Innovation, anyone?

This post was originally published on December 27, 2009. Since then quite a bit happened; Nokia’s phones, for instance, disappeared.


The buzzword of the decade: Innovation.

It seems that the more the average corporate manager found how easy it is to brush up any uninspired Powerpoint presentation with the fancy word “innovation”, the less innovation actually happened.

In the absence of ideas, the motto of the decade was: Make it big, and make it again. In the media industry, the motto was reruns, sequels, and sequels of sequels. In the automotive industry, the size of the average American car increased proportionally with the average debt of households.

The beginning 21st century was also the time of relative standstill in the electronics sector. The mobile phone boom, the growth engine for electronics companies in the early 2000s, is over, and electronics companies are struggling to find out what to do next.

The “Supersize Me” tactic was also the only idea for television sets. Of course, the tactic to offer ever-larger TV screens is naturally coming to an end as TVs are approaching sizes larger than the average apartment.

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The innovator in the mobile phone market was not a mobile phone company, but a computer company. The simple idea of the overall market leader, Nokia, is to make a lot of different models. While Nokia presumably does this in an attempt to fine-slice a saturated market, the iPhone comes as one model. (For more about the perils of thin-spreading see my 2007 article in Danish Designers; For more about Apple strategies, see my post “From Walkman to Ipod”). In the third quarter of 2009, Apple made significantly more profit from its single phone model (1,6 billion US) than Nokia from its entire range of 20+ models (1,1 billion US). Nokia’s large market share in developing economies seems in the meanwhile to be more of an inertia effect. The mass tactic fails in advanced markets: Nokia’s market share in the North American smart phone market is a negligible 3,9%. Apple’s has 29,5%, and Research in Motion, the maker of BlackBerry, has 51%.

Yet, actual innovation happened. Instead of big and a lot, it was rather smart and light, brought about by outsiders and unlikely candidates. The movie industry, trying to reduce risk by investing primarily in reruns and sequels, opened a horizon for a handful of independent filmmakers with actual ideas.

The only car in the North American market where demand outstripped supply was the exact opposite of chunky and gas-guzzling: The Honda Prius.

In the computer market, the innovator was the lesser known Taiwanese manufacturer Asus, who stood out with its introduction of the ieee, turning upside down the idea that small and light must be more expensive than big and heavy. Since then, nearly all manufacturers rushed to catch up with similar models based on Intel’s Atom processor. The moral of the story: The future won’t be about big, a lot, and the same all over again.

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