recommendations - Boligejer · recommendations #13 October 3 2005. FORA ensures a fact-based platform conducive for effective business policy development. FORA enables decision makers

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The Ministry of Economic and Business Affairs’ Division for Research and Analysis

Jørgen Rosted

User-driven innovationResults and

recommendations

#13

October

2005

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Jørgen Rosted

User-driven innovation Results and recommendations

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ForewordTh e intense global competition poses a major challenge for many companies. For the majority of companies the ability to innovative will be the only way to survive and their only path to success in the global market.

Innovation-driven competition has led to an increased focus on innovation in relation to company business strategies and its possible implications for business policies.

In recent years, a new innovation term has materialised - user-centered inno-vation. Th e term surfaced in the late 1990s and was fi rst embraced by Profes-sor Von Hippel from MIT who defi ned the concept as “innovation created by the user to obtain a higher user value as opposed to commercial innovations taking place within companies.” Hence, the concept of user-centered innova-tion has literally been created by the user.

In Denmark, the term user-driven innovation was applied for the fi rst time in the 2003 FORA publication “A Benchmark study of innovation and in-novation policy – what can Denmark learn?” Th e report’s methodology and data was inspired by the traditional focus on natural science and technology. However, there was a general understanding that the innovation process in large portions of the Danish business community was not limited to tech-nology, but also focused on developing new products and concepts built on emerging consumer needs that could be matched by existing technologies.

With that in mind the terms price-, user,- and technology-driven innovation were introduced, and user-driven innovation was given a broader defi nition to cover signifi cant parts of business innovation processes. However, at the time no data was available to fully uncover the scope of user-driven innovation.

In light of this, the Danish Ministry of Economic and Business Aff airs ini-tiated an analysis project focusing on innovation processes and the possible impact of user-driven innovation on business policies.

It was decided to launch 3 industry reports covering the electronics industry, the fashion industry and the medical device industry.

Th e Danish Council for Trade and Industry has shown great interest in user-driven innovation and has fi nanced large portions of the analysis.

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Th e actual organisation of the project has been discussed with the relevant trade associations: ITEK, the trade association for IT, telecommunications, electronics and communication enterprises, the Danish trade association for textile and clothing, and the trade organisation for the medical device indu-stry in Denmark.

We would like to extend our gratitude to the Danish companies, organisati-ons and institutions that have participated in the surveys and in discussing innovation challenges:

Anders H. Povlsen, BestsellerArne S. Madsen, NovoBjørn Christ, GN ResoundCarsten Lønfeldt, ColoplastErik Stridbæk, KIRK telecomHenrik Wiboltt, GN ResoundJens Hvalkof, UnomedicalJens Ulrik Poulsen, NovoJesper Mathiesen, IC CompanysJohn Th esmer, ColoplastJørn Rex, NovoKim V. Hansen, FossKim Steengaard, NovoLiselotte Højgaard, RigshospitaletNiels Martinsen, IC CompanysPeter W. Christensen, KISS TechnologyPeter Hansen, IC CompanysPeter Ingwersen, Add MikkelsenPeter Kurstein, RadiometerPeter Petersen, B&OPeter Røpke, NokiaSander Jacobsen, Kopenhagen FurSøren Svendsen, WidexTorben Klausen, LindonTorben Nielsen, Kopenhagen FurTorben B. Sørensen, B&OAnders Smith, Anders Smith designDitte Nørgaard Andersen, Th e Medical Device IndustryHenrik Morgen, GTSJens Bloch, Danish Textile & ClothingJens Bollerup-Jensen, Danish Textile & Clothing

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John S. Pedersen, ITEK/DILeif Lytken, Th e Danish Rehab GroupNicolai Dupont-Mersing, Danish Textile & ClothingPoul Erik Jakobsen, Pej gruppenTom Togsverd, ITEK/DI

Anne Mette Zachariassen, TEKOBirgitte Granjean, BEC DesignLone Dalsgaard André, Kolding Design School

Anders Knutsen, Th e Danish Business Council

We would also like to extend our gratitude to the international companies, organisations and institutions that have committed a considerable amount of time and resources in assisting our research eff orts:

Alexandra C. Zafi roglu, IntelBarry W. Wilson, Medtronic IncCrawford Bryce, DebenhamsChris Woodward, Samsung Design EuropeChristian Kemp-Griffi n, La Chemise LacosteChristine Riley, IntelDagmar Geer, InnovaphoneDamian Mycroft, Philips DesignDeidre McCready, Giorgio ArmaniErich Kamperschroer, SiemensFrederic Partureau, Groupe EtamJeroen Raijmakers, Philips Design Medical SystemsJeana Hong, Brooks BrothersJoanna Bowring, Marks & SpencerKhadijah Lawrence, Gap Inc.Kirsten Dryden, Health Hero NetworkMatt Garwood, Samsung Design EuropeMichelle Chang, IntelMike Bell, Life ScanRichard Beckwith, IntelScott Mainwaring, IntelSue Chorley, Marks & Spencer

Barbara Trebitsch, Domus AcademyBill Evans, Bridge Design

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Catherine Champeyrol, Carling International David Kelly, IDEOJamie Ross, Th e Doneger GroupJennifer Gardner, PARCJoost Gode, Smart DesignMarc Esslinger, Frog designMichelle Valdovinos, Cultural Access GroupOrietta Pelizzari, Mattori SRLPaolo Ferrarini, Future Concept LabRami Habal, ProofpointRobert Hall, Point ForwardSteve Diller, CheskinTim Brown, IDEOYves Behar, Fuseproject

Barbara Blair Randall, Th e Fashion Center, NYGerald Scupp, Th e Fashion Center, NYGeorge Kembel, d.schoolGeorge Simonton, Fashion Institute of TechnologyFrancoise Bonnetin-Sackrider, Institute Francais de la ModeJane Rapley, Central Saint Martins College of Art & DesignOrietta Pelizzari, Nouva Accademia Belle ArtiPatti Loué-Milanese, ESMOD/ISEMSandy Miller, Stanford Biodesign Program Teresa Robinson, Stanford Biodesign ProgramTimothy R. Gunn, Parsons School of Design

An analyst team consisting of external consultants Casper Høgenhagen, Stine Hedegaard Jørgensen and Rasmus Bech authored the report on the fashion industry, External consultant Anne Marie Munk Riis authored the report on the medical device industry, and Casper Høgenhaven covered the electronics industry. Jacob Ramskov, Signe Hansen, Kasper Kirkegaard and Anders Jør-gensen from FORA have contributed with data analysis for all four reports.

Copenhagen, December 2005.

Jørgen Rosted.

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Part 1

1.1

1.2

1.3

Part 2

2.1

2.2

2.3

Part 3

3.1

3.2

3.3

Part 4

4.1

4.2

4.3

Part 5

5.1

5.2

5.3

5.4

5.5

5.6

Part 6

6.1

6.2

6.3

Main results 10

Innovation processes 28

The three sources of innovation 28

Various innovation processes 31

Critical questions in the innovation process 37

The innovation concept and the scope of innovation 40

The broad innovation concept 40

The level of innovation activity within the three sectors 41

Summary 44

Knowledge and skills for innovation 46

Access to knowledge and competences 46

Employee skills 47

Summary 49

The importance of user-driven innovation 52

Customer focus 52

Frequently used sources of innovation 53

Summary 55

Industry studies on user-driven innovation 56

Defi ning user-driven innovation 56

Customer focus 57

Employee skills 59

Business partners 61

User surveys 64

Summary 67

International case studies 70

Screening and selection of companies and institutions 70

The electronics industry 74

The medical device industry 75

Table of contents

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The fashion industry 76

In-house departments 77

External business partners 83

Network architects 88

Challenges and recommendations 90

Challenges 90

Recommendations 92

Testing the correlation between competences, innovation and company

characteristics 98

References 102

6.4

6.5

6.6

6.7

Part 7

7.1

7.2

Appendix A

Appendix B

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In the global knowledge economy, we have witnessed an increased competi-tion on innovation. It is a competition on new technology, however, it is also a competition that focuses on consumer understanding and on uncovering customer needs. Th is has resulted in an increased proliferation of user-driven innovation. Today, competition focuses on the understanding of emerging customer needs and the ability to utilise this knowledge in developing produ-cts and experiences that provide the customer with a value that no competitor can match.

Th e customer will of course always be the focal point when new products and concepts are developed. Th is is hardly new. Th e new element is the systema-tic and scientifi c approach in identifying customer needs. New methods and skills from social sciences are increasingly being applied in the mapping of customer experiences and non-recognised customer needs.

If a profound understanding of customer needs is the source and driver of the innovation process this is referred to as user-driven innovation. In many cases, even radically new concepts are developed using already established technologies or by using new combinations of well-known technologies. Even when new technology is applied in the process, the innovation will be termed user-driven if the source of the innovation is customer needs.

Hence, the customer is at the centre of user-driven innovation, and it is the expectation and the desire to fulfi l a customer need in an improved fashion that drives innovation. On the other hand, research remains the focal point of technology-driven innovation. Here, the reseacher’s desire to develop ground-breaking technologies that outperform existing technologies remains the key driver in the innovation process. Companies will of course expect the new technology to have a commercial potential, but it is only later that such a potential is realised.

Main results

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In the industrial age, technology-driven innovation was the key competitive force in the market. Th roughout the 20th century technological leadership became increasingly important, and educations, knowledge centres and tra-ditions were built to support technology-driven innovation. Most people will associate innovation with technological change.

However, technology-driven innovation may no longer post the highest retur-ns. Th e analysis documents that companies may create innovations through multiple channels, and illustrates that user-driven innovation potentially could have a signifi cant impact in a large number of Danish companies.

Technology-driven innovation and user-driven innovation often go hand-in-hand. Most companies need technical skills and skills pertaining to customer needs. However, there are diff erences in resource allocation; user-driven in-novation requires substantial resources for mapping, analysing and assessing customer needs, while technology-driven innovation often will require more resources for new technology development that competitors do not have fi rst-hand access to.

Technology-driven innovation led to the creation of new educations, know-ledge centres and traditions. So will user-driven innovation. However, compa-nies are forced to compete in a fi eld that is not currently covered by any formal education. Th e report shows that most Danish companies express dissatisfac-tion with the skills and competences of their newly-graduated employees.

Th e purpose of the study is to gain more insight into the area of user-driven innovation. Th e report applies the three industry reports – electronics, fashion and medical devices – as the starting point, as these industry sectors have dif-ferent innovation patterns and cover important parts of the Danish business world. Industry leaders from the three sectors have been interviewed, and a representative share of companies from each of the three industries has com-

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pleted a comprehensive questionnaire on innovation. FORA has consulted the participating Danish companies in selecting a number of international best-practice companies that could serve as points of reference in determining the proliferation of user-driven innovation.

Where innovation takes place – and where it pays offIn practical terms, innovation may take place in any part of the company’s value chain – business model, production processes, product and logistics and marketing. In the survey, companies have reported the number of innovati-ons within each of the four areas. Th e economic impact of each individual innovation has been assessed on a scale from 1 to 5, where 5 = signifi cant economic impact.

Th e survey shows that although innovations take place throughout the entire value chain they are most often found in production processes and product attributes. Th e largest economic benefi ts from innovations are found in busi-ness models and branding/marketing.

As would be expected there are large sector diff erences, and the fashion in-dustry in particular has a signifi cantly diff erent innovation pattern compared to the electronics industry and the medical device industry. In the fashion industry, we see an identical number of innovations in branding and product attributes, and innovation in branding yields the largest economic returns (Figure 1).

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Companies in the electronics and the medical device industries have a more traditional innovation pattern. Most of their innovations occur in production processes and product attributes, where the economic returns are substantial. However, innovations in the medical device industry’s sales system and the electronic industry’s business models yield equally high returns (Figure 2 and Figure 3).

3,00

3,25

3,50

3,75

4,00

Brandin

g/Mark

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Sales s

ystem

Delive

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Economic return

Average number of innovationsN

umber of innovationsE

cono

mic

retu

rns,

inde

x

Figure 1

Number of innovations in

the fashion industry and

their economic impact

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Figure 3


the electronics industry

and their economic impact

Figure 2


the medical device indu-

stry and their economic

impact

Brandin

g(Mark

eting

Sales s

ystem

Delive

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Produc

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Economic returns

Average number of innovations

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When comparing the survey results to similar international surveys on pro-duct innovation, Danish companies appear to be quite innovative. Th e eco-nomic gains from innovations are signifi cant and higher as compared to the results from other international studies.

Knowledge, skills and co-operation on innovation It is vital that companies have access to knowledge and skills. Th erefore, companies have been asked – on a scale from 1 to 5 – if they have access to the knowledge and skills required to create innovations throughout the entire value chain from their employees or from external business partners.

If companies report a value below the mean value of 3 it is taken as an indi-cation that the companies do not have access to the knowledge and compe-tences required. Values between 3 and 4 indicate limited access to knowledge and competences with some room for improvement, while a value between 4 and 5 shows that companies have access to a satisfactory level of knowledge and competences.

Overall, the companies express some degree of satisfaction with the knowled-ge and skills of their employees and business partners. Th ere are no elements in the value chain where the companies lack the necessary skills and compe-tences. However, in only one area – access to knowledge and skills in product innovation – do the companies express a strong sense of satisfaction. Th e survey also shows that companies are most satisfi ed with the skills pertaining to technical and commercial areas including product attributes, processes and outsourcing (Figure 4).

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Th e companies have also assessed employee skills. In general, companies are content with their employees, in particular with their technical skills. It is noteworthy that the companies assess “softer” skills such as creativity and independence as being as important as “harder”, professional skills.

Companies have also been asked to assess the skills of newly-graduated emplo-yees. Here, we detect an interesting pattern. Th e technical skills of newly-gra-duated are perceived as being almost as good as the technical skills of the companies’ own employees and of employees that are recruited from compe-ting companies (Figure 5).

Figure 5

Employee technical skills

Note: The index is calculat-

ed on the basis of company

assessments of new and

existing employees’ techno-

logical skills

Figure 4

Companies’ access to

knowledge and skills

Note: Results have been

weighted in terms of industry

GDI (Gross domestic

income at factor cost. :

Fashion = 6, Medical device

= 36, Electronics = 58

2,5 3,0 3,5 4,0 4,5

New or changed business model

Network - outsourcing etc.

Core processes

Support processes

Product service

Product attributes

Delivery system

Sales system

Branding/Marketing

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Newly-recruited employees

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Medical device

Fashion

Electronics

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When it comes to the skills required to engage in innovation relating to custo-mers and suppliers, we see a completely diff erent picture. Across all three in-dustries, companies report that the newly-graduated employees do not possess the necessary skills (Figure 6).

It is hardly surprising that the skills of the existing employees are perceived as being superior to those of the newly-graduated. Some level of experience and on-the-job training is often necessary. However, when it comes to engaging in innovation with customers the diff erence is striking. It would appear that the educational system is not capable of supplying companies with the proper set of skills.

In general, the three industries off er similar assessments of the role of uni-versities and knowledge centres. Th e fashion industry is completely detached from universities and knowledge centres; only 8 percent of the companies in the fashion industry have used universities as a source of inspiration for innovation. In the electronics and medical device industries the share is mar-ginally higher as universities are used as sources of technological innovation. Th ere is virtually no co-operation between universities and companies in the area of user-driven innovation.

Th e lack of commitment from universities cannot be explained by a lack of outreach from Danish companies. In practical terms, Danish companies are

Figure 6

Employee customer skills

Note: The index is cal-

culated on the basis of

company assessments of

new and existing employees’

customer skills0 1 2 3 4 5



Employees

Medical device

Fashion

Electronics

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very active in locating external partners for their user-driven innovation ef-forts. In the electronics industry and the fashion industry app. 60 percent of the companies co-operate with external partners in identifying customer needs and customer experiences. In the medical device industry the share is 50 percent.

Sources of innovationTh e survey points to a strong customer focus among Danish companies, which is a prerequisite for user-driven innovation. Almost 90 percent of the companies in the medical device industry have “engaged in working with customer experiences, customer needs, market trends etc.” Th e share is 80 and 65 percent in the electronics industry and the fashion industry, respectively. We only detect a low customer focus among small fashion companies. Cor-respondingly the survey shows that customers are among the most important sources of innovation (90 percent). By comparison, one in four companies report universities as a source of innovation, and only one in seven report knowledge centres as a source of innovation. Th us, we fi nd that knowledge centers and universities are less used sources of innovation as compared to periodicals, among others (Figure 7).

