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Digital innovation?

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These days, it's almost impossible to talk about innovation without talking about new digital technology. With the development of the Internet, the “Old World” as we have known it is gradually disappearing, giving way to a “modern” world where digital is becoming the new Wild West. In the past, innovation was confined to the R&D department. The innovation was generally technical and a patent was often filed. This innovation provided a competitive advantage over a period of time until competitors produced the same thing at a lower price. The advantage was therefore not sustainable.

Digital innovation is not located at the level of a department of the company, but at all levels. Still too few French-speaking SMEs integrate the concept of digital innovation into their strategy. However, a digital innovation makes it possible to create a sustainable competitive advantage and sometimes a monopoly situation (GAFA). Dematerialize products, understand customer expectations, interact with customers via a platform, use artificial intelligence to automate processes, etc. Revise your business model in order to rethink it “digital”, “customer centric” and “Experience” are the foundations of digital innovation. The first step towards digital innovation is digital transformation. Indeed, on a scale of 1 to 4, Swiss SMEs are around 2 and nearly 80% of SMEs declare that digital will have a major impact on their activity in the next 5 years. This is why Geekworkers Sàrl supports its clients in the process of digital transformation and digital innovation at affordable prices that make digitalization accessible to all. Digital, which was previously considered a support for business strategy, is becoming its driving force. Digital innovation is an ongoing process that must be initiated and supported by the highest management of a company. In addition, digital innovation often involves a total questioning of the business model, but also a radical change in the structure and practices of the organization. Digital innovation presupposes a successful digital transformation beforehand.

A solution to stand out from the competition

A concrete example of the importance of digital innovation: the GAFA (Google, Apple, Facebook and Amazon) which are the most powerful players and which are in the process of “dominating” the current world. Digital innovation is not unanimous. Some managers still prefer to run their businesses “the old fashioned way”. They see the technology as a simple tool and that its use could not make the difference with the competitors. What they do not know is that 20 years ago, to have real serious competition in a new sector of activity after an innovation, you had to wait at least 5 years. Currently, in less than a year, it is possible to have a strong competitor who will be difficult to rule out. Digital enables the acquisition of a sustainable competitive advantage.
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They understood the users' need. The main rule: the user is in the center. There are many search engines on the web, but why is Google attracting 88, 6% Internet users? Apple products are expensive, but in Switzerland alone, 40% of mobile users own an iPhone. In 2020, Facebook recorded a connection rate of 1.8 billion users per day, across the world. Amazon has over 350 million active user accounts worldwide. These figures prove to us that digitization is an essential element for development.

These GAFAs have implemented a digital strategy that touches the hearts of users. Let us take the example of Apple again. By the way, the Californian giant doesn't just sell a smartphone. It also sells an unforgettable experience that users can have by purchasing one of their products and using the applications on IOS. In this case, it is the software that makes the difference, but not the product.

Digital innovation: a strategy that attracts executives

How do you explain that the biggest taxi company owns no vehicles, that one of the biggest vacation rental companies does not own any buildings and that the biggest online business in the world has no inventory? At Tesla, for example, they revolutionized the automotive world thanks to unparalleled electric batteries and mastery of software.

This technological breakthrough makes this company a pioneer in digital transformation in the automotive sector. It is good to note that in terms of vehicle production, Tesla is nothing compared to the competition. Once again, digital innovation scores a point.

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What all these companies have in common: Digital innovation is driven by managers. For example, it produces
30,000 vehicles per month against 8,500,000 vehicles per year at the Toyota group, but it is this digital innovation that has placed it at the center of investors' interest and its valuation to exceed that of the world's largest manufacturers in just a few minutes. years. It is always thanks to this concept that several competitors admire Tesla. Some even claim that Tesla is ahead of them, like Markus Duessman, CEO of Audi who says that: “Tesla is two years ahead in terms of IT and software architecture, as well as in the field of autonomous driving ”. What all these companies have in common:
Digital innovation is driven by managers.

Why should we start digital innovation?

With the appearance of young startups, the vulnerability to disruption index of several “old school” companies is obvious. Indeed, startups generally have a predisposition to apply the principles of digital innovation due to their agile organization. Agility is an inseparable mindset from digital innovation. A significant risk of disruption is emerging not only at the level of Swiss SMEs, but also at the level of the country in international comparison. Switzerland would be 20 years behind and this could have catastrophic consequences for companies that do not join the “movement”. 
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Studies have shown that 63% companies in 82 countries (including Switzerland) are exposed to high disruption risks and 44% are vulnerable and could disappear if they do not quickly initiate their digital transformation.

The lack of digitalization will cause several companies to disappear within ten years. They will have a much narrower field of action and will be able to target their customers less and less. Because customers are digitizing themselves much more
quickly. Thanks to digital innovation, everything becomes instantaneous and traceable. Users will therefore tend to lean towards a modern business. “Traditional” companies will literally be wiped out of the business world.
Currently, 4.79 billion people are connected to the internet. In 10 years, that number has climbed to 166%. This shows whether we like it or not, that digital transformation is a must if we want to stay in the game!
Of course, digital innovation has caused certain activities such as the primary sector (agriculture, fishing, etc.) to fall, but it has also given rise to the tertiary sector (sales, service, etc.). In the case of Switzerland, the tertiary sector currently represents more than 75% of the economy. This growth has created a number of new jobs that did not exist before. This phenomenon was called by economist Joseph Schumpeter during the 20th century: “creative destruction”.
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