What is Innovation?
The process of translating an idea or invention into a good or service that creates value or for which customers will pay.
To be called an innovation, an idea must be replicable at an economical cost and must satisfy a specific need. Innovation involves deliberate application of information, imagination and initiative in deriving greater or different values from resources, and includes all processes by which new ideas are generated and converted into useful products. In business, innovation often results when ideas are applied by the company in order to further satisfy the needs and expectations of the customers.
In a social context, innovation helps create new methods for alliance creation, joint venturing, flexible work hours, and creation of buyers’ purchasing power. Innovations are divided into two broad categories:
Evolutionary innovations (continuous or dynamic evolutionary innovation) that are brought about by many incremental advances in technology or processes and
revolutionary innovations (also called discontinuous innovations) which are often disruptive and new.
Innovation is synonymous with risk-taking and organizations that create revolutionary products or technologies take on the greatest risk because they create new markets.
Imitators take less risk because they will start with an innovator’s product and take a more effective approach. Examples are IBM with its PC against Apple Computer, Compaq with its cheaper PC’s against IBM, and Dell with its still-cheaper clones against Compaq.
In 2010, Thomas Thwaites decided he wanted to build a toaster from scratch. He walked into a shop, purchased the cheapest toaster he could find, and promptly went home and broke it down piece by piece.
Thwaites had assumed the toaster would be a relatively simple machine. By the time he was finished deconstructing it, however, there were more than 400 components laid out on his floor. The toaster contained over 100 different materials with three of the primary ones being plastic, nickel, and steel.
He decided to create the steel components first. After discovering that iron ore was required to make steel, Thwaites called up an iron mine in his region and asked if they would let him use some for the project.
Surprisingly, they agreed.
The Toaster Project
The victory was short-lived.
When it came time to create the plastic case for his toaster, Thwaites realized he would need crude oil to make the plastic. This time, he called up BP and asked if they would fly him out to an oil rig and lend him some oil for the project. They immediately refused. It seems oil companies aren’t nearly as generous as iron mines.
Thwaites had to settle for collecting plastic scraps and melting them into the shape of his toaster case. This is not as easy as it sounds. The homemade toaster ended up looking more like a melted cake than a kitchen appliance.
This pattern continued for the entire span of The Toaster Project. It was nearly impossible to move forward without the help of some previous process. To create the nickel components, for example, he had to resort to melting old coins. He would later say, “I realized that if you started absolutely from scratch you could easily spend your life making a toaster.”
Don’t Start From Scratch
Starting from scratch is usually a bad idea.
Too often, we assume innovative ideas and meaningful changes require a blank slate. When business projects fail, we say things like, “Let’s go back to the drawing board.” When we consider the habits we would like to change, we think, “I just need a fresh start.” However, creative progress is rarely the result of throwing out all previous ideas and innovations and completely re-imagining of the world.
Consider an example from nature:
Some experts believe the feathers of birds evolved from reptilian scales. Through the forces of evolution, scales gradually became small feathers, which were used for warmth and insulation at first. Eventually, these small fluffs developed into larger feathers capable of flight.
There wasn’t a magical moment when the animal kingdom said, “Let’s start from scratch and create an animal that can fly.” The development of flying birds was a gradual process of iterating and expanding upon ideas that already worked.
The process of human flight followed a similar path. We typically credit Orville and Wilbur Wright as the inventors of modern flight. However, we seldom discuss the aviation pioneers who preceded them like Otto Lilienthal, Samuel Langley, and Octave Chanute. The Wright brothers learned from and built upon the work of these people during their quest to create the world’s first flying machine.
The most creative innovations are often new combinations of old ideas. Innovative thinkers don’t create, they connect. Furthermore, the most effective way to make progress is usually by making 1 percent improvements to what already worksrather than breaking down the whole system and starting over.
Iterate, Don’t Originate
The Toaster Project is an example of how we often fail to notice the complexity of our modern world. When you buy a toaster, you don’t think about everything that has to happen before it appears in the store. You aren’t aware of the iron being carved out of the mountain or the oil being drawn up from the earth.
We are mostly blind to the remarkable interconnectedness of things. This is important to understand because in a complex world it is hard to see which forces are working for you as well as which forces are working against you. Similar to buying a toaster, we tend to focus on the final product and fail to recognize the many processes leading up to it.
When you are dealing with a complex problem, it is usually better to build upon what already works. Any idea that is currently working has passed a lot of tests. Old ideas are a secret weapon because they have already managed to survive in a complex world.
