The author points to the seven key social and economic trends that provide a framework for companies’ innovation strategies in the second decade of the 21st century. The book argues that the global business world is on the cusp of major transformation, and that now is the time to reassess market impulses, and to look at the new global pressure points that will influence businesses’ long-term growth.  Preparing an open and innovation-friendly business model will be the only way for organisations to successfully navigate these external developments.

The author argues that fostering a culture of innovation excellence can only be achieved by five success factors:

• Developing a shared vision
• Setting the base for results with a nurturing innovation culture
• Making innovation management the backbone of your company
• Developing and executing a strategy to make the vision a reality
• Accepting and integrating all new approaches into a new business model

Companies who accomplish to establish an innovative culture, will not find it hard to adapt to the seven megatrends expected in the future.

Trend 1: the West-East shift

The growth of new economic areas in the Near and Far East is skyrocketing. While production costs in these areas remain relatively low, quality standards are rising, and these economies are also the source of some of the most cutting edge innovations, e.g. the $1500 Tata Nano car from India.  The author highlights the opportunities and challenges for Western enterprises dealing with this shift, arguing that this time Westerners will be the ones who need to adjust their behaviour in when working within the cultural norms of these emerging market nations.

Trend 2: Cost issues

The cost of doing business is permanently rising, and controlling cost remains central to achieving competitive advantage.  However, we are moving beyond the days when cost-cutting alone was enough to boost a company’s financial ratings.  To sustain growth into the coming decades, businesses must first acknowledge that good customer relationships are the source of corporate value, and all cost issues must therefore be seen in this context.  By including cost considerations in new product development, companies are encouraged to incorporate cost-cutting options into the entire supply chain.

Trend 3: Regulation and Accelerating State Control

The world economic crisis and increasing environmental degradation have called into question the continued role of the state as society’s ultimate regulator. With a new host of global laws and regulations affecting local, national and regional economies, innovation will play a role both in the type of abatement measures favored by governments, and in how organisations work with regulators to achieve compliance.

Trend 4: Sustainability and the Challenges of Climate Change

Sustainable business is here to stay, and the public no longer accepts businesses that seek to maximize profit to the exclusion of their environmental, ethical, or societal responsibilities. Today companies are expected to be accountable stakeholders in the social discourse – and nowhere can this be seen more clearly than in the monitoring and management of their CO2 emissions.  Apart from the obvious issues of developing alternative propulsion technologies and re-thinking the power grid, the author challenges businesses to consider how their global procurement processes contribute to CO2 emissions, and how innovation along the supply chain could significantly improve the human and environmental impacts of production.

Trend 5: Increasing Complexity

Companies across industries are launching more and more product variants, adding new features to even the smallest things.  The more of these innovations that are brought to market, the more complex the product palette becomes, can, in some organisations, lead to a lack strategic focus and tendency toward negative complexity.  The author argues that smart innovators manage to keep complex product variants from weighing down the efficiency of their supply chains, and recognise that innovation aimed at simplification can be just as powerful – if not more so – than innovation based on increasing complexity.

Trend 6: The New Middle Classes

While the middle class in Western countries continues to shrink, it is permanently growing in the BRIC states. However, many Western enterprises continue to limit their emerging market sales strategies to the premium segment; thus missing out completely the largest percentage of their potential customer base in the BRIC countries. Given the rising demand from these consumers, Western companies should instead concentrate on serving the middle price segment. This means not only offering simpler and more favorable “de-engineered” products, but also ensuring that the product offering addresses the specific needs of each respective new market.

Trend 7: Technology

New technologies make differentiation, cost reductions and new product development possible.  With regions across the globe searching for the holy grail of economic development, creative and innovative technology development are the twin engines through which regional economies can simultaneously stay abreast and move ahead.  Examples of this are seen in the growth of the electric vehicle and green IT markets.