Every year the consulting firm PwC produces the list “Global Innovation 1,000”, which lists the one thousand companies in the world that spend the most on innovation and development. In 2017, these companies invested an entire 630 billion US dollars.1 That represents an increase of 75 percent in the 12 years since the list was first published in 2005, when the companies spent 360 billion dollars.
That companies invest more and more in innovation and development is a clear trend that is driven by companies that want to take the lead in technological development. At the top of the investment league we find Amazon, which invested 14.4 billion US dollars in innovation in 2017, followed by number 2 – Google (Alphabet) – which spent 12.5 billion dollars. In third place we find Intel, with 11.4 billion dollars, which is equivalent to 21.5 percent or their total revenue.2
Larger investments do not necessarily result in more innovation. But there are other indicators that point toward an innovation acceleration. The number of patents has increased dramatically since the end of the 1970s. In fields such as nanotechnology, stem cell research and mitigation measures for global warming, the number of approved patents doubles every two to three years. At the same time, the number of patents applied for globally quadrupled between 1990 and 2016.3 In China, where the increase has been the largest, the numbers have increased from essentially zero to over a million patent applications per year.
These developments have led to a flood of new products and services that companies want us customers to embrace. One example is the development of apps. According to Statista, in 2017, a normal Android user could choose amongst 2.8 million apps available via Google Play, and Apple’s App Store had 2.2 million apps available for download.4 Note here that the app market has only existed for a little over ten years. Between 2016 and 2018, 6,140 apps were launched every day on Google Play.5 Far from all apps achieve broad penetration on the market, but companies invest heavily in the race to publish innovative solutions for an increasingly discerning target audience.
One of the driving forces behind this development is that we now have the ability to quickly find and adopt new innovations. In a digital world, new innovations or products can achieve a following of millions of people in just a few hours, days or months. Compare that to all of the innovations that were developed during the larger part of the 20th century, when adoption was often drawn out and could occur over long periods of time. It took 50 years for radio and electricity to become common products amongst the people, and for the telephone it took 80 years. Compare that to the cell phone, which achieved the same level of distribution in only 15 years.6
We see the same development for innovations such as the Internet, smart phones or social media. Not to mention all of the digital products that have been launched in recent years. The music app TikTok (formerly Musical.ly), where primarily young people create and share own-produced music and dance videos, is one example of this. The app had about 200 million registered users when it was acquired by the Chinese tech company Bytedance for nearly 0.99 billion US dollars in 2017.7 This is impressive knowing that the app was launched only three years earlier, in the fall of 2014.
Innovations, just like news, are launched and snapped up at an increasingly fast pace, which also creates a feeling that things are happening faster. Something can be developed today on one side of the planet and a few days later be commercially viable on the other side. S-curves have been replaced by a firework of small rockets that are distributed in the digital world in a matter of seconds. Only a few succeed, but it goes fast.
One consequence of this development is that we also experience that everything is happening much faster. At the turn of the century Swedes were asked in a survey how they felt about the current tempo of society compared to ten years ago. Nine out of ten thought that the tempo had increased, of which 58 percent responded that the tempo was much faster.8 If they had known what was coming they would probably have thought that change at the time was relatively slow. For the past 15 to 20 years development has accelerated at a much faster pace.
One can contemplate what the increased acceleration of innovation means for business development and future competitiveness. There is no doubt today that success requires investments in development. Lose interest in this and you will eventually be replaced. Many studies confirm this. But fundamentally it is not a question of who invests the most. Even small companies with less economic muscle can succeed, often because they find a niche that the larger companies haven’t been fast enough to conquer.
The world is changing very fast. Big will not beat small anymore. It will be the fast beating the slow. | Rupert Murdoch, Media mogul
Innovation is not only about developing products and services either. It is just as much about investing in smarter production, logistics, sales and marketing. There is a wealth of technologies and working procedures today that can make both market communication and sales to new and existing customers more effective.
1 Fortune. (2014). The 10 biggest R&D spenders worldwide. Downloaded 2018-10-22 from https://fortune.com/2014/11/17/top-10-research-development/26/
2 PwC. (2017). The 2017 Global Innovation 1000 study. Downloaded 2018-10-22 from https://businesstech.co.za/news/business/207819/tech-companies-dominate-as-the-most-innovative-in-the-world/
3 World bank. (2016). Patent applications, residents. Downloaded 2018-10-22 from https://data.worldbank.org/indicator/ip.pat.resd?view=chart
4 Statista. (2018) Number of apps available in leading app stores as of 1st quarter 2018. Downloaded 2018-10-22 from: https://www.statista.com/statistics/276623/number-of-apps-available-in-leading-app-stores/
5 Statista. (2018). Average number of new Android app releases per day from 3rd quarter 2016 to 1st quarter 2018. Downloaded 2018-10-22 from https://www.statista.com/statistics/276703/android-app-releases-worldwide/
6 Thompson, D. (2012, 7 April). The 100-Year March of Technology in 1 Graph [Blog post]. Downloaded 2018-10-22 from https://www.theatlantic.com/technology/archive/2012/04/the-100-year-march-of-technology-in-1-graph/255573/
7 Mediakix. (2016). 10 STATS MARKETERS NEEDS TO KNOW ABOUT MOBILE APP, MUSICAL.LY. Downloaded 2018-10-22 from https://mediakix.com/blog/top-10-musically-statistics-marketers-should-know/
8 Medieakademin. (2000). Förtroendebarometer 2000. Downloaded 2018-10- 22 from https://snd.gu.se/sv/catalogue/study/snd0950