Many business organizations across the globe face a challenge of gaining competitive advantage over their competitors and therefore, they need to add a special edge to their products and processes that might help them to stay on top in the marketplace. This special edge can be termed as innovation. With the help of innovation, different companies from the countries like South Korea, Mexico, China, Brazil and India are able to challenge the established players of Europe and US. There are different forms and process of innovation such as incremental innovation, disruptive innovation, architectural innovation, radical innovation and so on.
The report discusses and critically evaluates the process of innovation that many new companies across the globe adopts to overcome the barrier of competition to challenge the long-established companies. The report aims at understanding the key aspect of the concept of innovation and its use and benefits in the corporate sector. The purpose of the repot is to understand the major international developments in the field of technology and innovation that is used by the new companies or organization for gaining competitive advantage over the established companies globally (Roberts and Grover 2012). Innovation is quite significant in developing a completely new, different yet useful product, which in turn lets and organization for gaining a competitive advantage in the marketplace. The report evaluates the different methods of innovation that is considerably used in organizational processes. The scope of this report is to analyze the effectiveness of innovative processes, operations or methods within an organization that ultimately helps it in achieving the desired success (Kleis et al. 2012). The report analyzes and discusses five different ways in which technology and innovation can help in the economic advancements of an organization. The rise of innovation empires worldwide and the different phases of value capture in order to find the competitive advantages in information age are elaborated in the following section.
According to Urbancova (2013), knowledge and skills is the two important tools that an organization must possess in order to develop innovative products. The personal creativity of the people working in an organization is a significant key factor in achieving the competitive advantage (Urbancova 2013). It is important for the new organization to support an innovative culture that is a major output of the transformational process. The organizations can gain competitive advantage by managing effectively the present processes and also by creating innovation for tomorrow. Amit and Zott (2012) argue that it is achievable for an organization to benefit from a new and innovative business model globally. The new companies are making substantial efforts in innovating their products and processes that further helps them in achieving the revenue growth and in turn gaining the competitive advantages over the market place. However, the innovation to improve the processes and products of the organization might be expensive and time consuming. Furthermore, it requires a proper research in order to successfully implement and integrate the innovation in product and processes of the organization. The five ways, technology and innovation can help the economy are discussed in the following section-
The new organizations are looking for the ways or policies that will be helpful in stimulating the growth of the organization. Improving the economy of a country is largely dependent on the process of creating new jobs (Mithas et al. 2012). The ICT is one of the fastest growing industries, which is creating millions of job. This sector is an important enabler of development and innovation. The competitiveness in economy of the organizations and new companies largely depends on their ability of leveraging or using new technologies in their processes and operations. The fie common economic effects of information technology are elaborated blow (Kvochko 2013)-
The phenomenon of innovation centres has continued to spread globally along with a number of new empires that have emerged with the flourishing innovation centres. However, Silicon Valley is the hub of the world’s most dominant innovation empires. Over the last few years, it has been observed that Asia has considerably risen as a destination of the innovation centres. To evaluate, Singapore has been a fast emerging Fintech hub in Asia. UBS has launched an innovation centre in Singapore with an aim of creating innovative customer proposition for digital wealth management. Furthermore, India as a country has seen a rise in the number of innovation centres centred on Bengaluru. Airbus and Visa have also set up innovation centres in India. Innovation centres can be termed as a community of industry entrepreneur and researchers, who work in partnership to instigate the breakthroughs, such as fusing uncommon business processes and thinking big. The concept of innovation centre is new in Australia as Huawei Technologies is choosing to locate an innovation centre here. Apart from this, Telstra has also set up an innovation centre in Sydney (Capgemini.com. 2017).
However, India is rising in ranks as one of the most preferable locations for opening an innovation centre. Bangalore in India has four innovation centres and is a home for several billion-dollar start ups such as Flipkart and InMobi.
BNY Mellon, which is one of the oldest banking institutions of the world, launched its primary innovation centre in EMEA region of London. It aimed at bringing together the start-ups, developers and researchers in reimagining the future of finance.
These digital empires or the innovation centres acts as start up accelerators that plug companies into a start up ecosystem. In this digital era, technology is a key input of innovation. Different companies nowadays are seeking to connect with the latest trends with the help of technology. The internet of things is a top emergent of technology and innovation that is revolutionizing the whole world. Therefore, Internet of things occupies 21% of the focus areas of the innovation centres. The key objective of the innovation centre or digital empire is to collaborate with the ecosystem and development of the product and concept. The digital empires further improve the operational efficiency of a company, thereby helping it in achieving a success in the marketplace and gaining a competitive advantage over their competitors.
The innovation centres are furthermore capable of scaling the slippery slope of digital innovation. Although it is extremely challenging to make a successful innovation centre, it is important to scale the slippery slope of the digital innovation in order to prevent the innovation centres from failing. There are certain challenges that an innovation centre might face, which includes lack of leadership support with an ineffective focus to the companies’ inability of scaling the innovation at an enterprise level. Therefore, the critical success factor for the innovation centres includes, defining the right purpose and focus of the digital empire, harnessing the talent and delivering the core innovation promise in order to extend the innovation across the enterprise.
