Vantage point: Insights from cutting-edge research

Family firms are more innovative than other companies

Family-owned businesses are among the most innovative in their industries, belying their perception of being risk-averse, traditional and stagnant, say professors Nadine Kammerlander and Marc van Essen in an article in the Harvard Business Review. The authors conducted their research along with academics Patricio Duran and Thomas Zellweger to determine how family firms compare to their non-family counterparts when it comes to being innovative. The findings, published in the Academy of Management Journal, show that on average family firms have a smaller R&D budget than other organisations of similar size, but that does not mean they are less innovative. For every dollar invested in R&D, they get more innovative output, measured by number of patents, new products, or revenues generated with new products. An explanation for this, offered by the authors, is that entrepreneurial families tend to concentrate their wealth in one or few firms (for instance, the Walton family’s huge wealth concentration in Walmart). “These families are very cautious about investments, aiming to avoid any waste. Family firm owners can use their powerful shareholder positions to ensure that managers engage only in prudent investments.”

IoT botnets present unimaginable cybersecurity risk, says Juniper

New data from Juniper Research has found that the consumer IoT (Internet of Things) installed base will reach over 15 billion units by 2021, an increase of 120 per cent over 2016. Embedded connectivity is increasingly being used as a product differentiator. However, Juniper cautioned that the vast scale of this connectivity will, unless action is taken, lead to an unmanageable cybersecurity risk created by botnets in excess of 1 million units. Recent IoT botnets will prove merely to be the tip of the cybersecurity iceberg, according to the Internet of Things for Security Providers: Opportunities, Strategies, & Market Leaders 2016-2021.
 

The report found that the use of botnets to disrupt Internet services forms a part of the near-term threat landscape. It predicted that botnets will be used for more malicious purposes in future, impacting consumer, industrial and public services markets. The research called on IoT device manufacturers to “take responsibility” by implementing security-by-design, adding that corporate-scale vendors such as Amazon, Google and Samsung should lead efforts to galvanise other vendors to apply security best practices. The research also highlighted providers such as Crossword and Positive Technologies who are using machine learning to disruptively protect against distributed denial-of-service and malicious network activity. It predicted that the industry will be forced to move beyond traditional signature-based detection methods in the near term to address IoT cybersecurity effectively.

Consumers willing to pay more to socially responsible companies

Seventy-seven per cent of consumers prefer to purchase from companies which demonstrate community responsibility, and are willing to pay five to 10 per cent more for products from such firms, according to a recent survey by Zendesk in partnership with Union+Webster. The survey covered more than 7,000 people across eight markets. The conscious consumer results by country showed similar patterns. However, there were exceptions. For example, conscious consumers are especially prominent in Brazil and Mexico, making up 87 per cent and 85 per cent of all consumers, respectively. They are less common in the UK (67 per cent). Willingness to pay more decreases as product costs are increased by 10 per cent, as compared to five per cent. This holds true whether the product is purchased for business or personal use. But among conscious consumers, nearly as many will purchase at the 10 per cent uplift. Besides, many conscious consumers also encourage others to embrace their purchasing preferences by leaving recommendations on key websites, including Facebook, Twitter and Amazon. Seventy-four per cent of them are social activators, who leave positive reviews on these sites at least occasionally and want others to act on them.