If I had to pick an industry that is less innovative than the rest, I would choose the real estate industry. As one article I read states, “buildings today are conceived and constructed in much the same way as they were hundreds, if not thousands, of years ago.” In terms of construction, the process also hasn’t differed much. A design team envisions and draws up a plan, a builder builds that design checking back to confirm its intent with the design team, and finally the building is constructed. Certain aspects of the building process have been changed or improved which are considered innovative (i.e. using research findings, leveraging technological advancements, designing the blue prints virtually etc.), but overall it has evolved very little. I think what’s led the industry to this state of affairs is the mindset that “if it ain’t broken, don’t fix it.” Overall, the process by which buildings are constructed is simple and it works, and thus while there are certain aspects of the process that can be and will continue to be improved, it isn’t anticipated that the industry will see any major breakthrough innovations.
I would have to agree with Ashley on this one. I definitely feel that residential real estate is one of the least innovative industries today. Home builders are not incentivized to be innovative in their construction, in that it is costly to implement innovative aspects to homes, and builders want to construct homes that they are certain will sell. Therefore, you rarely see innovative construction such as solar panels in homes.
On the other hand, though, I think that there is a fair amount of innovation in other forms of real estate, such as offices. Nowadays, you see more and more office buildings with solar panels, interesting layouts and landscaping, etc. There is more of an incentive for companies to have "state of the art" buildings because it can serve as a signal to consumers that they are "green" or innovative.
There is no single industry that I consider the least innovative. Any industry I can think of has adapted in some ways to new technologies available. For example, while one article considers the real estate industry less innovative in terms of building design, it has become more innovative in terms of financing, accessibility through the internet, and aligning buyers and sellers. Obviously, the tech industry, whose customers expect innovation at regular intervals, excels in terms of product innovation. And while many other industries fall short in that regards - food, CPG, real estate, furniture, etc - their customers do not demand or expect constant product innovation. Instead, they want improved access, better pricing, and a positive experience, which most companies have managed to successfully produce. Today's "least innovative" industries depend upon how innovation is framed in relation to their customer base. Most companies that still exist are doing a good job of adapting to customer demands within their industry.
I second Taylor's comment and want to add that I initially thought that some industries may not be "innovative" in our eyes, but if they are still present and in business, they must be adapting to their surroundings and winning against their competition. I would have to say though in terms of the technology industry, I do believe that social media while initially innovative, is now lacking innovation in product design. They've used one concept and applied it to different forms such as pictures, short sentences, and videos but it hasn't grown past the initial concept and how is it going to change over time to make it relevant 15 years down the road? They may not have a sustained competitive advantage if they can't adapt to other social changes.
I decided that the least innovative industry is the entertainment industry--both in terms of the content of the entertainment and the methods in which that content is delivered to consumers. So many TV shows and movies are either remakes or adapted from books. There seems to be a lack of innovation in coming up with novel concepts for plot lines, etc. Additionally, how the content is delivered to consumers has not adapted very much even though the internet and other new technologies have presented so many new opportunities. The music industry is suffering because of pirating and as yet has not innovated enough and found a way to combat this. Similar is true for the movie industry. There are just so many new ways to deliver content to viewers, but there have not been many innovations in this arena because CD's, movie theaters, and DVD's are still the main forms of delivery.
One of the least innovative industries seems to be the publishing industry (most notably books and newspapers). Book publishers have long exploited their power over writers and readers while for a long time there was simply no reason for newspapers to revamp their business model. As we know, the rise of the internet and audiobooks or ebook-readers have dramatically changed the publisher's business environment. The most renowned book publishers at last have reacted to those changes and offer new releases as books, ebooks or audiobooks (thus finally reacting to customers' demand for more flexible products). Newspapers, on the other side, still struggle to implement profitable online-papers or apps for smartphones. In general, both too long adhered to the already mentioned rule of "if it's not broken, don't fix it" and now find it hard to leave this state of inertia.
This time, I have to go with the Airline industry. Although I am aware of the pressures the airlines are under (cost related), I think they do a poor job of innovating alternative ways to compensate for the increased costs. Additionally, the industry seems to be more focused on cost considerations than ever, cutting back services and amenities. A little more innovation in new products - from the carriers, not the airplane manufacturers - would be great!
I would agree with Nick's statement. While airplane manufacturers are certainly innovative, I don't see the airline industry in general as being innovative. Carriers, due to cost restrictions, are doing nothing more than charging people in unique and unthought of ways.
I realize, as Nick noted, that there are incredible pressures for the airline industry but maybe some innovation on their part would result in happier clients and have the potential for profit.
