Most People Would Agree that innovation is one of the keys to success in engineering and business. And, to maintain a competitive edge, a company's innovation derived from research and development (R&D) must be a consistent effort. Over the last two decades when business thrived, too many companies de-emphasized R&D, which allowed their competition to gain on them.
Innovation from competing companies led to “creative destruction,” a term used by the Austrian economist Joseph Schumpeter. This term describes the process of transformation that accompanies radical innovation. In Schumpeter's view, innovative entry by entrepreneurs was the force that sustained long-term economic growth, even as it destroyed the value of established companies.
Examples of creative destruction include Xerox and Polaroid, which saw their dominance vanish as rivals launched improved designs or cut manufacturing costs. Other examples are the cassette tape that replaced the 8-track, only to be replaced by the compact disc, which itself is being threatened by MP3 players.
Unfortunately, creative destruction can also hurt. Layoffs of workers with obsolete working skills can result from new innovations. However, an innovating economy can also generate new opportunities for workers to participate in more creative and productive enterprises. Creative destruction can cause severe hardship in the short term and adversely affect those who cannot acquire the needed skills.
Several types of possible innovation-generating creative destruction ideas for the power electronics industry include:
- New circuit topologies
- New energy sources
- New lighting sources
- New semiconductors
- New system configurations
- New power electronics applications
- New thermal management methods
- New transportation methods.
Just identifying what you believe is an innovative product is not enough. You may think you have a great innovation, but how can you really tell? In his book “The Silver Lining: An Innovation Playbook for Uncertain Times,” Scott D. Anthony says, “It's natural to want to have a simple way to compare multiple projects quickly. But taking an overly simplistic approach can sometimes be wrong. Instead of focusing on a single metric, companies should consider the answers to the following five questions.”
Anthony proposes that a company consider the following questions about an innovative project:
What is its upside potential, and how long will it take to be profitable?
How much risk is involved in developing the commercial product?
What resources are required to finish the product? A project with high risk and huge potential might be worth pursuing, if you can learn about a critical unknown cheaply and quickly.
How well does the idea fit important qualitative criteria?
How much can the idea contribute to the company's overall portfolio balance? Anthony notes that for innovation efforts, that might mean an approach to reach a new customer segment, using a new business model, or relying on different technologies.
According to Anthony, “These kinds of questions can help companies identify when it's time to pull the plug on a project. When you can't shake residual risk, when tests grow increasingly expensive and learning increasingly scarce, and when it's getting harder to see the upside potential, it might be time to move on to another project. Making these decisions quickly can help companies maximize the return on their investments in innovation.”
The number of innovators in the United States will certainly change in the next few years. Between 1990 and 2007, immigrants in the U.S. labor force increased from 9.3% to 15.7%. Many if these immigrants were responsible for innovating new products. Now, many of these immigrants have started returning to their home countries, who will gain innovators at the expense of the United States.