Deloitte report series explores whether manufacturers can innovate quickly enough
Business leaders advised to look beyond immediate wins and align R&D and innovation efforts with long-term strategic goals.
Manufacturers can maintain momentum if they continue to identify and capitalize on new inventions and advancements, according to a new report series by Deloitte.
Innovation in industrial manufacturing indicates that patent-based innovation – in both business process improvement and new product development– has become a key marker for how industrial companies are leveraging their R&D budgets to remain competitive in the Fourth Industrial Revolution.
In the report series, Deloitte reviewed the US Patent and Trademark Office (USPTO) filings and citations of 43 Fortune 100 industrial manufacturers between 2006-2018 and found important insights into how companies are investing in R&D. The series goes on to describe how digital technology is developing in the sector – specifically “exponential technologies” such as 3D printing, blockchain, cybersecurity, IoT, etc. – and outlines winning approaches to innovation for manufacturers.
Highlights from Deloitte’s USPTO analysis include:
● Patents in exponential technologies have consistently represented the majority share of overall patents filed by industrial manufacturers (59% in 2018). In fact, such patents nearly doubled between 2006-2017.
● Industrial companies are frequently combining two or more exponential technologies through their patented innovations, and IoT-related patents are often at the nexus.
● There could be a “sweet spot” for R&D investment that yields the greatest intensity of patent-related innovation for industrial companies.
Pathways to faster innovation for industrial manufacturers:
● Focusing on exponential technologies and applying them in different combinations to innovations in both process and product can help industrial companies get an edge over their competitors.
● Complementing a long-term internal innovation strategy with shorter-term external moves, such as through inorganic growth, for innovation can help manufacturers balance their R&D investments to deliver a continuous cycle of innovation.
● Applying a variety of external approaches—ranging from acquisitions, joint ventures, public-private alliances, to technology-based industry consortia— strengthens industrial manufacturing companies’ capabilities quickly and effectively.
● Consider the split of patent-driven research that is focused toward product innovation vs. process innovation. The study showed an increasing gap between the patents related to process innovations and products (43% in 2018). This is expected to be increasingly important as industrial companies advance along the digital maturity curve.
