Companies innovate by making incremental product improvements inspired largely by market research that looks to fill needs. New product development of the future, it can be argued, will actually be accomplished by communities of user groups feeding cool stuff they want to use into manufacturers who make it happen. And now, Denmark has become the first to say it will pay incentives to companies who align with their open innovators rather than in-house R&D to create new products. Expect EU partners to follow.

Over the last 30 years, market-changing, mega-income producing new products have largely been created with a single market research method: find a need and fill it.

Simple.

Yes, but increasingly ineffective, says MIT/Sloan School of Management Professor of Innovation Management Eric von Hippel. His exhaustive study of multiple industries and innovations shows that in most cases, the truly ground-shaking product innovations come from the the most ignored part of the market curve: the user’s own invention.

“All markets are small and uncertain at the beginning; users experience need well ahead of manufacturers and are usually ignored by companies because they are few in number,” Dr. von Hippel just told hundreds of global business strategists attending the World Innovation Forum in New York.

Why? Because, Dr. von Hippel says, users innovate to develop something they can use the way they want to use it as opposed to companies who innovate largely when they see the potential to sell something. Products created this way include the heart and lung machine, the jogger baby stroller, the mountain bike, the Dyson vacuum cleaners, and endless software and IT systems.

The US economy is in a slow period. As corporate leaders explain their flat or low growth performance, fingers are pointing to oil prices, lack of job growth and, of course, that sub-prime mortgage business. 

How will the global economy and specifically, US indicators affect your business performance?

Leave us a comment and tell us:

Yes, the economy will affect my business and here’s how:

No, the economy really isn’t worrying me, here’s why:

I’m worrying about other things and they are:


Join the discussion that’s developing in the comments section of this entry:

“I am in the recruiting industry at the senior executive level and despite what the press states about a lack of job growth and a slowing US economy, I expect my business to be solid this year.  I expect my growth this year to be about 10% which clearly is slower than each of the last 2 years which was more like 20-25%.

Others I speak with ask, how can this be.  Aren’t we in some sort of a recession and isn’t the hiring market weak with the job market?

The fact is that many of my client companies in the US are not dependent totally on the US marketplace.  The worldwide economy is still strong even as the US slows and they are focusing accordingly on their growth areas.

There also is still growth in US industry sectors like healthcare, biotech, and energy --even as the financial services & housing sectors, that we read about everyday, deteriorate rapidly.

One suggestion to those small and growing businesses that are wondering what to do as the US economy slows:  avoid being trapped in a no-growth segment.  Look for growth and customers in niches and with companies that are still growing.  Target, target, target!

That is what I do.  Internationally based companies are probably doing better than those serving solely the financial services marketplace.  Even those in financial services that made the right bets on sub-prime are probably doing things differently than those that did not.

One way to survive in a no-growth market is listen to your customers and don’t believe everything you read in the papers.  Reporters typically sell newspapers by doom and gloom or over they over accentuate the upward trend.  There are often hidden opportunities if the “herd is going in one direction”.  Caution:  I do admit that I’ve yet to find it productive to stand in front of an approaching freight train!  Hope this helps.”—Mark Andrews

“Mark, I agree. It’s easy to start believing all the doom and gloom.  Laurence Haughton is a business coach who works with companies to achieve their toughest targets and we asked him whether he thought the economy was going to have a negative impact on growing businesses.  He says it’s actually rare for business results to be affected significantly by external events.  Here’s a quick clip of what he said:

http://www.execunet.com/execunet_ondemand/FTDISC1HAUG_Discussion_1_030608_Haughton.mp3

For a more in-depth view of how to grow your company in these uncertain times, visit the Resource Center and download our hour-long conversation with Laurence Haughton.”—Lauryn Franzoni

“I agree with both of you. Regardless of what is being discussed in the press, anyone is subject to a slow down if we become complacent in any part of their company or specific function in the organization. A refocus on productivity, stronger marketing and development are always keys to success. As the old axiom goes you are either moving forward or you are moving backward. If the economy is truly going to effect a business or industry, effort must be increased and creative opportunities must be explored. Involving ones stakeholders in evaluation and decision making is always a positive opportunity to ferret out the issues.”—Rodney Holt

A recent study suggests that sky-high CEO payouts are mostly well-deserved. Do you agree?

The financial pages are regularly riddled with news of big CEO payouts, but research from Watson Wyatt seeks to dispel some of the negativity. In their 2007/2008 report, Debunking Executive Compensation Myths, the financial services consulting company draws a correlation between the compensation of high-performing companies and their lower performing brethren, with CEOs of better performing organizations earning up to 75 percent more ($10.5 million compared to $6.0 million).