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Embracing the Innovation Economy.

Supplier relationship managementInnovation

In this guest post, the first in a series, Procurement Leaders invites the Innovation Garage's Jon Washington to explain what the innovation economy is and why procurement teams needs to adjust their thinking when it comes to harvesting innovation. 

 

Innovation and collaboration should always provoke thought and discussion in the procurement community. Each supply chain leader has some element of the necessity for innovation in what they do…whether a major technology company, consumer goods manufacture, media firm, services provider, or a major financial institution, indirect or direct procurement; all leaders desire to innovate and go faster.

 

What is the innovation economy?

 

In summary, it is a refined method of economic thinking where innovation is the center of the economic engine that will drive growth and prosperity. To read deep see Innovation Economics - The Race for Global Advantage by Robert Atkinson and Stephen Ezell; the book's authors describe how government policy should foster innovation with four pillars of Technology, Tax, Trade, and Talent.

 

According to them, technology, once developed, should be rapidly commercialized. Government must encourage business investment in innovation with favorable tax policies. Work and trade policies should balance globally. Finally, focus to train talent in innovation principles from grade school to university level. This includes federal labs and related US manufacturing networks.

 

The objective is to learn from past mistakes and rapidly commercialize the right technologies to make the US a first mover…essentially, develop a plan to execute an innovation system as a national strategy.

 

Recently I attended and exhibited with the Innovation Engineering Institute at SelectUSA sponsored by the Department of Commerce, in Washington DC. The two-day event focused on driving direct foreign investment in the United States. President Obama spoke at the event and articulated a main mission to create more innovation and technology focused jobs, based on four key objectives.

 

First, having US ambassadors tasked and measured to drive foreign investment in the US. Second, ensure a coordinated message from the US Government in how to invest here. Third, provide a single point of contact for Direct Foreign Investment in the US. Lastly, providing tools and technology to help US companies compete and track the efforts.

 

As you build out the connections between the discussions about sourcing at Procurement Leaders' global events, re-shoring initiatives like ReshoreNow and on a smaller scale (but perhaps with much more disruption potential) the maker movement growth and success, and couple that with the potential for an improved alignment at the US federal government level, all signal evidence that every multi-national company has a choice to make: begin to engage in the innovation economy, or sit it out and wait to see what happens.

 

At the Procurement Leaders September 2013 Boston Forum Event - captured in the writings of David Rae and Paul Teague - it was quite clear that senior procurement and supply chain leaders have an interest in gaining insight and discussing what is on their minds related to driving better value for the enterprises they lead.

 

Many just aren't sure (or at minimum might not readily admit) on how to proceed.

 

Over the next three months, this series is intended to provide some insight and create some sparks intentionally designed and intended to peak your curiosity to explore and learn more. To kick things off, here's an outline of five key points that can drive success in these surroundings. 

 

Five Steps to Success

 

STEP 1: From a strategic perspective, FOCUS ON INNOVATION as the engine for growth, not just cost reduction through transformation.

STEP 2: TAKE THE LEAD, to drive value for the business across the enterprise, not just focused on the supply chain and procurement groups you are responsible for.

STEP 3: TRAIN UP YOUR TEAMS with your peer functional groups to focus on a system based Innovation Mindset.

STEP 4: Add Technology to CAPTURE THE INNOVATION PIPELINE.

STEP 5: Cascade the methods and training to your suppliers to CREATE GLOBAL INNOVATION SUPPLY CHAINS.

 

At the completion of the series, it's our desire to have provided insights that will help you, as a senior supply chain leader, take steps to develop a team that is not afraid to make decisions, can fail quickly, and drive your enterprise on a value driven growth trajectory, poised and ready for the innovation economy.

 

 

 

 

Jon Washington is founder and proprietor of The Innovation Garage, a business innovation firm driving long-term growth of companies and non-profits. He is the former senior director of product sourcing and global procurement at Diebold. 

Guest Blog
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