The practice of innovation, bringing to life new ideas and concepts so that they deliver value to an intended customer, market, or audience, is the height of audacity. To think that what you create will be valued enough by another (or, hopefully many others) that they will be willing to pay good money for it seems a conceit. It is in that force of will that enterprises live and die. Those willing only to tinker around the edges, improving yet not reinventing themselves or their products and services, eventually become moribund; their customers, someone else’s.
Where GE chooses to marshal its innovation efforts based on their sheer, market-moving and customer creating mass, Tata Group plays a more subtle game networking their innovation into the fabric of the organization over all. These multi-industry global movers express quiet different approaches to betting on innovation. Another global titan, the South Korean powerhouse Samsung Electronics, plays a different game entirely. The bets Samsung places are tied directly and uniquely to a systematic and ongoing assessment of the vision of what the company will become.
The power of Samsung’s vision is reflected in an image that did the rounds of email In boxes several years ago: it was a stitched-together night view of the whole Earth as seen from space. Of the brightest places in the image one stood out most and that was South Korea which was almost entirely lit. This image was made all the more compelling because of complete absence of light emanating from its nearest neighbor, North Korea. Based on a vision of rapid and sustained technological innovation Samsung has reached beyond the Korean Peninsula to supplant another consumer products powerhouse as a consumer electronics purveyor of choice, Sony.
Long a mainstay of the technological wonderland that is South Korea, Samsung has differentiated itself with the sheer scale of the bets it has placed. Samsung’s climb to global dominance, a dominance that in many respects supersedes the much-loved Apple, rests not primarily on product development but on the essential components of many other company’s innovations. In the 1990’s and 2000’s Samsung doubled-down on DRAM chips (the engines for portable consumer electronics), liquid-crystal display screens (the interface to almost all our personal technology) and mobile telephones, all of which has turned the company into an economic force. Recently The Economist newspaper profiled Samsung and identified that, “…in the next decade the group plans to gamble again, investing a whopping $20 billion in five fields in which it is a relative newcomer: solar panels, energy-saving LED lighting, medical devices, biotech drugs and batteries for electric cars.” If the amount of that investment were not enough to startle its competitors, perhaps that fact that Samsung is using this to drive annual revenues in these five areas to $50B in only eight years and taking the company to sales of $400B globally.
Samsung sees that as the developed world transforms economically by enforcing stricter environmental protections, and a burgeoning middle class in the BRICS nations (Brazil, Russia, India, China, and South Africa) seeks the creature comforts long possessed by the West, they will be placed to meet the needs of a rapidly expanding global consumer base. Phil McKinney, the Chief Technology Officer of HP, gave a presentation late in 2010 that directly expressed the sectors in which Samsung’s innovation bets are being placed: social dynamics, personal entertainment, intelligent networks, gadgets, and ubiquitous content. The consumer is at the heart of all these and Samsung is poised to remain as close to the heart of their experience as possible.
If I were a betting man, I certainly wouldn’t bet against Samsung. That would appear to be a sure losing bet.
[Added: October 28, 2011]
As if by magic, Samsung’s bets appear to be paying off already. Reuters has just announced that Samsung has trumped Apple in smart phone sales.
