Discuss how design and innovation is used to gain a competitive advantage. Show examples of where design has been applied and what effect this has had on the competitiveness of a business sector of your choice.
The term ‘ design innovation’ while not having a universally acknowledged definition, is increasingly used in the professional design discourse. I will discuss the concept of ‘design innovation’ by unfolding the close relationship between ‘design’ and ‘innovation’, ‘design’ as the core function of ‘innovation’ and ‘innovation’ as the main driving force in a competitive business sector.
Innovation: “Transformation of an idea into a novel product, operational process or new service in industry or commerce”. (BS 7000-10:1995, definition 23011a) The term ‘innovation’ derives from the Latin word ‘novus’ which means new, thus to innovate means to create something new. There are five areas of innovation:
1.The generation of new or improved products.
2.Introduction of new production processes
3.Development of new sales markets
4.Development of new supply markets
5.Reorganisation and/or restructuring of the company
Schumpeter JA (1934)
These areas can also be combined to create further areas of innovation. The types of innovation that can occur can be summarised by three main definitions;
-Technical revolution, where by the product is a new invention to the world, which is very rare.
-Radical Innovation, where by there is a major development to a new sector, which is quite common.
-Incremental Innovation, where by an improvement is made to an individual product, which is even more common.
Freeman’s taxonomy of innovation.
These levels of innovation can also be measured in a graph; Figure 1 represents the two dimensions of innovation, different levels of novelty and type of innovation.
Figure 1; Dimensions of innovation space (Tidd et all, 2001)
Schumpeter put forward a “theory of innovation” where he suggests that innovation consists of growth spurts, which are the driving forces leading a capitalist economy. In the everyday language, ‘innovation’ is recognised as a synonym for ‘invention’, thus the word invention implies a new device or process that is created by study and experimentation. According to Tidd et al. (2001) “ Innovation is more than simply coming up with good ideas; it is the process of growing them into practical use. He also exposed invention as; “only the first step in a long process of bringing good idea to wide spread and effective use” (Tidd et al2001).
The theory of innovation dates back to the early 17th century on studies of capital system. However it was Schumpeter who first mentioned innovation in the first half of the 20th Century suggesting that innovation was imperative for economic growth, commercial profit and thus public wealth. Economists such as Freeman and Dosi have later developed Schumpeter’s theory. In Schumpeter’s first original theory, there are five types of innovations, comprising the two major categories:
- A new method of production
- A new source of supply of raw material or semi finished goods
- A new good
- A new quality of a good, opening a new market
- A new industry structure as the creation or destruction of a monopoly position (Meier and Baldwin 1957)
In 1982 Freeman was the first to emphasize the role of design in innovation. In its broad context design can be defined as: “The purposeful or inventive arrangement of parts or details”(The American Heritage Dictionary; 2000). However according to ICSID (2002) ‘design’ is “a creative activity whose aim is to establish the multi-faceted qualities of objects, processes, services and their systems in whole life cycles as the central factor of innovative humanization of technologies and the crucial factor of cultural and economic exchange”. (ICSID 2002). Figure 2 represents the main areas of the design domain and the connections between distinct areas.
Figure 2: The main areas of design (Shirley and Henn, 1988; quoted from Walsh et al, 1992).
The studies by Freeman, which refer to design as the core of the innovation process, emphasise the role of design as the innermost part of the innovation process. According to OECD (1992), design is “the very core of innovation the moment when a new object is imagined, devised and shaped into prototype form.” Marzano (2000) defines design as “a role to play in sustaining and encouraging the evolution of civilisation, balancing technology and socio cultural value.” Porter (1980) describes design as an essential strategic tool for competitive strategy, design is committed to “producing attributes which place the products apart from competing offerings in the market.”
Design Innovation in a business sector
Thus I can infer that ‘design innovation’ comprises the incremental novelties in the design of an existing product or service or obtaining radically new products or services by design effort with no or minimal technical novelty. It is difficult to completely sum up what design and innovation are. However they are both critical in a competitive market and I am going to discuss the importance of them in the business sector of washing up powders.