I've got to counter this at least a little bit guys :) Innovation from the customer's perspective is coming through more personalized service and direct interaction with the consumer. Now granted, the transition is slow, but the airlines are definitely shifting the services that they offer consumers, and overall are at least trying to create additional value to the consumer.
From the airlines perspective, the Un-bundling of the product is a pricing innovation that has allowed the airlines to see profitability again that they haven't seen in years.
I would suggest that the insurance industry is one of the least innovative industries. Some of the lack of innovation is due to governmental regulations that control the various transactions in the market. Another aspect of the little innovation is that not many more products can be offered to better the industry. Many of these differentiating products already exist in the market place and any new products are subject to further regulations. There isn’t an R&D department available in which to pour money and the last time that some type of creative insurance progress was made, it caused the collapse of the financial system, further increasing the scrutiny on the industry.
The industry which makes up the US's state and federal governmental agencies comes across to me as the least innovative industry. Specifically, two examples of agencies lacking innovation that come to mind include the DMV and Voting. These two under-utilize technology and thus have very inefficient, unautomated processes.
They have never felt the pressure to innovate like most companies have. There is also a high level of bureaucracy present, which makes it more challenging to innovate because of all of the decision-making levels and hurdles involved in trying to effect change. Moreover, the majority of government employees are not incentivized to innovate or push the envelope to drive improvement.
Have to agree with Sherene on this one. To the extent that the government counts as an industry, it is undoubtedly the least innovative. Among the factors that contribute to this lack of innovation are: lack of competition for service, entrenched status of employee unions, and a lack of urgency to radically cut costs (it will be interesting to see how this changes given the pressures of the upcoming fiscal crisis).
Jumping on the US Gov bandwagon here. I've always been frustrated with the lack of technology adoption throughout the government. Cost reductions (one of the value propositions of technology) should be considered as a main driver for the government.
After reflecting on various global industries and inspired partly by Lindsay's comment, it is my opinion that the least innovative industry is Bollywood (the movie industry in India). The industry typically produces remakes of former Hollywood blockbusters. Furthermore, the plot line almost always centers around a love story between and man and woman, and lastly all movies take the form of musicals. To me this "business model" is consistent, and unchanging in the face of consumer/demographic preferences and differences. Ultimately, it's leading to disinterest and viewer disengagement.
The education sector is not as innovative as it should be especially in developing countries. Since it is a service industry where the customer pays upfront, the customer is locked into the contract which acts as a deterrent for innovation. There are huge switching costs involved in case the customer is unhappy with the quality of the service.
This sector is incentivized to invest a great deal in the front end while acquiring customers. The shortage of a skilled and highly qualified workforce is another issue that plagues this industry.
I agree with Venkat that the education sector is not a model of innovation. The tenure system in place at major universities is misaligned with the incentives of students. Professors are rewarded for research rather than teaching ability. As discussed in class, the burden is on the student body to demand change. However, in an MBA program specifically, the agents of change must act quickly, or 2 years will come and go without any progress made.
Universities are notorious for red tape and complex processes with layer after layer of approvals for any proposed change. Even lacking substantial innovation, the demand for education services continues to grow, eliminating much of the incentive to change. Until a major share of the population can secure appealing jobs without university degrees, or the value of education in the workforce declines for some other reason, schools will likely continue to operate as they currently do. Students may demand change and celebrate small victories, but a complete overhaul of the education sector that results in continual innovation is not likely.
Is the federal election process an industry? It will have to be for now because it's so front-of-mind just a week after the presidential election and was the first thing I thought of.
The way in which federal elections, specifically presidential elections, are conducted is so primitive compared to our manufacturing capabilities, smartphone technologies, logistical efficiencies, and so on. Constant worry about fraud, long lines, and correct tallying of votes is a time-old tradition every four years, and it seems that such an old-fashioned way of voting is the main problem. There plenty of opportunity for innovation but no change is made. I believe the primary reason for this is the fear of corruption. Whereas the most modern way to hold elections would be to use computers, smartphones, and/or tablets, federal elections are so important that we use big boxes that resemble a 1980s PC.
To bring it back to a business setting, if an industry fears that its product or services could be easily corrupted by competitors or "bad customers", it will hold that industry's innovation behind the times. One example of this might include specific types of micro-lending that banks could pursue for teenagers or college-aged borrowers that is barred because of the easily imaginable corruption that could take place.
Sort of along the same lines as Ashley, if there is one industry that I consider less innovative than others, it would be the construction industry. As a Yale professor put it, "the construction process is almost exactly the same. The way we build a skyscraper today is not radically different from the way the Empire State Building was built." An architect comes up with a plan and draws it on paper, then hands the diagrams off to a building contractor who gets paid to build the architect's two-dimensional vision and convert it into a functioning building on budget and on time. It is interesting because today, even the features inside buildings are adapting to technological changes but the construction industry itself largely is not.
