Radical Innovation, Breakthrough invention, or Incremental innovation dominate the discourse of inventions and innovations. But how do we draw borders in segregating them? For example, was the digital camera a radical innovation at the beginning? If it were the case, being the first to get the digital camera patent, why did Kodak not pursue it? Similarly, is the effect of digital cameras on all products, like automobiles, radical? Perhaps, no. Numerous such examples have been confused due to categorizing them as radical or incremental innovations. Ironically, all radical innovations invariably begin the life cycle in primitive form. Instead of a big bang from a breakthrough invention, radical innovations are the outpost of the snowball effect, created through cumulative clout from incremental advancement.
Like digital cameras or mobile handsets, the gradual unveiling of an innovation’s potential over time in an incremental manner is a surprisingly common pattern. Often, it happens due to the scalability of technology crores, making innovations increasingly better performing and less costly. For example, the rise of Motorola’s Dynatec into today’s radical, innovative smartphone has been due to the advancement of semiconductor technology, making microchips increasingly powerful and less energy-consuming. However, not all technology cores are equally scalable, creating R&D management challenges. Furthermore, not all technology cores experience the same scope and externality advantages. As a result, the growth of innovations as radical or not faces uncertainty.
The embryonic beginning and uncertain scale, scope, and externality advantage pose decision-making challenges. The decision not to pursue emerging innovation possibilities may lead to lost opportunity and suffering from Creative Destruction. On the other hand, Premature Saturation, high R&D cost, long path to profit, and poorer performance than competing technologies may lead to unrecoverable loss. Hence, companies leveraging innovation possibilities must craft innovation management systems with this phenomenon in mind.
Defining Radical Innovation
Radical innovation is a significant and transformative development in technology, business models, processes, or products. It creates a substantial shift in industry or society. It involves groundbreaking advancements by introducing revolutionary ideas, concepts, or approaches that challenge existing norms or mature products, disrupting the incumbent dominant players and markets. But does it mean such transformative development shows up as a big bang due to revolutionary ideas? Or do they incrementally grow from humble beginnings? Let’s draw a lesson from the following examples.
Examples of Radical Innovations
Accelerometer chip
The invention of electronic components and micro-electrotechnical devices as a single integrated system led to the innovation of accelerometer chips in the 1980s. Initially, this chip was born to measure linear acceleration for the automotive industry’s needs. Its application began in crash detection for airbag deployment.
Subsequently, it was improved to measure inclination and vibration. Using motion and acceleration detection, it’s now feasible to detect free fall, wakeup, single/double-tap recognition, activity/inactivity detection, vibration, and 6D/4D orientation. As a result, over the last four decades, its application has expanded outside the automotive industry. It has found incremental advancement roles in video games, training simulators, medical instrumentation, sporting goods, robotics, mobile handsets, optical communication, and satellite technology. As a result, both the business volume and transformative effect have substantially increased, making it a radical innovation. But initially, it was difficult to predict its growth in performance, application areas, revenue, and profitability.
Digital camera
The invention of the electronic image sensor led to the innovation of a digital camera in 1974 by Kodak. But it was bulky and primitive. It was able to capture noisy, low-resolution images. And it was far more expensive than a film camera. Hence, Kodak decided not to pursue it.
But the technology cores like sensors, memory, electronics, and lenses were amenable to progression, making the digital camera increasingly better, smaller, and cheaper. As a result, in the 1980s, Sony succeeded in unleashing creative destruction force with its still and video camera on Kodak’s film business. Besides, the digital camera started finding usages in many applications due to increasing miniaturization, performance improvement, and cost reduction. Notable ones are mobile handsets, security monitoring, and medical instruments. As a result, the digital camera has grown as a radical innovation.
Mobile handset
In 1984, Motorola unveiled Dynatec, a primitive handset weighing 3 pounds priced at $3995. Its application was limited as Carphone. But its technology cores like radio frequency modules, electronics, software, display, battery, and many other technologies were highly amenable to advancement. Consequentially, mobile handsets started getting better performing, smaller, and less costly. Furthermore, due to the growing scope of adding software-intensive features, mobile handsets have become smartphones, taking the roles of increasing functionalities like e-mail, music and video playing, internet, camera, personal digital assistant, and many more. Hence, the mobile handset has grown from a humble beginning to radical innovation over the last four decades.
Liquid Crystal Display (LCD)
The technology of turning liquid crystal opaque and transparent by turning on and off voltage led to the innovation of liquid crystal display (LCD). In the 1980s, it found its application in wristwatches as seven-segment displays. Who would have imagined that LCDs would grow as retina displays or flat panels in those days? But due to the advancement of underlying technology cores like thin-film-Transistor, light sources such as micro-LED, and many more, LCD started to grow bigger, less costly, and higher performing. Consequentially, LCD has become the preferred display for mobile handsets, instruments, computers, cameras, and Television. Consequentially, LCD has grown as a radical innovation.
Lithium-ion Battery
In the 1960s and 1970s, scientists like British Chemist M. Stanley Whittingham invented high-density electrical storage technology by leveraging lithium-ion. However, as it was difficult and expensive to manufacture, Exxon gave up exploiting commercialization efforts in the late 1970s. Subsequently, Koichi Mizushima and John B. Goodenough, among others, started investigating alternative formulations for addressing complexity, cost, and safety issues. Notably, Japanese scientist Akira Yoshino’s contribution led to improving storage density, making it safe and reducing the cost, which led to the first commercial lithium-ion battery in 1987. Based on Yoshino’s patented design, in 1991, Sony started producing the world’s first rechargeable lithium-ion batteries. Within a year, a joint venture between Toshiba and Asahi Kasei Co. also released their lithium-ion battery.
