I began the day today with Arise TV, speaking with Reuben Abati, co-anchors, and David Alozie on Innovation and Nigeria. It was a live TV program.

Innovation = Invention + Commercialization

Innovation enables a new basis of competition, offering firms and nations the opportunities to create a separation by anchoring new trajectories in markets and territories. Until ideas have been tested and the hypotheses validated in markets, within demand-supply frameworks, the term “innovation” cannot be used.

In my book – Africa’s Sankofa Innovation – I have explained different types of innovation [section reproduced below]: disruptive or breakthrough innovation, sustaining innovation, incremental innovation, discontinuous innovation, continuous innovation, open innovation, closed innovation, Hybrid innovation, grassroots innovation or “bottom of the pyramid” innovation, Sustainability innovation, inclusive innovation, social innovation, and user innovation. Then, there is Sankofa innovation.

Box 1.1: Different Forms of Innovation

Innovation is important in commerce and industry owing to its specific capacity to improve competitiveness and position institutions for success. There are many kinds and forms of it: disruptive or breakthrough innovation is one that changes the basis of competition in an industry — for example in watches, Swatch change the basis of competition from accuracy to fashion; sustaining innovation is one that perpetuates the current dimensions of performance —for example, Tesla making electric cars that can go further before recharging; and incremental innovation focuses on small improvements on existing products, services and processes.

Disruptive innovation is the most consequential as it redesigns markets through transformational impacts enabled by the technologies. The evolution of smartphones like iPhone has been termed disruptive. It brought new social systems like the sharing economy made possible by mobile apps. Also, the wealth created by Apple is well documented besides the economic and political consequences its impacts have exerted on the economies that hosted the industries its technologies have disrupted (think of job losses in Nokia home country Finland).

Innovation can also be examined within the direction of change: while discontinuous innovation breaks paths to move to significantly new directions, continuous innovation follows a sequence without deviating from the status quo.  When innovation takes place in a form that it draws insights that lie outside the boundaries of the firm, it is called open innovation and when the system is highly internally controlled and sequestered from outside, it is said to be a closed innovation.  Hybrid innovation where companies keep their internal R&Ds with controlled intellectual properties but open some R&Ds components to get insights from external stakeholders has become common.

Recently, innovations by the billions of global citizens living on less than $2 per day (the poor) and stakeholders of traditional form of knowledge mainly from the informal sector have been categorized as grassroots innovations or “bottom of the pyramid” innovations. Sustainability innovation combines sustainability — environmental preservation, protection through renewal, maintenance, and sustenance — with innovation. For inclusive innovation, the focus is reduction of inequality — poverty, disability, distance and others — and driving growth that considers every stakeholder. This is very close to social innovation which while considering owners/investors equities in enterprises also pushes for serving the society and improving the lot of the poor. And finally, when innovation is led by users — user firms, user communities, end users — and not by suppliers or manufacturers, it is user innovation.

Then, there is Sankofa innovation which is “reach back and get it” type of innovation that emphasizes continuous improvement by looking back and learning from past experiences.

Good People,
Thank you for the emails and InMails – we have them. I may be slow to get back but I want to use this medium to thank everyone ahead. To those that travelled from far to meet me which unfortunately did not happen, I will make time to speak with all. #Believe

Here is a cut-out of my presentation from the master content. The presentation is titled “The Growth of Nations”.

Two quarters ago, Apple saw its sales numbers in China crashed. I wrote that Apple was making a mistake, thinking that its customers did not have choices as it continued to misfire on “pricing“. With its attitude of increasing prices, Apple customers left in droves in China. Apple paid the price with lower market share!

In this world, you can do many things in the market. But one thing I will suggest you do not do is to assume that your customers and consumers are stupid. Yes, we get into that phase where we think we can do anything and get away with it. People, it does not work that way. The last time Apple reported earnings, it was the most capitalized private company on earth. Today, it has lost hundreds of billions of dollars on market value.

What was Apple’s problem? It misfired on its pricing. And when that happened, customers revolted, leaving the one oasis in the company (the iPhone) and sales dropped 15%. Apple made an increasingly commoditized product category a fashionista product, putting the cost of iPhone out of the reach of many people.

The drop on iPhone sales was not going to hurt just on monetary terms, the planned transition into services (which grew 19% to a record $10.9bn for quarter ended 31 December) depends on more people using the devices since services win on volume. That explains why Apple wants to lower prices so that it can get many devices out of the stores. In most markets, Apple had already re-priced iPhone to make the device affordable for customers.

Fast forward to last quarter, Apple made some changes. Yes, Apple reduced the prices on iPhone and in the process stabilized China iPhone sales. The results were not clearly pretty—profits and revenues fell, and iPhone sales dropped by 17%, their sharpest decline ever—but executives said price cuts in China led to a pickup toward the end of the quarter, sending shares up more than 10% in after-hours trading, as reported by Quartz.

The company announced its second-quarter earnings today (April 30). Wall Street had been expecting Apple to generate around $54.77 billion in revenue for the quarter, according to Nasdaq—in fact it posted $58.02 billion. While investors will likely be pleased that Apple came in above expectations, that revenue figure is still a drop of about 5% over the same period last year, when the company generated $61.1 billion.

[…]

The iPhone has been Apple’s cash cow for over a decade now. As Apple has struggled to break into emerging markets like China and India, where brand loyalty is less important than value for money, it has had to find new ways to generate additional cash from existing customers. For the past three years, its services business—which includes sales of apps, games, movies, music, cloud storage, and Apple Pay fees—has been the company’s second-largest business. Services have eclipsed sales of Macs, iPads, and everything else the company sells beside phones.

The company’s strategy on services is also paying off. Largely, if Apple reduces prices of hardware, it can get the products in the hands of many to grow the service revenue.