Innovations: evaluate, strategize and invest

Abstract

Evolutionary stages of industrial product maturity follow a predictable pattern that usually spans many decades. Beginning with the emergence of a craft, an industry then standardizes parts and, in parallel, standardizes the process of production. As these stages unfold they lead to shifts in various advantages, existing firms in market place enjoys. For e.g. as software development industry matured, it moved from craft to standard form of development. These changes lead to emergence of IT Outsourcing and Offshoring industry. Indian IT industry utilized the benefit of it and made software development a science and created a huge industry. They made several innovations in the process of service delivery in order to sustain itself and grow at such a rapid pace. Japanese Industry did this in automotive industry. Such opportunities in business are always brought about by a new innovation (a trend that becomes mainstream). Firms take advantage of the changed context that an innovation brings about and thus various business models (models of engagement) starts emerging in the industry. Technology industry is changing at rapid pace. Innovations are happening every few years. And adoption of a particular innovation sometimes becomes a key to survival in the IT industry. Early adopters of a successful new innovation almost always make abnormal profits. However, these innovations (some promising some not) keep happening and do generate lot of signals to the market players. How does one identify which signal is worth pursuing and should be invested upon. We try to delve upon this problem as part this study. One needs to develop sound understanding of past signals to understand the validity of current emerging signals. We try and develop a framework based on analysis of past signals like emergence of PC, Client Server Technology, Internet etc. which could be applied over current emerging signals to understand whether they will be able to cross the chasm or will get diffused in market place.