As explained, the invention in 1970 did not make lithium-ion battery innovation a radical one. Even in the 1980s, rechargeable lithium-ion batteries were limited to powering digital still and video cameras, like Sony Cybershot and Handycam. Subsequent advancement, the increasing popularity of mobile handsets, and the use of lithium-ion batteries in powering mobile devices started to unleash the radical innovation power of lithium-ion batteries. Besides, due to the growing demand for lithium-ion batteries for electric vehicles and large-scale energy storage for renewable energy, the lithium-ion battery has reached the stage of radical innovation.
Characteristics of Radical Innovations
Radical innovations are powered through technology cores that enjoy Economies of Scale, scope, and positive externality effects. They are scalable to progression, making them increasingly better and cheaper by many factors over time. But at the beginning, it’s quite challenging to assess the potential, as they remain latent, demanding a flow of knowledge and ideas for blooming. For example, the electronic image sensor emerged in embryonic form, resulting in a primitive digital camera patented by Kodak. Consequentially, Management decided not to pursue it after failing to envision the likelihood of its progression being better and cheaper than Kodak. But to the surprise, the primitive digital camera grew and unleashed creative destruction forces on Kodak, giving birth to the Kodak momentum.
As explained, invariably, all radical innovations give birth in embryonic form. Their growth as radical innovation depends on the continued progress in an incremental manner, making them better and cheaper. As a result, their value and customer base keep increasing. Furthermore, they contribute to advancing a growing number of products, whether incrementally or reinventing. This gradual unveiling of an innovation’s potential over time is a surprisingly common pattern. Consequentially, they create decision-making challenges in R&D management challenges.
Embryonic Beginning and Misleading Early Progress of Radical Innovations
As explained, all radical innovations sprout in a nascent form. They begin the journey with minimal and scope effects. Often, a single product benefits from such innovation. Besides, at the early life cycle stage, quality improvement and cost reduction progress remain very slow. On the other hand, although after overcoming initial hurdles, upon showing exponential growth, they often slow down, reaching premature saturation. But not all of them slow down or saturate at the same level. Some of them experience far longer runway of growth than others.
Most importantly, their applicability and scope effect in advancing the number of products also highly vary. As a result, they show misleading signs of potential, growth prospects, and scope of application. Such a reality poses a severe challenge to technology and innovation management.
Management Decision-Making Challenges—Rise and Fall of Firms
Due to embryonic beginning and misleading early progress behavior, R&D and innovation managers face decision-making challenges. Hence, they risk suffering from the loss by pursuing radical innovation. Although Kodak’s suffering from disruptive effects from not pursuing digital camera innovation is quite well known, many investments in pursuing autonomous vehicle innovation are stuck. Similarly, human-like machine innovations (Humanoid) growth has reached saturation before crossing the threshold level. Such a reality of management decision-making challenges in pursuing radical innovation or overlooking them lead to the rise and fall of firms.
Mapping, Monitoring, and Predicting Candidate Radical Innovations
How far a candidate’s innovation will grow as radical or not depends on three major factors. It begins with how far the innovation will keep enjoying performance improvement and cost reduction, fueling the scale effect. The 2nd is about how many products are going to benefit from such innovation and at what level, determining the scope effect. The third dimension is its ability to create a positive Externality Effect. However, the diffusion of innovation creates both negative and positive externality effects. For example, the growing diffusion of automobiles has been increasing pollution and traffic congestion, causing a negative externality effect. But growing diffusion also causes a positive externality effect due to the increasing availability of fueling stations and maintenance services. Besides, specific innovations create a positive network externality effect. Online platforms are prominent examples of benefiting from positive network effects.
How far a product and how many of them will benefit from a candidate innovation depends on (i) the growth potential of underlying technologies fueling radical innovation, (ii) the level of competition, (iii) the Passion for Perfection of the innovators, (iv) consumer preferences, (v) scientific knowledge flow and advancement in manufacturing technologies and (v) standardization and infrastructure. As all these factors keep unfolding gradually, it’s essential to keep mapping, monitoring, and predicting them.
Managing Radical Innovations for Profiting and Preventing Loss
As explained, the journey of radical innovations not only reaches profit, but also suffers from the fate of incurring loss. The underlying reason has been the latent potential at birth. Invariably, no idea is born as radical innovation. Some ideas grow as radical innovations through the cumulative effect of a Flow of Ideas, creating scale, scope, and positive externality effect.
For profiting from radical innovations, the focus should be on advancing and leveraging the underlying technology cores to create the scale effect—making it better, cheaper, and safer. To benefit from the scope, we must map target products and pursue ideas for incrementally advancing or reinventing them using radical innovations’ latent potential. Similarly, we need to leverage candidate radical innovation to create positive externality effects in a growing number of products. Hence, the focus should be on managing technology, innovation, R&D, and partnerships for growing candidate innovations through increemental advancement as radical innovations instead of waiting for a big bang to give birth to them.
Furthermore, management should focus on insurmountable barriers in creating scale, scope, and positive externality effects to avoid loss. Besides, the threat of the rise of Reinvention waves and superior performance of competitors in incremental innovation through leveraging candidate radical innovation should also be paid attention.
