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The race for innovation

19 March 2013

According to a new study carried out by a research team at the Cass Business School, part of City University London, the way in which Formula 1 racing teams continually push for new innovation in an attempt to gain a competitive advantage may actually be having a detrimental affect on their chances of success.

Having statistically examined all the strategic factors influencing Formula 1 competitions between 1981 and 2010, the study asserts that "adapting car technology to regulation changes is more beneficial than pioneering new innovative solutions". This is said to be particularly prevalent in years when the FIA forces teams to implement major changes to their cars’ technology, with the 2009 season being cited as a particular example when two relatively inexperienced teams, Brawn GP and Red Bull, came first and second in the Constructor Championship, respectively, using basic, reliable, 'no-frills' cars.

Dr Paolo Aversa, who headed up the study, says: "Our study has important implications for practitioners in times of crisis and uncertainty. Managers often display a bias towards action, so they overwhelmingly tend to believe in an ever-increasing positive relationship between innovation and performance gains. Our theory and findings, however, point to a possible inflection in the increasing value of innovation due to shifts in the environment, after which firms may find it detrimental to their performance to improve beyond what the environment currently demands.”

Of course, I haven't seen the whole study and I'm no F1 expert, but wasn't one of the reasons that Brawn GP did so well in 2009 the fact that they used the controversial 'double deck diffuser'? And what was this if not innovation? 

To say that F1 teams do better when they curb innovation (even in uncertain times) seems like a very short-term view. Developing innovative technology is always going to have some element of uncertainty attached to it, but isn't it the companies that take the gamble that are in a better position to succeed in the long run? In global dynamic markets it's very rare for a business to achieve perennial success by simply 'carrying on doing what they do best'.

Plus, in the case of F1, it just seems like such a shame to be extolling the virtues of playing it safe with innovation. Apart from the fact that the constructors' continuous efforts to give their cars a competitive edge makes for a more entertaining season, much of the technology that has its origins in the world of F1 can bring benefits to everyday life. Examples include flywheel technology that is helping to make road cars greener, racetrack telemetry being used to monitor patient health and a magnetic filer that traps rust in central heating systems, to name a few.

If teams simply stuck to "adapting car technology to regulation changes", what would happen to such innovations? 

 
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