0 25 50 75 100

Internal sources

Customers

Suppliers

Competitors

Other companies

Conferences/Exhibitions

Periodicals

Universities

Knowledge centers

Consulting companiesFigure 7

Company sources for in-

novation

Note: Results have been

weighted in terms of industry

GDI (Gross domestic

income at factor cost):



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User surveysTh e medical device industry often uses more costly ethnographic and scienti-fi c tools in identifying customer needs. A scientifi c approach is well suited for identifying non-recognised customer needs, which may very well lead to radical innovations. Other less costly methods for identifying customer needs include trendspotting, market reports, surveys, focus groups and face-to-face interviews.

In general, Danish companies rarely use sophisticated scientifi c and ethno-graphic analysis tools. Still, there is a strong focus on user-driven innovation, which can be accredited to a strong customer focus, an extensive use of user surveys and an adequate access to skills. International best-practiceTh e report highlights the approach of internationally renowned companies and clusters in working with innovation. Th e purpose of the exercise is not to compare Danish and international standards. It makes no sense to compare the ordinary or average Danish company with the international front-run-ners. Th e goal is to look for inspiration. What sophisticated companies do today, the average company will have to do tomorrow.

In the electronics industry, California is one of the world’s most domina-ting business clusters. California has more than 23 000 high-tech companies with over 700 000 employees. Th e California electronics industry work with knowledge centres in mapping user demands and the physical and cultural needs of the market. Innovation agencies and knowledge centres including IDEO, Cheskin, Look-Look, Cultural Access Group, Jump Associates and Beam Inc. work closely with the electronics industry in mapping customer needs using state-of-the-art scientifi c research. Some multinational compa-nies such as Sony, Canon and Ricoh have established dedicated research cen-tres in California.

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Despite an abundance of technological skills a company like Intel may benefi t from a cultural or ethnographic approach to product development. In 1996 Intel launched the People and Practices Lab to sharpen Intel’s understanding of people-technology.

Large European conglomerates in the electronics industry have also embraced the idea of mapping and decoding cultures and user preferences.

With 450 employees in the Netherlands and the United States, Philips De-sign is one of the world’s largest in-house design departments. Philips Design employees cover disciplines in design, psychology, anthropology, engineering and marketing. Th e Cultural Scanning division decodes future consumer trends and analyses their potential impact on markets where Philips is pre-sent.

In the medical device industry, the Bay Area holds a unique position. Th e Ca-lifornia medical device industry draws on the same types of knowledge cen-tres and innovation agencies found in the electronics industry. Th e electronics and medical device industries are characterised by a unique set of technical skills. When supplemented by a profound understanding of human factors, the combination of the two elements complements the image of the region’s competitive power.

In the fashion industry, New Work holds the largest concentration of fashion companies and knowledge centres. Th e Fashion District in Manhattan counts more than 40 000 employees, three design schools and 23 knowledge centres. While user-driven innovation was fi rst initiated in the US consumer industry it has now permeated into the fashion industry. Some fashion companies have in-house consumer insight departments with more than 50 employees.

All in all, we see a tradition for user-driven innovation among the world’s

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most sophisticated companies. While to some extent Danish companies have addressed user-driven innovation, companies may draw inspiration from best-practice around the world and so will policy makers when designing fra-mework conditions conducive to user-driven innovation.

Challenges and recommendationsIn conclusion, evidence from the world’s leading companies and competence clusters identifi es at least three areas where Denmark could strenghten user-driven innovation:

• Th e skills and competences of newly-graduated employees in identifying customer needs and preferences should be addressed.

• Th e survey shows limited co-operation between Danish companies and external knowledge centres in identifying customer needs, as compared to the quite extensive col-laboration in technology.

• Th e international part of the analysis shows that compa-nies that excel in user-driven innovation often are very large or belong to a highly competitive cluster with strong networks that provide access to sophisticated technical or customer-related knowledge.

To boost the skills necessary for carrying out user-driven innovation requires extensive investments in knowledge and competence building. Seven concrete recommendations have been deduced from the analysis that could signifi can-tly strengthen user-driven innovation in Denmark:

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1. Establishing an interdisciplinary education in user-driven innovation. It is recommended that an interdisciplinary education be established, uni-ting academic disciplines necessary to analyse and assess customer needs and customer experiences.

Academic disciplines include psychology, sociology, ethnography and anthro-pology; disciplines that all relate to people, communities and society. A com-mon deniminator for the disciplines could be human factors. Th e education may be designed as a superimposed course and could be off ered as a graduate or master degree. Th e programme should be tied to a faculty, whose academic record creates a platform for research and education in human factors and related tool subjects. 2. Research. It is recommended that a university research institute supported by signifi cant government funds that could spear-head research in the areas of human factors and consumer behaviour be established. High-quality research could also support a human resource master degree.

In the academic disciplines that constitute human factors, research constantly gains new insights. It must be expected that research in factors that motivate human behaviour may provide valuable insights. Often research is carried out in the cross section beween the various disciplines.

Th e research institute should be established in a university with a strong re-cord in human factor research.

3. Educational programmes in existing education. It is recommended that a short, yet comprehensive, educational programmes in the area of human factors be established. Innovation is more and more becoming a team-disci-pline, which necessitates the involvement of various professional skills and cultures. If user-driven innovation is to make a signifi cant impact it is vital

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that diff erent academic groups have a profound knowledge of human factor disciplines.

4. Life-long training. It is recommended that an extensive life-long learning programme in the area of human factors be established. Public co-fi nancing of new courses in human factors could be tied to the supply of such program-mes.

Th e organisation of life-long learning in human factors should be carried out in close cooperation with regional companies. Th e regional companies should also co-fi nance the strengthening of their employees’ skills.

5. Knowledge- and innovation centres. It is recommended that universities and other knowledge institutions in close cooperation with private companies establish knowledge and innovation centres, where interdisciplinary research teams can work with user-driven innovation and new technology in areas of interest to the Danish business community.

Basic research provides the core foundation for the research eff orts, but should be supplemented by applied research when fulfi lling the full potential of the basic research.

As new technology became a key competitive element, new institues emer-ged whose core purpose were to make proper use of baisc research in natural science. Th e Academy for Technical Science is one such institute.

Th e increased focus on customer understanding will be an important source of competitiveness in the future. Th is is supported by recent developments in leading business clusters around the world. Th e practical use of human factor knowledge will be a key competitive factor in the future.

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Th is may be approached in a variety of ways. Th e latest initatives coming out of Stanford are inspiring. Stanford University has set up 3 knowledge and innovation centres; Bio-X, Media-X and d.school. Th e centres are built on an interdisciplinary approach and aim to strengthen co-operation with the business community with regards to specifi c innovation projects. Bio-X focu-ses on biotechnology; however, the research eff orts are combined with other research areas. Media-X is primarily focused on media research, but will also involve other research areas. d.school is a design centre which aims to com-bine design knowledge with customer understanding.

Th e university provides access to the necessary facilities but leaves it to in-terdisciplinary teams to compete for research facilities. Th e university then selects the most promising research projects. Th e three centers place emphasis on co-operation with private companies on specifi c innovation projects.

Other US universities have applied a similar approach. CITRIS at Berkeley is currently planning a research- and innovation project with the Alexandra Institute at Aarhus University, which in time will involve the participation of Danish and US companies.

Th e creation of interdisciplinary knowledge and innovation centres should take into account unique Danish skills and the structure of the Danish busi-ness community.

We recommend that a number of knowledge- and innovation centres that combine research on human factors with natural science, technical and com-mercial disciplines be established. Th e centres could potentially cover areas such as foods, health, medicine and medical devices, electronics, IT, energy and environmental technologies, fashion and housing. It should be made a condition that research and knowledge building is interdisciplinary and that the centres cover concrete innovation projects with the participation of private

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companies. To secure a coupling a knowledge building and business demands, the establishment of knowledge and innovation centres requires co-fi nancing from the business community as well as from local authorities.

6. Networking. It is recommended that autonomous network organisations that may promote a networking culture within Danish business clusters be established. Th is will necessitate a public-private partnership, as public insti-tutions often assume important roles in knowledge networks.

Th e netowrks are incereasingly important to a company’s knowledge and competence building. Strong networks are thus important factors in econo-mies, where innovation has become the key competitive element.

Th e analysis confi rms that large companies and companies in strong business clusters have a proven track record in the area of user-driven innovation.

Th e analysis confi rms that the Danish networking culture is underdeveloped as compared to the world’s leading business clusters. While this is hardly surprising, it underlines the need for a stronger Danish networking culture. A stronger Danish cluster creation will increase the proliferation of user-driven innovation.

Th e report highlights specifi c examples of autonomous international network-ing organisations. Th is is in line with several business analyses which shows that the presence of autonomous networking organisations is a precondition for the creation of strong networks.

Companies and knowledge institutions with a commercial interest in net-work knowledge sharing are not capable of running the network. Th e risk of a confl ict of interest is too large. Th is also applies to traditional industry organisations, since they are supposed to manage their members’ interests. In

26

Denmark and abroad we fi nd examples of independent network organisations that have been established as public-private partnerships, but there appears to be a demand for additional networks.

7. Networking architects. It is recommended that courses in regional develop-ment and cluster creation be off ered.

It requires a specifi c set of skills to successfully run a network. Among other things networks require interpersonal skills, as well as more down-to-earth tools. Th e increased focus on networks and the emergence of networking or-ganisations underline the need for developing and communicating tools for network facilitators.

Th e seven recommendations presented above will strengthen the innovation eff orts of Danish companies. User-driven innovation is merely one element in the renewal process that companies will have to address across the entire value chain. However, when looking at the markets where Danish companies compete, user-driven innovation remains one of the key factors in increasing competitive powers. A dedicated eff ort may propel Denmark to become one of the world’s most advanced countries in the area of user-driven innovation.

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Th e biggest driving force in innovation is competition. Companies compete on delivering products or services unmatched by the competition and which cannot be replicated without considerable eff ort. A product or service may stand out in terms of the price, product shape and function or the attached value or experince that the product or service off ers.

Hence, innovation competition will cover the entire value chain; business model, production process, product delivery and marketing. Th e traditional perception of innovation as being merely technological or product-oriented is too narrow.

As innovation becomes a key competitive factor, it is vital to obtain an impro-ved insight into various innovation processes and the skills required to master these processes.

1.1 The three sources of innovationOne can distinguish between three sources of innovation depending on the company’s competitive landscape. Th is study distinguishes betweeen three sources of innovation:1

• Price competition • New research and technology • Non-recognised customer needs

Companies may of course draw inspiration from all three sources, and most companies need skills in all three areas.

Price-driven innovation implies that companies are constantly striving to market a product that customers perceive as aff ordable, or at least as being cheaper than the competitors’ products. Th e primary source of price-driven innovation is cost reductions allowing companies to market their product

Innovation processes Part 1

1) Jørgen Rosted (2003): ”Three types of innovation”. www.foranet.dk

29

at a competitive price, and companies compete in the areas of organisation, logistics, business ability and marketing.

Research-driven innovation implies that companies are striving to gain a technological lead over the competition, allowing them to produce at a lower cost or to deliver a product that distinguishes itself from the competition. Th e source of research-driven innovation is, of course, research, but also the ability to translate research into marketable products.

User-driven innovation implies that companies are constantly striving to de-liver a product that provides the consumer with a special value or experience unmatched by the competitors. Th e source of user-driven innovation is a pro-found understanding of customer needs, as well as the ability to translate customer knowledge into unique products and experiences that competitors cannot match.

As most companies compete on price, technology and customer needs, they should ideally master all three innovation processes. However, we fi nd some companies specialised in only one of three innovation processes.

Price competition is as old as the market economy itself. Price competition is refl ected in the educational programmes off ered by higher education, and research is still being carried out in the area of price competition. Hence, companies are able to recruit employees with a strong set of competences in this fi eld, and knowledge institutions and management consultants off er in-depth advice on price-driven competition.

Technology-driven competition also goes back a long time, but made its biggest impact in the industrial age. Th e 20th century witnessed remarka-ble technological progress that had a signifi cant impact on the competitive landscape. For more and more companies it became vital to master the new technologies. First-movers were able to profi t from lower costs or from being able to market a product that their competitors could not match.

Th e long-standing tradition for technology-driven innovation has led to building of an extensive set of competences across the technical and natu-ral science disciplines in higher education. A wealth of knowledge instituti-ons and consulting companies off er technical advice to companies. Even if the competences for conducting research-driven innovation are percevied as being adequate, it is important to bear in mind that technological progress moves at a rapid pace. Companies, regions and countries must continue to

30

invest in technology to keep pace.

Some would argue that also user-driven innovation is as old as the market economy itself. Th is is true as far as maintaining a general focus on your customers. However, this is merely a question of business ability rather than user-driven innovation.

In this study, user-driven innovation is characterised by the systematic and scientifi c mapping of customer needs, as well as company access to the skills necessary for translating this knowledge into innovation.

New knowledge on user needs may arise by chance, as many needs are only recognised when the possibility to meet the need is present.

However, knowledge on recognised and non-recognised user needs may also be collected through scientifi c and systemtaic surveys and tests. If this is the case, the innovation process may be regarded as user-driven.

Th e scientifi c and systematic approach is a relatively new phenomenon. Th e growing prosperity in the Western world has increased consumer demands for product value and product experiences, which in turn has led to a growing interest in user-driven innovation.

Th e study is built on the hypothesis that companies have limited access to the skills necessary for user-driven innovation, but that companies with ac-cess to those skills and companies that engage in a scientifi c and systematic approach to identifying consumer needs have a competitive edge over their competitors.

Th e study appears to confi rm the hypothesis. Some 200 companies have par-ticipated in the survey. Th ose companies that have the skills and the access to the knowledge necessary for user-driven innovation are also among the companies with the highest economic returns from innovation. Th ese are also the companies that compete in the high-price segment (Appendix A)

We have selected three sectors - fashion, medical device and electronics - in mapping company innovation processes. Th e three industry reports assess the companies’ access to the necessary skills among employees and business part-ners, and assess the methods applied in mapping customer needs. Th e main focus is on user-driven innovation. For comparison purposes the analysis also attempts to map the conditions for technology-driven innovation.

31

Th e three sectors have been chosen because of their diff erent approaches to innovation, and because they represent signifi cant portions of the Danish business world. Th e delimitation of the industry sectors is described in further detail in the three industry reports2.

Th e purpose of the analysis is to highlight the overall the impact of user-dri-ven innovation, the skills and competences required for driving user-driven innovation and the potential implications for business- and innovation poli-cies. To introduce a framework for interpreting the results, the following sec-tion introduces the method and procedure used when conducting user-driven innovation.

1.2 Various innovation processesUser-driven innovation is a relatively new phenomenon. Originally, user-driven innovation was tied to innovations carried out by the consumer to increase the utility value of a given product, as opposed to a company inno-vation, which solely serves a commercial purpose.3 Extreme sports products is an area where the user is actively involved in improving existing products, which often serves as direction for product enhancements. Computer games is another area, where the consumer assumes an active role in developing new products.

Th is study applies a broader defi nition of user-driven innovation. Th e com-mercial innovation is termed user-driven, even if the consumer is not an active participant in the innovation process. If the company maps costumers needs in a scientifi c and systematic fashion, and apply non-recognised user needs as a source of innovation, the innovation process may be termed as user-driven.

Many innovations apply existing technologies or new combinations of existing technologies. Th is requires that companies have access to sophisticated tech-nological skills. In case the company introduces new technology to meet a consumer need that the company has identifi ed through the systematic use of surveys, the innovation process can simultaneously be termed user-driven and technology-driven. If the company also spends signifi cant resources on production and distribution, the innovation process may simultaneously be termed price-, technology- and user-driven.

In this report, the innovation process is determined by the source of innova-tion and by the skills necessary for carrying out the innovation. Some innova-tion proceses use elements from two or three innovation types, while in some

2) FORA (2005): ”User-driven innovation in the Danish fashion industry - the 5th global cluster?”, FORA (2005): ”User-driven innovation in the electronics industry, FORA (2005): ”User-driven innovation in the Danish medical device industry.” The industry reports may be downloaded at www.foranet.dk (In Danish)

3) Hippel, Thomke and Sonncak (1999): ”Creating Breakthroughs at 3 M”, Harvard Business Review September/October 1999

32

cases the innovation process is characterised by one innovation type.

