When meaning drives innovation – a study of innovation dynamics in the robotic industry19th

No one nowadays dare to question the value of innovation. Indeed, several studies, from macroeconomics, to innovation economics, from strategy to innovation management, have investigated and discussed how innovation drives competitive advantage and the wealth of nations. However, in most studies, “innovation” is usually a shortcut for “technological innovation”, i.e. improvement driven by technological change. There are instead multiple drivers of change, within which technology is only one (and not necessarily what builds most value) both in business and society. In this article we focus on another driver of innovation, namely the search for “meaning”. Innovation of meaning is defined as a change in the “purpose” for people to buy and use products. It’s not necessarily associated to an improvement in performance, but, rather, by a change of performance and the creation of a new reason for people to use things. Meanings are concerned with the “why” of use, not the “how”. It is about making sense of an experience of use. Innovation of meaning seems to be a significant driver of differentiation, as shown in Verganti, 2009, Hekkert et al., 2011, Verganti and Öberg, 2012 and in some extent also in studies on technologies (Christensen, 1997) and market innovation (Kim and Mauborgne, 2005, Moon, 2010). However, we lack a deep understanding of if and how innovation of meaning creates value, and how it shapes competition in industries. The purpose of this article, therefore, is to contribute to create a better understanding of the value of innovation of meaning. Is innovation of meaning relevant for business and competition? If so, “how” (i.e. through which assets and economics is a new product meaning contributing to create value for businesses), and “when” (i.e. in which context is innovation of meaning a more or less fruitful strategy?). These questions are not marginal and cannot rely on traditional theories on the value of innovation. If indeed technological innovation creates an improvement in performance and therefore has a direct impact on value, innovation of meaning cannot be put on a scale (i.e. it is impossible to quantitatively claim that a meaning is “better” than another meaning). Therefore assessing the value of a change in meaning implies to redefine our assumptions about the value of innovation and challenges the related theoretical frameworks. In order to grasp the profound dynamics of innovation and its impacts on competition, our analysis focuses on a specific industry: industrial robotics. By analyzing major changes in meanings in this industry, and in particular innovations associated with safe robotics (a breakthrough in meaning for industrial robots, whose traditional meaning was of being dangerous and to be kept far from people), we show that innovation of meaning can indeed create significant value, even in an business-to-business environment that is typically considered to be driven by performance rather than by purpose. We also show that innovation of meaning may create value through several factors. Not only sales volumes, but also, and above all, through profit margins, brand, and positioning. Even if a change in meaning does not necessarily substitute an incumbent dominant solution. This implies that, differently than technological change, that is predestined to saturation cycles, there is always a potential for creating value (or destroying value) by a change in meaning. In fact, it leaves major questions open about how to assess and capture this potential. We therefore conclude by discussing the major theoretical questions about when and how investments in innovation of meaning are more likely to create value and possible research directions, namely: what are the circumstances that make people willing to re-interpret the meaning of a product? And, conversely, what are the circumstances that make people prefer to stay within the existing meaning of a product? And most of all, how can businesses recognize these two different situations?