Rothwell’s five generations (5G) of innovation provides an historic overview of industrial innovation management in the Western world between the 1950’s and 1990. Each of the five innovation management ‘generations’ arose from different and distinct business environments. Rothwell observed that more effective innovation processes lead to a decrease in market time and a reduction in product development cost.
The five generations are:
1. TECHNOLOGY PUSH
From 1950 to the mid-1960’s, fast economic growth led to a ‘black hole demand’ that allowed a strong ‘technology push’ and industrial expansion in the Western world and in
2. MARKET PULL
The mid 1960’s to early 1970 were characterized by a ‘market shares battle’ that induced companies to shift their development focus to a ‘demand pull’. The central focus became responding to the market’s needs.
3. COUPLING OF R&D
From the mid 1970’s to the mid-1980’s, ‘rationalization efforts’ arose under the pressure of inflation and stagflation. The strategic focus was on corporate consolidation and resulted in ‘product portfolios’. Companies moved away from individual R&D projects. Marketing and R&D became more tightly coupled through structured innovation processes. Operational cost reduction was a central driver behind this ‘coupling model’.
4. INTEGRATED BUSINESS PROCESSES
When the Western economy recovered from the early 1980’s to the mid-90’s, the central theme became a ‘time-based struggle’. The focus was on integrated processes and products to develop ‘total concepts’. Typical of this fourth generation was the ‘parallel and integrated nature’ of development processes. Externally, strong supplier linkages were established as well as close coupling with leading customers.
5. SYSTEM INTEGRATION & NETWORKING
Finally, from the 1990’s onwards, resource constraints became central. As a result, the focus was on ‘systems integration and networking’ in order to guarantee ‘flexibility’ and ‘speed of development’. Business processes were automated through enterprise resource planning and manufacturing information systems. Externally, the focus was on ‘business ecosystems’. Advanced strategic partnerships were setup as well as collaborative marketing and research arrangements such as ‘open innovation’. Added value for products was to be found in quality and other non-price factors.
Hopefully, with the aids of Web 2.0 and the various Social Networking tools available, it should be considerably easier to adopt the 5th generation of innovation model for your business and mine. This will certainly cut down both development cost and development time in bringing innovative products or services to the market.