Some airline companies and retail chains compete entirely on price-driven innovation. Low-budget airline companies have introduced business models that have driven air fares down signifi cantly. In all likelihood, these innova-tion are not based on systematic user surveys or new technology.

Highly-specialised biotech development companies compete on research only. Research results are sold to other companies, who assume responsibility for the process. Some of these development companies may cope with the compe-tition by relying solely on skills related to research-driven innovation.

Some fashion companies compete solely on customer experiences. Th ese companies are often headed by a fashion icon who creates the fashion. Th ese companies will rarely need systematic or scientifi c user surveys, but it may also include companies that maintain a high price by constantly developing garments that cover changing needs and are branded the right way. Here, customer skills are needed.

However, it is rarely the case that a company may base its business on one type of innovation. Most companies will have to master all 3 innovation forms, and the source of innovation may come from price competition, new technology or emerging consumer needs.

To shed further light on user-driven and technology-driven innovation the following section breaks down the various innovation processes.

User-driven innovationTh e innovation process may focus exclusively on customer needs. Th e fi rst step in the process is to systematically map unsatisfi ed customer needs. Ideas are developed into possible solutions, and the production and market oppor-tunities are assessed. Th is forms the basis for drafting an innovation strategy, which is then implemented. Such an innovation process is referred to as user-driven innovation (Figure 1.2.1).

33

Customer observationsAll companies should of course maintain a strong customer focus, no matter if the end-user is the actual consumer or another company.

If the customer is another company, we often see a close dialogue between the two companies with regards to product and service development. However, we also see a growing number of subcontractors that are in direct contact with the end-user4

If the customer is the end-user there are a variety of tools available for deco-ding and analysing customer needs. In that respect, it is important to distin-guish between recognised and non-recognised customer needs.

Although resource-demanding recognised customer needs are often easy to decode. Th e most commonly used methods include surveys, interviews and focus groups. Th e uncovering of recognised customer needs may provide in-spiration for interesting innovations, but under normal circumstances the in-novation will cover the adjustment of existing products or services, as people often are not aware of future needs.

To decode a non-recognised user need is far more diffi cult and necessitates the application of sophisticated tools for mapping, analysing and understanding user needs. It will often involve the participation of specialists with a back-

4) Anne Marie Munk Riis and Casper Hoegenhaven, 2005.

Design solutions, new conceptsand develop prototypes

Assessmarketpotential

Designinnovation-strategy

Investigateproduction-capabilities andtechnological opportunities

Implementation

Customer observations

Figure 1.2.1

The user-driven innova-

tion process

34

ground in anthropology, ethnology, sociology or psychology.

Th e investigation of non-recognised user needs draws on similar methods used in mapping recognised consumer needs. However, observations on non-recognised user needs are combined with observations of the user’s actions and behaviour. Often users’ perceptions of needs will confl ict with their ac-tual behaviour.5

To assess the often confl icting information on recognised user needs and ac-tual consumer observations necessitates the inclusion of information on social conditions, cultural trends, life style trends etc. Th is process will result in a number of theses on non-recognised customer needs, and the theses are then tested as prototypes.

Developing and designing new solutions and conceptsFollowing the identifi cation of a new customer need, the next step is to de-sign possible solutions that may fulfi l the need. Th e solutions may cover new products, services or concepts that combine several elements. It is conceivable that the solution could radically change the competitive situation in the mar-ket.

To design original and sustainable solutions is a challenging task that requires a broad set of skills. It is, however, a crucial element in the innovation process as companies face the opportunity of designing solutions that their competi-tors cannot copy. We see indications that new solutions refl ect unique cultural skills and traditions making it diffi cult for others to copy the solution.

Design skills are vital when developing new solutions be it new products, services, systems, visual expressions etc. Th e design skills may be built on tradition and may show some variation across cultures.

ProductionTh e commercial potential of a new product will of course be refl ected in the price that consumers are willing to pay. Th is requires in-depth analyses of available technology and production facilities, cost assessments and expected price-level.

In some cases, the product cannot be realised with existing technologies. Here, user-driven and technology-driven innovation is combined to produce often interesting innovative opportunities.

5) Stine Hedegaard Jørgensen (2003): ”User-centered design”, FORA (2005): ”User-driven innovation in the Danish fashion industry - the 5th global cluster?”, FORA (2005): ”User-driv-en innovation in the electronics industry, FORA (2005): ”User-driven innovation in the Danish medical device industry.”

35

Market opportunitiesMost companies have a business platform that poses a limit on which type of products that will adhere to company strategy and values. Before spending large resources on identifying customer needs, designing solutions, and analy-sing production capabilities, one should assess if the new solution is consistent with the company’s business platform.

If the product can be marketed at a reasonable price, one has to map the com-mercial potential of the product, as well as the possible actions of the compe-titors. Can or will they copy the innovation?

Th ese types of assessments are well-known, and most companies possess the skills necessary for conducting such assessments. Alternatively, they may opt to purchase the information from experienced and high-quality consulting companies. However, theses assessments are often costly, and companies will have to weigh the potential cost of extracting information against the costs of marketing a new product that may not have a suffi cient market potential.

Innovation strategyIf surveys and assessments show a solid foundation for moving on, an innova-tion strategy has to be drafted. If the solution only requires a smaller adjust-ment of an existing product, or if the solution is akin to an existing product, then there is probably no need for any signifi cant strategic considerations.

If on the other hand the solution is a groundbreaking innovation the poten-tial innovation strategy will have signifi cant consequences for the company’s value chain. A radical innovation may lead to adjustments in the business mo-del, production methods, delivery system and marketing. Strategic decisions are often made by the top management.

ImplementationTh e fi nal step in the innovation process is implementation; bringing the pro-duct to the market. Th is may seem trivial, but in a situation where a company is bringing several products to the market and the time factor vis-à-vis the competitors is crucial, the company has to make sure that the chosen strategy is followed to the last detail.

The research-driven innovation processIn earlier days innovation was normally tied to new technologies. Th e map-ping of national and regional innovation system was focused on resources for research in the areas of natural science, emerging technologies, and the dif-

36

fusion of technology throughout society.

It was assumed that there was a simple linear correlation between research, new technology and innovation, which in turn was refl ected in the compa-nies’ innovation processes.

Th e source of innovation was new technology developed in-house or in co-operation with others. Th e researchers and the company may have had a ge-neral idea of the usability of a new technology, but the innovation process was not driven by an unsatisfi ed customer need, but rather by the prospect of developing a new technology.

Once the technology has proved itself viable, the innovation process by and large follows a path similar to the one applied in user-driven innovation: de-veloping and designing solutions, assessing production capabilities, assessing market opportunities, forming an innovation strategy, and implementing the strategy (Figure 1.2.2).

Th e research-driven innovation strategy may also cover the systematic map-ping of customer needs before any decision is made regarding the realisation of the new idea. In that case, the innovation processes will be almost identical except for the actual source of the innovation.

Up until now the use of systematic user surveys has been sporadic. Th ere are

Develop and design solutions

Assessmarketpotential

Designinnovation-strategy

Assess production-capabilities

Implementation

Research anddevelopment of new technology

Figure 1.2.2

The research-driven

innovation process

37

numerous examples of companies launching unsuccessful products, simply because these products lacked any major potential.

1.3 Critical questions in the innovation processIn real life, the company will simultaneously be involved in several of the steps described above. Furthermore, it is likely that some of the steps are characte-rised by a more intuitive approach as opposed to a more systematic approach. However, all the elements of the innovation are important and require a va-riety of skills and competences. It is assumed that companies have access to the necessary skills internally or through external business partners.

It is diffi cult to assess the extent to which companies have access to the ne-cessary skills for mapping and analysing recognised and non-recognised user needs, the latter being at the core of this study.

Th e mapping of non-recognised user needs is often resource-demanding. Only a limited number of companies have a proven record in the systematic mapping of non-recognised user needs. It is quite possible that the resource requirements when conducting user-driven innovation may equal or even surpass the amount of resources normally earmarked for new technology de-velopment.6

A sizable resource requirement should be matched by a signifi cant innovation potential. Th is will be the case when new knowledge on non-recognised user needs leads to a radical innovation that dramatically alters the competitive landscape.

To usefully drive an innovation process through all the relevant steps poses a major challenge, partly because of the challenges faced through each step of the innovation process. Th e individual elements of the innovation process require diff erent professional skills which are often accompanied by diff erent cultures. Th e individual step should be coordinated. Th is requires a group of employees with in-depth knowledge of each of the individual steps that can drive the product or solution to the fi nal stage of the innovation process.

Th e questions is then to what extent existing or future employees are equip-ped with the necessary skills for driving the innovation process, and to what extent the organisational structure is adjusted to more complicated innova-tion processes.

Until now it has primarily been the responsibility of the top management

6) Council on Competitiveness (2004): ”Innovate America”. www.compete.org

38

to steer such a process and create new concepts. Th e pool of knowledge re-quired in controlling such complicated processes is substantial. However, the evidence suggests that companies more and more will compete in the area of innovation. Th is will necessitate innovation process management and the creation of new concepts will be performed at lower levels in the organisation. Hence, the question is if the employees have the skills necessary for managing complicated innovation processes.

Th e issue of employee skills was identifi ed during the company interviews conducted in preparation for the study. In connection with FORA’s regional benchmark analysis carried out for the “Triangle Region”, a study on the management of innovation processes was carried out under the headline of “konceptmageruddannelsen”. 7

Before reporting the results of the survey pertaining to the companies’ skills for user-driven innovation, we will introduce the analytical model applied throughout the report and describe the level of innovation activity within the three selected sectors.

7) The analysis has been carried out by the innovation agency Kontrapunkt in co-operation with Bang & Olufsen, Danfoss, Gumlink, LEGO and the Savings Bank of Middelfart

39

40

The innovation concept and the scope of innovation

Th e fashion, medical device and consumer electronics industries operate in diff erent competitive landscapes, which in turn is refl ected in their approaches to innovation. Th e three sectors are well suited for providing a more nuanced image of the practical approach to innovation.

In each of the three sectors, a representative share of companies has completed a questionnaire on innovation. We have applied a broad innovation concept that encompasses the entire value chain. Th e questions have been designed to fully refl ect the companies’ own assessment of the availability of skills in the areas of technology-driven and user-driven innovation.

Th e report focuses on comparing innovation across the three industries. Th e skills for technology-driven and user-driven innovation are measured against each other, with particular focus on the latter.

We assess the availability of innovation competences within Danish compa-nies in light of several international case studies. A number of interviews with leading international companies and knowledge institutions from the three sectors have been carried out. Th is report off ers a comprehensive summary of the international case studies. Please refer to the three industry reports for a complete run-down of the international part of the analysis.

2.1 The broad innovation conceptA company’s value chain can be divided into four components (Figure 2.1.1): 8

• Organisation covers business model, network and outsourcing

• Production processes, which may be broken down into core processes and support processes

Part 2

8) www.doblin.com

41

• Product attributes, which cover the core product and related services • Delivery covers delivery systems, sales systems and marketing/branding

Innovations may of course occur within each of the four areas, and compa-nies compete on optimising individual elements and on securing a coherent value chain. As mentioned earlier, the report applies a broad defi nition of in-novation. Th is is especially relevant when focusing on user-driven innovation. While product shape and function does provide value to the customer, the services, delivery-systems and branding tied to the product will also provide value and unique experiences to the customer.

2.2 The level of innovation activity within the three sectorsTh e companies have reported the number of innovations over the past 2 years in each of the 4 areas of the value chain. An innovation is defi ned as business models, processes, products, services or marketing activities that are new to the individual company.

Th e companies have also been asked to assess the economic value of each of the new innovations on a scale from 1 (low economic value) to 5 (high eco-nomic value).

It is a common feature among the three industries that innovations are di-stributed across the entire value chain. However, we see some concentration in product attributes and production processes. We see a limited number of innovations in organisation and delivery, where the largest economic returns are often found.

Innovations in the fashion industry are concentrated in product attributes, support processes, services and marketing (5 to 7 innovations). In the other areas, we see 3 to 4 innovations. When looking at economic returns we see a completely diff erent pattern; product attributes and support processes provide the lowest economic returns, while product service, delivery systems and mar-keting provide substantial economic returns (Figure 2.2.1).

Figure 2.1.1

The company’s value

chain9

9) The model is built on Larry Keeley (in print): ”The Taming of the New”, Harvard Business School Press

Organisation ProductProduction Delivery

Businessmodel Network Core process Support

processProduct Service Delivery

systemsSales channels Brand

process attributes

42

Innovations in the medical device industry are most common in product at-tributes and production processes (core- and support processes). In all three areas the medical device industry has carried out 7 to 8 innovations over the past two years. Th e number of innovations in the other areas is between 4 and 5.

Th e economic returns from innovations are signifi cant in product attributes and core processes, but the industry has also seen some economic returns in business model, outsourcing and delivery systems (Figure 2.2.2).

Figure 2.2.1


the fashion industry and


Note: The number of innova-

tions is calculated as the

average number of innova-

tions per company within the

past two years. The index

for economic gain is based

on the companies’ assess-

ments of the gain from

carrying out an innovation

where 1 = no effect, 2 = lim-

ited effect, 3 = some effect,

4 = signifi cant effect and 5 =

very signifi cant effect

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umber of innovationsE

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umber of innovations

Figure 2.2.2


the medical device indu-

stry and their economic

impact

Note: The number of inno-

vations is calculated as the

average number of innovati-

ons per company within the

past two years. The index

for economic gain is based

on the companies’ assess-

ments of the gain from carry-

ing out an innovation where

1 = no effect, 2 = limited

effect, 3 = some effect, 4

= signifi cant effect and 5 =

very signifi cant effect

43

In the consumer electronics industry, most innovations occur in product at-tributes (9 per company over the past two years). In production processes – core processes and support processes – we see 5 to 7 innovations.

Despite the large number of innovations, the average economic returns from product innovations have been substantial. Th e average economic gain has also been signifi cant when adjusting the business model, where the companies has seen an average of 3 innovations over the past two years. We see healthy returns from innovations in outsourcing, delivery systems and marketing (Fi-gure 2.2.3).

In terms of the number of innovations, we see a homogenous pattern across the three industries. Most innovations take place in product attributes and production processes and we see a limited number of innovations in busi-ness model, outsourcing, delivery system, sales system and marketing (Figure 2.2.4).

Figure 2.2.3


the electronics industry and


Note: The number of in-

novations is calculated as the



past two years. The index for

economic gain is based on the

companies’ assessments of

the gain from carrying out an

innovation where 1 = no effect,

2 = limited effect, 3 = some ef-

fect, 4 = signifi cant effect and

5 = very signifi cant effect

0

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2

3

4

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6

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44

Figure 2.2.5

The economic returns

from innovations in the

three industries

Th e size of economic returns from innovations follows identical paths in the medical device industry and the electronics industry. Th ere are signifi cant economic returns in product attributes and core processes, and there are sub-stantial gains in organisation and delivery as well. In the fashion industry, the economic returns from product innovations are modest, but remain substan-tial in organisation and delivery (Figure 2.2.5).

2.3 SummaryIt remains diffi cult to put the results from the survey into perspective. Are Danish companies in the three sectors innovative? Are the economic gains from innovations satisfactory?

Compared to similar international product innovation surveys, the three in-

Figure 2.2.4


the three industries

Note: The number of inno-

vations is calculated as the



past two years.

0

1

2

3

4

5

6

7

8

9

10

Fashion

Medical device

Electronics

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45

dustries are quite innovative. Until now, the rule of thumb has stated that innovative companies should at least carry out 2 innovations per year. Th ere are of course industries with a higher number of innovations, and we also see industries with only a limited number of product innovations.

Th e economic returns from product innovations are healthy. It is often assu-med that it is diffi cult to carry out innovations with a satisfactory economic return. Several surveys show that less than 10 percent of all product innova-tions are profi table.10

Product innovation and new production processes are the most prolifi c in-novation areas within the three industries. Th is corresponds well with inter-national surveys. However, in general we see limited economic returns from product innovations and production processes as most companies compete in those areas.11

Th e results from the Danish fashion industry are consistent with several in-ternational surveys, while the results from the electronics industry and the medical device industry are somewhat diff erent. In both sectors, we see a signifi cant number of product innovations and new production processes that yield signifi cant economic returns.

