Braden Kelley wrote an article entitled “Is the era of Innovation Over?” ( http://bit.ly/h9FCr6) which I would like to build upon.
Braden is the author of “Stoking Your Innovation Bonfire” from John Wiley & Sons and is also the editor of Blogging Innovation (http://bit.ly/d2c9aW ).
Braden picked up on an article lamenting the seemingly poor state of Canada’s innovation efforts (http://bit.ly/fdLeI5 ) with the view that “Innovation is literally hitting a wall”. Braden has also commented about the recent US approach to resolving their innovation approach and believes it is limited in its understanding and appreciation of innovation.
Here in Europe we are certainly going through the same crisis of confidence with innovation, it is not producing the wealth and growth expected and needed to fuel our economies. The EU commissioner for innovation, Máire Geoghegan- Quinn, the EU’s first innovation commissioner, has started to created a lot of positive energy around some exciting new initiatives but are they enough? My answer is simply no.
For a very thoughtful article on the EU and innovation (http://bit.ly/hCZWdO ) published in www.innovationmanagement.se by Ann Mettler, Executive Director of think tank The Lisbon Council and here she gives her take on policy and innovation.
Ann Mettler comments “One needs to distinguish between policy levers and policy drivers such as competition. It is about levers versus drivers. One key here is to look at the money and how the EU chooses to spend. Current spending priorities are the antithesis of innovation. If we continue to spend the largest proportion of the budget on the common agricultural policy we cannot with a straight face claim to prioritise innovation”.
Braden states the same within the article he was picking up upon, written by University of British Columbia economics professor James Brander. (http://bit.ly/fdLeI5) that explores this sobering possibility of “hitting a brick wall” in a new study published in the Canadian Journal of Economics. Brander concludes that the pace of innovation is slowing dramatically in four key areas: agriculture, energy, transportation and health care. The consequences could have a profound impact on our lives if these are slowing down. Others will pick up any slack.
For me reading about Europe and its innovation policies it does seem Europe faces an “innovation emergency” because its businesses are falling behind its US and Japanese and now China as rivals in terms of investment and new patents, graduates and investment start ups. We are facing many challenges that seemingly the Commission cannot get the necessary momentum behind to reverse some frightening trends and quess what, the developing world is rapidly catching up.
So I do agree, we are actually in crisis. I also agree we really do need a new era of innovation as the old one has clearly not worked. It has to be bolder, more radical and more reflective of what innovation is providing for us. The realization is innovation cannot be contained within borders, it needs to be encouraged wherever it goes, and the Governments need to work on ensuring they keep a stake of it. Presently this is not as good a stake as we need for the level of growth, jobs and economic prosperity.
Innovation policy makers need a better understanding of innovations parts.
- Any innovation policy is a formidable task, innovation by its nature and understanding is very broad. How can policy guide and stimulate innovation differently?
- Braden is right in his article, the heavy emphasis on applied science and investments in research and technology as the keys to innovation is not the complete answer but it is part of it, of course.
- Increasingly within the EU there is a growing realisation that all this research effort that is being heavily supported through grants and funding is falling very short in the commercialisation of inventions. There is a shift to measuring impact on society, in the delivery of benefits and that is important.
- There is an increased realization on bringing new services and products to market and this comes through the SME. This is where it becomes harder to administer and develop levers for the SME to thrive. Often the argument for Governments is to simply get out of the way and let the market manage this. In the EU, dispersion of grants or funds will still have bureaucratic strings attached to it, so this is unlikely to happen.
The new recent US & EU initiatives on innovation
With the announcement of new initiatives on both sides of the pond I still get the distinct impression the policy makers are simply re-arranging the deck chairs on the Titanic- to do something that will soon be overtaken by events, or that contributes nothing better to the existing solutions to our current problems and that is a worry. We do need something more radical. Policy needs to be bolder. We simply don’t need just another sputnik moment, a realization others are beating us, we need to put that man on the moon to make sure we mobilize society around innovation.
The real challenges needed to be faced.
- The first big challenge to innovation is really a management challenge, not a research challenge, and it is not clear how the latest policies will succeed on this front. We do need to recognize managing innovation is rapidly changing the way we need to work. Is this being fully accounted for within new policies or pushed more? Remaking management to innovate is essential to deliver through.
