New type of innovation has emerged during COVID-19

Companies have been very creative during the corona crisis. When Denmark was lacking PPE, the ingenuity was astounding, and many manufacturers diverted their resources to produce hand sanitiser, face masks and gloves – they even demonstrated an entirely new way to create products. Researchers from the University of Southern Denmark have named the new type of innovation: lateral innovation.

– In innovation research, this is the equivalent of naming a new planet. I have never discovered a new type of innovation before, associate professor Lykke Margot Ricard of SDU Innovation and Design Engineering says smilingly.

Innovative uses for existing products

She has discovered the new type of innovation together with professor Mette Præst Knudsen of Centre for Integrative Innovation Management. They explain that lateral innovation occurs when companies transform existing products into new products in new industries.

– The company JP Air Tech has specialised in making face masks for the construction industry, but during the corona crisis they have developed two new types of face masks: a surgical mask and a regular face mask that both meet international standards, says Lykke Margot Ricard:

– Another example is Fibertex, who usually produce fibre materials for e.g. nappies. They came up with the idea of using their materials for face masks.

Swift transition

The researchers have studied data from the Confederation of Danish Industry (DI), who was in charge of coordinating Danish companies’ redirection of resources to producing PPE. The new type of innovation emerged from this data.

– Lateral innovation is a new type of innovation that has not yet been described in the literature. The examples of lateral innovation that we have seen during the corona crisis shows that companies are able to quickly change their products and move into a new industry, where there is a critical need, Mette Præst Knudsen explains.

– We see a great potential in lateral innovation. Companies can obtain great competitive advantages, when they are able to innovate on their products and quickly find new uses for them.

Crises cause creativity

The vast majority of PPE are usually imported from China, but when Denmark was in critical need of face masks, sanitizer and white coats during the lockdown, DI made an agreement with the Danish state to coordinate the manufacturing of PPE.

– We had a global shortage of PPE in the early phases of the corona crisis. But at the same time, we saw our companies’ amazing ability to redirect their resources to meet the sudden critical needs. New partnerships between companies were formed in record time, and manufacturers utilised new technology such as 3D printing to create PPE – and most of these companies do it for free. They are donating, Lykke Margot Ricard points out.

External pressure, internal skills

The Confederation of Danish Industry were approached by more than 190 companies, who offered their help. In the end, 45 companies were producing PPE for hospitals and nursing homes:

Carlsberg stopped part of its production of cider to donate the alcohol to hand sanitiser. In 36 hours, Grundfos developed a prototype for a visor and have since donated more than 100,000 visors to medical staff in Denmark, Great Britain and France.

– We know from research that innovation is typically the result of external pressure, but it is realised because of the internal skills of the company. That insight has very much been confirmed during the corona crisis, Lykke Margot Ricard says.

A difficult market

That a crisis can accelerate innovation is no surprise to the researchers. The same thing happened during the financial crisis in 2007.

– We can clearly see that companies that are able to adapt in times of crises and continue to invest in research and new technology are the ones that survive and gain competitive advantages, Mette Præst Knudsen says.

Companies like JP Air Tech and Grundfos operate in the heavy industries, and they are not used to navigating the myriad of laws and EU standards that apply to products for the healthcare industry.

– We have seen new partnerships emerge as a way to meet these special demands, where public actors are helping the companies form the necessary consortia, Mette Præst Knudsen says.

– That is an interesting approach to ensuring fast innovation of high quality. Maybe public and private actors should pursue these partnerships in other areas to improve innovative solutions to societal issues such as climate and sustainability, Lykke Margot Ricard points out.