In my opinion, one of the reasons why the construction industry restricts innovation is because it is a highly fragmented industry. The people who design are different from the people who actually construct. And the industry as a whole invests very little in R&D. Another reason for lack of innovation can be because the demand for buildings and homes (apartments, houses, office buildings etc) is almost inelastic. People need to find a place to live so this creates little incentive for the constituents of the construction industry to be innovative. They may ask the question: "Why be innovative in construction when it makes no difference?"
I would consider the road & highway construction industry as one of the least innovative industries. There seems to be a constant pattern of repairing a problem in the same way. No new techniques are used. For instance in cold weather cities, each year after the harsh winter potholes appear in the summer. When these are finally fixed, it is just in time for another winter and then more potholes. This cycle results in companies spending more time trying to fix the same problem rather than building new roads (slowly growth for other industries).
While some of this is due to government bureaucracy and rising material/ labor costs, I believe is mainly due to the lack of emphasis placed on research and development. If the industry had a dedicated area for exploring new options and technologies, the companies in the industry may be able to cut costs and spend more time on creating new types of roads or repairing techniques.
I would agree with Erin's statement, I think that the road construction industry is one of the least innovative. It seems that most time is spent repairing and making small fixes to existing structures, rather that improving on these structures. A major factor for this pattern is the investment in new roads and the possible downtime required to truly improve upon existing structures. However, making new strides in technologies may reduce possible downtime and improve commutes for many large metropolitan areas.
What quickly comes to mind is the luxury goods industry (it's also a class project topic...). Luxury goods has a rather solid consumer base that does not require it to be inventive. In fact, one of its most defining characteristics is that it is time-less and classic. Specifically, I am thinking of the extremely "high-end" side of the industry (i.e. Hermes, Goyard, etc.). It is not swayed by trends and mass-consumer fashions mostly because its core consumer demographic is not looking for fads. So it can just tweak classic designs and bring older merchandise "out of retirement." The innovation mostly takes place on the mid-market/mass merchant level that is primarily influenced by consumer trends (i.e. Marc Jacobs, Kate Spade, etc.).
An industry that I consider to be extremely uninnovative is the paper goods industry. Despite the devastation that the paper industry wreaks on global forests, and the declining availability of the resources required to make pulp and create paper(which in turn undoubtedly lead to higher prices), the industry has still not explored other potential products that it could use to create paper. While the apparel industry (specifically Hanes) has been exploring the use of flax fiber instead of cotton (a fiber which would be more durable and more sustainable), the paper industry continues to rely on the same resources that it always has. The industry’s current position is certainly unsustainable and innovation could be the answer to their declining resources, however it has not as of yet tried to find an innovative solution to this prolem.
If there is one industry that I consider less innovative than others, it would be the aerospace products industry.
In my opinion, this is caused by difficult access to foreign markets because it depends on Government policy. Sales cycles can last many years, during which the domestic political environment can change.
Also, the industry is struggling to attract qualified engineers, many of whom are opting for careers in IT and telecommunications.
Finally, government contracts are subject to potential annual budget cuts and commercial airline changes to existing orders based on economic conditions.
I'm incredibly biased, as this is the only industry, I have experience in, but I have to say that the health care industry, especially on the provider (hospitals, doctor's offices, etc.) side is the least innovative.
There's a couple of things that have led them to this state of affairs. One has been the historical system for receiving revenue in this industry that has de-incentivized the notion of population health or keeping consumers healthy since treating sickness is a source of revenue for these entities. Additionally, most of the labor is made up of specially licensed individuals (doctors or nurses) coming from educational programs that have been rigid in updating the way they train are future clinicians. And finally, the lack of transparency in pricing and the fact that insurance prevents consumers from understanding the true cost of services has meant that competitors have not needed to pursue innovation to maintain profitability.
I think the least innovative industries are those industries that customer have no choice to choose the provider especially in monopoly market. Utilities industries such as electricity and water are a good example. They have no pressure to improve because everyone has to use their products anyway because there are no other suppliers. Moreover, it usually a big company so it will be hard to change. Government owned company may be even less innovative due to the culture in the organization.
To the extent that it still exists, the long distance passenger rail industry in the United States might qualify as one of the least innovative. They failed to adapt to the rise of automobiles, the interstate highway system, and air travel.
