Managing Essentials

International The end of innovative products?

Market researchers in the USA are currently discussing if Apple will once again become a major player in the computer market. The discussion is not fueled by advance knowledge of a new product or an expected revolutionary shift in sales with regard to Apple desktops or notebooks. The reason lies in the classification of the tablet computer iPad. Viewed as a computer and classified as a kind of netbook, Apple would gain a significant market share in this sector but the question is a tablet really is a computer? needs asking. There is no keyboard or hard-disk, and it is often used for entertainment and recreation. The cores of game consoles are technically computers also but they are not classified as such. Do the tablets warrant opening up a new category? This small problem points to the bigger one, namely that new categories for innovative products are rarely needed. Unfortunately, market researchers do not often have to fight to see which categories new products fit into, or if their system of categorization has to be modified. The reason is simple: not many genuinely new consumer goods have been launched in the last decades. Existing products, like the television, have advanced or became close to obsolete like the gramophone record, when their functions were merged into new advanced products. Information Technologies (IT) especially enabled a lot of advancements and functional mergers. However, outside this domain genuine new life enriching products with new functions have become rare. The walkman, navigation systems, motion controlled game consoles are some good examples - as well as exceptions to this general rule. However, compare even these recent innovations with those of the industrial revolution of the late 19th Century. At this time, in less than a decade, products as diverse as the razor blade, washing powder and light bulbs flooded into households. They transformed lives in such a progressive way that the recent developments in music formats and their playing devices or game technologies appear minor in comparison. Also for products what Francis Fukuyama termed the end of history seems to become true. He sees humankind at the final end of its ideological evolution as in the evolution of ideas nothing really new has come up for a long time. We just rethink, reformulate or adapt ideas and models which originated a long time ago. As with ideas, humankind also seems to have given up some hopes with regard to products. Supersonic civil aviation ended with the last flight of the Concorde in 2003. Eight years later, Daimler-Benz announced the end to production of its top of the range car, the Maybach. To add a for the time being would not be warranted, as in both cases the managements expressed happiness at finding the courage to get rid of a burden. In the tradition of Fukuyama, in a recent article the end of the future, Peter Thiel says that technological progress has stalled in the last twenty years with the exception of information technologies. Three basic technological fields seem to have fallen behind in progress. The first is energy, whose costs have risen considerably and most likely nobody in this world would forecast cheap energy for the future. Real technological breakthroughs are missing and existing technologies are abandoned for environmental concerns. There may even be a renaissance for coal, as dirty as it is in its production and use. The second field is food production; grain yield increased over 126 percent from 1950 to 1980, but only 47 percent in the last thirty years. The third field is medicine and biotechnology; not only the fight against cancer looks back at a 40 year history without major

Managing Essentials
International
breakthroughs, but in addition, pressing issues like Alzheimers are not being addressed adequately. Thiels article is echoed by many, including Steve Denning, on the many obstacles that innovators face in major corporations. Innovation is often perceived as a costly risk and not as a valuable opportunity. Of course, real progress is hard to measure. One is tempted however to add some varied examples of buried hopes. What has become of the Jarvik heart and other artificial organs? What is really new in the fusion technologies? Where are the small lightweight batteries to power future cars? Some fading hopes also take strange turns pointing to strategic insecurities. A few months ago the last flight of the Columbia space shuttle manned space flights for NASA ended, at least for now. Nevertheless, some weeks later NASA started hiring 55 new astronauts. Maybe one of those astronauts will join colleagues from China, the only country with a long term agenda in space currently. Fukuyamas book received wide attention and inspired a heated debate nearly twenty years ago. This can hardly be said for the debate on innovation. As indicated, innovation and progress are difficult to measure; Innovation is also a marketing term and companies assess themselves so that even minor advancements may qualify for this term and enter official statistics. This lack of public discussion is worrying. The reaction of the Western World to Chinas first outpost in space was neither a new Sputnik shock nor a hearty welcome to co-ordinate this program with the ones of the West. The formulation of such an offer to co-operate would have revealed that the West has in fact not much to contribute anymore. Of course, as far as technological details are concerned, Western companies are still in a leading position, however, when it comes to the core of the program, in its vision and most of its hardware, China will lead. The East may realize one day the fading hope of the West to conquer space. Space is not the only area in which China pushes long term programs. A young nation with a growing and ever younger population looks into the future. The much older and shrinking populations, especially of Europe, seem to look back on their glorious history. China wants to advance; the West wants to hold on to what it has. With this background it would not be accidental that many innovations in the West are from the entertainment industries.
Why Are There No Successful Innovation Initiatives? (Steve Denning) www.managing-essentials.com/1bm Fukuyama, F. (1992): The end of history. New York: Free Press. The End of the Future (Peter Thiel) www.managing-essentials.com/1bn