Concept value of the product might sometimes prove to be bigger than the product itself

Companies fail to utilize the full potential of their innovations

The Academy of Management Review Business Journal 2013 consisted of critical study focusing on the difference between “generative appropriability” and “primary appropriability.” The observations in the research work remain valid, and unfortunately, ignored, even in 2019.

It highlighted how several companies do not exploit the ideas in their products. Brands fail to understand and utilize the potential of their existing inventions but keep on spending millions on developing new plans.

Companies created ideas but failed to execute and develop them

Something is unusual about Facebook’s controversy between Winklevoss twins and Mark Zuckerberg. The twins did create the interface for students to interact with each other, but it was Mark who turned the same idea into the social network for people around the world. Here, the value of the interface created by Winklevoss twins was lesser impressive than the actual idea behind the same. Later, Mark Zuckerberg took the same concept, created history, and proved that the concept value of the product might sometimes prove to be bigger than the product itself.

Xerox’s PARC research center was the first to create laser printers, mouse, and graphical user interface. But unfortunately, the company was not able to commercialize and exploit the ideas behind these innovations. After a few years, Apple introduced the same products in its Macintosh computers. So, simply put, Apple took Xerox’s ideas and developed, marketed them further to turn them into successful products.

Apple perfectly manages to exploit ideas behind their innovations

Harvard’s professor Gautam Ahuja has pointed out the best example in one of his study papers to show that some companies do manage to exploit the ideas behind their products. He pointed out that Apple created the iPod, and kept on exploiting the original concept behind the iPod to further build the iPhone. Some technical aspects of the phone were taken from iPod’s technology. Later, the company used the foundations and idea of iPhone to develop iPad.

Right atmosphere for research and development

It is of a common knowledge that companies with a limited or moderate budget for R&D are forced to find more value within their innovations from the past. Such organizations are in a better position to develop new products using existing ideas.

Companies with a too high budget for R&D do not usually go back to their innovations. On the other hand, organizations with too small budgets struggle to create new products. So, the budget for R&D should be “not too less, or not too huge.” A moderate budget would motivate the company’s researchers to look into new directions, as well as look into their inventions from the past.

Interchange and interactions between senior and junior engineers in the organization are significant, as this can help in creating new products out of old ideas.

Surprisingly, several companies have reduced their spending on R&D to almost nothing. More and more CEOs are turning towards cost cutting to increase profit margins. As the author, Debra Kaye recently said, “Companies can stay ahead only if they innovate.” Let’s hope that CEOs who are busy in finding cost-cutting opportunities understand the importance of innovation soon.

Nitten Gokhaley is a consultant journalist based in Pune, Maharashtra. You can email him at-

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