Clayton Christensen of Harvard Business School has identified three broad forms of innovation that make firms – and ultimately economies – stronger. Firms can make incremental changes to existing products, thereby becoming more competitive in an existing market segment; they can introduce products, like Sony’s iconic Walkman or Apple’s iPhone, that create new market segments; or they can develop a product – such as electricity, the car or an Internet search engine – that is so disruptive that it renders an entire sector or way of doing business almost obsolete.
Fortunately, there is a third approach, evident in the numerous innovation successes in Europe, Asia, the Middle East and elsewhere that neither had state backing nor occurred within a uniquely creative business culture. Consider, for example, the Internet-based telecoms firm Skype, created in Estonia; Rovio’s “Angry Birds” video game, made in Finland; the TomTom GPS navigation system, developed in the Netherlands; Navigon, another navigation system, and SoundCloud, a music download service, both made in Germany; Maktoob, an Arabic Internet service provider, and Rubicon, a burgeoning animation educational company, both established in Jordan; and Infosys and Wipro, two of many successful technology ventures in India.
In studying these and other cases, the Innovation and Policy Initiative at INSEAD has identified four factors – the “Four Cs” – that support technological innovation and entrepreneurship: cost, convenience, caliber and creative destruction. Success lies in firms’ ability to combine these factors either in a single country or across several markets.
Published by: TMCnet.com