In a recent roundtable discussion at Wharton, C. Robert Henrikson, the CEO of Metlife said “In our industry, the winners will be determined because of marketing. By that I mean true marketing, not sales support, which is what the insurance industry is about in the United States” (here via a pre reading documents from the Innovation & Corporate Entrepreneurship Research Center at Babson for their upcoming Idea-to-profit event which will cover the intersections of marketing and innovation).
Henrickson went on to say that most insurance firms have no marketing plan other than to be a fast follower of innovations developed by competing firms.
Now isn’t that true for most industries. Marketers mimic their competitors, they go after the same customers with the same offerings, and they end up killing the market with price-wars…
The panel which also included an executive from a major drug manufacturer, a major real estate developer, a major bank CEO, a retired partner from a major investment bank, and a few Wharton Professors, were then asked if they saw major innovations coming from India and China.
Almost all said no, which is rather surprising even though there were no high tech players on the panel. After all, Muhammed Yunus just won the Nobel Price for Peace for Grameen Bank – which is not just a do-good organization, but a very profitable one at that. Does this not count as a major innovation in the financial services sector?
The health care experts saw little innovation coming from India because of their weak patent system, which they claim is holding innovation back. They also see the biggest opportunity in India being with clinical trials, saying that “there are massive patient populations there that have not been tapped in any major way.”
Ouch! Is this perhaps a case of real-time marketing myopia? Perhaps those experts should take a look at open source business models – especially the ones that have been applied to non-technology products – and their potential for traditional business model destruction (or is it disruption?). And instead of looking at India as a massive source of (probably largely unprotected) people available for early clinical trials or cheap labor, they should look at it as a test bed for new business models. After all, it is because of Indian generic drug manufacturers that the price of Aids treatment came down from $15,000 a patient to less than $200 in 10 years time – and that Indian generics are now being used to treat half of the aids patients in the developing world. Does this not count as innovation in health care?