- Innovation has fragmented; today’s ‘innovation’ means what? We do need to understand the different ‘types’ of innovation needed to perform the specific task. I am not sure the policy makers understand the really important differences between open innovation, needs based innovation, service dominant innovation or where Business model innovation fits for support or development to name a few. This needs to change by rethinking innovation. Break it down more. It is not an internal event; it is an external collaborative event beyond a few PhD scientists to deliver innovation. Innovation needs to engage society more, not at the end but throughout the whole innovation development process.
- There is a greater emphasis on innovation partnerships as innovation comes about at the intersection of different disciplines and relationships, so this is very positive. Bringing a diversity of people and what they can contribute together is positive. I’m not sure yet if this will be understood enough this includes the final consumer with this.
- 70% or more of GDP comes from services. Many service areas don’t depend on research; they rely on ‘gut feeling’ instinct and quickly spotting ‘breaking’ opportunities, they utilise and combine knowledge more than product alone. Speed to market or first mover advantage can be much more important and how do you account for this in policy? We need to find better ways; we need to push more of the levers that help in this. We need to develop more knowledge platforms that combine knowledge to make better intelligent products.
- I do share this opinion expressed by Ann that there is still just too close a relationship and political patronage of certain sectors that are leading to a kind of inbred relationship between government and companies, leading to lagging performance in terms of international competitiveness and protective positions that are not actually creating new jobs, they are simply sending jobs away.
- US economist Tyler Cowen argues, there are huge economic implications if innovation stagnates. This is what lies behind what he calls The Great Stagnation: How America Ate All the Low-Hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better. What underpinned the great postwar boom was the industrialisation of inventions made between 1910 and 1940. The goods that poured out of the west’s factories between 1950 and 1975 provided employment and rising real wages for the mass of the US’s and Europe’s citizens. But the “low-hanging fruit” that delivered such benefits is disappearing, he argues.
- So are we actually stagnating? So perhaps the era of current innovation activity is over. We are clear of the importance of innovation as a driver of growth and the imperative to exploit it. Perhaps if Innovation was left to look after itself a little more, it could really flourish and provide real breakthroughs that did altered our lives as in 20th century very radically, that seemed unfettered far more.
I very much liked Ann Metters final comment in her article. “The biggest problem, however is that we don’t appear to respect the process of innovation itself in the EU. Innovation is not unidirectional. It does not lead to success nine times out of ten. It is by nature experimental, disruptive and unpredictable. We have no formula for it. We can’t control it top down. And that’s hard to accept, particularly if a lot of money and institutional reputations are at stake. So we create our formulas around R&D, shy away from risk and expect success. But it really doesn’t work that way”
So for me the battle of ecosystems becomes the necessary innovation platform.
Great advances do exist and many are still out there hanging on the tree. We do need to get past the low hanging fruit but to do this we do need our institutions to step back and provide a new ‘enabling’ infrastructure, we need to build the scaffolding to pick this new economic fruit. Government need to stick more to their basic knitting, focusing upon developing the conditions for building the ecosystem in which innovation, experimentation and investment can really flourish. We need supportive innovative management or investment ecology not micro management through administrating funds.
If we want to step up the pace of invention, there has to be a huge shift in the way we think and who does what. We are all presently trying to do each other jobs, often we are falling over each other, we duplicate effort, dilute innovation competition by accepting incremental innovation as the end result. We can’t continue that way, we all need to be bolder, to realize we are in crisis and where bolder innovation (and invention) can provide solutions. Government needs to design markets and build institutions that promote innovate and let the markets build their individual ecosystem on which innovation, experimentation and investment come together on platforms that provide broad benefit to all that participate. Let the market fund these, let Government encourage the enabling platforms, the brokerage to bring these together and ensure it anchors part of that for its society.
Are ecosystems and platforms the global answer to innovation acceleration? I think the more the Governments promote innovation platforms, provide the levers, infrastructures and technical backbone to allow this to happen, the better. I think we can see rapid acceleration of ecosystems and then innovation by encouraging these platforms and new business models that can dramatically transform many industries. Scale and scope will be seen differently, these are global not country specific. Individual Governments need to help to build the global cake and ensure they get a slice of it. It will often be messy, unclear and not as well defined as policy makers would like but that is the nature of innovation.
Focusing more on building different ecosystem becomes main stream for innovation delivery and we usher in the new era of global innovation. We need to move beyond today’s innovation thinking so the new era of global innovation can emerge.