Over the years, it has been observed that the companies are expanding their research and development (R and D) footprint beyond their home countries that is done with the help of technology. The rise of economic nationalism and protectionist trade policy can have a considerably impact depending on where the companies conduct their R and D. It has been observed since the beginning of the 21st century, that a number of companies have been directing their research and development to the regions that have seen fastest growth of sales and manufacturing. While the largest global shift in research and development investment in the recent years is from Europe and North America to China and India. On the other hand, Europe saw the largest reduction in the field of relative activity and corporate innovation. The multilateral trade agreements however enabled the companies in reconfiguring and optimizing their manufacturing, supply chain and research and development footprints. Another factor that considerably affects how organization develop their research and development model is the increase of more rigorous immigration and residency requirements, more the requirements more is the profit.
Rise in the economic nationalism can further encourage the continuation of the protectionist policy of many countries, increasing the possibility of laying a widespread effect in the corporate decisions about the research and development model. As China’s pursue of trade and intellectual property practises is considered overly restrictive by many companies and global institution. Political rhetoric has grown in the recent years due to the pressure of many countries in developing more restrictive trade immigration policies, that of China. One of the major effects of this trend is to discard the global innovation model that many multinational companies had embraced (Bogliacino and Pianta 2012). This innovation model was based on the free flow of the information, money and talent across the borders. However, most of the companies often undertakes the wait and see mode without reporting the direct effects on their research and development operations.
The rise of economic nationalism has created high levels of uncertainty in executive suites. Many companies have already seen impact of the R and D policy in their innovation models and are concerned about their immigration policy initiatives, which is capable of restricting the talent availability in R and D markets. The companies in US, UK and China are mostly at risk due to the effect of increasing nationalism in their research and development operations. Therefore, majority of the companies are making the contingency plans in protecting their research and development network (Som 2012).
Research data however, states that a general move towards the economic nationalism will have a moderate impact on the research and development efforts of a company. The Global Innovation 1000 report says that the policies geared up by the economic nationalism has the capability to disrupt the global innovation casting a shadow over the sustainability of the research and development networks. Therefore, there is an increasing need of the contingency plans.
The R and D operations of US are most vulnerable to rhetoric at this point and therefore, different companies from the countries like South Korea, Mexico, China, Brazil and India are able to challenge the established players of Europe and US. Somewhat similar is the case for UK as well. In UK, Brexit negotiations considerably impacts the number of people coming to study in the technical fields, that compromise the desirability of UK from and R and D and product development point of view.
Major companies conduct their R and D outside their headquarters, however, the increasing attention on the regulations and policies associated with Visa and labour movement are questioning the sustainability of the integrated global innovation network. The effects of economic nationalism can be said to be widespread in R and D talent acquisition or retention (Olsson, Bosch and Alahyari 2013).
In 1878, Thomas Edison through an experiment gave birth to the future of a vast and influential recording industry, and that have profited him greatly both as an entrepreneur and as an inventor. This is because he created value and was able to capture a large part of the same value for his company. Similar is case for Napster, who was able to transform the recording industry. On the other hand, Shawn Fanning although created value for the public, could not capture the value properly and hence could not succeed. These incidents have to do with the history of new economy. Innovation plays an important role in galvanizing the customers’ interest and propelling the growth of revenue across the industry. Many companies have witnessed the power of innovation and therefore, developed websites to sell their goods, spending millions on marketing, only to grab the interest of their customers that can positively affect their profitability. Yet the profits have hardly materialized in their case as these companies failed to shift their focus to value capture from value creation and followed the flawed logic. The However, the point is, all the companies are able to capture value from their own and others’ innovation by exploiting the new techniques in the places on a value chain where potential profits reside. The three phases of value capture are as follows (Muralidharan 2017)-
Phase I: Proving the feasibility and value of Innovation- This is the earliest period, when the innovation just enters the market, which is needed to be tested and is generally embraced by risk taking innovators (Afuah and Tucci 2013).
Phase II: Defining the rules of the game- In this phase, the companies merge together to evaluate how value can be created and realized among the value chain that can lead to an innovation. In this phase, the company must analyze and retain a long view about how the industry must evolve.
Phase III: Value maximization- Finally the phase three deals with continuous business model innovation that is centred on customer needs. It depends largely on execution, and proper execution of the same leads to innovation and profitability.
In order to gain competitive advantage in the information age, it is necessary to think about the evolution of creation of value and value capture trade off. The new companies have exploited a chain of opportunities that innovation has brought to them, which in turn helped the, in gaining a competitive advantage over the established players from United States and Europe. Furthermore, including customers’ economics in constellation planning was another step that has helped the new companies in gaining competitive advantages in the information age (Lew and Sinkovics 2013). .
Conclusion:
Therefore, from the above discussion, it can be concluded that innovation is a key stimulus for a company’s success in this information age. The report evaluates the different ways technology can help economy and innovation. Technology plays a very important role in building a new product and launching new processes in the marketplace. E-commerce makes use of technology to reach a global audience. Use of proper technology in business processes has enabled the new companies in gaining competitive advantage over the established players from US and Europe. Value creation and value capture are two most important tools in this digital dynasty, where the innovation centres making it easier for the companies to research and develop new ideas. Researches prove that technology not only helps in improving the business processes of an organization, but also helps in improving the job opportunities, that contributes positively to the economy of the country. The research and development centres are emerging in the regions where there is fastest growth of sales and manufacturing industries. It is important to design product according to the customers’ preferences, and that is one of the major reasons for success of new companies. The three phases of value capture is discussed in the report. It is utmost essential for the companies to not only create value to capture it as well. The race from creation of value to capturing of value requires extreme commitment and vision. The evolution of value creation are helping the new and emerging companies across the globe in gaining competitive advantages in the marketplace. It is important to evaluate how a particular industry will be subjected to increasing returns, which will further help it in designing the business processes in an innovative way.
References:
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