Customers #1 Source of Innovation, Global Innovation Study Finds

A new innovation report by Grant Thornton International (GT), a consulting and advisory firm, examined the thoughts and attitudes of business executives globally towards innovation. The report is based on a survey conducted by the renowned Economist Intelligence Unit (EIU).

Students, beware: As usual with these kind of reports, it should not be considered as a rigid academic research but more than a snapshot of company perceptions.of its authors. Still, the reports are good starting point for further study. Also, their purpose often is to drive the consulting business

In the GT 2009 report, the role of customers, along with the attitude of companies to their customers, emerges as a defining characteristic. "No longer simply passive recipients of goods and services, customers now help to shape the future of their own consumption." They are now the leading source of innovations globally (41 per cent), more important than anything inside companies, including research and development.

Firms in Asia Pacific are particularly attuned to what their customers want with almost half (48 per cent) of the best innovative ideas coming from customers against 40 per cent in Western Europe and 35 per cent in North America. Globally, heads of business units followed as the best origins of ideas followed by general employees and the inhouse R&D team (both 33 per cent). So the customer is king, then comes the boss, then the R&D team.

The report also asked about the notion of open innovation, broadly defined in the survey as "leveraging both internal and external ideas and information". The answers show an interesting picture: 33 per cent of the companies say they have applied open innovation and will continue to do so, as they regard open innovation as a key for future growth. This figure is lowest in North America (30 per cent) and highest in Western Europe (35 per cent). This seems interesting, but confirms my earlier notion that companies in Europe are better networked and organized in associations and university networks for innovation. But at the same time, a lot of companies also have major concerns against open innovation.

The report's authors draw four main conclusions:

• Pay more attention to what your customers say and their ideas for innovations
• Consider expanding your open innovation projects and working with more third parties
• Look outwards, explore new markets, rather than drawing back into your domestic market
• Capitalise on the great shifts of the age, the move away from carbon-based energy and the emergence of China and India as major trading nations with huge consumer markets.

GT offers the reports for free download here.

I got notice about the GT report by reading a blog posting at Promise, a UK innovation market research and co-creation company. Promise, together with the LSE, also recently published a good report on the status of co-creation and the role of customers in the innovation process.

Comments

[Robert Dempsey]

Thanks for the link to the report Frank.

I wonder if the reason that customers are a great source of innovation is due to their outside perspective on the products and services they purchase? Who is more in tune with the customers' needs than the customer? The job of a company is translating those needs into sellable products and services.