Great news for Switzerland, another global leader in technology (besides Google and IBM) is opening a Research Lab: Nokia (See press release). The research lab will be located in Lausanne and the research program itself is with the Ecole Polytechnique Fédérale de Lausanne (EPFL) and the Eidgenössische Technische Hochschule Zurich (ETH Zurich).

[The Nokia Research Lab] will focus on helping people benefit from a world where they are connected to each other, to the Internet and also to information from the surrounding physical world. Access to the “Internet of Things” from a mobile device will allow people to collect information from their physical environment, filter it based on their location or preferences and share with their friends or communities.

The initial joint research agenda will focus on pervasive communications:

• Exploring new interaction experiences and technologies utilizing all the human senses;
• Services and applications based on the user’s context, such as location, and personal preferences, e.g., information provided by sensors within a mobile device or in the surrounding world
• Internet services and technologies - enriching the Internet experience on mobile devices.

Personally, I think this is great news because it will will strengthen Switzerland’s position to become a “hotbed of innovation” (See the video from Google Earth CTO Michael Jones on this topic) and will move Switzerland one step closer to become the Silicon Valley of Europe. Discussions about that at “Will a Nokia research center suck up all the Swiss talent?” and here “Europe Is Searching For Its Silicon Valley“.

If you want to know more about the research focus at the new Laboratory, you should watch the embedded video. EPFL has already done a research project for Nokia in 2007 (Project title: Mapping the Digital World) and Francesco Cara, a design strategist at Nokia, has presented some of the results at lift08.

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A lot is written about innovative companies and their visionary leaders yet most of these stories focus on the usual group of companies: Apple, Starbucks or Google. Telling stories of this small group of “elite innovators” is easy but to gain new insights one has to go beyond this group of companies to discover something new.

FastCompany recently published their 2008 ranking of the world’s most innovative companies and the list provides fresh insights into innovation beyond the “usual suspects”. They are of course included but most interesting are the stories about the less known innovators.

Here is a selection of a few of these companies, the full list can be found online at Fast Company “Presenting the 2008 Fast 50“:

#13 AFFYMETRIX

Imagine going for a half-hour doctor’s visit and coming out with a treatment plan tailored to your unique genetic blueprint. That’s the vision at Santa Clara, California-based Affymetrix, which makes lab tests that scan tissue samples for variations in thousands of genes. The company banked an estimated $405 million in revenue last year, a payday spurred by the Amplichip test — developed in partnership with Roche Diagnostics — which identifies people who metabolize drugs slowly and therefore are especially vulnerable to side effects. Now the race is on to develop advanced tests for genetic predisposition to heart disease and the most common types of cancer.

#30 OMNITURE (See Full Profile)

Omniture is like an intelligence upgrade for the Web. It provides thousands of clients, from Bank of America to JetBlue, with real-time information about how visitors use their Web sites; those visitors, meanwhile, find an increasingly personal experience rooted in previous behavior and interests. And the data derived from this sort of high-IQ interaction have made Omniture an essential tool for improving its return on online ad spending.Last year, it managed $500 million in keyword spending that led to $10 billion in actual commerce. “We want to change the online experience,” CEO Josh James says. “If consumers are happy, everyone is happy.” James certainly is: Omniture grew about 80% in 2007, with sales topping $140 million.

#43 AIRASIA (See Full Profile)

Seven years ago, former music exec Tony Fernandes paid 25 cents for an ailing carrier with two creaky planes and $12 million in debt. Today, AirAsia’s bottom-of-the-pyramid strategy has created one of the world’s fastest-growing, most-profitable carriers, with the lowest operating costs in the industry and fares as cheap as $3. “It’s like our bus,” says Yap Choo Ying, who runs a market stall in eastern Malaysia and now regularly jets to Kuala Lumpur to see her grandkids. In November, the Malaysian company made a risky bet by going long-haul, adding flights to Australia; this year, it will add flights to China and India, where billions of people have yet to take to the skies.

#48 AKQA (See Full Profile)

Most interactive-ad shops master either the creative or the technical; AKQA is expert at both. Whether building a Pixar-quality interactive online universe for Coke’s breathtaking “Happiness Factory” campaign (below), or masterminding a multimedia “alternate reality game” for Microsoft’s Halo 3, the digital powerhouse doesn’t just dream up mind-bending ideas, it actually writes the code that brings them to life. Which is why, after five consecutive years of profitability, AKQA is one of the most dangerous global forces in the ad industry. While ad holding companies and tech firms spent billions in 2007 to snap up digital shops, AKQA fended them off, opting instead for a $250 million investment from private-equity firm General Atlantic. In the meantime, the 700-person agency boosted revenues 39% to $100 million and added new clients such as Unilever, DoubleClick, and Cadbury Schweppes — on top of existing accounts with Nike and McDonald’s.

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Bruce Nussbaum, who is responsible for coverage of design and innovation at BusinessWeek, recommended in May 2007 that Cerberus, the company that acquired Chrysler, should not just focus on cutting costs but use its long tradition of design to reshape the company.

