Innovation centers provide ways for companies and industries to evolve thanks to new ideas, better ways of doing things, new processes and fresh talent. These startups may give traditional American manufacturers a paradoxical boost due to competition, new supply chains and more efficient techniques.
Large corporations tend to resist change because of several factors. A company's culture may make it difficult for research and development departments to innovate. Businesses that focus on profit margins, stock prices and investors may have CEOs with risk-averse attitudes who simply want to increase revenues each quarter. This rigid thinking may cause growth patterns to remain stuck.
Enter innovation centers, which entail groups of smaller companies that work together for the greater good. These startup American manufacturers often work in the same facilities, bounce ideas off each other and have staff that's more open to collaboration. These new companies have nothing to lose by creating partnerships with each other very early in the game, and these collaborative efforts help startups survive.
To play catch up, many large businesses create their own innovation centers to foster a sense of creativity apart from the main company culture. Data indicate why companies need these fresh ideas more than ever. Based on statistics, 85 percent of new products from consumer goods companies fail, while just 5 percent of people in research and development departments feel empowered, and even motivated, to innovate. As many as 58 percent of manufacturers create incubation hotbeds in strategic places, such as Silicon Valley, Shanghai, Seoul, London and Munich.
Innovation centers can capture new talent as these people enter the workforce. Engineers right out of college may know the latest robotics, automation and software integration concepts. Inventors may have bright ideas about the next device that could create a niche market for a connected device. Finding new ways to analyze data means big business for everyone who uses the software. Larger companies have learned to foster these new ideas far away from headquarters.
The Obama administration encourages innovation centers through the National Network of Manufacturing Innovation. These centers form after startups compete for grant money that help get products out the door faster by increasing productivity, reducing manufacturing times and bringing in relevant talent.
Manufacturers generally have four basic models for these microcosmic incubators. In-house innovation labs process new ideas and new products from the design phase all the way through protoyping and integration into the company. University residences, such as Volkswagen's Automotive Innovation Lab at Stanford University, try to capture young talent right out of college by helping pay for academic facilities and programs. A community anchor tests new products and concepts on large groups of people before hitting the more-expensive mass production mode. Innovation outposts represent small teams designed to collaborate with other industry leaders in the tech world without a large investment.
These initiatives do not need a lot of initial startup funding, and yet, they can have huge returns on investment when firms encourage people to turn ideas into reality in venues not bound by traditional company cultures. Therefore, manufacturers should have a "if you can't beat 'em, join 'em" attitude with regards to innovation centers. Eventually, a competitor or a startup may come up with that great idea that takes away irrecoverable market share.
Photo courtesy of suphakit73 at FreeDigitalPhotos.net
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