Strategyn

Thomas Edison’s Innovation Process

A needs-first approach to innovation Truly ahead of his time

White Paper Abstract

By Sarah Miller Caldicott

In just over 30 years, Thomas Edison pioneered six industries that today have a cumulative market value of more than $1 trillion. How did he do it? What was Edisons innovation process? This article shows that Edison was ahead of his time, adopting a needs-first approach to innovation rather than the ideas-first methods that companies still use today.

America has reigned as the world’s dominant innovation leader since drawing its first breaths as a nation in 1776. Pluck and “Yankee ingenuity” drove its growth during its first 100 years. But in America’s second century, it was the genius of Thomas Alva Edison (1847–1931) and the efforts of his legions of employees that spurred the nation forward to global dominance as a leader in scientific and technological innovation.

With the creation of Edison’s storied Menlo Park, New Jersey, laboratory in 1876, Edison not only invented what we know today as research and development, he also pioneered six industries in just over 30 years—all of which remain with us today. At Menlo Park and later in his West Orange, New Jersey, lab, Edison designed a systematic process for successfully moving concepts from an idea stage all the way through to commercialization.

Historical records indicate that the six industries pioneered by Edison generated a market value of $6.7 billion by 1910 (see Table 1)—or more than $100 billion in today’s dollars. Furthermore, from the roots of those six industries grew much of the modern technology that shaped America in the 20th century. On a global level, the ripple effect of these six industries—alongside Edison’s 1,093 U.S. patents and 1,293 international patents—accounts for more than $1 trillion in market value today.

Today, in an era when leaders in both developed and developing markets are grappling with how to pioneer new industries and drive value, Edison has a great deal to teach us. Edisons innovation process success provides numerous clues as to how to look at 21st-century markets, how to discover new market space, and how to slice through the complexity that often accompanies the development of new products and services. How was Edison able to consistently and so successfully carve out new market space in such a relatively short period of time? And how can we begin to leverage Edison’s value creation insights today?

Download the full white paper, “Ideas-First or Needs-First: What Would Edison Say?”