Double Loop Process: The Next Innovation Paradigm

Abstract

A turning point in the innovation process may have been reached with the appearance of arecent proposal to emphasize customer toolkits in a bid to alleviate the dilemma between customer dissatisfaction and supplier overextension in the innovation process. This proposal is based on two decades of experience with software toolkits (including simulation) by the semiconductor industry. In the present article, the focus is on the main implication of a double loop innovation process involving the concurrent design of a base (or general purpose) product as well as the toolkit used by customers to optimize customization. A historical perspective reveals that the precedent for the double loop process can be found in two areas of concurrent engineering (CE) (viz. of product and process technologies) and in the concurrent evolution of markets for innovations. All three are clubbed together as “CE” and all three emphasize rapid knowledge transfers (including on a global basis) and rapid problem-solving (including via simulation). Thus, CE, along the three foregoing dimensions, provides a quasi-analytical framework for shaping the emerging double loop innovation process. However, it becomes necessary to evaluate a potential drawback which might negate the prospects of the double loop process at this stage. This lies in the observation that: with the transfer of design work from firms to their customers, there would be a decline of design in the supplier firms, and with a tendency for “followers” to simply replicate toolkits developed by “leaders,” the double loop process would get pre-empted. To bypass this, the additional category of “strivers” is proposed, especially given the obvious shortcoming of relying on a “one best way” philosophy. Having placed the double loop process (referred to interchangeably as CE II) in the historical context and in order to overcome a potential drawback to its viability, an attempt is made to apply it to a strategic societal issue. In the past, CE has helped expand markets for a variety of developed-country products such as cars and computers mostly in developed country markets. Thus, it is believed that CE II will help boost business in the so-called “base-of-pyramid” (BOP) markets around the world. The software and services industry of India may be well placed to apply the customer toolkit concept. This is because: It basically involves the extension of existing practices in the computer industry. There is a huge global need for lower cost, lower complexity software applications that need to be customized. Software toolkits should thus help leverage scarce personnel resources in the software industry as well as accelerate customization in other industries worldwide.