Innovate or Perish: Managing the Enduring Technology Company in the Global Market

Shifts in Innovation

Beginning in the early twentieth century, the hallmark of the U.S. economy has been industrial goods and production technologies that can churn out millions of an item with the least unit cost. Businesses achieved these capabilities through standardization of manufacturing processes, initiating the reliance on relatively broad labor skills to staff and operating mass production capabilities. However, where firms once derived value from production efficiency—brought through standardization and scale operations—markets soon shifted to reward improved flexibility to meet customer demand and the ability to deliver an improved customer experience. This resulted in a shift from a focus on production innovation toward service innovation based on improved marketing, sales, and customer support. Later, this evolved to focus on increased customization of product and experience through enhanced knowledge of the customer and through technological improvements in information technology (IT), requiring a more highly skilled workforce and improved IP treatment for business methods and software-based technologies.