In terms of innovation in organisation and delivery, there is a close correlation between our survey and a number of international studies. We see a limited number of innovations that yield signifi cant economic returns.

Th e fundamental prerequisite for a high success rate is of course that compa-nies have access to the necessary skills from their own employees or from external business partners. Th e following chapter will discuss the availability of skills and competences for carrying out successful innovations.

10) Larry Keeley (in print): ”The Taming of the New”, Harvard Business School Press

11) As above

46

Part 3 Knowledge and skills for innovation

3.1 Access to knowledge and competencesTh e successful implementation of innovations is a complicated endeavour. Innovation is built on new and innovative ideas. Th e biggest challenge is to pick an idea with a large commercial potential and to shape and carry out a strategy that will trigger the potential.

Th e most successful innovations involve changes and adjustments to the company’s value chain, and it requires a knowledgeable and highly-skilled organisation.

Companies have been asked to assess whether they have access to the know-ledge and skills – from their own employees or through business partners – required to become innovative. Th e companies were asked to evaluate the entire value chain on a scale from 1 (limited access) to 5 (full access).

A score below the mean value of 3 indicates that the companies have limited access to skills and knowledge. A score between 3 and 4 indicates that some skills are available, but that there is room for improvement. Scores between 4 and 5 indicate that companies have access to high-quality knowledge and skills.

Th ere is no element in the value chain where companies fi nd that skills and competences are not available. Th e survey shows scores between 3 and 4 for all but one of the 9 areas. Companies express a great deal of satisfaction with available knowledge and skills in the area of product attributes (Figure 3.1).

47

Th e survey shows only limited variation in scores across the three industries. Th e most signifi cant deviation (0.5) is found in product innovation and pro-duction processes, where the electronics and medical device industries report the highest assessments.

3.2 Employee skillsEmployee skills are vital for the innovation process and companies should ideally have access to a broad set of skills, covering narrow professional skills, as well as a broader set of competences such as independence, co-operation and creativity.

Companies have been asked to assess the importance of employee skills in the following categories:

• Technological skills • Customer and supplier skills • Independence • Ability to share knowledge • International co-operation • Creative skills

Companies have been asked to evaluate the importance of the 6 competences, where 1 = not important and 5 = very important.

It is hardly surprising that companies award high marks for all six competen-ces. It should, however, be emphasised that the scores for creativity and inde-pendence match those of professional skills, and that customer-related skills and technology skills receive almost identical scores (Figure 3.2). Again, we

Figure 3.1

Companies’ access to

knowledge and skills

Note: The survey has been

wieghted based on industry

GDI (gross domestic income

at factor cost):


= 36, electronics = 58. The

index is calculated in terms

of company assessments

of the access to skills and

competences where 1 = no

access, 2 = limited access,

3 = average access, 4 =

signifi cant access, 5 = full

access.

2,5 3,0 3,5 4,0 4,5

New or changed business model

Network - outsourcing etc.

Core processes

Support processes

Product service

Product attributes

Delivery system

Sales system

Branding/Marketing

48

only detect limited deviations across the three industries (.5), as the fashion industry places less emphasis on technological skills as compared to the two other industries.

Employee skills Companies have been asked to assess the existing employees’ skills and the skills of newly-recruited employees on a scale from 1 to 5.

It is hardly surprising that companies give high marks to their current emplo-yees, in particular technology skills, customer skills and independence. We see marginally lower marks for knowledge sharing, international co-operation and creativity (Figure 3.3).

With one exception, scores are consistent across the three industries. In the fa-shion industry, we see signifi cantly lower marks for technology skills. Howe-ver, technology skills generally receive low marks in terms of their importance to the fashion industry’s innovation processes.

Skills of newly-recruited employeesAs described above employee skills are vital to the innovation process. So are the skills of newly-recruited employees, especially in a rapidly changing competitive environment. We distinguish between newly-recruited employees with some job experience and newly-graduated employees.

2,5 3,0 3,5 4,0 4,5

Technological skills

Customer and supplier skills

Independence

Ability to share knowledge

International co-operation

Creative skills

2,5 3,0 3,5 4,0 4,5

Figure 3.2

The importance of various

skills



GDI (Gross domestic





of company assessments of

employee skills, where 1 =

no importance, 2 = limited

importance, 3 = some impor-

tance, 4 = very important , 5

= highly important

2,5 3,0 3,5 4,0 4,5



Independence



Creative skills

Figure 3.3

Employee skills



GDI (Gross domestic factor

cost): Fashion = 6, Medical

device = 36, electronics =

58. The index is calculated

in terms of company as-

sessments of the employee

skills, where, 1 = no skills,

2 = limited skills, 3 = some

skills, 4 = adequate skills, 5

= high-quality skills

49

Th e newly-recruited employees receive good marks, although somewhat lower compared to the more experienced employees. However, this is only to be expected. Except for technology skills the newly-graduated employees receive low marks across the board, and we see particularly low marks in skills per-taining to customers (Figure 3.4).

We see consistent rankings in the medical device industry and the fashion industry. Apart from customer skills, the skills of newly-graduated employees are ranked signifi cantly higher in the electronics industry.

It is understandable that newly-graduated employees receive lower marks compared to the existing employees. Some job-training and experience is ne-cessary, however, the diff erence is striking. It should also be noted that there is a great deal of variation in the assessment of technological skills and customer skills among the newly-graduated.

3.3 SummaryA successful innovation process requires a wealth of knowledge and good skills. Th e survey shows that in general companies across the three sectors have access to both knowledge and skills. However, only in areas related to product innovation do the companies express full satisfaction.

Th is is hardly surprising. In the industrial age, product innovation was the dominant innovation factor. In the global knowledge economy, innovation covers a broader fi eld of skills and competences, and the survey shows that there is room for improvement. Th e employee is the most important resource in the innovation process. “Softer” skills such as independence, interpersonal skills and creativity are as important as “harder” professional skills, and custo-

Figure 3.4

Skills of newly-educated



GDI (Gross domestic





of company assessments of

new-employee skills, where,

1 = no skills, 2 = limited

skills, 3 = some skills, 4 =

adequate skills, 5 = high-

quality skills

2,0 2,5 3,0 3,5 4,0 4,5



Independence



Creative skills



50

mer skills are as important as technology skills.

In general, the surveyed companies express a high degree of satisfaction with employee skills, in particular the “harder” skills. In a time of constant change it is vital that the newly-graduated employees have suffi cient skills. Th ey may not have signifi cant experience or job-training, but could still be an impor-tant source of innovation.

Newly-graduated receive good marks for their technological skills; however, in terms of broader and softer competences and competences related to custo-mers the newly-graduated employees generally receive poor marks.

Th is poses an important challenge for the ability to carry out user-driven in-novation.

51

52

Th ere are many sources of innovation and users are only one of those. Th e question is: do Danish companies regard customers as a signifi cant source of innovation? Th e question is answered by assessing to what extent:

• Companies maintain a strong customer focus.

• Customers are frequently used sources of innovation.

• Customers are among the most important sources of innovation.

By answering the three questions we can assess the practical importance of user-driven innovation.

4.1 Customer focusA fundamental prerequisite for user-driven innovation is a strong customer focus. Consequently, companies have been asked if they have worked with customer experiences, customer needs, market trends etc. in their product de-velopment process. Figure 4.1.1 shows a signifi cant focus on customer needs across the electronics, medical device and fashion industries (90, 80, and 65 percent, respectively).

Th is is somewhat surprising as one would expect the fashion industry to be particularly focused on customer needs as compared to the more technical focus found in the electronics and medical device industries.

Working with customer needs often requires signifi cant resources. It could be

The importance of user-driven innova-tion

Part 4

Figure 4.1.1

Have companies worked

with customer needs?

0 20 40 60 80 100

Electronics

Medical device

Fashion

YES

YES

YES NO

NO

NO

53

argued that only large companies are capable of channelling customer needs into a viable innovation.

Th is does not appear to be the case. A large number of small- and medium sized companies in the electronics and medical device industries have a strong customer focus. However, this does not appear to be the case in the fashion industry (Figure 4.1.2).

Companies with more than 1000 employees in the electronics and medical device industries maintain a strong customer focus, as do fashion companies with 100 to 999 employees.

Small companies in the fashion industry have a limited customer focus, and probably survive because of their strong creative skills.

4.2. Frequently used sources of innovationInternal skills and knowledge are very important sources of innovation. Of-ten ideas from individual employees or ideas generated from the interaction between employees materialise into viable innovations. Employees will often draw inspiration from external sources, as these permeate when people get together or experince an interesting phenomenon.

Th e company may also draw inspiration from planned and formalised inter-action with external sources. A mapping of the external sources of innovation may shed light on the innovation process and the importance of user-driven innovation.

Companies have been asked to answer the following broad question. What are the primary sources of innovation? Companies were able to report multi-

Figure 4.1.2

Customer focus by com-

pany size

0 20 40 60 80 100

Fashion

Medical device

Electronics

1.000+

100-999

25-99

10-24

1-9

54

ple sources. Th e most commonly used sources of inspiration are internal sources and customers. Roughly half of the companies mention competitors, suppliers, conferences and trade shows. 25 percent of the companies report that they use consulting companies and universities as sources of innovation, while knowledge centres are at the bottom of the list (10 percent). Universities and knowledge centers are used less frequently than for instance periodicals (Fi-gure 4.2.1).

Companies have also been asked to assess the importance of the various sour-ces of innovation. Internal sources and customers are rated as very important sources of innovation. Surprisingly, all sources are regarded as being impor-tant, including universities and suppliers, knowledge centres and consulting fi rms.

However, there is a lack of coherence in terms of the actual application of sources and their importance. In particular, consulting fi rms, universities and knowledge centres are perceived as being very important to innovation. However, they are not among the most frequently used sources of innovation (Figure 4.2.2).

Figure 4.2.1

Sources of innovation


weighted based on industry

GD( Gross domestic income

at factor cost): Fashion = 6,

Medical device = 36, Elec-

tronics = 58

0 25 50 75 100

Internal sources

Customers

Suppliers

Competitors

Other companies


Periodicals

Universities

Knowledge centers

Consulting companies

55

Th e homogeneity in industry assessments is surprising; however, it could be the case that companies have had diffi culties in rating the importance of the various sources.

If taken for granted, it is striking that universities and knowledge centres are regarded as very important to the innovation process given that most compa-nies only have limited relations with universities and knowledge centres.

4.3 SummaryCompanies maintain a strong focus on customers in their innovation proces-ses. Th is not only applies to large companies, but also to small- and medium sized businesses.

Internal knowledge and skills are very important sources of innovation, and so are customers. Other sources remain important to company innovation; however, this is not fully refl ected in the companies’ interaction and net-works.

Overall, the results indicate that user-driven innovation is a key factor for all three industries.

In light of this, it is important to map the level of co-operation between companies and their external business partners. Th e next chapter will shed light on this issue.

Figure 4.2.2

Sources of innovation

and their importance to

innovation


weighted based on industry

GDI (Gross domestic in-

coem at factor cost):



0 10 20 30 40 50 60 70 80 90 10050

60

70

80

90

Customer

Internal source

SupplierUniversities

Competitors

Conferences/exhibits

Periodicals

Other companies

Consultants.

Know. centres

Index for sources of innovation

Inde

x fo

r im

porta

nce

to in

nova

tion

56

Industry studies on user-driven innova-tion

5.1 Defining user-driven innovationUser-driven innovation is characterised in three dimensions:

• Customer focus • Skills for analysing and assessing customer needs • Methods applied in conducting user surveys

Customer focusIn the survey, the term customer focus refers to the companies’ ability to work with customer needs and customer experiences in the product development process. Companies constantly maintain a strong focus on customers in terms of their sales and marketing eff orts. However, our analysis focuses specifi cally on customer needs and customer experiences as sources of product innova-tion.

SkillsA strong customer focus is essential but far from adequate. Companies should have access to the skills and competences required for assessing customer ne-eds either from their own employees or from external business partners.

User surveysTh ere are a variety of tools available for conducting user surveys; customer interviews, market reports and scientifi cally-based analyses of recognised and non-recognised customer needs.

Th is chapter presents survey data from each of the three dimensions in each of the three industries. Companies have been asked about their sources of innovation and the importance of customer needs and customer experiences. Th ey have also been asked to report their employees’ skills in working with customer needs, and report with whom they have co-operated in identifying customer needs. Finally, companies have been asked to report the methods

Part 5

57

applied in mapping customer needs and customer experiences. It is compared how companies work with customer needs as the source for product innova-tion to how companies work with new technology as the source for product innovation.

5.2 Customer focusChapter 4 provided an assessment of the importance of customer needs and customer experience as sources of innovation. It was shown that customer needs and customer experiences are among the most important sources of innovation.

In the following section we compare survey data from the three industries. Th e various sources of innovation are presented, and the importance of the various sources of innovation is highlighted.

Sources of innovationIn-house knowledge and skills remain important sources of inspiration across the surveyed industries. Some 90 percent of the companies report in-house skills and competences as sources of inspiration. Customer needs and custo-mer experiences are reported as being equally important in the innovation process.

Roughly half of the surveyed companies state that suppliers, competitors, other companies, trade shows, exhibitions and periodicals are inspiration sources, 25 percent report consulting companies as a source of inspiration, while only 10 percent state that knowledge centers (outside universities) are sources of inspiration.

We see some variation with regards to using universities as sources of inspi-ration. Only 8 percent of the companies in the fashion industry report uni-versities (including design schools) as sources of inspiration. In the electronics industry and the medical device industry the share is 22 and 28 percent, respectively (Figure 5.2.1).

58

Th e strong focus on universities as a source of inspiration in the electronics and medical device industries is probably explained by a strong technology collaboration between universities and companies in the two sectors.

Importance of inspiration sourcesCompanies have been asked to assess the importance of the abovementioned sources of inspiration in their innovation processes, where 1 = not important and 5 = highly important. With an average score of more than 4, internal sources and customers are rated as the most important innovation sources. Other sources of inspiration receive an averange ranking of 3.5. We see co-herent assessments across the three industries with regards to the importance of variuos sources (Figure 5.2.2).

Figure 5.2.1

Sources of inspiration for

innovation

0 20 40 60 80 100Other sources

Universities

Knowledge centres - technology

Knowledge centres - customer needs


Periodicals


Competitors

Otehr companies

Suppliers

Customers

Internal sources

Medical device

Electronics

Fashion

1 2 3 4

Knowledge centres

Universities


Periodicals


Competitors

Other companies

Suppliers

Customers

Internal sources

Medical device

Fashion

Electronics

Figure 5.2.2

Importance of innovation

sources



assessments of the impor-

tance of various sources

for innovation, where 1 =

no importance, 2 = limited

importance, 3 = some impor-

tance, 4 = very important , 5

= highly important

59

Th e strong homogeneity in ratings across the three industries is remarkable. However, it may be the case that companies have had diffi culties in assessing the importance of the various sources of inspiration.

It is striking that companies report universities and knowledge centers as fairly important sources of inspiration given that co-operative eff orts remain limited, particularly in the fashion and electronics industries. SummaryCompanies have a strong customer focus and almost all of the companies across the three industries see customer needs and customer experiences as the most important sources of innovation.

5.3 Employee skillsCompanies have been asked to rate the quality of current employees, newly-recruited employees and newly-graduated employees in terms of skills related to technology-driven and user-driven innovation.

Employee customer skillsCompanies have been asked to assess the quality of employee skills in terms of customer and supplier skills, where 1 = low quality of skills and 5 = high quality of skills.

Companies across the three industries rate existing employee skills at an ave-rage score of 4 or above for all three industries. Th is is hardly surprising. One would have expected companies to readjust their organisations if the existing employees had below-average skills.

Skills among newly-recruited employees Company ratings across the three industries in terms of the skills of newly-recruited employees and newly-graduated employees in particular are lower compared to existing employees. Th e average for newly-recruited employees is 3.5, while the average score for the newly-graduated employees is 2.5. It is striking that companies across the three sectors have such a uniform opinion of the lack of ability of newly-graduated employees in working with customer needs and customer experiences (Figure 5.3.1).

