Is The US Done Innovating?

[Marc]

I wasn't sure where to put this. An interesting read...

Poll: U.S. has conservative tack on innovation
U.S. technology executives mainly focus on existing products and services

By Johan Bostrom, IDG News Service
February 25, 2005

U.S. technology executives identify innovation as essential to improving their competitiveness, yet their approach to innovation is conservative, mainly focusing on existing products and services, according to a study published Thursday by consulting company A.T. Kearney Inc.

Top executives at manufacturers, software companies, and IT service companies in the U.S. clearly feel the pressure from the risk of falling behind global competition in technology and telecommunications, according to a survey of more than 300 executives. The survey was conducted in late 2004 and early 2005.

"Ninety percent of the executives see the major changes going on. But they don’t seem to react to them," said John Ciachella, vice president of A.T. Kearney’s high technology practice.

The respondents said their competitors, which today are often international companies, have become larger and more agile. Still, only about one-third of the executives indicated that they have instituted formal functions for measuring their position in the market. The majority, 54 percent, said they use informal discussions to measure competitiveness.

"They are trapped in their company's structure, organized in product groups and market groups. With the ongoing change of market boundaries, if you only look at the current peer group, the real competition is not coming up on your screen," Ciachella said, asking for more formal and regular planning of strategies at a company level instead of at a product or strategy level.

The survey respondents, most of whom were chief executive officers, pointed to product and service innovation as the most critical element of competitive success in technology and telecommunications.

"But the companies' actions -- improvement of existing products, bundling products and service offerings and continuous investment in research and development -- add up to innovation around the core: around the current offering," Ciachella said.

Ciachella attributed this cautious approach to innovation to the aftermath of the IT bubble of the late 1990s. "In the pre-bubble time, there were bets all over the place -- too many. Now, maybe the pendulum has swung too far to the other side."

Larry Keeley, president of the innovation strategy company Doblin and adjunct professor at Illinois Institute of Technology, was surprised by the survey results.

Doblin's own diagnostics and Keeley's experience indicates that U.S. tech companies are even more conservative than A.T. Kearney found them to be. "Tech companies overemphasize on products to the exclusion of changing business models or improving the customer experience," Keeley said, pointing to telecommunications equipment manufacturers and carriers as an example.

"Compared to the tremendous value of the global telecom market, the level of innovation is lamentable. The industry chases obvious feature enhancements, equipping the phones with all these features and function variations, but in the end they only chew each other up," Keeley said.

By way of contrast, Keeley pointed to innovations by two foreign companies in the mobile telecommunications industry. Virgin Mobile Telecoms has introduced an uncomplicated prepaid service and Samsung Electronics has created a more graceful product experience on its phones, he said.

Keeley sees two reasons for U.S. companies' lack of innovation.

Read the rest at the (broken link removed) web site.

Your comments?

 

[The Fast One]

I haven't looked at the entire article but, one example for automotive I suppose could be the influence of Japanese inovation and the rest of the world following, but then someone has to lead. North America doesn't seem to have done that badly for copying....

 

[Lynda Young - 2008]

This reminds me of the vidio by "Joel Barker" where in it he demonstrates how inventive we in North America are but that we do a bad job at developing those inventions.
We need to develop that trait or watch as the rest of the world does it for us. The world is getting smaller all the time. How we look at things today can not be how we look at it tomorrow.
The 80/20 rule was used to drive this home. 80% of the inivations in the last century originated in North America but only 20% were developed here.
I do not believe that this is a bad thing by any stretch of the inmagination. The world is developing as was intended and we will all be better for what we have all done by doing what we all do best.
Change has to be a willing part of everyones makeup.

 

[Craig H.]

When it comes to bigger companies, I think the article is, generally, correct. The focus on quarterly and yearly earnings makes it difficult for an executive to get behind projects that have a time to market that falls outside of the short term window. At some point though, the long term risk of such an outlook is waking up one o morning to discover that the company is producing the absolutely best buggy whips ever made.

There are smaller companies (biotech comes to mind) that seem to be much more agile and focused on true innovation.

JMHO, of course.

 

[Steve Prevette]

Personally, I think Tom Peters' Reimagine ought to be required reading. He has quite a bit of energy on innovation and what prevents us from innovating.

 

[Al Dyer]

I believe there is a lull in inovation at the moment as companies look at the bottom line and try to survive in the changing markets. As jobs are moving out of the country along with NAFTA, FTAA, and GATT, there is a general upheval in the entire system. I'm sure they will level out and inovation will return although maybe at a different level or with a transformed goal.

Looking into a crystal ball on this one.

Al...

 

[Caster]

I guess I have no real interest in what "US technology executives" think.

Last time I checked these were the fine gentlemen who brought us the "tech bubble" and wrecked my pension plan.

I'd rather take advice from a SSBB than this group of characters!

 

[qualitygoddess - 2010]

I think innovation has definitely slowed down, especially in larger corporations, for the reasons cited in the article. I also agree that many of our efforts in what is termed "product innovation", are just more features added. In effect, this just confuses the consumer or frustrates them! I cite the example of my retired parents, mid-60's, who wanted to buy a minivan. It is easier for them to climb in and out, and provides the option to "haul stuff", since they purchased the stow-and-go seat feature (which was a product innovation a couple of years ago). However, they had a really tough time finding a van without the DVD player! The sales person kept telling them that this was a great feature; that it was 'cutting edge'. My dad told him that they preferred to sit in comfy recliners at home to watch movies, so would he please find a van without the DVD player!

What also concerns me these days is how many mega-corporations are being built up through mergers and acquisitions. This is across many industry segments. Will this add to the slow down in innovation? How will this affect quality of products and services? I'm concerned. JMHO.

 

[WALLACE]

I'm thinking the lack of ground breaking innovation may be down to cultural insecurity.
Having a look at my chosen country of residence (Canada); I have to say, there's no real "in your face" innovation and if it is noticable or recognisable in any form, it's almost always foreign in content.
Innovation seems to be coming from the Europeans more often these days. The oneness of the EU may be the motivational factor for innovation.
Cultural insecurity reveals itself in the fact that, political and social oneness seems to allow a "free flow" of innovative thinking.
JMO.
Wallace.

 

[Jim Wynne]

I think that the initial death knell was sounded with the advent of benchmarking and seeking out "best practices" (God, I hate that phrase) as a corporate strategy. It's supremely ironic that the same companies that say "Our employees are our best competitive advantage" are the ones that have benchmarking functions. Benchmarking is tantamount to saying, "Our employees aren't allowed to innovate because they're not very bright, so can we steal something from you?"