The first thing that comes to mind when thinking of low-tech industries is typically anything but innovation. There is a belief that innovation is strictly the sphere of Research and Development (R&D) initiatives. As such, innovation is generally meant to connote advancements through new products and technology, but of course generally strictly within R&D.

But times have changed and new studies indicate that the foregoing “belief” is anything but the truth. Titled “Gaining Competitiveness with Innovations beyond Technology and Products: Insights from IMP3rove,” the study details the falsehoods in this belief with concrete results. So how innovative are low-tech companies?

Who is innovative?

The above question will most likely elicit a responses that includes all major dynamic and technologically innovative firms such as Apple. Most people will quickly point out major firms that have been in existence for quite some time as the most innovative. Of course some of these firms are truly innovative, take Apple for instance. But the new study now reveals that even low tech companies can be just as innovative.

The main objective of the study is to close the gap between low-technology and innovation. The study researched both high and low-tech businesses, with the outcomes pointing to the possibility of high innovation in both segments. The study demystifies the belief that low-tech and innovation is not possible.

On average, the study further reveals that low-tech companies invest some 10 per cent of their total revenue on innovation. On the other hand, high-tech firms such as Apple invest around16 per cent of their revenue on innovation.

However, any money spent on innovation covers the whole innovative process, from idea generation, development, launch and subsequent improvements on the innovation outcomes. The deduction here thus is that innovation spending goes well beyond mere R&D investment. And low-tech companies are just as ambitious in this quest as their high-tech counterparts. Innovation plays a major in overall low-tech company performance, just like it does for majors such as Apple.

Benefits of Innovation

Results from the study reveal a considerable disparity between incomes from innovation from low-tech companies that invest significantly in innovation against those that don’t. This is reflected in the annual income growth rate and the annual employment growth rate. Low-tech companies that invest heavily in innovation generate more income than their counterparts that invest less.

The study offers interesting lessons from the foregoing observation. Because low-tech companies that invest heavily in innovation contribute highly to job creation, policy makers need to rethink their job creation strategies that have formerly mainly focused on high-tech companies. This can be done by putting more emphasis on innovation policies and support programs for low tech companies ambitious on growth through profitable innovation.

Proficiency in Innovation Management

Low-tech companies can better leverage the opportunities of innovation through heavy investment in innovation. This creates proficiency in innovation management. Most low tech companies spent most of their innovation money in developing the capacity for successful innovative product launches. As such, continued heavy spending in innovation enables these heavy investors develop their skills in innovation management when compared to their low-tech counterparts.

Therefore, heavy innovation spenders in low tech companies industries increase their chances of innovative product launches by continuously innovating. As the company matures, its successful product launches go up as well. The study shows that low-tech firms with heavy innovation spending have an average 60 percent rate for new successful innovations. On the contrary, low tech companies with less investment in innovation scored a 48 per cent success rate for new product launches.

For any young company in the low tech industries to succeed, innovation must obviously take center stage, if this study is anything to go by. One way to create a routine for innovation and develop innovation management skills is through identifying areas that need improvement in the company by benchmarking company innovation with competitors.

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