Who do you compete with, really?
April 1st, 2010
Two reports on innovation and competitiveness were released by the European Commission in recent weeks. These two reports come on the heels of the 2009 Global Competitive Index (GCI) being released last fall. They provide a fascinating look at the changing dynamics of our global economy as well as the impacts of our lingering economic crisis.
Why is this important? Just look at some of the recent shifts in the GCI Index as a result of the recent economic downturn. The U.S., which has historically held the #1 position, slipped to 2nd place allowing Switzerland to take 1st place. Singapore jumped from 5th place to 3rd place. Japan moved up from #9 to #8 in 2009 while Denmark dropped from 3rd to 5th place. Are these the countries you think of when conducting your competitive analysis?
Expanding your analysis of potential competitors creates advantages for you in a couple of ways. According to the EIS report, firms that are more innovative are less likely to cut back on innovation expenditures. The report found companies that maintained their innovation strategies and spending, including the use of open innovation and user innovation, were more resilient to economic downturns. Shifts in rankings as reported by the EIS suggest that other countries are being far more effective in remaining innovative and potentially producing a competitive threat to your business.
One of the most interesting findings in the 2009 EIS report is the causality between internationalization and innovation. “The extent to which a country’s businesses, institutions and industries are linked with resources and capabilities located outside the country is likely to positively impact the innovation performance of that country. Conversely, innovation intensive firms and countries are more likely to be able to compete successfully in international locations.” Movement across borders of capital, employees and students are key drivers to a company’s success. It’s not enough for your company to monitor competitive threats in other countries; it’s critical to be in the right countries to leverage your innovation efforts.
The U.S., despite falling to 2nd place this past year behind Switzerland, has a long standing tradition of highly efficient markets, sophisticated business culture and an impressive capacity for technological innovation supported by high levels of collaboration with research universities. Yet these very factors that drive US productivity and competitiveness are the areas where other countries are making impressive gains.
The EU27 outpace the US in all areas except those related to R&D expenditures and patents. While the US leads in 11 of the 19 indicators measured, the rate of growth is slowing (1.63%) while the EU27 is growing (3.17%). Similarly, compared to Japan, the EU27 have shown greater improvements in education, research and other collaborations and exports while Japan improved its lead in R&D expenditures and PCT patents.
The BRIC countries have been lumped together for some years, however the disparities reported in the EIS study suggest a new grouping will emerge. China is surging ahead with high tech exports, while Russia has fallen behind. Russia’s key strength is its higher education but it has not been effective in converting that to innovation growth. China surprisingly is outpacing the EU27 with their improvements in patents, trademarks and knowledge intensive services.
These findings are a not so gentle reminder that we must look past our borders when evaluating the competition but also when searching for partners and R&D opportunities. Depending on your business – manufacturing based or services based – you will find different countries offer different strengths as competitive threats or prospective resources.
Vision & Execution specializes in taking a global perspective to developing strategic growth plans for your business. If you’re struggling with how to ramp your growth internationally, contact us for a 60 minute complimentary review of your current strategy.
The Russians are coming…
December 11th, 2009
Actually they’ve been coming for the past 5 years to Silicon Valley Open Doors – an investor conference sponsored by AmBAR for Russian and Russian-American entrepreneurs. This is my fourth year attending and I’ve found it insightful in terms of the dynamics of innovation and migration of innovation centers. An interesting example was a company that presented in 2006 which designed a product for India, manufactured it in China and came to Silicon Valley for funding – the company was based in Israel.
This year has been notable in terms of the sophistication of the investor presentations and also in the complexity of the offerings. It’s not just twenty-somethings with a Web 2.0 application they coded in their dorm room. There’s more gray hair, more serial entrepreneurs and not so many hockey stick revenue projections.
What’s interesting this year is the migration of financing. A US-based company that started to flounder after receiving its Series A funding went to Russia for its next round of funding. It received funding from Troika Dialog (Russia) and DoCoMo (Japan). It was then able to close a sizable Series B round from Morgenthaler Ventures.
In addition to learning about entrepreneurial activity in former Soviet Union states, there are always nuggets to be gleaned from the high quality VC speakers they secure. A few highlights from my perspective are noted below:
The second day included a one hour Q&A session with Vinod Khosla of Khosla Ventures who offered his point of view across a wide area of topics but some particularly interesting ones on CleanTech:
And after 18 presentations culled from 80 submissions ….The winner is….PTP Group Americas.
Looking forward to SVOD 2010.
Vision & Execution celebrates its 10th Anniversary…
October 20th, 2009
…rather quietly. It’s hard to believe that 10 years have gone by. It’s the longest job I’ve had and most of the time the best boss I’ve had. We’ve ridden the dot com boom and bust, the rolling waves of recessions adjusting our services to meet client needs along the way. Our tag line evolved from Marketing Strategies that Deliver Results to Creating Value Across the Product Lifecycle to our latest incarnation of Turning Innovative Ideas into Global Success.
We’ve watched the epicenter of innovation — Silicon Valley — lose a bit of luster as emerging markets developed their own innovation centers. We’re enjoying riding that wave with relationships to organizations like FinPro, AmBAR, Innovation Center Denmark with the goal of having similar relationships to Chinese and Indian trade organizations.
When we started, cleantech had been languishing for roughly 20 years…it was not the hot technology sector it is today targeted to lead the US into financial recovery. Now it’s a significant part of our business and we’ve done our pro bono part mentoring entrepreneurs competing in the California Cleantech Open.
What has been constant over the 10 years is our passion for helping entrepreneurs and companies find the best way to bring the best products to market for the benefit of customers and now more than ever, the planet. We look forward to continuing that commitment here in Silicon Valley and the many new innovation centers around the globe.