Make your Mark in the Innovation Economy

Historically, organizations were successful if they controlled more physical resources than their competitors could. They wanted financial control, distribution, and factories. “More Widgets! Buy them!” they bellowed at potential customers, as they tried to prove they were more efficient than everyone else making products and services in an ultimate race to the commoditization of everything.

This behavior is the sign of a company entrenched in Industrial Age economics. But this has gently been replaced in the years since the Second World War with Knowledge economics which are quite different. In Knowledge Economics, long term value is driven by intellectual, rather than physical assets. Things such as brands, patents, and know-how. This has been a successful formula for a new generation of companies who derive all their value from what they know how to do: Google and Microsoft are two good examples.

In the present, though, organizations are recognizing a new battleground: creating uniqueness in response to uniqueness, and being better at it than everyone else. The reason for this change is the emergence of a new economic imperative: the Innovation Economy. An innovation economy is not built on know-how, but the ability to make use of it in value-creating ways.

For many organizations, however, day to day reality is still the transition from Industrial to Knowledge economics. This is a challenge, because the recent global economic crisis has proved that control of assets in both categories does not necessarily result in decent market performance.

The changes which are happening are occurring because of the democratization of everything. Consumers can now not only consume, they can also produce, and the result is everything has sped up.

Performing organizations are now taking advantage of this be creating processes to let them innovate rapidly and consistently. The are building Innovation Centres which make these processes part of business as usual, and the most successful are beginning to see spectacular returns on their investments in this area.