Innovation Scouting:
The Way Forward
T
en years ago a Japanese electronics
company made a strategic decision
to leave the business -- because the
TV set industry turned out to show rapidly
declining profits -- and to move into the
development of the next generation. After
a few years, the company became a world
leader with its LCD TV sets, and its revenues
rose sky high.
Fast changes in the modern era have forced
firms to get ahead of competitors and identify
innovations early, otherwise they would
not survive.
A few years ago, an intriguing study was
published which revealed that one third of
the world's leading companies, according to
the Fortune 500 list, disappeared from the
marketplace between 1970 and 1983. This
evidence supports the assumption that without
innovation, companies cannot exist.
Innovation – The key to
survival
Until recent years, companies did not allow
employees to promote innovative ideas, and
the focus was on performing daily tasks.
Management was characterized by controlled
processes striving to minimize the number
of failures. One result was that the spirit
of entrepreneurial thinking could not be
developed.
Tom Peters, a leading thinker in the field
of management, said, "Get innovative or
die,” referring to the fact that the existing
managements lead companies to continue
on the same path at the expense of forging
new directions.
Innovation Scouting
Innovation scouting is a systematic search for
innovation in any field, bringing its findings
to the attention of the decision-makers to
determine whether and how to proceed with
the idea to make it a product.
Historically, innovation scouting can
trace its roots to the isolated inventors
who had a tremendous urge to discover
and put innovations on the map of world
knowledge.
Innovation scouting encourages employees
to look for innovation and ideas that would
give them a competitive advantage. It is no
coincidence that from its early days, Google
has encouraged its employees to spend some
of their time developing new ideas.
Recently, more and more decision-makers
have been confronted by two types of
uncertainties -- whether to continue the
innovative direction or to enter a new line
| By Avner Barnea*
of business due to the innovation.
In recent years, energy has taken an
outstanding innovative direction, including
renewable energies. An exciting example of
innovation in energy use is the world's largest
cement producer, which was looking for
an innovative concrete formula in order to
substantially reduce carbon dioxide emissions
through the use of substitutes derived from
the sugar industry and rice by-products.
An Update on Innovation
Scouting
Successful innovation scouting is a
combination of several factors: internal
factors within the firm itself, together
with external partners including research
institutions, mainly in academia.
If in the past the Americans were leading
the innovation field worldwide, in recent
years the Japanese have been winning this
race as indicated by the registration of more
new patents
One of the most significant advances in the
automotive industry in the past 50 years was
the development of the hybrid engine. This
technological breakthrough was definitely
a creation of innovation through systematic
activity of the Japanese manufacturer’s
innovation scouting teams. This innovation
gave the company a technological advantage
over the competition for almost 10 years.
Pharmaceuticals is one of the leading
industries of innovation. This industry is
conducting systematic monitoring in medical
innovation that can produce significant
competitive advantage by early identification
of new drugs.
Breakthroughs in innovations often come
at the expense of existing products. Prof.
Clayton Christensen in his book The
Innovator's Dilemma calls them
“disruptive technologies” – i.e.,
new technologies that often
render the existing technologies
irrelevant.
Facing difficulties in absorbing
innovations was also true
in renewable energies. Alvin
The Jerusalem Post | Innovation Industry & Science | 02/2010
and Heidi Toffler noted in their book
Revolutionary Wealth that “The main
question is thus whether we will overcome
the impending energy crisis. It is dependent
largely on the results of the conflict between
the profits from the existing energies and
industry researchers who strive for alternative
breakthroughs.”
Characterizing Innovation
Scouting
A global benchmark study published in
December 2009 by Nerac, a US research
firm, characterizes the status of innovation
scouting. It indicates that to obtain
information from external sources, most
companies (76%) made use of competitive
intelligence tools by a massive gathering of
information from the Internet, participation
in conferences, leveraging relationships in
academic research and the use of networks
of personal relationships. Some 70% of
companies stated that their main objective
was "early detection of new technologies."
Serving the Local
Renewable Energy Industry
In Israel, promoting research in renewable
energies must be addressed by the larger
corporations already in these areas working
in close partnership with government
ministries that will establish research
foundations, legislate relevant laws and
issue a master plan for this purpose when
innovation scouting is one of the tools to
monitor new ideas
Conclusion
It appears that more and more companies are
moving towards proactive and systematic
activities to obtain early information about
innovations. Although in most companies
innovation scouting has not yet reached
a high standard of quality, it merits close
attention, especially in competitive fields
where capturing innovation can create a
significant edge.
*The writer is a competitive intelligence
strategic consultant and lecturer on
competitive intelligence in the MBA program
at Ono Academic College.
avnerpro@netvision.net.il
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