Over the years, they could have innovated by introducing high speed rail service and competed with airlines (especially for passengers that were afraid to fly), or they could have become a lower-cost longer duration option for people that could not afford to fly or travel by car. Instead, they haven't really done anything and the industry has seemingly been in decline for decades.
I agree with Marcus and Dan in stating the US Railway systems are the least innovative, both passenger and freight. Alternatives forms of transportation have evolved to almost make these obsolete, yet there is a still a need. Compared to that in European countries, the US has not innovated or adopted to create advancements that consumers need and make inter-state travel easier. This industry is largely plagued by the high operational costs and their revenue potential does not adequately complete with other forms of transportation. Especially after 9/11 and the heightened security requirements, the railways had an opportunity to capitalize, but the Northeast corridor remains the only market that has kept the system alive. New advancements are possible and really need to be explored, especially in larger cities, where traffic and congestion are a major issue, yet people continue to drive and commute further and further each year.
I'd have to say the U.S. railroad industry is probably one of the least innovative industries out there. On the passenger train side, there is potentially high consumer demand, and successful examples in Europe, yet no company that I'm aware of has been able to successfully attact passengers outside of a select few major cities. On the freight shipping side, railways are losing significant traffic to quicker substitutes (i.e. trucks and air).
When I think of industries that lack innovation, I think of those that are highly regulated or controlled by governments. I would point to utilities, railroads, and many financial services businesses. These industries are either restricted in their ability to adapt, lack competition, or are held back from generating enough revenue to fund new projects. The bottom line is that the managers of these industries generally do not have the proper incentives to innovate.
I would consider the legal industry to be one of the least innovative. Considering how reactive the practice of law is, especially corporate law, it almost makes sense for the industry at large to stifle innovation, or anything that would significantly allow attorneys to work more efficiently/be able to bill fewer hours.
One could argue that it's in the best interest of the law firm to take as long as possible to complete work and bill as much as they can for that work. This is reflected by the fact that many firms still utilize older technology (word processors, antiquated legal databases, etc). It's also reflected by how hard the industry was hit by the recession. In the years leading up to 2008, large corporate law firms were hiring law students based on projections three years out (they would hire first year law students as summer associates based on their forecasted need for 3 years down the road when those students graduated). After the recession, companies (clients) became much more diligent about their legal expenses and no longer tolerated such high billing (without sufficient justification). Law firms have scrambled to adjust to this new reality, both in terms of reducing their hiring needs as well as improving their internal processes. Prior to the recession, law firms did not have to innovate how they offered legal services because their clients were, for the most part, doing well and would pay essentially whatever they billed. The sheer fact that firms have struggled so mightily to adjust is evidence of how little they've innovated, both in terms of the services they offer and how they offer those services, over the past few decades.
I think the railways industry is among the least innovative industries in the market today. I cannot think of many innovations that this industry has come up with in recent years. The reason for this might be the way the market is structured. The very high capital requirements, as well as the strategic / political importance of this industry has resulted in railways being monopolistic in most parts of the world. As a result competitive pressures and therefore the need / drive to innovate has been missing from the industry.
The least innovative industry that I know of is the forest products industry. Certain factors such as capital intensity and cyclicality are an industry-wide challenge, but most companies in the industry continue to produce the basic commodity products that have not changed in years. While the uses for the products haven't changed much either, there's room for innovation. Also, innovation could help insulate these companies from negative effects of producing commodity products.
The music industry is the least innovative industry. The major labels have been waiting for five or more years to invest in new technology following the collapse of the traditional album. Major record labels are continuing to try to squeeze every penny out of an antiquated business model. In addition, the people at the top of the industry are still relying on tactics that worked well in the industry's heyday. If the labels were smart, they would be utilizing technologies like Rdio and Spotify to supplement physical and digital recordings sales.
The least innovative industry that I can think of is rail-road. This industry is in this state maybe because it has some constraints (it is very expensive to change the rail road system) and it is still leader in some aspects (e.g. energy efficiency in transportation).
The thing that comes to mind for me is the utilities industry. As mentioned before, they are highly regulated which has seemed to lead them to high risk avoidance and therefore low innovation. My father works with a southwest powerpool, a company that helps transfer energy across states and they struggle to find new ways to model, generate, transfer, and share energy with companies around the region. They spend more time trying to work with the regulation agencies than with innovating new methods that could better the industry on the whole.