I have some advice for the private equity firm Cerberus that appears likely to buy Chrysler from DaimlerChrysler—don’t just cut costs, the way you always do and then flip the company back out to the public. Instead, use Chrysler’s deep tradition of design and innovation to reshape the company into a 21st century consumer-driven, adaptable and cool auto giant.

It seems that Cerberus and Chrysler are not just focusing on cost-cutting but are indeed focusing on design and customer experience. AdvertisingAge reports that Chrysler hired Peter Arnell as its chief innovation officer. At least he has some history with Chrysler, even though he is probably not proud of that.

That the man who’s won raves for reworking Pepsi cans and bottles and conjuring a fashionable fire extinguisher for Home Depot is taking on a C-level design role at Chrysler opens a new chapter in Mr. Arnell’s rags-to-riches, fat-to-slim, celebrity-drenched biography. But rather than look at it as a chance to make good at the automaker that let his agency go in the aftermath of a 2003 ad campaign starring Celine Dion, he insists the post is about solidifying his reputation in a community that maybe hasn’t taken him as seriously as he’d like.

David Kiley of BusinessWeek’s BrandBlog sees the whole story from a different perspective.

The presence of Arnell in such key areas as product planning and design tells me that CEO Nardelli doesn’t yet have his arms around the auto business. If he has issues with his chief of design and chief of product planning, then he should replace them, as has been widely rumored for months anyway. Adding an ad-man who has Celine Dion on his speed dial is not going to make these guys get smart.

One of the areas Arnell is said to be consulting on is interior design. For more than a year, it has been clear that Chrysler lost the plot on interior design, opting for cheap looking materials on all of its new vehicles. Memo to Mr. Nardelli. The designers didn’t procure interior materials that look like they were from a 1994 Hyundai parts bin because they thought it looked hip. They did it because former COO Wolfgang Bernhard and CEO Dieter Zetsche told executives they had to take 40% of the cost out of the interiors regardless of the outcome. The result is a flock of products that have been panned by consumers in J.D. Power APEAL ratings, which judge such aspects of the vehicles.

Even though Chrysler has realized that they need to focus on design, everything depends on the people who design cars that you want to buy. Only time will tell wether Chrysler is already on the right track.

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Opinions on the degree of required formalization for innovation processes vary widely. While one group argues that innovation can not be engineered because it is the outcome of a creative processes others belief that it is possible to set-up highly formalized processes that lead to innovative products and services. No matter what group one belongs to, it is reasonable to use well-established methods and tools that support in innovation development.

“Market research methods for innovation development” is a paper written by Dennis List from the University of South Australia which looks at the variety of established and emerging market research methods for researching innovations. The methods are grouped into (1) understanding customers, (2) idea generation, (3) concept testing and (4) estimating market size, growth and composition. The methods for each group are:

Understanding customers

• Empathic Design
• Observation
• Customer visits
• Ethnography
• Alien interviewing
• ZMET (Metaphor Elicitation)
• Codiscovery conference
• Information acceleration

Generating Ideas

• Brainstorming and synectics
• Templates of product change
• Morphological analysis
• TRIZ
• Nominal group technique (NGT)
• Scenario planning
• Lead users
• Secondary research
• Lateral Thinking
• Ignoring customers

Concept Testing

• Storyboarding
• Customer Idealized Design
• Charrette
• Usability testing
• Consumer clinics
• A-B testing (formal experiments)
• Consensus groups
• House of Quality / QFD

Estimating market size, growth and composition

• Test marketing
• Delphi method
• Expeditionary marketing
• Tracking surveys
• Simulation
• Forecasting
• Monitoring, response techniques

Each of the methods is explained briefly and limitations are discussed. Most important the article provides further references for each of the methods.

Download the full paper.

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Not just trendwatching.com observed it, also Wired magazine dives fully into this trend with their special report titled “Free! Why $0.00 Is the Future of Business“. While the report at trendwatching.com is full of examples, this article in Wired analyzes a few case studies with more detail.

Thanks to Gillette, the idea that you can make money by giving something away is no longer radical. But until recently, practically everything “free” was really just the result of what economists would call a cross-subsidy: You’d get one thing free if you bought another, or you’d get a product free only if you paid for a service.

Over the past decade, however, a different sort of free has emerged. The new model is based not on cross-subsidies — the shifting of costs from one product to another — but on the fact that the cost of products themselves is falling fast. It’s as if the price of steel had dropped so close to zero that King Gillette could give away both razor and blade, and make his money on something else entirely. (Shaving cream?)

Wired also included an analysis of the countless business models leveraging the priceless economy and came up with six broad categories:

Freemium: What’s free: Web software and services, some content. Free to whom: users of the basic version.

Advertising: What’s free: content, services, software, and more. Free to whom: everyone.

Cross-subsidies: What’s free: any product that entices you to pay for something else. Free to whom: everyone willing to pay eventually, one way or another.

Zero marginal cost: What’s free: things that can be distributed without an appreciable cost to anyone. Free to whom: everyone.

Labor exchange: What’s free: Web sites and services. Free to whom: all users, since the act of using these sites and services actually creates something of value.

Gift economy: What’s free: the whole enchilada, be it open source software or user-generated content. Free to whom: everyone.

Read the full article here.

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