McKinsey identifies edge as the center of innovation for the year ahead thanks to the enormous speed advantages delivered through 5G networks.
To many, the rise of cloud computing has spurred new waves of innovation thanks to the availability of cheap computing power for experimentation and new types of digital products. Now, as the cloud revolution reaches maturity, the impetus for innovation is moving to a new realm: the edge and 5G. But it’s going to take more than technology to make innovation a reality: it requires a supportive corporate culture that encourages new thinking at all levels.
That’s the word in a new analysis from McKinsey, which identified edge as the center of innovation for the year ahead – thanks to the enormous speed advantages delivered through 5G networks. “5G will deliver network speeds that are about ten times faster than current speeds on 4G LTE networks, with expectations of speeds that are up to 100 times faster with 40 times faster latency,” the McKinsey team writes. Such hyper-speed computing will boost innovation around real-time applications such as AI-driven speech, written word, or computer-vision algorithms, they add. “Innovation develops around personal networks of experts at the porous edge of the organization and is supported by capabilities that scale the benefits across the business.”
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Technology companies have been working with such edge-driven initiatives for a number of years. The rise of 5G and edge technologies opens up similar possibilities for mainstream companies now as well. “Tech companies innovate at the edge. Legacy companies can, too,” states Steve Van Kuiken, senior partner with McKinsey, writing in Harvard Business Review. “Technologies like 5G, artificial intelligence, and low and no-code software design tools are changing how companies need to approach innovation. Specifically, they look to the edge of the organization where the business interfaces with its customers, suppliers, and other stakeholders, and where small-scale innovations are happening,” he urges.
Edge, by its very nature, is higher decentralized and distributed. To boost innovation at the edge, “it’s important to free small teams to operate independently,” Van Kuiken states. There are two groups that need to be part of these edge engagements, he adds. The first are the hands-on experts (i.e., the engineers, chemists, product developers, and scientists) who are working on the most complex problems for the business. Second are “non-tech workers who can use low code/no code tools and SaaS products and services to act as citizen developers.”
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Companies successfully delivering innovation at the edge have adopted three common practices, Kuiken illustrates:
- Develop and encourage the formation of small, empowered teams. “To empower the edge workers in your organization, form a portfolio of small teams and give them the freedom to work independently along with clear goals and responsibilities,” Kuiken urges.
- Feed these teams with the systems, resources, and tools they need. “To avoid teams working at cross purposes and wasting effort on work that doesn’t produce value, leading companies invest in tools, infrastructure, and processes to enable teams to work more quickly and effectively — such as establishing an easy-to-use system that any team can access to find people within the business based on skills and availability.”
- Funnel edge innovations back through the company. “Individual developers or small teams working fast don’t tend to naturally think about how to scale an application. That issue is likely to be exacerbated as non-technical users working in pockets across organizations use low-code/no-code applications to design and build programs with point-and-click or pull-down menu interfaces. This is where IT can play an important role in building up a scaling capability to funnel innovations to make them work for the business.”
In today’s fast-paced digital world, “the current models of harnessing innovation are not sufficient,” Kuiken says. “Fostering the spirit of innovation in everyone in your organization is the right mindset. But that won’t just happen. Getting there requires establishing mechanisms to support hands-on experts and scaling winning innovations to keep pace.”