If I had to pick an industry that is less innovative than the rest, I would choose the real estate industry. As one article I read states, “buildings today are conceived and constructed in much the same way as they were hundreds, if not thousands, of years ago.” In terms of construction, the process also hasn’t differed much. A design team envisions and draws up a plan, a builder builds that design checking back to confirm its intent with the design team, and finally the building is constructed. Certain aspects of the building process have been changed or improved which are considered innovative (i.e. using research findings, leveraging technological advancements, designing the blue prints virtually etc.), but overall it has evolved very little. I think what’s led the industry to this state of affairs is the mindset that “if it ain’t broken, don’t fix it.” Overall, the process by which buildings are constructed is simple and it works, and thus while there are certain aspects of the process that can be and will continue to be improved, it isn’t anticipated that the industry will see any major breakthrough innovations.
ReplyDeleteI would have to agree with Ashley on this one. I definitely feel that residential real estate is one of the least innovative industries today. Home builders are not incentivized to be innovative in their construction, in that it is costly to implement innovative aspects to homes, and builders want to construct homes that they are certain will sell. Therefore, you rarely see innovative construction such as solar panels in homes.
DeleteOn the other hand, though, I think that there is a fair amount of innovation in other forms of real estate, such as offices. Nowadays, you see more and more office buildings with solar panels, interesting layouts and landscaping, etc. There is more of an incentive for companies to have "state of the art" buildings because it can serve as a signal to consumers that they are "green" or innovative.
There is no single industry that I consider the least innovative. Any industry I can think of has adapted in some ways to new technologies available. For example, while one article considers the real estate industry less innovative in terms of building design, it has become more innovative in terms of financing, accessibility through the internet, and aligning buyers and sellers. Obviously, the tech industry, whose customers expect innovation at regular intervals, excels in terms of product innovation. And while many other industries fall short in that regards - food, CPG, real estate, furniture, etc - their customers do not demand or expect constant product innovation. Instead, they want improved access, better pricing, and a positive experience, which most companies have managed to successfully produce. Today's "least innovative" industries depend upon how innovation is framed in relation to their customer base. Most companies that still exist are doing a good job of adapting to customer demands within their industry.
ReplyDeleteI second Taylor's comment and want to add that I initially thought that some industries may not be "innovative" in our eyes, but if they are still present and in business, they must be adapting to their surroundings and winning against their competition. I would have to say though in terms of the technology industry, I do believe that social media while initially innovative, is now lacking innovation in product design. They've used one concept and applied it to different forms such as pictures, short sentences, and videos but it hasn't grown past the initial concept and how is it going to change over time to make it relevant 15 years down the road? They may not have a sustained competitive advantage if they can't adapt to other social changes.
DeleteI decided that the least innovative industry is the entertainment industry--both in terms of the content of the entertainment and the methods in which that content is delivered to consumers. So many TV shows and movies are either remakes or adapted from books. There seems to be a lack of innovation in coming up with novel concepts for plot lines, etc. Additionally, how the content is delivered to consumers has not adapted very much even though the internet and other new technologies have presented so many new opportunities. The music industry is suffering because of pirating and as yet has not innovated enough and found a way to combat this. Similar is true for the movie industry. There are just so many new ways to deliver content to viewers, but there have not been many innovations in this arena because CD's, movie theaters, and DVD's are still the main forms of delivery.
ReplyDeleteOne of the least innovative industries seems to be the publishing industry (most notably books and newspapers). Book publishers have long exploited their power over writers and readers while for a long time there was simply no reason for newspapers to revamp their business model. As we know, the rise of the internet and audiobooks or ebook-readers have dramatically changed the publisher's business environment. The most renowned book publishers at last have reacted to those changes and offer new releases as books, ebooks or audiobooks (thus finally reacting to customers' demand for more flexible products). Newspapers, on the other side, still struggle to implement profitable online-papers or apps for smartphones. In general, both too long adhered to the already mentioned rule of "if it's not broken, don't fix it" and now find it hard to leave this state of inertia.
ReplyDeleteThis time, I have to go with the Airline industry. Although I am aware of the pressures the airlines are under (cost related), I think they do a poor job of innovating alternative ways to compensate for the increased costs.
ReplyDeleteAdditionally, the industry seems to be more focused on cost considerations than ever, cutting back services and amenities. A little more innovation in new products - from the carriers, not the airplane manufacturers - would be great!
I would agree with Nick's statement. While airplane manufacturers are certainly innovative, I don't see the airline industry in general as being innovative. Carriers, due to cost restrictions, are doing nothing more than charging people in unique and unthought of ways.
DeleteI realize, as Nick noted, that there are incredible pressures for the airline industry but maybe some innovation on their part would result in happier clients and have the potential for profit.
I've got to counter this at least a little bit guys :) Innovation from the customer's perspective is coming through more personalized service and direct interaction with the consumer. Now granted, the transition is slow, but the airlines are definitely shifting the services that they offer consumers, and overall are at least trying to create additional value to the consumer.
