New Product Development (NPD) is the holy grail of marketing and as a result, commercial success. Revolutionary new products were and still remain the greatest source of revenues for most successful companies. A study of successful companies shows that companies with more than 20% of revenues from new products year after year continue their growth trajectory and continue to command commercial success as well as brand recognition. Companies that are not able to do so eventually mature and get bought out or stagnate. A huge correlation exists between market capitalization of successful companies and their revenues through new products.
Revolutionary products are now losing their shine to evolutionary products. Products that evolve from newer technologies are stealing the thunder. New drug classes and new technologies are making headlines. The world is changing very rapidly and integration of different technologies across different domains is becoming commonplace.
Over the next few posts, we will discuss the New Product Development Process and see how innovation can change NPD process as well as products.
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I have been doing a research on how to measure the extent and success of open innovation. I agree with your point that revenue ratio coming in from a new product is one of the good indicators. Keep it up.
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Jayesh
http://innovate2market.blogspot.com/