No competition = No innovation?

Can there be innovation without competition?

David Armano posited this question on his blog and I thought I add my own thoughts to the question and hopefully incite some useful discussion.

I actually think there is innovation without competition. If we all lived in a perfect world it would be pretty boring. More of the same. Who would want to like in a world like that? Not me.

The type of innovation Armano is talking about is incremental innovation. The type that leads to tit-for-tat. One firm outdoing, outworking the other one. Think line extensions and upgrades.

Both Google and Facebook are incremental innovations. Improvements over the originals. They’re simply better executed ideas than the originals. Head to head competition is never smart, it’s tit-for-tat ego driven BS that leads to predictable outcomes. Red Oceans.

The type of innovation that exists without competition is disruptive. This type of innovation is often driven by external sources, not direct competition. A recent example of what could potentially disrupt the banking industry is BankSimple. The guy who started it is not a banker (equity researcher), he was just pissed off at the complexity that is banking and decided to create an alternative.

Another example of disruptive innovation is the iPod, the Kindle, XM Satellite Radio. We could argue that Groupon is a form of disruption as it makes it possible for people to experience new things when they might not have because of price, while at the same time providing merchants with an infusion of new clients.

We could also argue that Jack Dorsey‘s newest venture, Square, can potentially disrupt the financial services space by enabling any individual or small business to accept credit cards for any product or service at any time in any place for no cost. Very powerful.

An example of a disruptive idea in direct competition (a rarity) is the Nintendo Wii because it made video games accessible to non-consumers (moms, dads).

Put simply, if you see possibilities where no one else does; you can innovate where there is no competition. But the best type of innovation though, is to go where there is no competition and define the terms of competition. To create a Blue Ocean.

What do you think, can there be innovation without competition? Do you agree with my examples? What other examples come to mind?

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  • Kevin Mcfarthing

    Hi Jorge,

    I wrote a similar post last year – http://www.innovationfixer.com/webblog/?p=54. The message is to set yourself tough targets to drive your innovation.

    Kevin

    • Hi Kevin (@innovationfixer),

      Thanks for the pointer. Left a brief comment on your post.

      Cheers,

      Jorge