Asia is set to overtake the U.S. as the largest hub for innovation centres worldwide. Central to the success of these centres are CMOs, who are leading the digital transformation charge by pushing companies to explore new products and solutions.
Also key: how effectively these ecosystems function within an organisation and the role innovation plays in driving the broader corporate strategy.
Customer experience (CX) is the CMO’s domain and, as a top driver of digital transformation, is also among the top reasons cited by businesses for investing in innovation centres, said Brian Solis, principal analyst at research firm Altimeter and author of a new report, “The Spread of Innovation Around the World: How Asia Now Rivals Silicon Valley as New Home to Global Innovation Centers,” written in conjunction with Capgemini Consulting’s Digital Transformation Institute.
“CMOs build bridges between brands and customers, giving purpose to internal transformation while demonstrating to the rest of the C-suite the ROI in doing so,” Solis said.
While CMOs don’t typically lead R&D efforts, they are at the forefront of digital transformation and driving CX initiatives to compete for connected customers.
“Innovation centres connect to outside ecosystems and introduce new value by solving problems and creating opportunities. There’s still a lot to learn, but what’s clear is that no one solution is enough,” Solis said. “Companies must continue to invest in pilots that help teach stakeholders through trial and error how to compete differently.”
Asia experienced 35% growth in the number of its innovation centres in the six months from March to October 2016. The region’s emergence as a hotbed of innovation is underscored by its position as the world leader in patent applications, a key indicator of technological and scientific breakthroughs. The region now accounts for 56% of the world’s total patent grants.
Nevertheless, Silicon Valley’s reign as the epicentre of innovation continues. It currently hosts 65 innovation centres, up from 53 in July 2015. However, between July 2015 and October 2016, its share in the world’s total innovation centres fell from 18% to 14%. This is seen as largely the result of increasing competition from a diverse set of hubs across the world.
“Asia represents a tremendous opportunity to tap specific expertise in concentrated areas. Artificial intelligence, for example, is one of the hottest areas for corporate investments in APAC as companies seek to embed AI in next-generation products and services,” the report stated.
Innovation Is A Global Phenomenon
Solis warned that if companies want to compete globally, the impact of their efforts will be limited by simply investing in one region.
“No one technology represents the prescription to compete for the future,” he said. “Executives need to plug into all innovation hot spots to partner with startups and entrepreneurs, regardless of where the primary innovation facility is based.”
As of October 2016, there were 456 innovation centres around the world, up from 368 in February 2016, and 301 in July 2015, the report found.
Manufacturing firms represent the largest share of new innovation centres, at 11%, while the telecommunications sector experienced 5% growth. Financial services grew by 31%, while the automotive sector experienced 15% growth.