DeleteFrom the airlines perspective, the Un-bundling of the product is a pricing innovation that has allowed the airlines to see profitability again that they haven't seen in years.
I would suggest that the insurance industry is one of the least innovative industries. Some of the lack of innovation is due to governmental regulations that control the various transactions in the market. Another aspect of the little innovation is that not many more products can be offered to better the industry. Many of these differentiating products already exist in the market place and any new products are subject to further regulations. There isn’t an R&D department available in which to pour money and the last time that some type of creative insurance progress was made, it caused the collapse of the financial system, further increasing the scrutiny on the industry.
ReplyDeleteThe industry which makes up the US's state and federal governmental agencies comes across to me as the least innovative industry. Specifically, two examples of agencies lacking innovation that come to mind include the DMV and Voting. These two under-utilize technology and thus have very inefficient, unautomated processes.
ReplyDeleteThey have never felt the pressure to innovate like most companies have. There is also a high level of bureaucracy present, which makes it more challenging to innovate because of all of the decision-making levels and hurdles involved in trying to effect change. Moreover, the majority of government employees are not incentivized to innovate or push the envelope to drive improvement.
Have to agree with Sherene on this one. To the extent that the government counts as an industry, it is undoubtedly the least innovative. Among the factors that contribute to this lack of innovation are: lack of competition for service, entrenched status of employee unions, and a lack of urgency to radically cut costs (it will be interesting to see how this changes given the pressures of the upcoming fiscal crisis).
DeleteJumping on the US Gov bandwagon here. I've always been frustrated with the lack of technology adoption throughout the government. Cost reductions (one of the value propositions of technology) should be considered as a main driver for the government.
DeleteAfter reflecting on various global industries and inspired partly by Lindsay's comment, it is my opinion that the least innovative industry is Bollywood (the movie industry in India). The industry typically produces remakes of former Hollywood blockbusters. Furthermore, the plot line almost always centers around a love story between and man and woman, and lastly all movies take the form of musicals. To me this "business model" is consistent, and unchanging in the face of consumer/demographic preferences and differences. Ultimately, it's leading to disinterest and viewer disengagement.
ReplyDeleteThe education sector is not as innovative as it should be especially in developing countries. Since it is a service industry where the customer pays upfront, the customer is locked into the contract which acts as a deterrent for innovation. There are huge switching costs involved in case the customer is unhappy with the quality of the service.
ReplyDeleteThis sector is incentivized to invest a great deal in the front end while acquiring customers. The shortage of a skilled and highly qualified workforce is another issue that plagues this industry.
I agree with Venkat that the education sector is not a model of innovation. The tenure system in place at major universities is misaligned with the incentives of students. Professors are rewarded for research rather than teaching ability. As discussed in class, the burden is on the student body to demand change. However, in an MBA program specifically, the agents of change must act quickly, or 2 years will come and go without any progress made.
DeleteUniversities are notorious for red tape and complex processes with layer after layer of approvals for any proposed change. Even lacking substantial innovation, the demand for education services continues to grow, eliminating much of the incentive to change. Until a major share of the population can secure appealing jobs without university degrees, or the value of education in the workforce declines for some other reason, schools will likely continue to operate as they currently do. Students may demand change and celebrate small victories, but a complete overhaul of the education sector that results in continual innovation is not likely.
Is the federal election process an industry? It will have to be for now because it's so front-of-mind just a week after the presidential election and was the first thing I thought of.
ReplyDeleteThe way in which federal elections, specifically presidential elections, are conducted is so primitive compared to our manufacturing capabilities, smartphone technologies, logistical efficiencies, and so on. Constant worry about fraud, long lines, and correct tallying of votes is a time-old tradition every four years, and it seems that such an old-fashioned way of voting is the main problem. There plenty of opportunity for innovation but no change is made. I believe the primary reason for this is the fear of corruption. Whereas the most modern way to hold elections would be to use computers, smartphones, and/or tablets, federal elections are so important that we use big boxes that resemble a 1980s PC.
To bring it back to a business setting, if an industry fears that its product or services could be easily corrupted by competitors or "bad customers", it will hold that industry's innovation behind the times. One example of this might include specific types of micro-lending that banks could pursue for teenagers or college-aged borrowers that is barred because of the easily imaginable corruption that could take place.
Sort of along the same lines as Ashley, if there is one industry that I consider less innovative than others, it would be the construction industry. As a Yale professor put it, "the construction process is almost exactly the same. The way we build a skyscraper today is not radically different from the way the Empire State Building was built." An architect comes up with a plan and draws it on paper, then hands the diagrams off to a building contractor who gets paid to build the architect's two-dimensional vision and convert it into a functioning building on budget and on time. It is interesting because today, even the features inside buildings are adapting to technological changes but the construction industry itself largely is not.
