This research shows how consumer demand influences innovation, and provides insights to maximise organisations’ competitive advantage.

Key findings:

• The connection between demand and innovation is fundamental.
• Our case studies revealed that consumer needs and preferences influenced innovations in two main ways: Incremental innovations that responded directly to consumer needs after consumer preferences were fed into the organisation; and radical innovations that responded directly to consumer needs and preferences as a result of a focus on longer-term consumer trends and hidden preferences.
• The report outlines three recommendations for policy makers and organisations. These are based on: allowing more opportunity for innovation in the procurement process; uncovering consumers’ hidden preferences and ideas; and embedding opportunities for interaction with consumers into the business culture.

This working paper presents key findings from research by the Work Foundation for Nesta. The research reveals how consumer demand is influencing innovation within organisations.

It shows that organisations are missing out on opportunities to involve users early in the innovation process, and thus valuable insights which could maximise their competitive advantage.

Until the recent economic downturn, there was an assumption that demand for innovation would grow automatically. Now, politicians are becoming more aware of the need to engage consumers and users to stimulate innovation. This paper suggests ways of achieving this.

Author:

The Work Foundation