60

Employee technology skillsCompanies were asked to assess the employees’ technological skills. Th e skills of existing employees are rated highly, and both the electronics industry and the medical device industry rate the technological skills of newly-recruited and newly-graduated employees above average (Figure 5.3.2).

One should probably treat the data from the fashion industry with regards to technology with some caution, as technology is hardly a crucial factor in the industry.

It is hardly surprising that the skills of the existing employees are rated higher than the skills of the newly-recruited employees, since there will always be company-specifi c skills.

However, it is interesting that the companies in the electronics and medi-cal device industries report the technological skills of their newly-recruited employees as being signifi cantly higher compared to the customer-related skills of their newly-recruited employees.

Th e companies rate the technological skills of the newly-graduated employees as high as the technological skills of newly-recruited employees. On the other hand, the customer-related skills of newly-educated employees are perceived as being lower compared to the customer-related skills of the newly-recruited

0 1 2 3 4 5



Employees

Medical device

Fashion

Electronics

Figure 5.3.1

Employee customer skills

Note: The index is calcu-

lated in terms of company


existing employee customer

skills, where 1 = No skills, 2

= limited skills, 3 = average

skills, 4 = signifi cant skills

and 5 = high-quality skills

0 1 2 3 4

Employees



Medical device

Fashion

Electronics

5

Figure 5.3.2

Employee technical skills




existing employee techno-

logy skills, where 1 = No

skills, 2 = limited skills, 3 =

average skills, 4 = signifi cant

skills and 5 = high-quality

skills

61

employees.

SummaryCompanies across the three industries express a high degree of satisfaction with their existing employees’ customer skills. Th is also applies to newly-re-cruited employees, but does not apply to the customer-related skills of newly-graduated employees.

In other words, companies must assume the role of passing on customer skills to their newly-recruited employees.

Although the newly-graduated employees possess adequate technological skills, they cannot serve the role as sources of inspiration in the area of user-driven innovation.

5.4 Business partnersOnly a few companies have the in-house skills and competences needed for conducting user-driven innovation. Hence, companies should engage in ex-ternal partnerships that may provide additional resources and inspiration to the innovation process.

Business partnersCompanies have been asked to report the level of co-operation with external partners in identifying customer needs, customer experiences, market trends etc. Furthermore, companies have been asked to report to what extent they are engaged in strategic and binding technology projects in the product de-velopment process.

A large number of companies have worked with external partners in relation to customers and technology.

In the electronics and fashion industries app. 65 percent of the companies have worked with external partners in identifying customer needs and custo-mer experience, while the share is 50 percent in the medical device industry.

In the electronics industry 75 percent of the companies report that they have engaged in strategic and binding technology eff orts with external partners, while the share in the fashion industry and the medical device industry is 25 percent and 60 percent, respectively.

A large number of companies work with external partners in the product

62

development process.Th erefore, in the following section we highlight the level of co-operation with external partners in identifying customer needs and co-operation in the area of new technology.

Business partners - customersRoughly half of the companies in the three industries work with consulting companies and suppliers in identifying customer needs and customer expe-riences. Between 20 and 30 percent work with other companies (excluding competitors) in identifying customer needs.

Collaboration between companies and universities and knowledge centres is limited. Only between 10 and 20 percent of the companies across the three industries work with universities and knowledge centres in identifying custo-mer needs (Figure 5.4.1).

Assessment of co-operationCompanies have been asked to report the level of co-operation with external partners in three areas: business partner knowledge and skills, the collabo-rative process and the outcome of working with external partners, where 1 = very unsatisfactory and 5 = very satisfactory. Response rates are quite low; hence, the results should be treated with some caution.

Companies in the electronics and medical device industries give high marks for the collaborative process, while fashion companies are less enthusiastic (Figure 5.4.2). However, the low response rate should once again be taken into account.

0 10 20 30 40 50 60

Other business partners

Knowledge centres

Danish universities

Private consulting companies

Suppliers

Other companies within the particular industry

Competitors

Other companies

Medical device

Fashion

Electronics

Figure 5.4.1

Business partners used

in identifying customer

needs and customer expe-

riences

63

New technology business partnersNew technology collaboration is particularly important in the electronics and medical device industries, where roughly half of the companies report having worked with suppliers in new technology development.

Almost half of the companies in the electronics industry have strategic and binding relations with universities, while 25 percent work with knowledge centres in relation to new technology. 40 percent of the companies in the medical device industry work with knowledge centres in the area of new tech-nology, and 30 percent work with universities.

App. 30 percent of the electronics and medical device companies co-operate with consulting companies and other companies in the area of new techno-logy development (Figure 5.4.3).

Figure 5.4.2

Assessment of co-op-

eration on customers and

customer needs



assessments of co-opera-

tion on customers where 1

= very unsatisfactory, 2 =

unsatisfactory, 3 = aver-

age level of satisfaction, 4

= satisfactory and 5 = very

satisfactory

0 1 2 3 4

Outcome of co-operation

The collaborative process

Knowledge and skills

Medical device

Fashion

Electronics

0 10 20 30 40 50 60 70

Subdivisions

Competitors

Other companies within the particular industry

Suppliers

Danish universities

Knowledge centres

Private consulting companies

Other business partners

Medical device

Fashion

Electronics

Figure 5.4.3

Business partners on new

technology

64

Th e collaborative processCompanies in the electronics and the medical device industries give high marks for the collaborative process. Th e average score is 3.5, but again, one should bear in mind the low response rate (Figure 5.4.4).

SummaryRoughly half of the companies in the three industries work with external partners in identifying customer needs and customer experiences. 60 per-cent of the medical device companies have engaged in collaborative eff orts in terms of new technology, and 75 percent of the electronics companies have worked with external partners in the area of new technology.

Collaboration with universities and other knowledge centres is limited in the fashion industry (3 to 4 percent), and also remains rather limited in the two other industries (15 percent).

Collaboration on customers involving companies and knowledge centers is less prevalent as compared to new technology collaboration, where the elec-tronics and medical device industries have extensive collaboration.

Overall, it is assessed that collaboration with knowledge centers in customer-related issues remains limited.

5.5 User surveysTh e mapping, assessment and analysis of customer needs and customer ex-periences may be approached in numerous ways. Th e choice of method will depend on the purpose and customer group to be surveyed. Th ere is signifi -cant variation in resource consumption in applying the diff erent methods. In-vestment in user surveys should of course be assessed in light of the expected value of the user surveys.

Figure 5.4.4

Assessing collaboration

on customers and cus-

tomer needs



assessments of co-ope-

ration on new technology,

where 1 = very unsatisfac-

tory, 2 = unsatisfactory, 3 =

average level of satisfaction,

4 = satisfactory and 5 = very

satisfactory

3,0 3,3 3,6 3,9 4,2

Outcome of co-operation

Collaborative process

Knowledge and skills

Medical device

Fashion

Electronics

65

Th ere is a signifi cant diff erence in mapping recognised and non-recognised customer needs, the latter being more complicated and involving comprehen-sive and resource demanding investigations.

Th e various approaches to user surveys can be summed up as follows:

Purchase of information on market trends and cultural changes that in-fl uence consumers. Th is often covers information prepared and sold to a large number of companies across several industries.

Panel discussion and focus groups. A group of consumers particularly rele-vant to one or more companies are gathered, and participants are interviewed on customer needs and customer experiences.

Surveys and personal interviews. A representative share of the population is questioned on specifi c customer needs and customer experiences. Surveys and personal interviews may be prepared for a single company of for a group of companies with similar characteristics.

Ethnographic and scientifi c studies. Surveys and personal interviews are combined with observations of consumer behaviour, and the results are asses-sed in light of societal and cultural trends.

Companies have been asked to what extent they apply internal user surveys, or if they conduct user surveys in collaboration with external business part-ners.

Internal user surveysFace-to-face interviews is the most commonly used survey method applied in-house. All but a few of the medical device companies that only conduct in-house surveys use face-to-face interviews, while roughly half of the companies in the electronics and fashion industries that exclusively conduct in-house surveys use face-to-face interviews.

40 percent of the companies in the fashion industry use trend spotting. Th is is probably explained by the unique market conditions found in the industry.

Between 20 and 30 percent of the companies in the electronics and medical device industries use surveys, panel discussions and focus groups, while app. 20 percent carry out ethnographic and qualitative research. In the fashion industry the application of ethnographic research and qualitative interviews

66

is less prevalent (Figure 5.5.1).

User surveys with external partnersTh e face-to-face interview is also the most common method applied by companies working with external partners. More than half of the companies in the fashion industry that work with external partners use face-to-face in-terviews. In the electronics and medical device industries the share is 75 and 90 percent, respectively.

Half of the companies in the medical device industry that co-operate with external partners conduct trend spotting. Other investigative methods are used by 20 to 40 percent of the companies. However, as was the case in the area of internal surveys, we fi nd a lower number of medical device companies working with external partners (Figure 5.5.2).

0 20 40 60 80

Other methods

Scientific research

Ethnographic research

Qualitative surveys

Face-to-face interviews

Surveys

Focus groups

Panel discussions

Trend spotting

Purchase of information on market trends etc.

Medical device

Fashion

Electronics

20 40 60 80

Other methods

Scientific research

Ethnographic research

Qualitative surveys

Face-to-face interviews

Surveys

Focus groups

Panel discussions

Trend spotting

Purchase of information on market trends etc.

Medical device

Fashion

Electronics

Figure 5.5.1

Internal user surveys

Figure 5.5.2

Use surveys with external

partners

67

It is striking that among the companies that conduct in-house surveys, 40 percent of the companies in the medical device industry apply scientifi cally-based methods and 20 percent use ethnographic methods, while only a li-mited number of companies working with external partners in the electronics and fashion industries use scientifi c and ethnographic methods.

SummaryWe see a widespread use of user surveys across the three industries. Th is not only applies to in-house surveys but also to surveys carried out in collabora-tion with external partners.

It should be noted that only a limited number of companies in the electro-nics and medical device industries work with external partners in the area of scientifi c and ethnographic research; research methods especially suited for analysing and assessing non-recognised customer needs.

5.6 SummaryUser-driven innovation is characterised in three dimensions:

• A strong customer focus • Skills for analysing and assessing customer needs • Methods applied in conducting user surveys

Survey results for the area of user-driven innovation are compared to similar results for the area of technology-driven innovation.

Customer focusCompanies have a strong customer focus, and almost all of the companies across the three industries see customer needs and customer experiences along with internal sources as the most important sources of innovation. Nearly all of the surveyed companies have worked with customer needs and customer experiences in the product innovation process, and a large number of small-and medium sized companies in the electronics and medical device industries apply customer needs as the starting point of the innovation process.

Th erefore it is our assessment that most companies covered in the survey meet the fi rst of the three requirements for user-driven innovation.

Access to knowledge and skillsAccess to knowledge and skills on customer needs and customer experiences is measured in light of the employees’ customer skills and the level of co-ope-

68

ration in the area.

Companies across the three industries express a high degree of satisfaction with their existing employees’ customer skills. Th is also applies to newly-re-cruited employees, but not to the customer-related skills of newly-graduated employees.

Correspondingly, companies have a very positive view of their employees’ technological skills. Th is also applies to newly-educated employees.

Roughly half of the surveyed companies have extensive collaboration with external partners in identifying customer needs and experiences.

Technology collaboration is even more wide-spread. 60 percent of the medical device companies and 75 percent of the electronics companies have worked with external partners in the application of new technology in the product innovation process.

Co-operation on customer needs and customer experiences between on the one hand companies and on the other hand universities and independent knowledge institutions is modest. Less than 5 percent of the surveyed fashion companies work with knowledge centers, while the share is 15 percent in the electronics and medical device industries.

Company collaboration with knowledge centers in the area of new techno-logy is signifi cant. Roughly half of the electronics companies collaborate with universities, and 40 percent of the medical device companies work with knowledge centers in the area of new technology.

Th e question remains: do companies meet the second requirement for user-driven innovation? Th e answer remains ambiguous.

In general, the surveyed companies give high marks to the customer skills of their existing employees. On the other hand it is the assessment that the customer-related skills of the newly-graduated employees are far from ade-quate. Newly-graduated employees may be a potentially important source of innovation in methods and techniques.

While the surveyed companies have extensive collaboration with external partners in identifying customer needs, the magnitude of co-operation with knowledge institutions is limited. Knowledge center collaboration may play a

69

signifi cant role in securing high-quality skills throughout the organisation.

Overall, it is clear that the companies’ access to skills and competences for mapping customer needs is signifi cantly lower compared to the access to new technology skills and competences.

If the companies’ access to skills and competences in new technology is ap-plied as a yardstick, it is evident that a large number of companies do not have access to the customer-related skills and competences necessary for conduc-ting user-driven innovation. Hence, the surveyed companies fail to meet the second requirement for conducting user-driven innovation.

User surveysA signifi cant number of companies across the three industries use a variety of user survey tools. Th is applies both to internal user surveys and investigative eff orts with external partners.

Methods suitable for analysing recognised customer needs are wide-spread, whereas scientifi c methods (ethnographic surveys etc.) applied when mapping non-recognised customer needs are rarely used except for companies in the medical device industry.

Th e fact that a large number of companies apply a variety of user survey tools would indicate that the surveyed companies meet the third requirement. However, if emphasis is placed on a scientifi c approach to the mapping of non-recognised customer needs we fi nd that only a limited number of compa-nies meet the third requirement for user-driven innovation.

70

International case studies

We have found several examples of large international companies with in-house departments that focus exclusively on the mapping and assessment of user needs. Moreover, we see examples of small and large companies working with private consulting companies in driving innovation projects built on systematic user surveys. Universities and knowledge centers will often par-ticipate in the process as well. Th e charting of customer needs covers the thorough and systematic collection of data and sophisticated analysis to fully understand customer experiences and if possible to uncover non-recognised customer needs.

Th e three industry report present a number of practical examples on how in-ternational companies approach user-driven innovation, and how consulting companies and universities participate in the innovation process.12

Th e purpose of comparing Danish companies with international front-run-ners is to create the foundation for good-practice benchmarks. International companies, universities, knowledge institutions and networking organisati-ons are not necessarily best-practice in terms of user-driven innovation, but they nonetheless possess a pool of experiences that may serve as inspiration in strengthening user-driven innovation in Denmark.

6.1. Screening and selection of companies and institutionsA number of leading international companies, knowledge centres and net-work architects across the three industries have participated in the mapping of user-driven innovation. Th e criteria for selection are as follows:

Danish companies that have expressed an interest in user-driven innovation have been asked to identify leading international companies within their re-spective industries.

Leading competence clusters in the three industries have been identifi ed and

Part 6

12) Please refer to the three industry reports

71

interesting companies, knowledge centres and network architects within the clusters have been selected for further analysis.

International business analyst networks have been consulted.

A total of 40 companies and institutions have participated in the internatio-nal part of the study. We have conducted interviews with one or more repre-sentatives from participating companies, universities, knowledge institutions, consulting fi rms and network organisations. In the process we have collected a wealth of information on user-driven innovation.

16 companies have participated in the international part of the study. We have had some diffi culty in locating companies with in-house departments dedicated to the systematic mapping of user needs or in locating companies that co-operate with innovation agencies and knowledge institutions. Th ere are of course more companies working with a systematic approach to user needs, however in many instances company policies prevent them from parti-cipating in surveys. Th e 16 participating companies are listed in Table 6.1.

Companies Country Industry Contact

Intel USA Electronics Christine Riley

Samsung Design Europe Korea Electronics Chris Woodward

Samsung Design Europe UK Electronics Matt Garwood & Chris Woodward

Philips Design The Netherlands Electronics Damian Mycroft

Innovaphone Germany Electronics Dagmar Geer

Siemens Germany Electronics Erich Kamperschroer

Health Hero Network USA Medical device Kirsten Dryden

Life Scan USA Medical device Mike Bell

Medtronic Inc. Switzerland Medical device Barry W. Wilson

Philips Design Medical Systems The Netherlands Medical device Jeroen Raijmakers

Brooks Brothers USA Fashion Jeana Hong

Gap Inc. USA Fashion Khadijah Lawrence

Debenhams UK Fashion Crawford Bryce

Giorgio Armani Italy Fashion Deidre McCready

Groupe Etam France Fashion Frederic Partureau

LA Chemise Lacoste France Fashion Christian Kemp-Griffi n

Levi Strauss EMEA Belgium Fashion Flemming F. Thygesen

Table 6.1

Participating companies

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For the purpose of this study we have focused on locating universities and other types of knowledge institutions with a systematic research approach to user needs, as well as universities and knowledge institutions that co-operate with the business community in conducting user surveys.

