It’s the time of year for those of us of with a forecasting bent to opine on the state of innovation practice and what’s to come in 2017. We don’t claim to have perfect insight, but our reading and research, our participation in multiple innovation conferences, and our work with clients does give us a unique perspective.

In this article, we use four lenses – Growth, Decline, Organization and Transformation – to emphasize the dynamic nature of the field of innovation. The field is being driven by companies, service providers, and academics who are constantly moving the ball forward in our understanding of the art and science of innovation.

Growing

What is nascent and growing? What is accelerating and potentially reaching a tipping point?

  • Incubation was a hot area in 2016 and will continue to be so in 2017. Companies are experimenting with the ways and means of corporate ‘intrapreneurship,’ and various models of incubation (especially Test & Learn models) will continue to be developed and adopted.
  • Corporate collaborations with startup companies will continue to grow. Large companies are learning how to work well with startups and are looking to them as a source of new technologies, new business models, and new corporate cultures.
  • New tools, many based on artificial intelligence/machine learning, will take major steps forward in their capabilities (e.g. identifying unmet needs & desires, constructing domain ecosystems, etc.). New companies and offerings will enter the market at a rapid pace. This market is in a divergent phase and will continue for at least another year or two before consolidation begins.

Declining

What is decelerating, commoditizing, or going away?

  • Open innovation is becoming a background activity instead of a leading activity (except for hubs – see below). Many companies have established some form of open innovation, and, while still a source of value, they are declining in importance and influence vis-à-vis other parts of the innovation system.
  • The commoditization of innovation software systems continues. The many companies offering these systems are struggling to differentiate themselves and companies are realizing that these systems, by themselves, are not a solution to the issues they are facing in their innovation practice.
  • Corporate R&D will continue to struggle to find relevance for strategic innovation, though it will still be relevant to support sustaining innovation for the core business. The trend for corporations to look to the outside (e.g. academic organizations) for basic research and inventions that can be commercialized will continue. Nobel Prize-level research will continue to vanish from the corporate R&D lab.

Organizing and Transforming

What is coalescing, self-organizing, or evolving into something new?

  • Incubators, accelerators, and innovation hubs, both corporate and independent, will continue to be established as innovation centers within metropolitan areas throughout the world. These will become more relevent and influential as they become more adept as organizing local innovation ecosystems.
  • The focus on, and discussion of, disruption is rapidly evolving. The intense discussions about disruption that erupted in 2016 will continue as the whole notion of what disruption is and how it manifests itself (or even if disruption is the right descriptor) get sorted out and refined. 2017 will see a consensus start to emerge – and it may not be consistent with Clayton Christensen’s view.
  • Research into innovation leadership, culture, and organizational design will continue to cause companies to transform the way they behave. Research and practice (case studies) will converge on a consensus that will compel companies to pay attention and leaders to adapt.

Despite all of this, some things won’t change much. There will still be very little tolerance of failure, there will still be tensions and struggles between corporate and business unit innovation, and there will still be issues in innovation leadership, culture, and mindset. But despite these issues continuing to plague us, we are making progress.

Selected Readings

How Amazon Innovates in ways that Google and Apple can’t

Why do Amazon and Google have such different success rates for transformational initiatives? The answer may be in how they approach the problem.

Original article | Read our short take

Corporate Innovation as a System

Much more than a set of tools and processes, an innovation system functions to resolve the natural tensions between existing businesses and future transformation.

Original article | Read our short take

How to Stop Short-term Thinking at America’s Companies

An emerging trend among certain investors and CEOs is to stop managing for quarterly results. Thinking long-term goes against current incentives, but is becoming increasingly demanded.

Original article | Read our short take