As in many technology industries, communication service providers (CSPs) have traditionally relied on research and development (R&D) teams to drive innovation. These teams typically focus on building technologies that address specific aspects of an established business or customer need. Often housed in standalone labs, R&D efforts are expected to produce predictable results at calculable costs so stakeholders can quantify return on investment.
However, research from PwC’s Strategy& on the top 1,000 innovative companies shows a significant problem: heavy R&D spending does not reliably correlate with sustained financial performance. While R&D remains an important component of innovation, it alone is not enough to guarantee long-term success.
For service providers struggling to adapt to rapidly changing markets, simply increasing the R&D budget is not necessarily the answer—especially when margins are shrinking and funding is tight. Instead, they need a different approach that is practical, financially viable, and fundamentally rethinks how innovation is pursued.
CSPs should aim to drive innovation across the entire organization rather than confining it to a lab. That requires moving beyond the traditional R&D mindset. R&D should evolve into a capability-building function that empowers a broader community within the company to implement ideas. In this model, R&D creates platforms, tools and tested components that operating teams—or even customers through self-service—can use to innovate in real time. Implementation thus shifts from isolated projects to continuous, on-the-fly improvements embedded in day-to-day operations.
Successful platform-driven innovation also depends on the right culture and collaborative practices. Understanding why customers remain loyal and what they value is essential for setting the right innovation goals. At the same time, it’s useful to remember Henry Ford’s observation that customers don’t always know what new possibilities will be transformative. The point is not to dismiss research, but to recognize that opportunity for innovation exists across all markets, even when customers haven’t explicitly asked for it.
Collaboration means dismantling internal silos, bringing in external partners with fresh ideas and capabilities, and engaging customers directly—supported by data analytics. Whether the aim is operational improvement, new services, or customer experience enhancements, the objective is to foster a sustained shift in mindset so teams work together more fluidly and share responsibility for innovation outcomes.
Companies also need robust innovation management processes that can be sustained over time. These processes should define how to test and prepare products for market, how to pilot and scale ideas, and how to validate business models under stress. Establishing these practices takes time and discipline, but they are critical steps toward becoming a repeatable innovator rather than depending on sporadic, isolated breakthroughs.
Interested in hearing industry leaders discuss topics like these and sharing practical use cases? Attend the co-located IoT Tech Expo, Blockchain Expo, AI & Big Data Expo and Cyber Security & Cloud Expo events in cities such as Silicon Valley, London and Amsterdam to explore the future of enterprise technology.