Th is has not been an easy task. However, the evidence suggests that scienti-fi cally based mapping and analysis of user needs is wide-spread at design universities and design schools. Since the early 1980s, the Design Institute has made signifi cant progress in user need research and has been involved in several innovation projects with international companies. Since the Design Institute played a signifi cant part in another report on user-centred design we have opted not to include the Design Institute in this report.13 Th e results from the study has played a signifi cant part in the preparation of the present study on user-driven innovation. It has not been possible to carry out an in-depth analysis of the scientifi c approach to user surveys by universities and knowledge institutions.

One university and seven design schools have participated in our analysis ef-forts (Table 6.2).

Knowledge institutions Country Type Contact

Stanford USA University George A. Kembel

Fashion Institute of Technology USA Design school George Simonton

Parson School of Design USA Design school Timothy R. Gunn

Central Saints Martin College of Art & Design UK Design school Jane Rapley

Domus Academy Italy Design school Barbara Trebitsch

Nouva Accademia Belle Arti Italy Design school Orietta Pelizzari

Institute Francais de la Mode France Design school Francoise Bonnetin-Sackrider

ESMOD/ISEM France Design school Patti Loué-Milanese

Since the publication of the report ReD Associates have conducted an in-depth international mapping of education and research in disciplines that are important to user-driven innovation.14 Th e study presents additional examples of user-driven innovation in international companies and knowledge centers.

If when defi ning user surveys we include simple interview-techniques, sur-veys, focus groups and trend spotting, we fi nd an abundance of consulting companies that are involved in the drafting and implementation of user sur-veys.

Th is study focuses on the systematic and scientifi cally based user surveys that

Table 6.2

Participating knowledge

institutions

13) Stine Hedegaard Jørgensen (2003): ”User-centered design”

14) Red Associates (in print): ”Applied Business Anthropology”

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not only maps customer behaviour, but also analyses customer experiences in formulating a platform for more radical innovations.

We propose that only a limited number of consulting companies have ac-tually focused their business on a systematic approach to defi ning user ne-eds. However, during our research eff orts we have identifi ed a number of interesting innovation agencies and consulting companies that have provided examples of their approach to user-driven innovation. A total of 10 consulting companies have participated in the analysis (Table 6.3).

Consulting companies Country Type Contact

Cheskin USA Design company Steve Diller

Smart Design USA Design company Joost Gode

Bridge Design USA Design company Bill Evans

Frog design Germany Design company Marc Esslinger

Point Forward USA Innovation agency Robert Hall

Fuseproject USA Innovation and design agency Yves Behar

IDEO USA Innovation and design agency David Kelly

Carlin International USA Trendspotting and advisory Catherine Champeyrol

Mattori SRL Italy Trendspotting and advisory Orietta Pelizzari

Cultural Access Group USA Culturel research Michelle Valdovinos

It is a well-known fact that over time companies with similar characteristics are concentrated in specifi c business clusters. Th e demise of the industrial age and the subsequent rise of the global knowledge economy imply that clusters are driven by the demand for access to new and groundbreaking knowledge.

Th e market forces are driving the cluster creation process. However, the pre-sence of non-profi t network organisations may also strengthen the knowledge diff usion within the cluster. We have identifi ed 2 network organisations that have assisted in facilitating knowledge diff usion and network formation in the area of user-driven innovation (Table 6.4).

Network architects Country Type Contact

The Fashion Center USA Network architect Gerald Scupp & Barbara Blair Randall

Stanford Biodesign Program USA Unviersity Sandy Miller & Teresa Robinson

Th is section summarises the results from the international part of the indu-stry reports and introduces a number of case studies.

Table 6.3

Participating consulting

companies

Table 6.4

Participating network

architects

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For each of the three industries a brief introduction to the most interesting global clusters is provided. Following that, we introduce 4 companies that have established in-house departments focusing on user-driven innovation, 6 consulting companies or knowledge institutions co-operating with compa-nies in the area of user-driven innovation, and 2 network organisations with a user-centred approach.

6.2 The electronics industryTh e electronics industry covers consumer electronics, IT-hardware, telecom hardware as well as low- and high current electro technology.

Th e electronics industry is concentrated in four global clusters: California, New Work-New England, Central Europe and Tokyo-Osaka. We also fi nd some concentration of electronics companies in Taiwan, South Korea and Ontario, Canada.

Denmark is a small player in the global electronics market accounting for a little over one percent of total OECD exports. However, since 1992 the Da-nish electronics industry has seen a 45 percent increase in export shares.

One third of the US electronics industry is located in California. California has more than 23 000 high tech companies with 700 000 employees. Th e largest concentration of high tech companies is found in Silicon Valley, “the high tech capital of the world.”15

California is home to a large number of universities focusing on new techno-logy research; University of California, Stanford, CalTech, California State, USC and California Community College.

In recent years we have witnessed a growing interest in working with a syste-matic approach to user needs within the electronics industry, and in many respect California should be regarded as the hotbed of the proliferation of user-driven innovation.

Stanford University was among the fi rst to embrace the systematic mapping of user needs, and the renowned innovation agency IDEO, a pioneer in user-driven innovation, is a Stanford spin-off .

Several multinational companies in California, including Intel, have establis-hed in-house departments dedicated to user need analysis, and several elec-tronics companies (Sony, Canon and Samsung) have set up design- and user

15) California Council on Science and Technology. www.ccst.us

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need centres.

California has a large concentration of knowledge centres and innovation/de-sign companies that conduct systematic surveys of user needs and demands, and that co-operate with both large and small companies in the area of in-novation. Th ese include IDEO, Cheskin, Look-Look, Cultural Access Group, Jump Associates and Beam Inc.

In Central Europe the industry is concentrated in an area covering parts of the Netherlands, Southern Germany, Northern France, Switzerland and Northern Italy. Some of the world’s largest electronics companies are located here including Siemens, Philips, Alcatel, Th omson, STMicroelectrics, Oli-vetti and Pirelli.

User-driven innovation is not as prevalent in Europe as in California. Howe-ver, some European companies such as Philips and Th omson have a strong focus on user-driven innovation.

6.3 The medical device industryCompanies in the medical device industry develop and manufacture medical equipment used at hospitals and nursing homes for disease diagnosis and tre-atment, and equipment for relieving the physically disabled.

Th e medical device industry is heavily fragmented with several niche products operating in smaller-sized markets. On the other hand we also fi nd a number of multinational companies that manufacture a wide range of medical device products, including Johnson and Johnson, Siemens, Medtronic and Philips.

A signifi cant share of the most successful companies is located in global medi-cal device clusters. Leading clusters include the Bay Area and Orange County, California, the Boston Area and the Munich region.16 It is our assessment that London-Oxford-Cambridge, Amsterdam-Utrecth-Aachen, Switzerland, Sweden and several regions in France are also among the most important clusters.

Th e Danish medical device cluster is limited in size due to size of the home market. In terms of export shares the Danish medical device industry is the 6th largest in the OECD. Th e industry embraces a variety of products. Se-veral Danish companies are world market leaders in areas such as insulin, disposable medical equipment, hearing aids and technical appliances for the physically disabled.

16) The selection of competence clusters is based on among others: The Danish Growth Fund (2004): ”Danish Competence Clusters”, The National Agency for Enterprise and Con-struction (2001): ”Medico/Health”, and the Ministry of the Interior and Health (2002): ”Bio-He-alth”

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A 2004 Danish Growth Fund report on Danish competence clusters shows that the Danish medical device industry rank among the world’s best, espe-cially in terms of research quality and the size of the established industry.

Th e Bay Area, California, has the world’s highest concentration of medical device companies including a large number of recently-established compa-nies. Th e area has a signifi cant supply of research resources and skills covering all aspects of the industry.

Th e Bay Area possesses a unique dynamic structure that provides a breeding ground for collective learning and network creation. Th e Bay Area is recogni-sed for its ability to create innovation through network-based activities. Stan-ford, UC Berkeley and a range of smaller universities as well as local hospitals are the driving forces in the medical device network creation.

California holds some of the most interesting examples of how systematic user surveys work as drivers of company innovation processes. It is noteworthy that some of the industry’s smaller companies have been able to compete in the area of user-driven innovation by teaming up with knowledge institutions and innovations agencies.

In the medical device industry the United States has spearheaded advances in user-driven innovation. However, companies in Europe have come a long way in embracing user-driven innovation. Th is certainly applies to Philips, which have a number of activities in the area of medical devices.

6.4 The fashion industryIn this report we apply a rather narrow defi nition of the fashion industry to only cover clothing. Th e global fashion industry is dominated by 4 clusters; New York, Paris, Milan and London. Th e four clusters are hosted by coun-tries that account for more than 45 percent of total OECD exports.17 Several large fashion companies are found in Germany and Spain; however we see no signifi cant cluster building in the two countries.

Denmark is the world’s 9th largest exporter of clothing. Several Danish fa-shion companies have made great strides in focusing on knowledge-intensive jobs and have outsourced standard production processes to low-income coun-tries. In many respects the Danish fashion industry is well equipped for the global division of labour and could potentially become the 5th global fashion cluster.

17) OECD Stan Database

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Th e Fashion District in Manhattan has the world’s largest concentration of companies design schools and knowledge centres. All of the leading US fashi-on companies have located all or some their activities in the Fashion District. Th e New York fashion industry employs more than 40 000 people and hosts 3 design schools and 23 knowledge centres.

Th e fashion industry in Northern Italy is fragmented which has resulted in the formation of small clusters throughout the region. Th e clusters have spe-cialised in various segments (clothing, textiles and leather), but the lion’s share of activities take place in Milan. Some 40 000 people are employed in the industry and Milan hosts 5 design schools and a large number of knowledge centres.

Th e fashion clusters in Paris and London are roughly half the size of the New York and Milan clusters but still plays host to a range of interesting and trend-setting companies.

Th e United States have spear-headed the use of systematic methods in iden-tifying customer experience and customer needs. Several companies inclu-ding GAP have established consumer insight departments with as many as 50 employees. Th e 23 knowledge centres in New York collect data on market and life style trends, and their eff ects on customer needs. We see a widespread knowledge diff usion and network activity in the fashion industry involving companies, design schools and knowledge centres. Th e network activities are facilitated by the Fashion Center.

Milan also hosts knowledge centres and design schools applying a systematic approach to fashion trends and user needs, and we see a growing networking activity involving companies, design schools and knowledge centres. Net-working activities are less formal and structured as compared to New York.

Paris and London have a large concentration of fashion companies and de-sign schools. However, networking activities are limited. London still holds a number of fashion companies with in-house consumer insights departments that work with user-driven innovation.

6.5 In-house departmentsIn-house departments with an interdisciplinary approach to identifying user needs are a relatively new phenomenon. For companies to be included in the qualitative part of the study the in-house departments should have a scientifi c and systematic approach to the identifi cation of user needs, and the depart-

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ment should be an integrated part of the company’s innovation process.

Th e following section introduces 4 examples of in-house departments:

Intel Based in Santa Clara, California, Intel is the world’s largest manufacturer of micro-processors. Intel also has a signifi cant production of computer hard-ware and network- and telecommunication products.

Intel was founded in 1968 and currently has a market share of 85 percent in the global micro-processor market. Intel’s dominant position can be ac-credited to the company’s production methods and standards, which have allowed Intel to sell their products at a lower price as compared to most of their competitors.

Intel’s numerous innovations have led to vast improvements in most of the products of the Digital Age including the lab top and the mobile phone.

In recent years Intel’s technological innovations have failed to make a signifi -cant impact in the market. Th is has caused Intel to invest additional resources in the decoding of customer needs and the future application of digital pro-ducts. Despite the fact that Intel is a subcontractor to the end product, Intel has chosen to build this competence in-house, which probably can be tied to Intel’s dominant position in the market; almost all of Intel’s innovations have an impact on other manufacturers of digital products.

In the early 1990s Intel launched two in-house departments as part of Intel Research in Portland, Oregon: Th e People and Practices Group provides in-put for Intel’s overall strategic and conceptual planning in a time frame of 5 to 10 years, while the User Centered Design Group focus on mapping user needs in relation to the development of concrete products, thus operating in a shorter time frame.

Th e two departments have made a signifi cant impact on Intel. In recent years Intel has increased the number of ethnographic researchers from 10 to 40. Most of Intel’s ethnographic researchers begin their careers in the two in-house departments and are recruited by other Intel Research departments; Digital Homes, Digital Health, Consumer Research/Emerging Markets and the Mobility Group.

Below we introduce Intel’s two user-driven research units:

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User-driven strategy developmentIn 1996 Intel set up the People and Practices Group. Using techniques from social sciences and design, the Group maps the daily lives and work routi-nes of ordinary people and applies this knowledge into long-term strategic guidelines. Th e Group has 10 employees and a sizeable budget for conducting ethnographic research. Employees include anthropologists, psychologists and designers.

Th e People and Practices Lab have strong relations to a number of universi-ties including UC Berkeley, the University of Washington, Carnegie Mellon, Cambridge, the University of Surrey and the Illinois Institute of Techno-logy.

People and Practices Lab customers include the various departments of Intel research; Digital Home, Digital Health, Consumer Research/Emerging Mar-kets and the Mobility Group.

Th e Group works exclusively with ethnographic tools such as investigative interviews, observations, video, photographic analysis etc. Due to Intel’s glo-bal presence analyses are carried out throughout the United States, Asia and Europe.

New technology in retail Intel asked the People and Practices Group to investigate new technology ap-plication in the 3 trillion USD retail market.

Th e group decided on a three-step ethnographic approach:

1. Observations and interviews with customer and staff across a wide selection of retail stores.

2. Intel researchers carried out an on-site analysis of new technology applica-tion.

3. Finally, the Group developed a number of concepts for the potential ap-plication of new technologies, which was subsequently tested on customers through face-to-face interviews.

Th e outcome of the ethnographic study was a series of proposals for techno-logy direction that Intel’s researchers should investigate to meet future retail industry needs. As an example the Group points to a signifi cant demand for

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Product-level user-driven innovation Th e User Centered Design Group is located in Portland, Oregon. Th e Group employs 10 ethnographic researchers (anthropologists, psychologists, and hu-man resource people) and a similar number of designers. Th e Group Manager David Gilmore was recruited from IDEO, one of the world’s most renowned design and innovation agencies.

Th e Group maintains a shot-term approach, 1 to 2 years, to user-driven in-novation. Th e Group applies many of the same methods used by the People and Practices Group.

Th e Group’s approach to ethnographic research can be summed up as fol-lows:

Th e starting point of the process is the study of selected users in a particular situation or in a particular environment. In the second step of the process user experiences are defi ned and translated into a range of possible solutions. Th e Group will often test solution concepts from the ethnographic studies and in-terviews on focus group or through face-to-face interviews. In the fi nal stage of the project group researchers work together with engineers and designers. Results are translated into technical terms and solutions in a design brief that is forwarded to the engineering departments responsible for developing and manufacturing new products.

Home computers in ChinaA number of 2003 market studies shows that a growing portion of the Chine-se population could aff ord and were motivated for buying a home computer. However, most people were reluctant to make that investment.

Th e Group decided to launch a comprehensive study that would survey at-titudes towards home computers and provide input for improvements and adjustments that could possibly persuade Chinese households to purchase a home computer.

Th e ethnographic research pointed to a number of factors believed to be parti-cular important. Among those was the “one-child” plan which makes Chine-se children the overriding center of attention in Chinese families. Education and multilingual profi ciency in particular, is a top priority.

Intel learned that Chinese home computers primarily were used for recreatio-nal purposes. Consequently, Intel embarked on defi ning a computer experi-

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ence that would meet Chinese household requirements; the product should be educational by nature and be equipped with a gadget that would con-vince Chinese parents that the computer fi rst and foremost is an educational tool. Also, the computer should be designed to fi t the relatively small Chinese homes.

A number of prototypes were manufactured and subsequently tested by Chi-nese families, who provided valuable input for improvements.

