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Is innovation dead?

March 8, 2010: 10:00 AM ET

Management gurus preach the virtues of 'continuous innovation' but a new kind of reinvention may be taking hold.

By Cédric Laguerre, Senior Analyst, lecturer at SKEMA Business School and Eric Viardot, strategy professor, SKEMA Business School

It has become an unassailable tenet of business: Companies must Always Be Innovating. Indeed, some proponents of so-called continuous innovation talk as if failing to reinvent your company every few weeks is tantamount to an assault on capitalism: Any profit-driven enterprise needs to innovate to reduce its costs or create new markets, which ultimately benefit consumers. Who knew perpetual innovation was the natural force guiding Adam Smith's "invisible hand"?

We would submit that real technological innovation for consumers actually has been stalled for some time. Yes, we saw an explosion of true innovation in the late 90s, as computer, telecommunications and software technologies converged.

But more recently novelties such as smart phones or social networking sites are more related to smart marketing than sheer technology. In the last three years the number of technology driven start-up companies has significantly decreased, and what passes for innovation seems to be restricted to a group of large companies who that are either acquiring or destroying their smallest competitors.

Why the slowdown? More

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