Driving the Innovation Economy
Though the debate about the United States and its competitive edge continues, it’s now time to turn that talk into action. Driving an innovation economy depends on a number of factors, including education, R&D, green investment and tax incentives, which can empower businesses to deliver innovative, eco-friendly products consistently and profitably. Companies also have to harness the talent and creativity of their most important asset: their people.
Based on conversations with business leaders and customers around the world, I’ve put together five priorities for making our future sustainable.
1. Stay the innovation course. It is much easier to justify investments in innovation during boom times than when the going gets tough. However, savvy executives know that funding innovation in a faltering economy allows them to remain competitive during difficult times and pushes them significantly ahead when the economy improves.
According to a Forrester report, 93 percent of senior business executives surveyed cited innovation as a top strategic priority. To stay ahead of constant change, CEOs are clamoring for continuous, not ad hoc, innovation.
An Aberdeen Group study found best-in-class companies are 36 percent more likely to implement a predictable, repeatable innovation process than are average companies.
One of our nation’s top challenges is building the innovation momentum so that “just average” evolves into “just the best.” The goals of driving profitable growth and reducing costs are often the impetus behind innovation. Companies need to be aggressive about innovation throughout the economic cycle and have confidence that every product they re-engineer or bring to the market will be done right the first time. With the right technology, companies have made innovation a repeatable, sustainable process.
2. Continue on the path of green innovation. If innovation is the heart of product development and corporate growth, then sustainability is the aorta. The green movement has evolved from marketing hype to business reality. Companies are looking to “operationalize” green initiatives across the enterprise, creating and redesigning sustainable products that foster the planet’s welfare and drive revenue.
In reality, only a handful of organizations have been successful in making green approaches operational. Going green needs to be a business imperative with an impact on the bottom line.
For example, Atlanta-based Interface, a $1.1 billion global manufacturer of commercial carpets, doubled its core business through sustainable innovation and increased NASDAQ valuation of the company by five times. Now that’s green!
3. Embrace alternative fuels. U.S.-based companies have filed more than a thousand alternative energy-related patents in the last five years, significantly exceeding their global counterparts. Now it’s time to translate those patented ideas into commercial products. America needs to ensure that all energy solutions are on the table, not just oil. We need to extend the existing tax credits for alternate energy, extend insurance for biofuel feedstocks, clear hurdles for wind farms and pay more attention to solar energy.
4. Provide incentives to innovate. It’s time for Congress to make the tax credit for innovation permanent. It’s an incentive for companies to keep intellectual and creative capital and jobs here in the United States. Investing in R&D funding should be expanded, and companies should re-examine their outsourcing strategies to be sure their choices continue to make sense from both a financial and an intellectual capital perspective.
5. View three as company, not a crowd. According to Forrester Research, a successful continuous innovation agenda “hinges on the empowerment and effective engagement of employees, customers, partners and other societal stakeholders.”
Let’s leverage the brightest minds in academia, the business acumen and global competency of the corporate world, the funding and political will of government, and the input of other influencers to deliver more cutting-edge products and sustain innovation.
Universities are the breeding ground for the innovation economy. For example, Shell is collaborating with universities and Invention Machine to create algae-based biofuel. We need more companies following Shell’s lead, using the right technology and people to deliver cutting-edge, eco-friendly products. In fact, our government should provide additional incentives and grants to foster these relationships, as the governments in Europe do.
As I travel to customer sites, I keep hearing the same message: America needs to keep moving forward, and sustainable innovation is the key. A number of discrete efforts designed to promote an innovation economy are in the works. Let’s build on that momentum and focus on a holistic, consistent and repeatable process for building an innovation economy in America.
Mark E. Atkins is the CEO and chairman of Invention Machine, which drives sustainable innovation across global organizations.