In this special report we focus on the top innovations that will fuel some of the key trends in 2018 and offer plenty of opportunities for businesses across retail, travel, publishing, property management and the healthcare sector. From tackling ‘fake news’ to reviving bricks-and-mortar as well as embracing the circular economy and the power of data, these innovations aim to inspire you and support you in your mission to drive product and business transformation.
Top 5 innovation ideas for 2018
1 Smart box wants users to take control of their health
The health industry has boomed in the past five years, with the desire to achieve peak fitness levels and track progress along the way proving popular with both fitness junkies and those simply wanting to look after themselves. Technology has allowed people to access their personal data from their own homes, with smart devices, apps, wearables and personalised services meaning it has never been easier to know how fast you run, what your blood pressure is and how many calories you are consuming.
UK-based Vie’s creation of a smart box that provides readings on heart rate, blood pressure, glucose and cholesterol levels, and blood oxygen can help the user detect the early signs of chronic diseases. The simplicity of having such a device in your home provides a preliminary step when tracking health that can be used before consulting a professional. Another notable device is the low-cost product that uses temperature to detect skin cancer. We predict the continuation of steady growth in this field as the public’s desire to be healthy proceeds to grow worldwide.
2 Digital publishing platform connects artists with audiences
Cryptocurrencies came to the forefront of news in 2017 thanks to their value multiplying at unprecedented rates. While many are still sceptical of its reliability as a form of currency, it is undeniable that such forms of payments are to become more prominent in coming years, especially now investors have had an insight in how their money can grow. The Lightstreams digital publishing platform uses an Ethereum-based blockchain network to connect music artists with audiences. The network will provide transparency for artists and help avoid misallocation of royalty fees and the damage caused by fake reviews.
Polish startup Userfeeds is also utilising the power of cryptocurrencies by using it as a means to provide transparency in news, thereby thwarting the spread of so-called ‘fake news’. This unique approach to using cryptocurrency is just one way it can be manipulated for differing industries. In 2018 we will see increased transparency across all sectors through the use of blockchain technology and streamlined transactions with the spread of smart contracts.
3 Interactive and practical retail space pilots new emerging brands
Retail spaces are no longer just places to browse shelves and make purchases. Technology has revolutionised the shopping experience by replacing store assistants with robots, boosting sales opportunities with digital walls and more. A new store developed by Simon Property Group is acting as a micro-retail space for emerging brands, eliminating the high cost of renting a permanent bricks and mortar shop. The spaces provide a multitude of technology-based offerings like staffing solutions and temporary displays.
Such leasing models will help small and new companies entering their respective fields gain the publicity they need to evolve. The flexibility that comes with innovative store concepts makes it a mutually beneficial business model, with new companies keen to take advantage of such opportunities and the brains behind the models having plenty of customers. E-commerce fashion business Farfetch has taken its own approach, combining the luxury retail experience with technology. Its store creates an augmented retail environment that brings the advantages of online commerce into the physical space. 2018 will see retailers embrace the concept of ‘experiential store’ making use of new technology to gain competitive edge.
4 Virtual aquarium tunnel speeds up security checks
With security measures at transport hubs tighter than ever before, technology has an integral role to plays in providing a simple, smooth and fast solution that is reliable for both passengers and security. Biometric security systems are a popular method adopted by airports such as Dubai International, which introduced a facial recognition system within a virtual aquarium. Passengers simply walk through the tunnel-shaped aquarium and when focused on a fish, 80 built-in cameras scan the face.
In addition to this unique take on the technology, NEC Corporation has created an earphone prototype that assists secure computing thanks to authentication. The device recognizes the characteristics of a user’s ear in order to enable hands-free authentication, providing an even faster way of logging into your computer. Biometrics is gradually integrating into everything we do, and businesses adopting the technology into its own product prototypes will give a nod to the future ‘normal’.
5 AI property management saves time and money
Once featuring only in Hollywood films, artificial intelligence is now expanding the way companies approach data that can hugely impact their business action.
Manual collation or even use of basic systems can be laborious, hard to analyse and mistakes can be easily made. By using an AI system, companies can access the widest range of information possible with minimal effort.
One example is AskPorter, an AI property management platform that aims to reduce inefficiencies in workflows and change the role of property manager into that of a supervisor or concierge. By acting as the first point of contact for queries, simple questions and requests from tenants can be managed quickly and easily.
In a different industry, DemandJump has created an AI-enabled marketing platform named TrafficCloud that guides marketers on what action to take next with campaigns. Unlike traditional data collation tools that would look into page hits, for example, this new tool is able to link customer activity across devices and present a much more detailed analysis of traffic between sources. Such innovation could revolutionise the way businesses look at their data.