New trends in innovation

The Business Week review of The Year in Innovation has more than the normal look back. It highlights three trends in innovation that are taking root: trickle-up innovation, design thinking and open innovation.

Trickle-up innovation may best represent what some are calling today's "good enough" marketplace. Multinationals used to develop their top-of-the-line products for the developed world. These goods then "trickled down" to emerging markets as even better replacements were introduced to affluent consumers. Now the process is being flipped. Companies increasingly are designing low-priced, no-frills products for those at the bottom of the pyramid and trickling them up to the developed world.
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Design thinking has been around for some years now, but it became a mantra among consultants in 2009. The notion boils down to this: Executives at all levels would be more innovative and therefore successful if they approached problems the way designers do. That means understanding a problem or need from the consumer's point of view and then coming up with the best good or service for the job. P&G, again, is often held up as a corporate role model here thanks, to such products as its dust cloth Swiffer, which opened up a whole new market for the consumer goods giant.
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Open innovation spread far and wide as companies sought to offset cuts in their own R&D budgets by soliciting help from outsiders, including customers, suppliers, and freelance experts. While companies such as Johnson & Johnson (JNJ) have used the Internet to vacuum up worthwhile ideas and practical assistance since the previous downturn almost a decade ago, the Great Recession is converting more to open innovation today. Clorox (CLX), for example, says 80% of its new products included input from at least one partner.

These are three ideas that could be game changers in our thinking about innovation. Now all we need to do is figure out the public policy to support these activities.