Technology and Innovation
We define innovation excellence as the ability to rapidly transform creative ideas into commercially viable product and service offerings while optimizing selection and development. Finding new ways to meet the market’s future needs for reliable, energy-efficient solutions is critical to driving our organic revenue growth.
Our average innovation revenue from 2016 to 2019 was 18.60%.
In 2019, we spent $236.2 million on research and development and launched 87 new products and services, spanning nearly every business and region. We refreshed 19.6% of our product portfolio over the past five years, achieving superior breadth and depth in every major category. Each of these new products features sustainable design, is aligned with total life cycle management principles and uses natural resources more efficiently than before. Read more about the Ingersoll Rand Product Development Process (IRPDP) and our product life cycle management.
Our innovation roadmap focuses on ensuring that we remain positioned in the right markets with the right products, services and technology capabilities. We do this by leveraging customer relationships, applying advanced data analytics and systemically drawing feedback from our global supplier base. We use our Business Operating System (BOS) as a framework to translate the market intelligence we gather into new products, services and solutions.
The global trends that inform our 2030 Sustainability Commitments — urbanization, resource constraints, climate change and workforce dynamics — will have an especially powerful impact on our customers and the solutions we provide. Enterprise-wide collaboration and knowledge transfer, which we foster through frequent exchange programs with global engineering leaders, drive our culture of innovation. We also form global distributed team structures for all new developed-market product engineers to grow skills in emerging-market R&D teams.
Innovation for Emerging Markets
One of our growth strategies is to increase our engagement in emerging markets, with the goal of improving living conditions in base-of-the-pyramid communities while addressing poverty and urbanization. Our emerging-market revenues were $18.4 billion in 2019.
We use a three-step process to prioritize our investments in emerging markets.
- We consider the macroeconomic and geopolitical conditions at the country level.
- Where these factors are acceptable, we perform an analytical assessment of the current attractiveness of our business, considering competitors, customers and channels.
- We consider how the attractiveness of our business will likely evolve over time.
One example of how we can enter early-stage markets with our products is a recent program the HVAC business is working on in China. The “Coal to Electricity” program initiated by China’s government is intended to significantly lower coal consumption for winter heating in North China, prevent air pollution and reduce PM2.5 emissions to improve long-term air quality in China. Our market and engineering teams and sales channels are collaborating to develop a new product with vapor injection and variable-speed technology to deliver heating capability that meets the needs of low-temperature environments. We continue to aggressively participate in more early-stage market opportunities.