When is the best time to invest in Innovation?
In today’s fast-paced world, the advantages of companies over each other do not last very long and are usually short-lived.
No company can enjoy the benefits of being the first for more than a few months to one or two years. Competitors quickly catch up.
Nokia and Blackberry are among the most interesting examples. They were the first and most innovative companies in the production and supply of mobile phones, and they became incumbents and dominants in the mobile market. But their huge market were hit hard by Apple and Samsung. This shows that success in innovation is not a one time act but an inexhaustible process of continuous actions and efforts that could produces a sustainable competitive advantage.
Innovation life cycle
The famous S-curve, which is widely used in technology, can also be used for explaining innovation life cycle.
So, What is the best time to invest in innovation?
The beginning of this curve shows the early stages of the formation of a new innovation, which is usually slow, requires a lot of resources, and many mistakes and failures occur in the process. Many innovative ideas, inventions, patents and business models can not survive this stage and are discarded. Some of them can be implemented with a lot of money, time and energy, but they will be short-lived and will not meet expectations. Some other innovations i.e. cosmetic products, can last a long time and generate acceptable economic returnss, .
In the first stage of the S-shaped innovation curve, the rate of financial return gradually begins to accelerate and accelerate rapidly until it reaches the center point of curvature. Usually from this point on, it is a good opportunity to start the financial exploitation of a new innovation. After passing the turning point of the curve, the rate of financial return decreases and the end of the curve may even bend down. We will not benefit much from innovation at this point. So either you have to stop or you have to start a new curve (new innovation) before it reaches its peak.
The best time to invest in innovation
Efficient companies are those that are flexible, agile and resourceful. These are the ones who have the potential to create new and dynamic capacities to keep up with the pace of market change by using continuous and radical innovation.
These companies are trying to spontaneously take advantage of the continuous innovation curve. In addition, they try to use new technologies or converge and combine existing technologies to start new curves before the current curve reaches its peak.
Companies that do not want to risk their survival must constantly surf on top of the innovation S-curve.