One would not normally associate detergents with design; the arrival of designer detergents is still way off. However there are many considerations that detergent companies must take into account. For example with environmental issues and concerns growing larger each year it was forced upon detergent companies to use design and innovation in their scientific research to produce washing up powder that would work at 30 degrees instead of 40, which was much more economical for the environment. Convenience is also crucial in this business sector, the size, shape and amount of detergent you can buy on shop shelves is very important to the consumer.
When it comes to design innovation in detergents it is mainly scientific based good performance and practicality is generally still the most important thing to consumers when buying a washing detergent, thus companies need to design better detergents that produce cleaner results. So it is up to detergent companies to use design innovation to produce detergents that are practical, environmentally friendly and that will produce good results on lower temperatures thus being more eco friendly.
Persil were the first company to produce a detergent that was in the form of a tablet, however there was much more to this new innovating design than the fact that it was more easy and practical to use. Persil manufactured by Unilever has a dominant 27% share of the fiercely competitive £1 billion UK household detergent market, where design and innovation is crucial. Unilever considers design to be crucial in pulling together the research, development and manufacturing operations to develop the product, which will secure the most market share (Competitive advantage through design MARCH 2002). Yet just as important to the company are its environmental issues which are a huge concern in the 21st century. Its policies include using environmental management tools to evaluate the potential whole life cycle effects of the Persil product, from the extraction and processing of raw materials through to manufacturing, packaging, distribution, use and eventual disposal (Competitive advantage through design MARCH 2002).
Many detergents have been produced over the past few years that are eco friendly but have failed because they do not do their job as well, but Persil created the tablets that were not only eco friendly but also produced excellent results and were extremely practical; all you needed to do was place a tablet in the washer, which eradicated the need of measuring out certain powders and mixing them. The tablet was also kind to skin and was backed by the British skin foundation, which put again Persil further ahead in there sector because parents of young children now new the detergent would not harm there Childs skin thus that is why Persils campaign comprises of the phrase “dirt is good” encouraging children to play and get dirty. Another advantage of the tablets was the fact they were pre measured. Research showed that most people used more than was needed when it came to pouring the powder and so having the tablet at the right amount was again more friendly to the environment, less powder was being wasted so less needed to be produced.
This put a huge demand on the business sector for other companies. Freeman developed strategies of the industrial firm consolidating of:
-Offensive- leader, first to the market with new products and services
-Defensive- Fast follower don’t create new inventions or services but develop it further
-Immative- Low cost manufacturers
-Traditional- Niche markets, established markets, constant demand, low technology
Freeman C (1982) The economics of industrial innovation
In this case Persil were the offensive leader and other companies were quick to follow because the demand for the tablets was extremely high. Ariel became a Defensive fast follower, they produced powders that could be washed at 30 degrees and thus their current campaign encouraging people to wash at 30 degrees to save enough electricity to light up a city. Other detergents closely followed trying to produce their products so that they could be washed at lower temperatures whilst achieving the same results, but none have been as effective as the Persil tablets. The design of the tablets and the innovation behind the scientific research of producing them proved to be very effective for Persil and thus gave them a huge competitive advantage In there sector.
In conclusion ‘design innovation’ has potential to be a new mindset when it comes to understanding the emerging approaches to design, their contribution to innovation and a bridge to close the theoretical gap between the design literature and the literature of innovation. Its practical applications will allow organisations in different business sectors to have long term benefits along with the advantage of more meaningful and satisfactory responses to the changing consumer needs by design.
British standard 7000. Licenced to leetexdbr. 11 october 2004
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The American Heritage dictionary 2000. The American heritage dictionary of the English language, fourth edition, Houghton Mifflin Company, United states
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Walsh V. Roy R. and Bruce. M. 1988. Competitive by design, journal of marketing management, 4/2