What combinatorial innovation is, and how to bring it into digital transformation

Innovation is a process that introduces something new into an existing system. Starting with the work of Joseph Schumpeter,, the first economist to examine this concept in depth almost 100 years ago, there are many theories that have analyzed the ways and means in which it affects the life of a company. But even today, for every entrepreneur, the fundamental question is the same: “How can I innovate, in order to grow my business?”

One possible answer can be found in combinatorial innovation, which Eric Schmidt defines as a way “of combining and recombining existing technologies to create new inventions”. In other words, it’s not always necessary to come up with entirely new solutions to bring about process or product improvement. Often, simply juxtaposing known methodologies and techniques is enough to jump-start evolution in the business.

Combinatorial innovation is not new

In a 2009 video, Hal Varian, Google’s Chief Economist, offers some examples of combinatorial innovation where ingenuity used simple, readily available tools to find solutions to problems. From the 3000-year-old invention of packing slips to verify that a ship’s cargo had arrived at its destination, to the use of barcodes to account for the number of times a videotape was rented out: a business model often needs only a little creativity and very little technology, some likely already known and used in other contexts, to flourish.

In recent years, with the increasing availability of advanced technology, the possible combinations of techniques and methods from different fields have produced business models that have revolutionized some sectors of the market:

  • By bringing together mobility solutions with real-time location systems such as GPS and cloud-based information management, Uber has revolutionized the transportation market, using a very simple idea to solve a very real need for users. With drivers easily located via mobile, and a cash-free payment process, anyone can have a private driver.
  • Although it is not yet available for all of us, self-driving cars are definitely one of the next technological innovations that will revolutionize the world of transportation. And which systems brought it to life? Machine learning, a discipline which has been around since the fifties, combined with real-time location systems and Internet of Things solutions are the driving force here.
  • Internet, distributed computing, and blockchain are the building blocks upon which BitCoin is based, the payment system conceived in 2008, whose value has continued to grow to staggering heights in the first months of 2021. 

Best practises for combinatorial innovation

Gartner suggerisce tre attività fondamentali che possono aiutarci come buone pratiche per sviluppare le potenzialità dell’Innovazione Combinatoria: 

Gartner suggests three key activities that can serve as best practices to develop the potential of combinatorial innovation:

  1. Combine: identify appropriate combinations of technologies and innovations in a market environment.
  2. Cluster: identify characteristics of emerging technologies to better understand how their operational elements can work together with others in the pursuit of new solutions.
  3. Complement: take into account any secondary areas that such technologies may impact. These “side effects” can provide additional application ideas, which are the most important feature of combinatorial innovation.

More opportunities with combinatorial innovation

Once upon a time, when the elements used in innovation were mechanical systems of motors and gears, recombining different technical solutions involved the dedication and complexity of having to re-engineer a system, create prototypes, and go through lengthy testing phases. Today, thanks to information technology, we can move, combine and assemble solutions using algorithms and simulations that allow us to take full advantage of the possibilities of digital technology. By using a “digital twin” of our own existing system, or of a process, it is possible to quickly and economically verify the benefits that may result from a change or the addition of something new.   

At the core of FlairBit’s way of thinking are the Internet of Things, machine learning, and artificial intelligence with mobile tracking systems: Senseioty is our platform for combinatorial innovation. With knowledge and understanding of your processes and activities, together we can zero in on exactly the technological change you need to get you the innovation you’re looking for.

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