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03The Jerusalem Post|Innovation Industry & Science|02/2010

T|By Avner Barnea*

Innovation Scouting:The Way Forward

en years ago a Japanese electronicscompany made a strategic decisionto leave the business -- because the

TV set industry turned out to show rapidlydeclining prots -- and to move into thedevelopment o the next generation. Atera ew years, the company became a worldleader with its LCD TV sets, and its revenuesrose sky high.Fast changes in the modern era have orcedrms to get ahead o competitors and identiyinnovations early, otherwise they wouldnot survive.

A ew years ago, an intriguing study waspublished which revealed that one third othe world's leading companies, according tothe Fortune 500 list, disappeared rom themarketplace between 1970 and 1983. Thisevidence supports the assumption that withoutinnovation, companies cannot exist.

Innovation The key tosurvivalUntil recent years, companies did not allowemployees to promote innovative ideas, andthe ocus was on perorming daily tasks.Management was characterized by controlled

processes striving to minimize the numbero ailures. One result was that the spirito entrepreneurial thinking could not bedeveloped.Tom Peters, a leading thinker in the eldo management, said, "Get innovative ordie, reerring to the act that the existingmanagements lead companies to continueon the same path at the expense o orgingnew directions.

Innovation ScoutingInnovation scouting is a systematic search orinnovation in any eld, bringing its ndings

to the attention o the decision-makers todetermine whether and how to proceed withthe idea to make it a product.Historically, innovation scouting cantrace its roots to the isolated inventorswho had a tremendous urge to discoverand put innovations on the map o worldknowledge.Innovation scouting encourages employeesto look or innovation and ideas that wouldgive them a competitive advantage. It is nocoincidence that rom its early days, Googlehas encouraged its employees to spend someo their time developing new ideas.Recently, more and more decision-makershave been conronted by two types ouncertainties -- whether to continue theinnovative direction or to enter a new line

o business due to the innovation.In recent years, energy has taken anoutstanding innovative direction, includingrenewable energies. An exciting example oinnovation in energy use is the world's largestcement producer, which was looking oran innovative concrete ormula in order tosubstantially reduce carbon dioxide emissionsthrough the use o substitutes derived romthe sugar industry and rice by-products.

An Update on InnovationScoutingSuccessul innovation scouting is acombination o several actors: internalactors within the rm itsel, together

with external partners including researchinstitutions, mainly in academia.I in the past the Americans were leadingthe innovation eld worldwide, in recentyears the Japanese have been winning thisrace as indicated by the registration o morenew patentsOne o the most signicant advances in theautomotive industry in the past 50 years wasthe development o the hybrid engine. Thistechnological breakthrough was denitelya creation o innovation through systematicactivity o the Japanese manuacturersinnovation scouting teams. This innovation

gave the company a technological advantageover the competition or almost 10 years.Pharmaceuticals is one o the leadingindustries o innovation. This industry isconducting systematic monitoring in medicalinnovation that can produce signicantcompetitive advantage by early identicationo new drugs.Breakthroughs in innovations oten comeat the expense o existing products. Pro.Clayton Christensen in his book TheInnovator's Dilemma calls themdisruptive technologies i.e.,new technologies that otenrender the existing technologiesirrelevant.Facing diculties in absorbinginnovations was also truein renewable energies. Alvin

and Heidi Tofer noted in their bookRevolutionary Wealth that The mainquestion is thus whether we will overcomethe impending energy crisis. It is dependentlargely on the results o the confict betweenthe prots rom the existing energies andindustry researchers who strive or alternative

breakthroughs.

Characterizing InnovationScoutingA global benchmark study published inDecember 2009 by Nerac, a US researchrm, characterizes the status o innovationscouting. It indicates that to obtaininormation rom external sources, mostcompanies (76%) made use o competitiveintelligence tools by a massive gathering oinormation rom the Internet, participationin conerences, leveraging relationships inacademic research and the use o networkso personal relationships. Some 70% ocompanies stated that their main objectivewas "early detection o new technologies."

Serving the LocalRenewable Energy IndustryIn Israel, promoting research in renewableenergies must be addressed by the largercorporations already in these areas workingin close partnership with governmentministries that will establish researchoundations, legislate relevant laws andissue a master plan or this purpose wheninnovation scouting is one o the tools tomonitor new ideas

ConclusionIt appears that more and more companies aremoving towards proactive and systematicactivities to obtain early inormation about

innovations. Although in most companiesinnovation scouting has not yet reacheda high standard o quality, it merits closeattention, especially in competitive eldswhere capturing innovation can create asignicant edge.

*The writer is a competitive intelligencestrategic consultant and lecturer oncompetitive intelligence in the MBA programat Ono Academic College.

avnerpro@netvision.net.il