Cheryl Perkins of Innovationedge on Innovation Drivers

If necessity is truly the mother of invention, then the conditions the world faces today should be the ideal triggers for an environment of breakthrough innovations. While the global economic crisis continues to dominate the media, two other trends will also be important factors in driving the next wave of new products and services: Aging boomers as well as the demand for eco-friendly products and services.

Economic Blues: Consumers and businesses are behaving more cautiously than at any other time since the Great Depression, stripping purchases down to core benefits and values, and delaying decisions whenever possible. Purchase evaluations are focused squarely on value. Businesses whose products or services promote economic efficiency or reduce operating costs will benefit from current economic trends.

Jeff Stibel, an entrepreneur and inventor of search engine interfaces, noted in a Harvard Business School Publishing article that "...2009 is shaping up to be a trigger for an unprecedented surge of innovation that may be one of the most important turning points in the last 100 years."

History shows that when the economy stumbles badly, entrepreneurs use this as an opportunity to create "engines of change." During the Panic of 1907, for instance, Henry Ford redefined how manufacturing was done by devising a far more efficient assembly line process. The result was increased productivity and reduced costs, making automobiles more affordable for a mass market, and leading to transportation and cultural revolutions that had powerful influences on how America grew and prospered in the 20th century. The year 2009 can present a similar platform for innovation for those willing to rethink the way products and services are created and delivered.

Boomer Influence: While all forms of media continue to demonstrate a bias toward youth, the facts of the aging baby boomers tell a different story about economic influence, growing healthcare issues, lifestyle changes and generational transfer of wealth. In America alone, 76 million baby boomers (those now in their mid-40s to mid-60s) have an annual spending power of $2 trillion. This group exerts a huge influence over worldwide cultures, behaviors, values and the industries that covet them most.

The biggest mistake entrepreneurs can make is in thinking that a boomer's age is perfectly predictive of where he or she is in life. If your business wants to appeal to and attract this powerful age group, do not focus on their age. Instead, focus on their life stages, lifestyles and values profiles. Know them before you engage, so you're talking to boomers in terms that are relevant and compelling in relation to where they are in life and what matters most to them and their situation.

A Greener World: The 19th century was powered by coal, and the 20th century was powered by oil. Recognition of what past and current human behaviors are doing to our planet have us now moving into an era that will be powered by the sun, the wind, wave motion and renewable energies.

And while large companies tend to hire established renewable energy vendors, a huge untapped market exists for products and services that are designed for those small businesses and homeowners who have a desire to go solar
or geothermal.

According to The Economist Intelligence Unit (www.eiu.com), North American venture capital investments in clean technology more than doubled in the past two years to $2.9 billion in 2008, making it the third-largest category after biotech and computing. More than 4,000 clean technology patents were registered during that time. What were the reasons? Consumers and businesses are demanding green products, and there's money to be made. Seventy percent of us now feel that we have a responsibility to make the world a better place when it comes to the environment. Nearly 60 percent of us buy from companies that give back, and more than half of us purchase so-called "green" brands.

So if you are an innovator, or work for a company that values or supports innovation, the silver lining behind the mess that the world is in right now is simple: An opportunity exists for game-changing innovation that could be once-in-a-lifetime.


Cheryl Perkins, founder and president, Innovationedge LLC (www.innovationedge.com)  is a CGT Research Advisory Board member.To read her last Insights article, titled "Changing the Light Blub," visit www.consumergoods.com/CPInsights908.