Industry must watch emerging trends, says expert

INDUSTRIAL policy must target multinationals who have a sharp eye on emerging trends in their own sectors, an expert has said.

Studies have shown the winners will be those who introduce what has been termed disruptive technologies, according to Professor Clayton Christensen.

These are products that are cheaper than existing expensive ones, are often less sophisticated and yet go on to command huge slices of the market.

Japan introduced successfully introduced such products in the 1960s and 1970s, pricing the existing players out of the markets.

But Japan has been in recession for nearly 15 years because it failed to introduce new technologies or products required to replace the winners they previously introduced to the world’s markets.

It became excellent at what it did but failed to see the emerging trends in the sectors it had come to dominate. That was a salutary lesson for all, said Prof Christensen, author of the bestseller, The Innovator’s Dilemma.

“The very management practices that have allowed them to become industry leaders also make it extremely difficult to develop the disruptive technologies that ultimately steal away their markets,” he said.

"Digital Computers went to the wall, not because it was a bad business, but because it failed to adapt to the growing needs of the market.

"When Apple came to the market initially it made its product available to children and it was only after a long period of gestation that they succeeded to the extent they have, Prof Christensen said.

"Highly-motivated and well-managed multinationals will not necessarily be around for ever," he said.

"IBM got hammered in the main frame business and EMC, the giant storage group came under attack from cheaper less sophisticated equipment."

Prof Christensen, of Harvard Business School, was the keynote speaker at this year’s two-day Irish Medical Devices R&D Conference in Limerick.

Opening the event yesterday. Shaun O’Connor, IMDA chairman and director of Hospital Products Ireland said the industry was acutely aware of the need to harness new technologies in order to stay in business.

“The solution to this dilemma is to harness innovation by developing a deeply-rooted R&D culture and focus within Ireland rather than stand by and see Irish jobs being lost to Singapore and Hong Kong,” Mr O’Connor said.