Being constantly exposed to how we analyze, develop and ultimately help our clients to become and stay successful in the creativity era, where innovation is at the heart, I have decided to put down and share some reflections about how our world is changing, hopefully for the better, and how you and the society can benefit from it.
The Creativity Era: fast-moving markets, hyper competition and companies’ shrinking lifespan…
The Nomura Institute defined four main eras of economic activity which are Agricultural, Industrial, Informational and Creative eras (an era may be defined as a long period of history that presents a particular characteristic). The era of creativity, also referred frequently by Philips and ADLittle, to mention two examples, presents the following characteristics:
- Rapidly expanding global competition, pushing companies to find new competitive advantage quicker. This competition may be coming from developing economies from every part of the world, or from startups
- New customer mind-set, power of influencing other buyers’ opinion and higher expectations, easily communicated through social medias or other channels (TripAdvisor or Booking.com and their respective customer reviews are perfect examples of this revolution in B2C activities). B2B customers do no longer expect to buy a commodity or a service as they used to but not expect customized solutions that could quickly be adapted to their changing needs, since they are also impacted by this rapidly expanding competition.
- Impact of technology megatrends (3D printing, new energies or robotics) and their accessibility through Open Source and global scale opportunities: 3D printers can be bought for few hundred euros on Amazon, Elon Musk made his Tesla’s patents open to anyone, enabling competitors or startups to copy his electric engine…
- Emergence of creativity management science, allowing businesses to apply systematic and repeatable tools and approaches to manage creativity and innovation, such as Business Prototyping, or Design Thinking. The Artem Alliance in Nancy, France, is a unique university project putting in collaboration students and academics in art and design, engineering, and business on joint workshops and projects, in order to adapt future designers, engineers and managers to today’s reality.
According to Crabbe, true or not, the Information Age is over and we have now entered the Creative Erea, where the only source of sustainable advantage is speed of innovation. Creativity and innovation are prerequisites for every organization in today’s highly competitive environment. The informational era, or Information Technology era, allowed this innovation quest to start by creating factors such as giving a large access to data, information and knowledge, as well as new mediums to work and communicate. There is a continuous and critical need for reinvention, especially in highly competitive industries, or technology-driven fields where every discovery might reshape the market configuration.
The knowledge, information and technologies are available. Open Source softwares and the Massive Open Online Courses added to an already massive amount of accessible information and knowledge accelerates and facilitates the arrival of new entrants with hard wiring and smart people. To quote John Kao, “we are in the age of creativity because that’s where information technology wants us to go”.
In the context of this globally hyper-competitive environment, the lifespan of companies massively fell down, by more than 50 years on average for companies listed in the S&P 500 index of US companies (from 67 years in the 1920s to just 15 years today). Thus, innovation is not just for startups or high-tech companies but a medium for all companies to create significant advantage and sustainability.
Companies are facing tough competition, making them all stuck in global scale red oceans. Many firms have already undertaken strategic decisions to address this issue by innovating. A 2010 survey of nearly 1,600 senior executives on their innovation practices and the outcome was that 72% of these executives considered innovation as one of the three top strategic priorities. This study also showed that companies were planning to increase the financial means allocated to innovation, definitely proving that companies seek a new advantage by innovating. 84% of senior executives were saying that innovation is extremely or very important to their companies’ growth strategy.
Even though budgets and priorities are set, many large companies fail to be innovative for various reasons such as the prioritisation of large markets, getting stuck in market preferences which is source of incremental innovations, or internal conflicts and legitimacy-problems slowing down or killing the concretisation of innovations (Sandström, 2015).
How is this Creativity Era bringing Stockholm to the forefront of the world map?
Born global and digital, startups have their word to say, and this applies in most market spaces. Thinking digital and getting the best out of it from the very start, being more creative and braver than average companies, putting more efforts in design, social and user experience are some of the factors that I believe are positioning themselves in the right way to succeed in this new era.
Just in Stockholm, we have a great examples number of success stories such as iZettle, tobii, Klarna, Spotify… and many more to come with Lifesum, Shortcut Labs, Instabridge, etc. The startup scene is extremely prolific in Stockholm, especially considering its size. According to a survey by Atomico, Stockholm is the 2nd most prolific tech hub globally on a per-capita basis and has been the starting point of already 7 unicorns, giving to the capital of Sweden the well-deserved title of “Unicorn Factory” in a FT article (March 2015). Swedish companies are naturally pushed to go global.
To read the full SUP46 annual report, http://sup46.com/infographic/
Startups are an additional source of competition, being fast-moving and truly innovative players. So why not learning from them? Of course, not everything startups do should and can be replicated, but in my next article, I will present a shortlist of key takeaways SMEs and large firms can use or simply get inspiration from.
Neither startups nor established corporations always know why they are successful, which makes it harder to repeat this success. Therefore, making sure that the required innovation capabilities are in place and aligned with the corporate strategy, is a proven smart way to x-ray your capacity of success and guidance for the future. This is a dynamic process and at Innovation 360 Group, we constantly collect data from all over the globe and build dynamical state of the art insights shared for free with InnoSurvey™ and as an integrated part of our consulting assignments. Thanks to all wonderful respondents we have all over the global, not to mention all cool start-ups young our free tool for innovation.