New type of innovation has emerged during COVID-19
Whisky and gin from Nyborg Distillery becomes hand sanitizer, Grundfos makes 100,000 visors and fibre materials are used for face masks instead of nappies. Researchers from the University of Southern Denmark have studied the redirection of resources in Danish companies to produce personal protective equipment (PPE) during the corona crisis, and they have discovered an entirely new type of innovation.
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.
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.
Companies can obtain great competitive advantages, when they are able to innovate on their products and quickly find new uses for them.
– 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.
– 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.
During the corona crisis, several companies have redirected their resources to produce PPE. Using data from the Confederation of Danish Industry, researchers from the University of Southern Denmark have found three categories of successful innovative solutions:
- Rapid prototyping shows that e.g. 3D printing technology can ensure time and resource efficient prototypes, which can be compared to standard requirements early in the process.
Example: In 36 hours, Grundfos develops a prototype for a visor. The company mass produces the visor and donates more than 100,000 visors to medical staff in Denmark, Great Britain and France.
- Process innovation shows how existing production equipment and materials can be used to cover new market requirements. This process is demanding and requires knowledge of one’s own skills and ability to re-organise as well as possible partnerships to ensure approval for production and distribution.
Example: Carlsberg, Ørsted and Re Holding enter a partnership to produce 36,000 l hand sanitiser every day, meeting 30 % of Denmark’s need. Nyborg Distillery redirects production of whisky and gin to produce hand sanitizer. Both Carlsberg, Royal Unibrew and Ørbæk Brewery donates alcohol to the distillery.
- Lateral innovation shows how some manufacturers were able to put existing products from known markets to new uses in new markets by e.g. looking at materials’ properties and testing their use in new products.
Example: JP Air Tech has specialised in production of face masks for the construction industry, but during the corona crisis the company has developed two new face masks: a surgical mask and a regular face mask that both meet international standards.
Meet the researcher
Professor Mette Præst Knudsen is Head of Centre for Integrative Innovation Management at Department of Marketing & Management.
Meet the researcher
Associate Professor Lykke Margot Ricard is Head of MSc Programme in Civil Engineering in Product Development and Innovation at Department of Technology and Innovation.
On 11 March, Danish Prime Minster Mette Frederiksen shuts down Denmark.
On 23 March, DI issues a press release stating that DI and the Danish state have agreed that DI will coordinate the partial redirection of resources to manufacture gloves, white coats, visors, hazmat suits, face masks and hand sanitizer. PPE which was critically needed as it is usually produced in China.