new market segments, competitors start responding with replication, imitation, and also innovation. As a result, the willingness to pay for innovations keeps drifting downward. Hence, sustaining innovation is a formidable challenge. To counter it, innovators must keep releasing successive better versions, leading to a race for the evolution of innovation.
For example, despite the miracle success, the sale of iPhone 1 dried up within one year. One of the reasons was the imitation response from other makers. Hence, to push up the sale, Apple was compelled to release the next better version. Since then, Apple has been releasing successive better versions, contributing to the evolution of iPhone innovation. Consequentially, the race to keep improving smartphones among competitors has been intensifying. Such a race is a major underlying driving force of the evolution of smartphone innovation. Similarly, all other great innovations have been evolving due to the race among competitors to release better versions for taking away market shares and also creating new market segments. For example, although Raytheon released microwave oven innovations as a bulky and costly machine, competition has been making it increasingly appealing to different market segments.
Creating and leveraging externality factors
Externality factors such as infrastructure, ease of maintenance, and the option of 3rd party component plugins play important roles in utility derivation from innovations. Particularly, ease of network connectivity has been expanding the scope of creating network externality effects. Hence, innovators are after resigning their innovations for creating as well as leveraging positive externality factors.
For example, through the addition of HDMI ports, TV makers made their products pluggable into cameras, computers, and others. Similarly, by creating the option of downloading 3rd party apps, Apple led the evolution of smartphones. Likewise, smartphone makers have been upgrading their products to leverage the continued advancement of cellular internet services. Hence, the evolution of innovation significantly benefits from innovators’ urgency of expanding the market base by creating and leveraging externality factors.
Gaining market power for attaining price setting capability
Due to the growing role of ideas and the scope of implementing them as software, innovators are finding ways to make innovations better and cheaper simultaneously. Hence, there has been a race to outperform the competition in evolving innovation to offer increasingly higher quality at a decreasing cost. As a result, the emergence of a top performer in attaining price-setting capability is becoming a reality. Consequently, winners show up in setting prices to make a profit while compelling competitors to take lower prices and suffer from loss. Hence, there has been a race in the evolution of innovation for gaining market power to monopolize. In reality, many of the technology innovation success stories such as Google, Microsoft, and Apple are the outcome of this race—resulting in a winner takes all.
Reinventions for creating a new path of growth
Despite the greatness, the evolution of every innovation reaches a state of maturity. Fortunately, sometimes, innovators find ways to reinvent their creations to create a new wave of growth of innovations. For example, Sony succeeded to give a new path of growth to the camera by making it a digital camera. It happens due to the change in the technology core. For example, the change of vacuum tube technology core with transistors gave a new path of growth to TVs, Radios, computers, and many other electronics products. The change of CRT with LCD has also created another path of growth for many products. Hence, reinventions caused by the change of matured technology core with emerging ones have been contributing to the evolution of innovations.
Enabling factors for the evolution of innovations
As discussed, driving forces have been demanding a flow of ideas as essential for the evolution of innovations. But how to get a flow of ideas for creating a flywheel effect is a burning issue. Should we just wait for creative sparks or rely on a random flow of ideas popping out from brainstorming sessions? For sure, no. To address this challenge, design thinking plays a vital role. At the core of it is the focus on jobs to be done with empathy and passion for perfection. But that is not sufficient.
To support idea flow and implementation, we need technologies. Hence, we need to keep scanning, detecting, sourcing, inventing, and improving technologies. For example, the change of mechanical components with electronics has been playing a vital role in evolving many innovations. Similarly, the change of hardware components with software has been a great source of ideas for making innovations better and also cheaper.
Although we emphasized the importance of great ideas, the evolution of innovation is at the core of success. But it does not happen just due to creativity. There are several underlying driving forces. To support it, we need a consistent flow of ideas for creating a snowball effect. Hence, in addition to design thinking, we also need systematic exploitation of an array of technologies for the evolution of innovations.