Photo: Bernard Yee
What are the ingredients of successful innovation, available to any company in any industry?
To find out, AT&T recently commissioned the University of Cambridge Judge Business School to discover how successful companies innovate. The report's author, Stelios Kavadias, Professor of Enterprise Studies in Innovation & Growth, identified six business model traits that successful innovators share. They suggest that organisations can use one or more of these "Six Degrees of Innovation" to transform their business models and compete more effectively.
This is good news for us in Asia Pacific. In our region, market demand and technological advancement converge, creating the perfect climate for innovation to flourish.
Growing consumer demand
Globally, demand is rising and shifting eastwards. According to the study, China, India and other developing economies could account for nearly 70 percent of global demand for manufactured goods by 2025, up from 30 percent today. This will drive demand for urban infrastructure as well as new services.
Incomes are growing dramatically in these developing markets, creating a vast new middle class in Asia with diverse needs and preferences. Some 60 percent of the world's households with incomes over US$20,000 will likely be in developing economies, according to the study.
Who better to serve these new consumers than the global multinational companies that know them best?
Exciting technology advances
A further advantage for multinational companies is that many already make good use of technologies. They are at the forefront of tech trends such as mobile Internet, cloud computing, Internet of Things and big-data analytics.
Deploying these technologies allows companies to foster growth, create disruptive new business models, optimise their processes and customise their offerings to meet consumer tastes. Connected car technologies are an example of this. AT&T's Internet-enabled connected car solutions already deliver in-car entertainment and satellite navigation. They can now also be linked to automakers for remote diagnostics and assistance and even to smart home-automation services. In the future this platform may allow vehicles to communicate with each other and could ultimately lead to safer self-driving cars.
The Six Degrees of Innovation
So how can your organisation take advantage of the trends in consumer demand and technological change?
The Six Degrees of Innovation report details six patterns that occur in successful companies that deliver innovation through the use of technology. You can use one or more of these six traits to adapt your business models and adopt the right technology to innovate and succeed.
The shared patterns, or Six Degrees of Innovation, are:
- Tailor-made products and services that meet customers' individual needs.
This focus on personalisation has been very evident in the Developers' Day application development competitions held in Kuala Lumpur and Manila over the past three years. For the region's young entrepreneurs, creating personalised mobile apps for Asian consumers is a winning formula.
- Sustainability initiatives that minimise waste and manage resource costs.
Many global energy services providers use metering solutions, typically linked to the Internet of Things, to allow consumers to monitor and modify their usage of electricity. Similarly, new water monitoring solutions that use sensors and wireless communications to look for leaks in water pipes help minimise waste of precious water resources.
- Jointly owned assets, such as peer-to-peer businesses.
Ride-hailing app company is perhaps the best-known example bringing the sharing economy to Asia. Mobility and connectivity allow customers to connect with drivers when and where they need the car service.
- Only paying for the service that is used.
Many fitness-sharing startups in Asia exemplify this innovative model. Instead of investing in a membership for a single fitness studio, subscribers pay a fixed monthly fee to use the facilities of a wide range of local gyms and other fitness providers.
- Effective monitoring of supply chains.
This may involve handheld tracking systems or Internet of Things technologies. For example, AT&T has made it possible for companies to remotely monitor the condition of valuable cargo, such as pharmaceuticals, electronics or artwork, in transit. The system uses lightweight airline-approved sensors that monitor temperature, pressure, light, location and shock levels to minimise the risk of damage, loss or theft.
- Using data to easily adapt to customer needs.
Applications of this could include a clothing retailer using customer feedback to tweak its designs or a healthcare provider integrating patient records to eliminate unnecessary tests. However, data analytics is also being used in other environments, such as the high-octane world of Formula One racing. Leading teams like Infiniti Red Bull Racing use advanced analytics and mobile communications to refine the design of their F1 car throughout the season and to optimise performance on the track during each race.
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