In order to understand what the true preferences of consumers are, today’s companies must take advantage of “The New Knowledge Channel in Fourth Generation R&D Management” as shown in the figure. The Channels in restructured markets are part of a new 4G dominant design based on new supplier capabilities, new supplier business models, and new industry structures such as supply chains and distribution channels. The new 4G dominant design enables multiple markets for the Internet of Things (IOT). Big Data and analytics are at the core of the new supplier capabilities that operate the Knowledge Channel. With embedded analytics in smart networked products, the Knowledge Channel gives suppliers a new 4G marketing capability to better understand how customers actually use products and services. Supplier business models are also combining manufacturing with networked services based on the Knowledge Channel.

Solving core problems for customers requires mutually dependent learning between customers and suppliers during the R&D process to reveal latent needs and test prototype solutions. The Knowledge Channel enables value creation during R&D, and after operational deployment of products and services via an Innovation Extension Center that facilitates lifetime learning. It is a pair of processes that operate to enable suppliers to iteratively guess and then discover and confirm unmet latent customer needs by developing prototype solutions that customers iteratively test. This reveals their needs including the detailed value attributes, and uncovers the value of new prototype solutions through customer experiences.