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In order for your business to flourish and gain new revenue opportunities, it’s important to constantly innovate, improve and optimize existing channels of profit.
Business innovation can provide a significant competitive advantage. The main thing in this matter is always to keep abreast of current tendencies and closely monitor trends and forecasts. That’s why we have made for you a summary of the most relevant and recent business innovations that will help your business thrive in 2020.
What is business innovation?
Business innovation refers to the introduction of new processes, services or products by an organization in order to produce positive business changes. This may include improving existing methods or practices, or developing new ones from scratch. Ultimately, the goal is to revitalize the business, increase business value and accelerate growth and/or productivity.
As you can see from the infographic below, companies from the most developed countries of Western Europe, Southeast Asia and North America are most actively investing in innovation. According to statistics from the Bloomberg news agency, in the U.S. alone, $476.5 billion was spent on R&D in 2019.
Some general theory
There are several business models for implementing business innovations, and organizations of different sizes will have different reasons for starting this process. If for some of them, the implementation of business innovation involves reassessing the ways in which a business generates income, for others, it can be a transition to another industry - or even creating a completely new one. Before starting any kind of business innovation cycle, it is important that organizations understand the different models available to them.
Revenue model innovation
This model is suitable for organizations which put revenue increase as the main driving force behind the implementation of innovation. This may include a reassessment of the products or services offered or a different look at the company's pricing strategy. Innovation doesn’t have to be radical, sometimes changing even one element can lead to significant results.
Business model innovation
Innovation focused on improving and optimizing business processes at the company level. Innovation in this case may relate to the formation of new partnerships, outsourcing of specific tasks or the introduction of new technologies.
Industry model innovation
Perhaps the most radical model of business innovation. Ambitious organizations can completely change the industry during the implementation of innovation or even create for themselves a completely new one.
Whatever model suits your business best, you’ll have to focus on current trends and tendencies. According to Gartner experts, today the key trends in business innovation are centered around the idea of "smart spaces focused on people.” This concept implies a focus on how innovative technologies will affect people (customers, employees) and their place of residence (home, office, car).
Even though an innovative business-solution may be implemented in each and every area, experts identify a number of key industries for which the development of innovative solutions in the near future will be most relevant
Promising Industries for Business Innovation
Finding ways to reduce costs and improve services is crucial for healthcare, and the best way to do this is to introduce innovative technologies to optimize data processing. The most common solution in this industry will be the introduction of artificial intelligence-based chatbots to help patients get services on their own. In addition, a striking example is the use of digital innovation by British clinics specializing in blood transfusion and organ transplantation. Hospitals have already begun implementing T-Impact digital consultation systems to improve and automate the process of matching donor heart transplants. This led to the world's first cloud-based donor heart detection.
This streamlined process eliminated the 40 steps that were previously performed manually by staff, which resulted in a 68% reduction in administration time. “These are the sort of improvements that well-run digital transformation programmes can deliver,” said Keith Stagner, T-Impact CEO.
In the next four years, global e-commerce is expected to reach about $ 5 trillion, according to Statista, which will force many retailers to transfer investments from conventional stores to online stores.
A number of stores are already taking advantage of online shopping opportunities with few physical locations, using social networks to create hundreds of millions of sales. An example is the H&M stores, which were able to achieve a significant increase in profits, entrusting the formation of the assortment on the shelves to artificial intelligence. What's next? Who knows, maybe soon they will go even further and invite the robot Sofia to be a model in the next collection.
In recent years, FinTech business innovation has been at the forefront of technological innovation area. It’s not surprising that reputable banks seek partnerships with fintech startups to rethink their business models. Promising technologies in this industry include blockchain, Big Data, AI, biometrics and much more. In 2018 alone, global investments in fintech reached a record high ($ 112 billion). Although global investment in fintech technology declined in the first half of 2019 ($ 22 billion) compared with $ 31.2 billion for the same period in 2018 (a 29% decrease), this reflects broader trends in the field venture capital investment, rather than showing the prospect of the future development of fintech.
Innovative solutions in this area help to significantly speed up and simplify the processes of registration of contracts, billing, workflow.
An example of technological business innovation in the field of legaltech is Taylor Vinters company, which has announced a partnership with artificial intelligence-oriented startups Pekama and ThoughtRiver. At the same time, the company closed part of its branches not related to digital innovation.
The executive director of the company, Ed Turner, explains such radical changes in the company’s activity as follows:
“Assuming it’s an accepted proposition that, it’s important to understand the purpose of your organisation and why there’s a need for it in the future. Having a clear understanding of that is absolutely essential, particularly in the mid-market.”
Based on the industries above and expert forecasts, one can identify key technological trends for 2020. In addition to the obvious course on the use of artificial intelligence, these include:
Technology is in a state of constant evolution. Nowhere is this more evident than in the field of biotechnology and biotechnological innovation. In the past century, the pace of technological progress became staggering, and new innovations, developments and breakthroughs are constantly taking place in this area. The introduction of innovative technologies is growing exponentially - some experts predict an increase of 400% over the next five years - and biotechnology is one of the main industries that will develop in 2020.
In the past few years, there has been a tendency towards the so-called hyperautomation of processes. With the help of advanced technologies, including artificial intelligence and machine learning, the role of people in working on a number of tasks is becoming less and less significant. Hyperautomation extends to a number of processes, but at the moment its main functions are:
Since no tool can completely replace a human, today automation includes a combination of tools, including process automation (RPA), intelligent business process management software (iBPMS) and AI, with the goal of making more decisions based on AI.
Despite the fact that hyperautomation is not the main goal, it often leads to the creation of a “digital twin organization” (DTO), which allows organizations to visualize the interaction of functions, processes and key performance indicators to increase business value. DTO then becomes an integral part of the hypeautomation process, providing real-time continuous information about the organization and providing significant business opportunities.
According to a Gartner study, in 2020 there will be an increase in the autonomy of things. Autonomous things, which include drones, robots, ships, and instruments, use AI to perform tasks commonly performed by humans.
Although autonomous things currently exist mainly in controlled environments such as mines or warehouses, they will eventually evolve, including open public spaces. In addition, a tendency is expected to bring autonomous things into groups, such as drone swarms used at various events.
In addition to the above trends, there are also many other factors that should be considered when introducing business innovations in 2020. You can read more about private venture capital in companies, the implementation of design thinking, and innovative laboratories in our article Trends of Corporate Innovations in 2020.
Competition for new customers is always fierce, and adapting to a changing consumer market can be critical to the success of any business. It is important to know what your customers require and where they spend their money. To help your business make the right decisions for the coming year and beyond, take advantage of these trends. Of course, do not forget that the implementation of business innovations is often quite a risky enterprise, but it is worth it, because the potential profit is huge! At the same time, risks can be reduced through proper planning. To find out about the way how exactly to do this, read our article Idea Development: How to Create and Implement Innovative Ideas.