As the innovation center-of-gravity shifts, the long-term economic implications are enormous.
In this globally competitive age, everyone wants to stimulate innovative thinking within his or her organization to achieve increasing growth and profitability. Innovation is clearly a primary source of competitive advantage.But innovation has ethereal and elusive characteristics and cannot be “managed.” Managers miss the point when they try to set aggressive improvement goals. What they achieve is incremental improvements in areas such as time-to-market, development cost, product cost and quality. Those have value—but they are not the disruptive shifts that bring significant change, explosive growth and real leadership.Looking back, the last major innovation in industrial automation was the distributed control system (DCS), which generated major growth for Honeywell in the mid-’70s. Around the same timeframe, after decades of relay-based controls, Dick Morley invented the innovative programmable logic controller (PLC), which generated industry leadership for Modicon (now Schneider Electric) and Allen-Bradley (now Rockwell Automation). More than three decades later, the PLC is still in use and generating billions in revenue.After those innovations, very little really new has emerged from industrial automation. Wonderware, Intellution and other personal computer software developers quickly saturated human-machine interface (HMI) markets, morphing DCS into networked PCs and PLCs, but with no significant disruptive growth. When will the next automation innovations arrive to energize the automation business?Take a look behind the hullabaloo of recent “major” announcements in industrial wireless products. The rapid deployment of commercial wireless technology indicates clearly that the need for wireless communications in factory and process environments is immediate and urgent. Instead of announcing a new break-through that will set the competition on its ear and energize the industry, the leaders feature different flavors of the same ingredients. The true spirit of innovation is missing.Meanwhile, innovative small companies are already generating growth and success with wireless products. I can picture their sales people making the rounds to the unimaginative hierarchy of all the industrial automation majors, trying hard to develop volume through partnership arrangements. And after the long-winded song-and-dance, with a lot of posturing, the larger companies start to introduce over-priced, under-performing offerings at prices that are too high to stimulate penetration. Beyond that, the focus—time and money—goes on developing standards like ISA S100, from the Instrumentation, Systems and Automation Society, which will drag on for years. Committees don’t promote innovation; by the time any standards gain consensus, technology will already have moved on.I’m willing to bet that advanced and innovative wireless products, if introduced rapidly at a breakthrough price, would sweep industrial automation markets; end-users would gobble them up, without waiting for “standards” to be developed. It could spark disruptive growth that will re-energize industrial automation.Shifting center-of-gravityIn the global arena, innovation does not originate just in the so-called developed countries—it is quickly spreading worldwide. Many countries are devoting significant funds and effort to higher education, which produces educated workers, the keys to innovation. Small countries like Ireland have rapidly emerged from relatively backward status to significant prosperity. Larger countries like India and China are starting to churn out disruptive products.More than ever, America’s prosperity depends on its ability to remain the global innovation leader. On balance today, America is still the world’s premier producer of high tech and growth services. Extrapolating those trends will be part of the challenge.Jim Pinto is an industry analyst and commentator, writer, technology futurist and angel investor. You can e-mail him at: [email protected]. Or review his prognostications and predictions on his Web site: www.jimpinto.com
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