ReplyDeleteIn my opinion, one of the reasons why the construction industry restricts innovation is because it is a highly fragmented industry. The people who design are different from the people who actually construct. And the industry as a whole invests very little in R&D. Another reason for lack of innovation can be because the demand for buildings and homes (apartments, houses, office buildings etc) is almost inelastic. People need to find a place to live so this creates little incentive for the constituents of the construction industry to be innovative. They may ask the question: "Why be innovative in construction when it makes no difference?"
I would consider the road & highway construction industry as one of the least innovative industries. There seems to be a constant pattern of repairing a problem in the same way. No new techniques are used. For instance in cold weather cities, each year after the harsh winter potholes appear in the summer. When these are finally fixed, it is just in time for another winter and then more potholes. This cycle results in companies spending more time trying to fix the same problem rather than building new roads (slowly growth for other industries).
ReplyDeleteWhile some of this is due to government bureaucracy and rising material/ labor costs, I believe is mainly due to the lack of emphasis placed on research and development. If the industry had a dedicated area for exploring new options and technologies, the companies in the industry may be able to cut costs and spend more time on creating new types of roads or repairing techniques.
I would agree with Erin's statement, I think that the road construction industry is one of the least innovative. It seems that most time is spent repairing and making small fixes to existing structures, rather that improving on these structures. A major factor for this pattern is the investment in new roads and the possible downtime required to truly improve upon existing structures. However, making new strides in technologies may reduce possible downtime and improve commutes for many large metropolitan areas.
DeleteWhat quickly comes to mind is the luxury goods industry (it's also a class project topic...). Luxury goods has a rather solid consumer base that does not require it to be inventive. In fact, one of its most defining characteristics is that it is time-less and classic. Specifically, I am thinking of the extremely "high-end" side of the industry (i.e. Hermes, Goyard, etc.). It is not swayed by trends and mass-consumer fashions mostly because its core consumer demographic is not looking for fads. So it can just tweak classic designs and bring older merchandise "out of retirement." The innovation mostly takes place on the mid-market/mass merchant level that is primarily influenced by consumer trends (i.e. Marc Jacobs, Kate Spade, etc.).
ReplyDeleteAn industry that I consider to be extremely uninnovative is the paper goods industry. Despite the devastation that the paper industry wreaks on global forests, and the declining availability of the resources required to make pulp and create paper(which in turn undoubtedly lead to higher prices), the industry has still not explored other potential products that it could use to create paper. While the apparel industry (specifically Hanes) has been exploring the use of flax fiber instead of cotton (a fiber which would be more durable and more sustainable), the paper industry continues to rely on the same resources that it always has. The industry’s current position is certainly unsustainable and innovation could be the answer to their declining resources, however it has not as of yet tried to find an innovative solution to this prolem.
ReplyDeleteIf there is one industry that I consider less innovative than others, it would be the aerospace products industry.
ReplyDeleteIn my opinion, this is caused by difficult access to foreign markets because it depends on Government policy. Sales cycles can last many years, during which the domestic political environment can change.
Also, the industry is struggling to attract qualified engineers, many of whom are opting for careers in IT and telecommunications.
Finally, government contracts are subject to potential annual budget cuts and commercial airline changes to existing orders based on economic conditions.
I'm incredibly biased, as this is the only industry, I have experience in, but I have to say that the health care industry, especially on the provider (hospitals, doctor's offices, etc.) side is the least innovative.
ReplyDeleteThere's a couple of things that have led them to this state of affairs. One has been the historical system for receiving revenue in this industry that has de-incentivized the notion of population health or keeping consumers healthy since treating sickness is a source of revenue for these entities. Additionally, most of the labor is made up of specially licensed individuals (doctors or nurses) coming from educational programs that have been rigid in updating the way they train are future clinicians. And finally, the lack of transparency in pricing and the fact that insurance prevents consumers from understanding the true cost of services has meant that competitors have not needed to pursue innovation to maintain profitability.
I think the least innovative industries are those industries that customer have no choice to choose the provider especially in monopoly market. Utilities industries such as electricity and water are a good example. They have no pressure to improve because everyone has to use their products anyway because there are no other suppliers. Moreover, it usually a big company so it will be hard to change. Government owned company may be even less innovative due to the culture in the organization.
ReplyDeleteTo the extent that it still exists, the long distance passenger rail industry in the United States might qualify as one of the least innovative. They failed to adapt to the rise of automobiles, the interstate highway system, and air travel.
