Main actors in the innovation process (Customers and suppliers)

Innovations do not succeed unless customers or clients use them. If the users of new products and services are involved in designing what they need, there is generally a better chance of success than if something is being designed for them. Active engagement of customers helps better articulate their needs. When Boeing developed the 777 aircraft, it involved its major customers, United, British Airways, Singapore Airlines, and Qantas, in trying to understand the demands of the market. It needed to know about optimum passenger loadings for airlines’ favoured routes. It also worked to understand the demands of the users of the aircraft: the pilots and aircrew, maintenance engineers, and cleaners. Software companies sometimes release their products in ‘beta’ form, that is, in prototype, to allow users to play with the software and suggest improvements. Essentially, customers do much of the final polishing of the product. Customers can also inhibit innovation: • they can be conservative and complacent and locked into ways of doing things that preclude novelty and risk • if innovators only respond to the immediate demands of customers, they often miss big changes occurring in technologies and markets that may eventually put them out of business • there is an advantage in working with ‘lead customers’, governments, firms, or individuals that are prepared to take risks to promote innovation in the belief that greater benefits will accrue than pursuing the safer short-term option of not innovating Innovative suppliers are also major stimulants to new ideas. In the automotive industry, a high percentage of the value of a car is bought from suppliers of components. In Toyota’s case they account for up to 70 per cent of the car’s total cost. Toyota enjoys very close relationships with Nippondenso, a very large components supplier of innovative products such as lighting and braking systems. The automotive supplier Robert Bosch plays a similar role in the European car industry. The task of the car manufacturer—or the organization responsible for integrating any system of different elements— is to encourage innovation in suppliers of modules or components while ensuring the compatibility of components with overall design architectures or systems.