An Analysis of Global Corporate R&D Budgets

A new Booz Allen study highlights corporate R&D spending worldwide:

"What does Dentsply International, a midsized manufacturer of dental products in York, Penn., have in common with Kobe Steel, a Japanese metals producer? What qualities are shared by Cadbury Schweppes, the European candy and beverage company; Tata Motors, the up-and-coming Indian automaker; and Google, the superstar of Silicon Valley? What links Caterpillar, the leviathan of earthmoving equipment, with Apple, the nimble conjurer of the iPod Nano, and Adidas, the German purveyor of sportswear? What does Toyota have in common with Christian Dior? The answer: All these companies spend less than their competitors on research and development, yet outpace their industries across a wide range of performance metrics."

Check it out here.

Co-Branding

If you've been out jogging with your Nike-iPod then you're up to speed on co-branding. Now here's another example of two strong brands joining forces in a way that may be unexpected but which brings both brands into new territory. Mattel's Barbie is entering a co-branding deal with Estee Lauder's MAC to create a new line of cosmetics aimed at women who grew up with Barbie dolls, and want to carry that icon into adulthood.

This deal shows how the lines between the child, the adolescent, and the adult are progressively blurred by a product concept that defines a new hybrid market space and in so doing, also defines a new business model.

If it's successful you can expect many imitators. Then again, if you think about it for a minute you may discover that these blended business models are not so easy to figure out. Think of a brand you admire, and then try to come up with a co-branding scheme with another brand. It's not so eay to do, but a useful exercise when you're managing a brand and looking to protect it, or extend it into new territory.

Large Scale Innovation

Yesterday a consortium of 5 huge companies announced their large-scale experiment in the helping their 2.5 million employees, retirees, and families manage their medical records digitally, in the hope that organizing all this information in one place will save money - lots of money. Intel, Applied Materials, BP America, Wal-Mart, and Pitney Bowes each kicked in $1.5 million of seed money to their new venture, Dossia.

Electronic medical records is a topic that has been discussed and debated for years throughout the health care sector and at all levels of government. The fact that these five companies have taken the initiative is indicative of a pattern I expect we'll be seeing more and more - the initiative isn't coming from the government, but from the needs and requirements of the private sector.

Similarly, NASA is now looking to private firms not just for component design and manufacturing, but for commerical offerings in launch and even in outer space opearations. They hope the X prize is just the beginning.

It's the same in the energy sector, in telecommunications, and many other fields - private companies are stepping up to address society-wide problems and issues because they see entrepreneurial opportunities are ever-larger scales, and because these large scale problems are their problems, too.

It won't be long before companies realistically consider creating new cities, and perhaps even new countries, radically altering the social landscape in this era of globalization and innovation.

Why is it called 'research'?

As seen in a Signals mail order catalog:

"If we knew what we were doing, it wouldn't be called Research."
- A. Einstein

Going against the grain - brilliant innovation!

Despair Inc. is a brilliant innovator - as a Contrarian Publisher, I'll bet they will make a fortune by going against the grain of feel good movitational drek. Their poster and calendar catalog came in today's mail and really hit my funny bone. Take a look - and think about ordering a customized Demotivational Calendar for your favorite losers for Xmas.

View All Demotivators�:

Here's the key paragraph of the Despair Inc. business model:

"MOTIVATION. Psychology tells us that motivation- true, lasting motivation- can only come from within. Common sense tells us it can't be manufactured or productized. So how is it that a multi-billion dollar industry thrives through the sale of motivational commodities and services? Because, in our world of instant gratification, people desperately want to believe that there are simple solutions to complex problems. And when desperation has disposable income, market opportunities abound.

AT DESPAIR, INC., we believe motivational products create unrealistic expectations, raising hopes only to dash them. That's why we created our soul-crushingly depressing Demotivators� designs, so you can skip the delusions that motivational products induce and head straight for the disappointments that follow!"

Here's a sample Demotivator

Need Friends? Try This

The internet is a fountain of creativity for new businesses and new business ideas like this one:

Tired of seeing all the beautiful people on other peoples' pages in MySpace? For 99 cents a month you can get models to post their pictures and comments on your page, too. It's "FakeYourSpace", which probably started as a joke, but it's apparently becoming a serious business.

This highlights on the key factors in innovation: it often comes from people who are both insiders and outsiders. They're inside enough to see the problem, and outside enough to see a solution.

It's the same story with a new airline serving the Hawaiian islands, Go. (Note the simplification - now we're down to two-letter business names.) Go was established in June this year by Mesa Airlines, the US's largest operator of regional jets, to compete with the two established players. Why the opening for Go? The established insiders, Aloha and Hawaiian, have been keeping fares high; the outsider, Go, has a low-cost business model that should work very well in the short-hop Hawaiian setting.