Is the Formula 1 Championship useful?

A lot of years ago I read a book where the author used a specific market as an example to analyze his assumptions about innovation management. He chose the hard-disk drive manufacturing evolution because the development of new products was extremely fast in that market.

Formula 1 is a competition where at least an 80 % of the performance depends on technology and many groups of engineers are developing improvements continuously. I will show you that Formula 1 is useful to understand innovation.

Looking at Formula 1 we can learn a lot about innovation environment in a competitive scenario, because things happen very fast.

We can think about Energy. There are some actors implied in this market: Governments, regulators, generators, distributors, sellers, users. It is an interesting and very important market to analyze, but unfortunately things are very slow because the business is very stable.

At the Formula 1 we can find other actors: Ecclestone, FIA, constructors, pilots, press, and public, but things are faster. Every year a constructor put a new car on the track.

Ferrari has a higher budget than Red Bull. Will the money be the most important thing to drive innovation to success? Formula 1 shows us that a high budget is not a guaranty of success, but we can notice easily that a high RDT budget increases the probability of success.

This factor could be considered in other markets establishing an analogy, but we can find many others.

I do not know if Fernando will be able to win the championship but if you are innovators, I propose you think about many other things. For example, what happens when the rules change from one year to another? Possibly, it could help you to analyze a business that depends strongly on the regulation. I could extract a conclusion: you will need to invest in research and development again.


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