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Countries around the world are putting innovation at the top of their agendas. As a result, companies now have access to a global market for talent, capital, tax credits, and regulatory relief. Before setting up a research laboratory or a marketing office in one of the world's innovation hot spots, organizations must consider which of the emerging innovation models best suit their requirements. An astute company can also blend elements of each model in a systems integration approach. In the focused factory model, countries concentrate their resources. Singapore, for instance, plans to increase funding for R&D in life sciences, clean technology, and digital media, and to provide benefits such as tax relief to attract companies interested in conducting research in those areas. GlaxoSmithKline and Novartis have already begun doing so at the biomedical research center Biopolis. Countries adopting the brute force model hope to generate innovations by marshaling massive amounts of labor and capital. China, for example, is increasing funding for 10 universities in order to produce many specialists in every area of science and technology. The goal of the Hollyworld model is to create the right environment for innovation by assembling a critical mass of skilled individuals. India, for example, is partnering the best graduates of its universities with Indians who have trained at educational institutions in the West. Several countries have developed large-scale ecosystems combining funding bodies, research institutions, and business and academic collaboration. Finland's innovation system, for instance, is bolstered by strong governmental stewardship and the involvement of public and private players. Aalto University, scheduled to open in the autumn of 2009, will exemplify the country's holistic approach.

HomeStar's reputation for being "the first, the best, the only" name in appliances is under threat. For the second time in six months, upstart competitor Vanguard has pulled off a market coup: Its retro line of refrigerators, ranges, and dishwashers is a huge hit. Meanwhile, HomeStar's latest big idea--jumbo appliances--is bombing. CEO Hal Marden is chagrined: How did the company lose its edge? Kelly Dowd, HomeStar's head of marketing, blames Charlie Hamad, the company's chief engineer. Charlie is so focused on developing smart appliances--products that can cook, clean, and even shop--that he's lost touch with the changing marketplace, Kelly complains. Global competition is growing, and consumers' tastes are changing. Now, more than ever, churning out new products is critical to HomeStar's success. But Charlie, a 27-year veteran who has spearheaded almost every major technological advance in the industry, pooh-poohs the new, flashy products: "Form over function. Nothing new there but a fancy paint job and higher prices." Hal is torn. Charlie is a hero to him, but what if the market doesn't go for networked appliances? The company simply can't afford to put all its eggs in one basket. What's more, the biggest trade show of the year is just six months away, and HomeStar has nothing new to offer. Vanguard, meanwhile, is making product announcements every quarter. Is it time for Charlie to move on? How can HomeStar get its R&D efforts back on track? In R0208A and R0208Z, four commentators--Ideo's Tom Kelley, Whirlpool's Philip Pejovich, Thayer School of Engineering's Lewis Duncan, and Ealing Studios' John Kao--offer advice in this fictional case study.

HomeStar's reputation for being "the first, the best, the only" name in appliances is under threat. For the second time in six months, upstart competitor Vanguard has pulled off a market coup: Its retro line of refrigerators, ranges, and dishwashers is a huge hit. Meanwhile, HomeStar's latest big idea--jumbo appliances--is bombing. CEO Hal Marden is chagrined: How did the company lose its edge? Kelly Dowd, HomeStar's head of marketing, blames Charlie Hamad, the company's chief engineer. Charlie is so focused on developing smart appliances--products that can cook, clean, and even shop--that he's lost touch with the changing marketplace, Kelly complains. Global competition is growing, and consumers' tastes are changing. Now, more than ever, churning out new products is critical to HomeStar's success. But Charlie, a 27-year veteran who has spearheaded almost every major technological advance in the industry, pooh-poohs the new, flashy products: "Form over function. Nothing new there but a fancy paint job and higher prices." Hal is torn. Charlie is a hero to him, but what if the market doesn't go for networked appliances? The company simply can't afford to put all its eggs in one basket. What's more, the biggest trade show of the year is just six months away, and HomeStar has nothing new to offer. Vanguard, meanwhile, is making product announcements every quarter. Is it time for Charlie to move on? How can HomeStar get its R&D efforts back on track? In R0208A and R0208Z, four commentators--Ideo's Tom Kelley, Whirlpool's Philip Pejovich, Thayer School of Engineering's Lewis Duncan, and Ealing Studios' John Kao--offer advice on this fictional case study.