Intel has developed a computer with a closing device which can only be ac-cessed by the parents. Th is ensures that the computer is solely used for edu-cational purposes. Furthermore, Intel has developed a variety of educational software, including language teaching software, and the computer is designed to fi t the physical boundaries of Chinese homes.

A Chinese computer company was chosen by Intel to manufacture and mar-ket the computer. In 2004 the computer was given the China Design Excel-lence Award.

GapBased in San Francisco Gap is one of the world’s largest fashion companies. Today Gap has more than 150 000 employees and annual revenues of more than 15 billion USD. Gap has more than 3 000 outlets in the Untied States, Canada, France, the UK and Japan. Gap labels include Banana Republic, Th e Gap and Old Navy.

Gap has set up a design department in New York City. A few years ago Gap launched a consumer insights unit aimed at establishing a better platform for brand and product development as well as searching for new ideas and op-portunities that could drive sales and profi ts.

Consumer Insight employees have an interdisciplinary background in social sciences and their main task is to generate knowledge on customer experi-ences that can be integrated into company strategies and core processes.

Knowledge on user needs and experiences supports design development and price-quality relations, but also brand positioning and loyalty programmes.Th e department focuses on how customers behave when shopping, what con-stitutes the ideel experience, and how this knowledge is applied when desig-ning stores.

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Philips Philips Electrics in Eindhoven, the Netherlands, is one of the largest elec-tronics companies in Europe. Philips has more than 160 000 employees and revenues of more than 30 billion Euros. Company activities include consu-mer electronics, hospital equipment, lamps and semiconductors. In the early 1990s Philips initiated a systematic apporach to user experince, and the de-sign department were given additional social science competences.

With more than 450 employees in the Netherlands and the United States, Philips Design is one of the world’s largest in-house design departments. Philips Design covers design, psychology, anthropology, culture, ethnology, engineering and marketing and applies social sciences in mapping customer experiences. Th e acquired knowledge is combined with technological insight to create valuable input to Philip’s innovation process.

Social Cultural Scanning is a subdivision of Philips Design focusing on deco-ding consumer trends. Starting from ethnographic studies and trend spotting Cultural Scanning maps cultural trends and assesses their impact on product development in market where Philips is present. Philips design also works with international universities and knowledge centres in mapping culture and life style trends.

Th e ethnographic research is pooled in a database from which designers and innovation teams can draw inspiration. Th e database allows for tracking cul-tural changes within diff erent sections of the population.

Ambilight-TVPhilip’s line of Ambilight TVs is a unique example of Philip’s approach to user-driven design. Various cultural studies shoed a growing interest among consumers in combining real-life and virtual experiences.

Ambilight is an ambient lighting feature that projects a soft light onto the wall behind the TV. Th e viewer can choose from six preset colours and white tones, or it can be fully personalized using the custom settings.

In 2004 Philips was awarded the EISA-award for plasma and LCD TV of the year.

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Marks & SpencerMarks & Spencer is among Britain’s largest retails companies. Th e company employs more than 65 000 employees in the UK alone and has branches in Europe, the Middle East and Asia. In 2004 Marks & Spencer had revenues of 90 billion DKK. Th e company’s main activities are clothing, foods, furni-ture and fi nancial services.

An important tool in the innovation process is the Trend Prediction depart-ment that collect consumer data and inspiration for the company’s design units. Th e Trend Prediction employees include designers and people from social sciences.

Trend Prediction works closely with Marks & Spencer design teams throug-hout the design process and supplies designers with useful data on culture and fashion trends.

Marks & Spencer is also engaged in working relationships with a range of external knowledge centres, including Future Concept Lab in Milan (see below).

6.6 External business partnersTh e use of scientifi c and systematic user surveys is often resource demanding, and companies may not have the resources needed for building in-house de-partments. Hence, the proliferation of user-driven innovation is closely tied to the availability of skills and competences found in knowledge centres and consulting companies.

Th e following section introduces four examples of institutions and companies that serve as advisers and consultants, and two examples of company/consul-tant collaboration in the area of user-driven innovation.

Palo Alto Research Center (PARC) Th e Palo Alto Research Center focuses on the decoding of future user techno-logy needs and new technology development. 170 of PARC’s 220 employees are researchers covering natural science, social science and design. PARC also employs 15 ethnographers and expect to increase that number in the coming years.

Founded in 1970 by Xerox Corporation, PARC focuses on identifying future technology innovations and the opportunities arising from new technology. Due to the presence of world class universities such as Stanford and Univer-

84

sity of California and the high concentration of technology-heavy companies, Xerox opted to locate PARC in Silicon Valley.

In the fi rst few years of existence PARC only serviced Xerox Corp. However, in recent years PARC has carried out projects for other companies including Siemens. 40 percent of PARC’s budget is fi nanced by Xerox and 15 by the US government, while the rest of PARC’s funding come from licenses and external projects.

Former PARC employees have been involved in the start-up of more than 20 spin-off companies, and several former PARC employees that have been involved in spin-off s have returned to PARC.

We see a signifi cant knowledge sharing involving PARC and numerous uni-versities, and PARC has initiated an extensive Summer Internship Program. Th e close relationships with universities ensure a constant supply of high-qua-lity researchers and students.

PARC pioneered the use of ethnographic research in new technology develop-ment. In 1979 the anthropologist Susan Suchman carried out an extensive survey of Xerox copy machines, which led to a comprehensive redesign of Xerox’ products.

PARC anthropologists and psychologists focus on three areas:

Technology improvements. Ethnographers are assigned to a technology pro-ject to map user perceptions of the new technology. Th is is used for locating new concepts and designs.

Consumer work space. Here ethnographers identify new work processes that improve productivity.

Target consumer space. Ethnographers map the life styles and work habits of specifi c target groups in identifying new business opportunities.

Years of experience has taught PARC the importance of an interdisciplinary approach in working with user-driven innovation. When launching a project, a project team encompassing ethnographers, designers and engineers is as-sembled. Th e continuous collaboration and dialogue between the stakehol-ders ensure that the project goal is clear to everybody.

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PARC business partners include Xerox, Fujitsu Siemens, Microsoft and Th e Scripps Research Institute.

Design and innovation consultants in the Bay Area Th e Bay Area hosts a range of consulting companies including IDEO, Point Forward, Frog Design, Smart Design and Bridge Design servicing companies of all sizes across numerous industries including the medical device industry.

Th e innovation agencies have diff erent approaches to the innovation process. Some focus on ethnographic research, while others specialise in developing prototypes. Common to all of them is the extensive use of early-stage proto-types, comprehensive product test and user surveys.

Th e innovation agencies are heavily involved in networking activities. David Kelly, co-founder of IDEO, is a professor at Stanford and lectures on design at Stanford’s Biodesign Programme. Point Forward employees are attached to Berkeley’s product innovation courses. Th e strong relations with local univer-sities expose innovation agencies to the students, and allow IDEO and Point Forward to scan the market for potential employees.

d.school In 2002 Stanford University launched a design institute with the main pur-pose of training students to co-operate with other stakeholders in innovation processes that require user-related skills. Th e core assumption behind this is that user-driven innovation requires that the involved parties combine know-ledge on user needs and design with a strong business sense.

d.school provides student with a thinking approach to design and attempts to strengthen interdisciplinary understanding among designer, ethnographers, engineers and marketing and business development students. d.school is not a school per se, but rather a meeting place.

d.school activities are not a part of the Stanford curriculum, but runs parallel to Stanford activities. d.school students include masters students and PhDs. A typical d.school class is attended by 20 students and 3 teachers. Th e school is fi nanced by a 35 million USD grant and receives donations from partnering companies and organisations.

d.school stakeholders have a strong record in user-driven innovation. Among the school founders is David Kelly, co-founder of IDEO. Th e interdiscipli-nary approach found at d.school refl ects the growing interest in user-driven

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innovation, and d.school students are equipped with the tools necessary for meeting the growing demands of today’s business world.

“If you listen to John Hennessy, president of Stanford, he will say that mul-tidisciplinary teaching and research are among Stanford’s biggest opportuni-ties.” George Kembel, executive Director, d.school.

d.school focuses on project-based learning and introduces new project every two months. Students work in groups of four. Th e educational background of participating students will vary, but there will always be at least one designer assigned to each team.

Several companies have embraced the concept of strengthening the students’ interdisciplinary skills, thereby equipping students with the skills necessary for working with user-driven innovation. Companies such as Motorola and Electronics Art have partnered with d.school and have each made 100 000 USD donations. By partnering with d.school companies are presented with student input for company-specifi c issues, and the companies may strengthen ties with the most promising students. Future Concept Lab Future Concept Lab in Milan is a research company specialising in marketing and consumer trends. Th e company currently has 20 employees of which the majority are designers and sociologists.

Th e pivotal point in Future Concept Lab projects is innovation and research. Th e Lab uses traditional methods (focus groups and surveys) and state-of-the-art consumer research tools, primarily ethnographic techniques.

Th e chosen method depends on the character of the project. Th e company has built a research system consisting of diff erent modules: Mindstyles, Body Signals and Genius Logi, that uncover life styles, norms, attitudes and con-sumer behaviour. 70 correspondents areound the world are affi liated to Fu-ture Concept Lab, contributing with observations and analysis of consumer behaviour.

Future Concept Lab customers include Coca Cola, Nokia, Unilever, Levi’s, Philip Morris and Nike.

Health Hero Network Health Hero Networks in Mountain View, California, manufactures sophi-

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sticated medical equipment. Th e company has 250 employees. Health Hero Networks is an example of a research-intensive, technology driven company that maintains a strong focus on the systematic collection of user information as a critical element in the innovation process.

A few years ago the company developed the Health Buddy, a small screen connected to the phone network. Th e device allows elderly people and people with a chronic disease to transmit vital health information from their living room to their physician.

Th e strength of Health Hero Networks lies in the development of the under-lying technology. However, since the Health Buddy revolutionised the entire concept of “consulting your physician”, the company focused on using user needs as the starting point of the product development process.

Health Hero Networks did not have the in-house skills necessary for the task, and opted to involve IDEO in the process. By observing elderly people in their homes, IDEO developed the underlying concept behind the Health Buddy.

Th e joint venture resulted in a sophisticated technological product with a high degree of usability.

Samsung Electronics Co.With 66 000 employees and 2004 revenues of 72 billion USD Samsung is a heavy- weight in the global electronics industry. Samsung’s broad product portfolio covers everything from radiators to mobile phones.

Up until the mid 1990s Samsung was a mass market electronics brand in the lower end of the price scale. Today, Samsung is market leader in a range of product lines, including LCD projectors and memory chips.

Samsung’s success can be accredited to a strong focus on design. Th e company has invested heavily in improving product design and usability. Over the course of the past 4 years Samsung has doubled its design staff to 550 emplo-yees. In 2004 alone Samsung hired 120 designers and design budgets grow at 20 to 30 percent annually.

To track global trends Samsung has set up design centers in London, Los An-geles, San Francisco, Shanghai and Tokyo. Furthermore Samsung has launc-hed an in-house design school “Innovative Design Lab of Samsung” where promising designers are taught by experts from the Art Center College of

88

Design in Los Angeles.

To streamline the design process Samsung has teamed up with leading inter-national business partners including IDEO and Seymourpowell. Th e business partners have contributed to a reshuffl ing of Samsung’s approach to design. Today, the engineer is no longer the most important part of the production process; design is now given top priority.One example of Samsungs’ focused approach to user-driven design is found in the Usability Lab in Seoul, Korea. Among other things the Lab researches in computer “beeps” and “clicks”. Design is longer tied to the physical ap-pearance of a product, but also to the customer’s experience when using the product.

6.7. Network architectsTh ere are many indications that knowledge sharing within business clusters will improve if independent and neutral parties facilitate the networking pro-cess. In situations where the knowledge sharing process is slow, there is a great need for the involvement of external sources that can drive the process forward.

Th is is also important to knowledge sharing in the fi eld of user-driven in-novation.

Below we present two examples of network organisations focusing on user-driven innovation.

The Biodesign Network Th e Biodesign Network in Palo Alto, California, assists students and resear-chers in “marketing” their innovations. Network members include industry leaders and the academics and focuses explicitly on the commercialisation of Stanford innovations. Th e network off ers educational services and mentors-hips for Stanford students and researchers. Network companies off er traine-eships to promising students and the network secretariat runs a web site with job advertisements.

Th e Biodesign programme is administered by four full-time and four part-time employees. A number of researchers and teachers are also involved in the programme.

Th e programme is believed to have contributed signifi cantly to the building of a widespread network (covering as many as 700 individuals) in the Bay

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Area. Th e programme has led to the start-up of a number of medical device companies, and the network has contributed to the more than 250 medical device patents taken out by Stanford students and researchers. Th e Biodesign programme is on of six larger Stanford themes, that are part of the reorga-nisation of biomedical and engineering research. Th is is called Bio-X. Bio-X is located in a building designed to host interdisciplinary research activities including joint lab facilities and informal meeting points.

The Fashion CenterTh e Fashion Center is a non-profi t organisation in New York’s fashion district. Th e center is primarily used by business-to-business including designers, di-stributors, PR agents, market analysts, model agencies etc. 6 of the Fashion Center’s employees work exclusively with off ering advice and counselling for the fashion industry.

Th e organisation is fi nanced by fashion districts homeowners. Th e fee covers expenses for refuse collection and co-fi nances the Fashion Center. Th e Center has a large database containing information on current events and initiatives, and the center off ers a wealth of information on tradeshows, fashion shows etc.

Th e center is also active in facilitating contacts to fi nancial advisers and other experts that may assist a newly-established designer in the start-up phase. Th e Center has strong relations with the education world and provides lectures and courses in co-operation with the Fashion Institute of Technology in New York.

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Results and recommendations

Th e report has shed light on the proliferation of user-driven innovation in Danish companies and provides some insight into the use of user-driven in-novation in selected international companies which are regarded as good-practice. Th is chapter outlines the challenges and recommendations that the analysis gives rise to.

7.1 Challenges In the global knowledge economy innovation is becoming an increasingly important competitive factor. It is a competition that involves technology but also a keen understanding of customer needs. Th is is the reason why user-driven innovation has become a key competitive factor. Th e ability to identify customer needs and to incorporate this knowledge into products and custo-mer experience will provide companies with a competitive edge.

User-driven innovation uses the customer as the starting point. It is the ex-pectation and the desire to fulfi l a customer need that drives innovation. So-metimes new technology may provide the customer with what he or she ne-eds. Often new technology is needed to fully realise the idea. In those cases new technology development is guided by the desire to meet a clearly defi ned customer need.

Technology-driven innovation focuses on research and the researcher’s desire to develop ground-braking technology which is superior to existing techno-logies. Th e company will expect the new technology to possess qualities that will make it profi table, but this will only happen later in the process.

Most companies should master both technology-driven and user-driven inno-vation. Th is requires access to skills and competences among the staff or from external business partners. In terms of actual resource allocation user-driven innovation requires substantial funds for mapping, analysing and assessing customer needs.

Part 7

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User-driven innovation is growing in proliferation, as it allows for an impro-ved allocation of technology resources. Furthermore, the continued growth in wealth has led to a growing number of individual and complex consumer needs that companies will have to address.

Th e proliferation of user-driven innovation has been analysed within three Danish industry sectors: electronics, fashion and medical devices. Th e survey shows that Danish companies maintain a strong customer focus and that customer needs is an important source of innovation.

Company employees are well-equipped for working with customer needs, and most Danish companies use external partners in gaining knowledge on custo-mer needs and customer experiences. In our assessment Danish companies have embraced the concept of user-driven innovation, but the analysis also shows a wealth of opportunities in further strengthening user-driven inno-vation.

A strong competitive edge in the area of user-driven innovation requires highly-specialised knowledge and very skilled employees. Th roughout the analysis Danish companies are compared to best-practice companies and business clusters. Th e comparison gives rise to three areas where Denmark could potentially improve its position:

• Th e skills of newly-graduated employees are not suffi cient in working with customer needs and customer understanding. On the other hand the techno-logy skills of newly-graduated employees are perceived as being good.

Th e international section of the survey introduced a number of universities and design schools where customer and market research and education re-main top priority areas.

• Th e survey shows limited co-operation between companies and knowledge centres in the areas of customer needs and customer understanding. On the other hand Danish companies are heavily involved in technology co-opera-tion with universities and knowledge centres.

