Future Perspectives are thought pieces with concise, focused insights into important issues of interest to marketing and business strategists.

Business Model Innovation

One of the dirty secrets of business is that most companies grow at around the overall speed of the economies in which they operate. As we see slower growth across most of the world economy, business growth slows too.

This creates a fundamental challenge for businesses if they want to maintain their rate of return on investment and avoid pressure from shareholders or investors. It requires them to think about the whole business as an engine for growth as they look for ways to create demand. But innovation systems are breaking down, caught between slowing growth on the one hand, and the rising costs of complexity on the other.

At one end of the spectrum, data from Kantar Worldpanel suggests that the returns on incremental innovation are falling to the point where it is no longer effective. Erixon and Weigel, in their book The Innovation Illusion, suggest that much innovation is more "fun than fundamental."