ReplyDeleteOver the years, they could have innovated by introducing high speed rail service and competed with airlines (especially for passengers that were afraid to fly), or they could have become a lower-cost longer duration option for people that could not afford to fly or travel by car. Instead, they haven't really done anything and the industry has seemingly been in decline for decades.
I agree with Marcus and Dan in stating the US Railway systems are the least innovative, both passenger and freight. Alternatives forms of transportation have evolved to almost make these obsolete, yet there is a still a need. Compared to that in European countries, the US has not innovated or adopted to create advancements that consumers need and make inter-state travel easier. This industry is largely plagued by the high operational costs and their revenue potential does not adequately complete with other forms of transportation. Especially after 9/11 and the heightened security requirements, the railways had an opportunity to capitalize, but the Northeast corridor remains the only market that has kept the system alive. New advancements are possible and really need to be explored, especially in larger cities, where traffic and congestion are a major issue, yet people continue to drive and commute further and further each year.
DeleteI'd have to say the U.S. railroad industry is probably one of the least innovative industries out there. On the passenger train side, there is potentially high consumer demand, and successful examples in Europe, yet no company that I'm aware of has been able to successfully attact passengers outside of a select few major cities. On the freight shipping side, railways are losing significant traffic to quicker substitutes (i.e. trucks and air).
ReplyDeleteWhen I think of industries that lack innovation, I think of those that are highly regulated or controlled by governments. I would point to utilities, railroads, and many financial services businesses. These industries are either restricted in their ability to adapt, lack competition, or are held back from generating enough revenue to fund new projects. The bottom line is that the managers of these industries generally do not have the proper incentives to innovate.
ReplyDeleteI would consider the legal industry to be one of the least innovative. Considering how reactive the practice of law is, especially corporate law, it almost makes sense for the industry at large to stifle innovation, or anything that would significantly allow attorneys to work more efficiently/be able to bill fewer hours.
ReplyDeleteOne could argue that it's in the best interest of the law firm to take as long as possible to complete work and bill as much as they can for that work. This is reflected by the fact that many firms still utilize older technology (word processors, antiquated legal databases, etc). It's also reflected by how hard the industry was hit by the recession. In the years leading up to 2008, large corporate law firms were hiring law students based on projections three years out (they would hire first year law students as summer associates based on their forecasted need for 3 years down the road when those students graduated). After the recession, companies (clients) became much more diligent about their legal expenses and no longer tolerated such high billing (without sufficient justification). Law firms have scrambled to adjust to this new reality, both in terms of reducing their hiring needs as well as improving their internal processes. Prior to the recession, law firms did not have to innovate how they offered legal services because their clients were, for the most part, doing well and would pay essentially whatever they billed. The sheer fact that firms have struggled so mightily to adjust is evidence of how little they've innovated, both in terms of the services they offer and how they offer those services, over the past few decades.
I think the railways industry is among the least innovative industries in the market today. I cannot think of many innovations that this industry has come up with in recent years. The reason for this might be the way the market is structured. The very high capital requirements, as well as the strategic / political importance of this industry has resulted in railways being monopolistic in most parts of the world. As a result competitive pressures and therefore the need / drive to innovate has been missing from the industry.
ReplyDeleteThe least innovative industry that I know of is the forest products industry. Certain factors such as capital intensity and cyclicality are an industry-wide challenge, but most companies in the industry continue to produce the basic commodity products that have not changed in years. While the uses for the products haven't changed much either, there's room for innovation. Also, innovation could help insulate these companies from negative effects of producing commodity products.
ReplyDeleteThe music industry is the least innovative industry. The major labels have been waiting for five or more years to invest in new technology following the collapse of the traditional album. Major record labels are continuing to try to squeeze every penny out of an antiquated business model. In addition, the people at the top of the industry are still relying on tactics that worked well in the industry's heyday. If the labels were smart, they would be utilizing technologies like Rdio and Spotify to supplement physical and digital recordings sales.
ReplyDeleteThe least innovative industry that I can think of is rail-road. This industry is in this state maybe because it has some constraints (it is very expensive to change the rail road system) and it is still leader in some aspects (e.g. energy efficiency in transportation).
ReplyDeleteThe thing that comes to mind for me is the utilities industry. As mentioned before, they are highly regulated which has seemed to lead them to high risk avoidance and therefore low innovation. My father works with a southwest powerpool, a company that helps transfer energy across states and they struggle to find new ways to model, generate, transfer, and share energy with companies around the region. They spend more time trying to work with the regulation agencies than with innovating new methods that could better the industry on the whole.
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