Facing up to real change

Even businesses that bring improved designs to market quickly can go bust, if they do not embrace radical new concepts when necessary – or even move into a different line of business. This was the main message to come out of the recent “Create, design, innovate” seminar organised by the Centre for Technology Management, part of the University of Cambridge Institute for Manufacturing. Professor John Bessant, who holds the Chair in Innovation Management at Imperial College, argued that a business needs two kinds of creative innovation: one to engage the market with new products when it is in ‘steady state’; and one that can cope with a ‘discontinuous’ market – meaning that it has either changed or is about to change radically. One type of radical change is the emergence of a new technology, such as the invention of refrigerators that destroyed the US New England ice trade. Then there is the emergence of a totally new market such as text messaging. Politics may also intervene in the form of regulations, sanctions, or trade liberalisation. New business models such as low cost airlines and Internet services also bring about radical changes. While standard advice to innovators is only to design products for the known market, he asked: “How do you do market research on a market that does not exist yet?” He argued that “a new market emerges” if you get the product right. While everyone can see such opportunities in hindsight, anticipating and taking advantage of them is a completely different matter, which he described as “working in the fog”. One company that embraced a radical approach – by switching markets – was Viridian Concepts. The company’s Stuart Elmes says that the company has sold one very successful business – making a benchtop robot for what he described as “moving about bits of biology” – and started another one, making low cost, solar hot water heating units. These are designed to take advantage of the new Part ‘L’ building regulations, which require homes to achieve certain degrees of energy efficiency. Apart from customers who want to be seen to be ‘green’, there is a need, if homeowners want, for example, large windows that would put them outside the requirements, to have something else, such as a solar hot water heater, in order to comply. Another massive driver of change is the shift in economic balance. Sir George Cox, chairman of the Design Council, told delegates: “The changing balance in the economic balance in the world is generating massive growth, massive opportunities and massive threats. His solutions to the challenge of change are set out in The Cox Review of Creativity in Business, which was published a year ago. The review came out with five main recommendations: to increase awareness and understanding of design, and make the Design Council’s Design for Business programme widely available to SMEs; to improve the effectiveness of government support and incentive schemes, particularly R&D tax credits; to broaden the understanding and skills of undergraduates, who will be tomorrow’s business leaders, creative specialists, engineers and technologists; to use “the massive power of public procurement” to encourage more imaginative solutions from suppliers; and to raise the profile of the UK’s creative capabilities by creating a network of centres of creativity and innovation. The full report can be found at www.hm-treasury.gov.uk/cox The review has been endorsed by the Chancellor, who has extended R&D tax credits to companies with up to 500 employees. Sir George also recounted the story of how a Chinese minister had once told James Dyson that he no longer wanted to see ‘Made in China’ stamped on products – but ‘Made and designed’ in China instead. “The idea that countries such as China should be content with low skill jobs is totally unrealistic,” he said.