Friday, April 22, 2005

IndustryWeek : Pipeline = Lifeline IndustryWeek's John Teresko writes an interesting piece commenting on research that predicts that 70% of today's manufactured goods will be obsolete in six years. In addition, companies with strong enabling R&D strategies (read: those that still conduct significant R&D in-house rather than rely on outside sources to sell them innovative products) are 73% more profitable.

Compare those results then with a Deloitte study of 650 companies in North America and Europe that revealed that while manufacturers cite launching new products and services as the No. 1 driver of revenue growth, they also view supporting product innovation as one of the least important priorities.


Teresko does also look at the trend toward "outsourcing" of innovation to developing and re-developing countries such as India and China - but in a twist that he neglects to notice - the companies he talks about are not conducting this outsourcing in the classic way being popularized in the media at the moment. They are not, in other words, relying on outside companies in those coutries to provide them with innovative products - but rather building R&D centers in those countries to take advantage of the unique human resource quality of the country's population (namely high education, low wages) without giving up the control over the IP and maintaining the competitive advantage of in-house R&D.

The advantages of capturing the brainpower from geographically and culturally dispersed intelligent people is not new though - Idea Management and Knowledge Management as disciplines have both looked into the role and value of diversity in the knowledge pool.

This is quite a heavy article that covers a wide range of topics and is certainly a great read!

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