Th e lack of co-operation is hardly the result of a lack of interest. Companies maintain a strong focus on customers and fi nd that university/knowledge center collaboration is a vital source of innovation. Th e limited co-operation is probably explained by a lack of institutions and knowledge centres with the necessary competences in customer needs and customer understanding.

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In the internationally leading business clusters we see an abundance of in-stitutions and knowledge centres working closely with companies off ering specialised knowledge on customer needs.

• Th e international survey shows that companies profi cient in user-driven innovation are either large or located in strong clusters with extensive net-works that provide access to specialised knowledge on technology- and custo-mer-related issues.

Survey results are in line with recent studies which shows that a concentra-tion of companies in business clusters provides companies with a competitive edge.

7.2 RecommendationsTh e analysis suggests that user-driven innovation may be strengthened by ad-dressing the following areas:

• Improved research and stronger education in the knowledge and skills that are prerequisites for user-driven innovation.

• To establish a range of high-quality knowledge centers that may engage with companies in co-operative eff orts focusing on customer needs and to incorpo-rate knowledge on customer needs into the product development process.

• To create stronger networks to facilitate company participation in know-ledge sharing.

Th e three areas will require massive investments in knowledge and compe-tence building. Th is may conducted in a variety of ways, however on the basis of our analysis we propose 7 recommendations that could potentially push Denmark forward.

1. Establishing an interdisciplinary education in user-driven innovation. It is recommended that an interdisciplinary education be established, uniting academic disciplines necessary to analyse and assess customer needs and cus-tomer experiences.

Academic disciplines include psychology, sociology, ethnography and anthro-pology; disciplines that all relate to people, communities and society. A com-mon deniminator for the disciplines could be human factors. Th e education may be designed as a superimposed course and could be off ered as a graduate

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or master degree. Th e programme should be tied to a faculty, whose academic record creates a platform for research and education in human factors and related tool subjects. 2. Research. It is recommended that a university research institute supported by signifi cant government funds that could spear-head research in the areas of human factors and consumer behaviour be established. High-quality research could also support a human resource master degree.

In the academic disciplines that constitute human factors, research constantly gains new insights. It must be expected that research in factors that motivate human behaviour may provide valuable insights. Often research is carried out in the cross section beween the various disciplines.

Th e research institute should be established in a university with a strong re-cord in human factor research.

3. Educational programmes in existing education. It is recommended that a short, yet comprehensive, educational programmes in the area of human factors be established. Innovation is more and more becoming a team-disci-pline, which necessitates the involvement of various professional skills and cultures. If user-driven innovation is to make a signifi cant impact it is vital that diff erent academic groups have a profound knowledge of human factor disciplines.

4. Life-long training. It is recommended that an extensive life-long learning programme in the area of human factors be established. Public co-fi nancing of new courses in human factors could be tied to the supply of such program-mes.

Th e organisation of life-long learning in human factors should be carried out in close cooperation with regional companies. Th e regional companies should also co-fi nance the strengthening of their employees’ skills.

5. Knowledge- and innovation centres. It is recommended that universities and other knowledge institutions in close cooperation with private companies establish knowledge and innovation centres, where interdisciplinary research teams can work with user-driven innovation and new technology in areas of interest to the Danish business community.

Basic research provides the core foundation for the research eff orts, but should

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be supplemented by applied research when fulfi lling the full potential of the basic research.

As new technology became a key competitive element, new institues emer-ged whose core purpose were to make proper use of baisc research in natural science. Th e Academy for Technical Science is one such institute.

Th e increased focus on customer understanding will be an important source of competitiveness in the future. Th is is supported by recent developments in leading business clusters around the world. Th e practical use of human factor knowledge will be a key competitive factor in the future.

Th is may be approached in a variety of ways. Th e latest initatives coming out of Stanford are inspiring. Stanford University has set up 3 knowledge and innovation centres; Bio-X, Media-X and d.school. Th e centres are built on an interdisciplinary approach and aim to strengthen co-operation with the business community with regards to specifi c innovation projects. Bio-X focu-ses on biotechnology; however, the research eff orts are combined with other research areas. Media-X is primarily focused on media research, but will also involve other research areas. d.school is a design centre which aims to com-bine design knowledge with customer understanding.

Th e university provides access to the necessary facilities but leaves it to in-terdisciplinary teams to compete for research facilities. Th e university then selects the most promising research projects. Th e three centers place emphasis on co-operation with private companies on specifi c innovation projects.

Other US universities have applied a similar approach. CITRIS at Berkeley is currently planning a research- and innovation project with the Alexandra Institute at Aarhus University, which in time will involve the participation of Danish and US companies.

Th e creation of interdisciplinary knowledge and innovation centres should take into account unique Danish skills and the structure of the Danish busi-ness community.

We recommend that a number of knowledge- and innovation centres that combine research on human factors with natural science, technical and com-mercial disciplines be established. Th e centres could potentially cover areas such as foods, health, medicine and medical devices, electronics, IT, energy and environmental technologies, fashion and housing. It should be made a

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condition that research and knowledge building is interdisciplinary and that the centres cover concrete innovation projects with the participation of private companies. To secure a coupling a knowledge building and business demands, the establishment of knowledge and innovation centres requires co-fi nancing from the business community as well as from local authorities.

6. Networking. It is recommended that autonomous network organisations that may promote a networking culture within Danish business clusters be established. Th is will necessitate a public-private partnership, as public insti-tutions often assume important roles in knowledge networks.

Th e netowrks are incereasingly important to a company’s knowledge and competence building. Strong networks are thus important factors in econo-mies, where innovation has become the key competitive element.

Th e analysis confi rms that large companies and companies in strong business clusters have a proven track record in the area of user-driven innovation.

Th e analysis confi rms that the Danish networking culture is underdeveloped as compared to the world’s leading business clusters. While this is hardly surprising, it underlines the need for a stronger Danish networking culture. A stronger Danish cluster creation will increase the proliferation of user-driven innovation.

Th e report highlights specifi c examples of autonomous international network-ing organisations. Th is is in line with several business analyses which shows that the presence of autonomous networking organisations is a precondition for the creation of strong networks.

Companies and knowledge institutions with a commercial interest in net-work knowledge sharing are not capable of running the network. Th e risk of a confl ict of interest is too large. Th is also applies to traditional industry organisations, since they are supposed to manage their members’ interests. In Denmark and abroad we fi nd examples of independent network organisations that have been established as public-private partnerships, but there appears to be a demand for additional networks.

7. Networking architects. It is recommended that courses in regional develop-ment and cluster creation be off ered.

It requires a specifi c set of skills to successfully run a network. Among other

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things networks require interpersonal skills, as well as more down-to-earth tools. Th e increased focus on networks and the emergence of networking or-ganisations underline the need for developing and communicating tools for network facilitators.

Th e seven recommendations presented above will strengthen the innovation eff orts of Danish companies. User-driven innovation is merely one element in the renewal process that companies will have to address across the entire value chain. However, when looking at the markets where Danish companies compete, user-driven innovation remains one of the key factors in increasing competitive powers. A dedicated eff ort may propel Denmark to become one of the world’s most advanced countries in the area of user-driven innovation.

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Appendix A Testing the correlation between compe-tences, innovation and company cha-racteristics

Th e analysis results are built on the premise that a positive correlation bet-ween a company’s competences for innovation and the number of innovati-ons, and the economic gains from innovations exists. It would be somewhat of a surprise if such correlation did not exist; however, while a theory may seem trivial one may lack the data to support it.

Th ere is a positive correlation between the companies’ assessment of their access to competences and the number of innovations, and we also fi nd a positive correlation between the number of innovations and their economic impact.

A total of 200 companies have participated in the analysis, equally distributed across the three industries. We have tested if a correlation between the compa-nies’ access to knowledge and competences and the number of innovations exists.

Th e companies have been asked to assess employee innovation skills on a scale from 1 to 5. Th e answers have been correlated with company information on the number of innovations. A positive correlation is shown (Table A.1)18.

Variable X2 p-value CommentAccess to the knowledge and skills necessary for creating in-novations

25,67 0,0023 Positive impact on the number of innovations

Employee skills … … No conclusion due to insuffi cient variation in data

Business partner technology skills 39,01 <0,0001 Signifi cant impact on the number of innovations

Business partner customers skills 25,86 0,0039 Signifi cant impact on the number of innovations

User survey methods 19,9 0,0181 Signifi cant impact on the number of innovations

18) The table shows the results of a multiple regression analysis on the number of innovati-ons. The test shows if the questions in the various categories can be omitted simultanously. A p-value below .1 suggests that the variable is significant at at 10 percent significance level.

Table A.1

Correlation between

the number of innova-

tions and access to

knowledge and compe-

tences

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Th e companies have also been asked to assess the employees’ skills for innova-tion. As mentioned in Chapter 5 companies in general express some degree of satisfaction with their employees’ skills across companies and industries. We see a low degree of variation across companies. Th is implies that a signifi cant correlation between employee skills and number of innovations cannot be estimated. Th e lacking signifi cance should not be interpreted as if employee skills are not important to company innovation.

Th ere is a larger spread in company assessments of business partner skills, which makes it possible to test for a possible correlation. Th e analysis distin-guishes between technological skills and the user-oriented skills of company business partners. In both cases we fi nd a signifi cant positive correlation.

To further shed light on the company’s approach to user needs, companies have been asked to report the methods applied in mapping customer needs. Th e most sophisticated mthods are assigned the highest value. On that ba-sis we fi nd a signifi cant positive correlation. I.e the companies with the hig-hest number of innovations are also among the companies that use the most sophisticated and resource-demanding user survey methods (Table A.1).

As mentioned above we found a signifi cant positive correlation between the number of innovations and their economic gains (R2 = 0.82. In other words, companies with a high number of innovations also experience the highest economic gains from innovations.

Furthermore, it has been investigated if a correlation between economic gains and company characteristics exists. Of particular interest is the correlation between economic gains and the companies’ fi nancial record. Unfortunately, available data does not allow for conducting such a comparison.

Company size as measured by the number of employees has no eff ect on the economic returns from innovations and company export shares have no im-pact on the economic returns from innovations. Th e latter may seem surpris-ing, however, most companies in the survey have high export shares, which implies that a low variation in responses should be treated with some caution. Finally, companies have been asked to report which price segment they be-long to, and we have tested for a possible correlation between price segment and the number of innovations. High-price companies see signifi cantly larger gains from innovations as compared to companies in the low- or medium price segments (Table A.2).

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Parameter estimate

t-value Pr>|t|

Number of innovations (B2) 0,23 10,23 <,0001

High-price segment (F1) 3,73 4,62 <,0001

Mid-level price segment (F1) 2,53 3,51 0,0006

Low-price segment (F1) 0,51 0,38 0,7063

Electronics 2,96 3,18 0,0018

Medical device 2,16 2,16 0,0326

It is hardly surprising that we fi nd the most innovative companies in the high-price segment. It is the assumption that Danish companies should mar-ket high-price products to cover their high costs, but that the competition is eventually won in the fi eld of innovation.

Table A.2

Regression analysis

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Appendix B References

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Copenhagen Economics og Inside Consulting (2004): ”Regional Competi-tiveness”.

Council on Competitiveness (2004): Innovate America (http://www.com-pete. org)

Statistics Denmark (www.statistikbanken.dk)

EFS (2001): ”Competence Clusters” - Report 1 & 2.(http://www.efs.dk/publikationer/rapporter/kompetenceklynger/rapport2/pub/html/kap05_4.html#ft5_16).

National Agency for Enterprise and Construction (2001): ”Medico/Health”.

National Agency for Enterprise and Construction (2003): ”Bio-/Health – A new Partnership for Growth”.

EUCOMED (2004): ”Medical Technology Brief”.(http://www.eucomed.be/docs/Brief%202004%20Final.pdf).

Forbes Magasin (http://www.forbes.com/lists/).

Hippel, Erik von, Th omke & Sonnack (1999):” Creating Breakthroughs at3M”. Harvard Business Review, September 1999.

Th e Ministry of the Interior and Health et. al. (2002): ”Bio-Health”.

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Inside Consulting and Oxford Research (2004): ”User-driven innovation in the Danish Business World”.

Intel (www.intel.com)

ITEK in numbers. yearly statistic for 2000, 2nd quarter of 2001 including the business cycle barometer for the 3rd quarter of 2001. (http://billed.di.dk/wimp. les/lores/image.asp?objno=/145610.PDF).

Jørgensen, Stine Hedegaard (2003): “User-centered design” (http://www.ebst.dk/. le/1622/brugercentreret_design.pdf)

Keeley. Larry (in print): ”Th e Taming of the New”, Harvard Business School Press.

Klynge, Alice Heegaard and Annemarie Munk Riis (2004): ”A benchmark study of human resources - What can Denmark learn?”

Levin Group (2001): “Outlook for Medical Technology: Will Patients GetTh e Care Th ey Need?”

Larsen, Anders Hertz and Lotte Langkilde (2004): ”A benchmark study of ICT - What can Denmark learn?”

Leonard and Rayport (1999): “Spark innovation trough empathetic design”,Harvard Business Review, November/ December 1997.

Nokia (www.nokia.com)

Nyholm, Jens & Langkilde, Lotte (2003): ”A benchmark study of innovation and innovation policy - What can Denmark learn?” (http://www.foranet.dk/upload/innovation.pdf)

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OECD (2001): “Th e New Economy - Beyond the Hype”.

Pammolli et al: ”Medical Devices: Competitiveness and Impact on Public Health Expenditure” (draft, december 2004)” (http://www.medicoindustri-en.dk/Library/ Pdf/Draft%20Report%20Medical%20Devices%20Competi

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tiveness%20 February%202005.pdf).

Red Associates (in print): ”Applied Business Anthropology”.

Rosted, Jørgen (2003): ”Th ree types of innovation”.

Saxenian, Annalee (1996): ”Regional Advantage: Culture and Competition in Silicon Valley and Route 128”.

Squires, Susan & Brian Byrne, Jr. Sherry (2002): “Creating BreakthroughIdeas: Th e Collaboration of Anthropologists and Designers in the ProductDevelopment Industry”. Greenwood Press.

Statistical Yearbook 1994 (1994): Statistics Denmark

Statistical Yearbook 2004 (2004): Statistics Denmark

Sundbo (1996): ”Innovation theory - three innovation paradigms”.

UK Health Industries Task Force (2004): “Better health through partnership: a programme for action”.

US Census Bureau (http://www.census.gov/)

Virtuelt Center for Sundhedsinformatik and MedicoTeknik Netværket: ”Technology, helath, information”.

Th e Danish Growth Fund (2004): “Competence Clusters”.

Wiklund (2003): ”Human factors: Moving in the right direction”, MedicalDevice and Diagnostic Industry 2004.

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All of FORA’s publications can be found on the website www.foranet.dk under ”Publications”

FORA reports:

#13 Userdriven Innovation - Results and Recommendations. October 2005 Jørgen Rosted

#12 Userdriven Innovation in the Electronics Industry. October 2005 Casper Høgenhaven

#11 InnovationMonitor 2005. September 2005 Anders Hoffmann

#10 Userdriven Innovation in the Medical Device Industry. August 2005 Annemarie Munk Riis

#9 Userdriven Innovation in the Danish Fashion Industry - a survey. August 2005 Casper Høgenhaven

#8 Userdriven Innovation in the Danish Fashion Industry - The fi fth Global Fashion Cluster? August 2005 Stine Hedegaard Jørgensen, Rasmus Bech Hansen, Casper Høgenhaven

Reports published in cooperation with others:

Entrepreneurship Index 2005. October 2005 Anders Hoffmann, Morten Larsen, Niels May Nielsen

Business Strategy - The Triangle Region. August 2005 Jørgen Rosted, Jens Bjerg Carlsen, Lotte Langkilde

Fact Leaves - The Triangle Region. August 2005 Jørgen Rosted, Jens Bjerg Carlsen, Lotte Landkilde

Measurement System - The Triangle Region. August 2005 Jørgen Rosted, Jens Bjerg Carlsen, Lotte Langkilde

Publications from FORA

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recommendations - Boligejer · recommendations #13 October 3 2005. FORA ensures a fact-based platform conducive for effective business policy development. FORA enables decision makers