Identifying innovation opportunities emerging from technology and business trends

Abstract

Businesses are continuously looking for opportunities to innovate. There is a gap in the literature regarding innovation models and approaches that are systematic, practical and easy to apply. This thesis addresses this issue through investigation of the potential for identifying innovation opportunities emerging from technology and business trends and of how to evaluate ideas. Technology trends depict the evolving direction of technology; can they be used to innovate products? Inspired by ideation literature, a novel model is presented which combines technology trends with product breakdown to generate product innovation ideas. The empirical evidence suggests that the model can generate quality ideas. Further investigation of technology trends indicated that the largest trend of the near future will be autonomation, which suggests that many products and services will be delivered in a totally autonomous way. Operations that can be standardized have a high likelihood of being autonomated in the near future. This is because sensor advancement has made it possible to install low-cost sensors on machines; these act as senses for the machine, and then the sensor data can be processed in digital algorithms to carry out fine-tuned decision-making for the machine. This enables a paradigm shift in how machines and applications are operated. The megatrend of electrification has dominated the past century, during which the leading inspiration for innovators was how to electrify industry, households, automobiles, etc. The inspiration for future innovation could likewise be how to autonomate the same. Anecdotal evidence supports this claim. A model and case study are presented in this regard. In a similar way to technology trends, business trends are also agents of change, revealing how businesses are evolving. The largest trend observed is servitization. Companies are gradually shifting away from the traditional model of selling just products towards selling the functionality of the products as services. The shelf life of many products has been significantly reduced, and there is stiff competition in the market. Services, on the other hand, are more sustainable. Servitization is here defined as reducing tangibility in the product. A utility-driven approach is developed, in which the products are broken down into the utility features that encourage the customer to purchase the product and barriers that prohibit the customer from purchasing the product. The model presented in the study presents options to gradually enhance utility and reduce both barriers and the overall tangibility of the product. That can assist users in transforming their products into services. Another way to servitize is to add services to a product in the form of product-service-system. Financing/ownership value added services are explored, and the changes they bring to the business model are studied. These services do not require changes to the product or technological development and can add service benefits to the product. A systematic framework is presented, in which the options can be individually evaluated, and suitable value-added service options can be selected. Another important business trend observed is outsourcing. Start-ups and high growth companies have limited resources, and they do not have the flexibility to carry out all business activities internally. Companies tend to outsource business activities, to survive with limited resources. However, sometimes outsourcing the core activities of the business can invite competition. In this thesis, a decision tree for evaluating business activities for outsourcing purposes is presented. The decision tree assists users in evaluating those activities that can be outsourced with minimal side effects for the business. Traditionally, ideas are screened based on subjective judgement after a brainstorming session. In this thesis, a systematic high-level idea screening tool is presented, which is useful for screening ideas in a short period of time. Six key parameters, which are producibility, problem size, market size, novelty, profit margin and business alignment, are pillars of the idea screening tool, compiled by assorting the idea screening literature. The tool is useful for screening the ideas generated in the aforementioned models. Together, the appended papers contribute to filling the gap in the innovation literature regarding practical guidelines to innovate businesses.