By 2020, there will be 7.7 billion people on earth, and there will be a 40% growth in the global economy. An optimistic perspective would be to look at the fantastic potential this increase in our population and economic growth holds for brands and businesses.
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Businesses must look at how they adapt now to take advantage of future economic growth. A more important question companies should be asking is ‘How do we remain viable and relevant to the consumer of the future?’ And, the answer to this question lies completely in innovation.
Innovation is not about small incremental steps, but rather giant leaps. Consider transport as an example. Transport shifted radically from horse-drawn carriages with the arrival of the motor vehicle, and even further with the arrival of flight, and it is set to take further giant leaps with the likes of innovative businessmen like Richard Branson and his brave step into Virgin Galactic and space travel, and Elon Musk's Hyperloop transportation.
Related: Essential insights to drive innovation in your business
Innovation does not only revolve around product innovation, it is also about functions, logistics, business models and processes. Peter Druker, considered by many to be the founder of modern management said: "Every organisation needs one core competence, innovation."
Innovation creates customers by attracting new users and building stronger loyalty among current ones. An innovative approach to business is more productive, more responsive, and more inclusive. A survey conducted by BCG Global Innovation highlights that 78% of new products and ideas for growth are generated by internal sources, in other words by staff members. This was closely followed by customer suggestions at 70%.
Innovation requires us to create an environment that encourages our employees to experiment and think with the future in mind; it also compels us to put the customer front and centre.
Google is considered by many to be one of the most innovative companies today; this doesn't happen by accident. Google applies a 20% rule, encouraging employees to dedicate 20% of their time to passion projects. These projects and new ideas are then cultivated, tested, challenged and then supported to market.
For every business owner, this requires not only bravery but also investment into research and development. The short-term costs often stop us from applying this innovative mindset, but the long-term advantages of innovation far outweigh this.
Related: Innovating for growth
The world's leading companies, Apple, Google, and Tesla (making up the top three) did not start innovating recently, it is part of the company structure, and it is clear to see how they are already reaping the rewards of this bold approach to business thinking.
Next time, we will take a look at trends that are driving innovation in business today, but in the meantime, think about your future customer and how your business can answer to their needs.