How technological innovations are quashed by big businesses

 

Firstly I am going to define what I class as a technological innovation.  To me a technological innovation is something that is clever, unique, is fit for it’s intended purpose and has a market.

 

Technological innovations can be created both within a company or outside of a company, or even within a start up business or university.  When these innovations come about and are developed to a point where they can be marketed and sold a lot of the innovations don't get off of the ground.  However most people believe that this is due to a lack of funding and finance.  This is where most people are wrong.  The funding is out there if you look hard enough for it and you can persuade the investors that there is a market that needs the product. 

 

Think about how many times you have come up with an innovative idea related to technology, be it a product or a program.  How many times has your company turned round to you and said, great idea, developed it and then shelved it?  Usually there is a reason behind this, and more often than not it is to do with it affecting their profits.  They see it as a negative, whereas they should take note of their innovators as these are the people that breathe life and soul into products.  There are thousands of companies that keep an eye out on innovative developments relating to their market and they are ready to pounce on the owner and buy the idea off of them.  Why is this?  Well it is cheaper to stop these products from ever reaching a customer than it is to compete against it.  Some shelved products include the ever lasting light bulb and the self recharging battery…. It is up to the innovators not to give into these bullying tactics. 

 

Entire small businesses and start-up companies are quashed in this way by bigger businesses who just want to ensure that they are at the top… which is the name of their game… and it is a shame in a way, that some of these inventions will never ever get into the market place.  They will probably be forgotten forever.  Something to look out for though is the dates on the patents covering these inventions….  The big companies can only hold the rights for so long before they need renewing and usually because they are so big they don't remember to keep up with their renewals and sometimes it can leave a market open to attack!!! Get them whilst they are off guard! 

posted @ Wednesday, July 13, 2005 6:04 AM

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# re: How technological innovations are quashed by big businesses

Left by rishi at 7/13/2005 3:43 PM
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This reminds me of something I read in a book from the Harvard business Press where the strategy went something like this. You don't innovate - you basically make the cheapst possible product that is clunky and feels like crap. Then you go after the cheap customers (a.k.a. small business that cannot afford to pay huge sums of money for the products but want the functionality) As customers start flocking to you, you start mmaking better quality product. You start inching up the market. The innovative product now starts losing market share. To maximize their return, the innovative company starts to add more and more features and charge more for the product. They start losing more ad more market share. Then you - little company - with huge market share at profits of penny to the dollar become rich. I can think of at least two industries where this is true - consumer products and steel. Funnily, enough, it has worked the other way around in the software industry - think Microsoft and the DOS when compared to Unix :)

# re: How technological innovations are quashed by big businesses

Left by peterg at 7/14/2005 3:00 PM
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I'd agree with Rishi (must save that comment for later actually) and I believe that a lot of innovative products are often quashed by business expectations, <i>but</i> it often depends on the business culture in force at the time.

If a company is used to a series of "quick wins", then anything that takes longer than the allotted time to develop is unlikely to get taken up. The problem is that if a new product is truly innovative it may often take longer than a financial year to develop and may not demonstrate a ROI straight away. I have worked for companies in which a product took a couple of years to develop but then provided an immediate ROI and is still providing a steady revenue stream a decade later. In the current economic climate, and with many companies run by bean counters, how many projects that require extended development never see the light of day ?

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