Dark side of innovation

"Everybody supports innovation, as long as it does not mean change". This is a quote I once heard and pretty much describes the phenomenon. Everybody loves the concept of innovation, nobody can be against it. That is why it is so popular among policy makers: strive for something everybody wants. But innovation always also means change. And not always people like change. See the topic of resistance that is discussed widely in innovation management: how do you fight of cope with the initial resistance against a new idea or innovation within a company. From the perspective of innovation management literature, people who initially fight change in a organisation do this out of fear, defending the status-quo and an attempt to keep their privileges and their current level of control. One part of people fighting against change and technological progress within organisations are described as Luddites . The challenges of managers and policy makers is often formulated as overcoming this resistance for the public wellbeing.

But let us look a bit deeper into that fear of change. What if technological progress or the new innovation does mean loss of jobs or loosing power? The introduction of the car factory producing T-fords meant more employment against a higher salary for many people, but it also meant the introduction of Taylorism: a very dull repetitive and relatively low responsible work. The concept of organisational innovation that includes outsourcing leads to the closing of many factories in US and Europe. The innovation of direct online booking of flights, cars and hotels has lead to the decay of the travel agencies. How to explain to a now unemployed person that innovation is a good thing for all? Part of the savings a car manufacturer can make by closing a factory in Europe and opening a new one in China will go to the people who close the deal and make it happen. But how to explain to the unemployed workers that some people get big bonuses for getting you laid off?

Do I still have to explain financial innovations to show the possible negative impact that innovation can create? What about computer viruses, online crime and identity theft, more powerful weapons and the possibilities of bio-terror?

The truth is that innovation always means change. And when change happens some people win and some loose. It does not have to be a zero-sum game, but there are almost always people who will loose. Accept & acknowledge that and try to see if that is a reason not to innovate or not

The future of books

The Future of the Book. from IDEO on Vimeo.

Small is the new big is the new small

Last week I was attending a seminar in which Getjar CEO and founder Ilja Laurs gave a presentation.

During his presentation, he compared the typical start-up company in Silicon Valley with the more traditional established business like Microsoft and nowadays also Google. According to Ilja Laurs, the start-up companies are winning the competition for talented people to the big firms, because they can offer higher salaries and better perspectives. The reason that small start-up firms can offer higher salaries is because of their prospect of fast increasing firm value which can be capitalised and partly spent on salaries. Big firms in general make small profits and don't increase their company value and cannot offer the same high salary. The future prospect of creating new 'world changing' technology, products or services is also more appealing than the prospect of making more of the same in the large firms. Small is the new big...

From a talk with some people in the former Innovation Platform in the Netherlands, I know that the people working their consider the "Big seven" companies in the Netherlands employ almost all talented scientific people in the Netherlands, which hurts the development of new technological based start-up companies, since they are unable to attract and attain talent. These large companies are able to attract talented people because of the high salaries, the variety of career opportunities within these firms and the prospect of working and collaborating on new advanced technological challenges and bringing new technological products to the world.

France is renowned for life-long employment for state-worker with good salary and working conditions. It is therefore not a surprise that many talented people choose a career in a state institutions after finishing one of the prestigious 'grandes écoles'. In Lithuania on the contrary, an average talented person would choose a career in business, and preferably start his or her own company.

In conclusion, it can be said that different circumstances in different countries and probably also different sectors determine the conditions for organisations to compete for talented people. The prospect any organisation can offer to people in terms of current and future salary are just as important as the values, working conditions and the image of the organisation and the sector it operates in. And finally, talent attracts more talent.

"Cargo Cult" innovation

Some time ago I participated in a strategic meeting about converging technologies in Lithuania. One of the speakers was prof. Rimas Vaisnys from Yale University. He explained the phenomenon of "Cargo Cult":

"Cargo cult activity in the Pacific region increased significantly during and immediately after World War II, when the residents of these regions observed the Japanese and American combatants bringing in large amounts of material. When the war ended, the military bases closed and the flow of goods and materials ceased. In an attempt to attract further deliveries of goods, followers of the cults engaged in ritualistic practices such as building crude imitation landing strips, aircraft and radio equipment, and mimicking the behaviour that they had observed of the military personnel operating them." (source: wikipedia)

He further concluded that this same ritual can be identified for policy makers in developing and transition countries when developing innovation policy. The policy makers are imitating the efforts of other countries, copying foreign policy documents without a true understanding of the topic itself.

I think that this practice is not limited to developing countries, but is wide spread among many developed countries. I have heard a Dutch minister of Education and Science justifying a multi-billion public investment in nano-technologies by claiming that: 'other countries also do that'.

Furthermore I suspect that the same "Cargo Cult" might be wide spread among companies trying to imitate, mimic or copy the success of innovative competitors. Put an i in front of your products name and hope you will become as successful as Apple...

[Edit 15 April 2011: More people have recognised that governmental policies for the support of innovation can be classified as cargo cult, see link]

EU: Innovation Union

The EU announces the Innovation Union, their strategy for innovation until 2020.



Press release here

UPDATE: Document is released here

My ideas?
The linear model of innovation is dead. Long live the linear model.
1. The EU focuses mainly on R&D and hopes that innovation will follow.
2. The EU believes that economic growth will lead to more jobs. Apparently they never talked to an economist and have not followed the news about jobless growth in the USA.

Where Good Ideas Come From

Who innovates?

Who innovates? Traditional answer: companies. All traditional literature and policies regarding innovation take this as a starting point. In most countries the Ministry of Economic Affairs is in the lead in creating innovation policy. Academic literature regards innovation as an economic phenomenon (following Schumpeter, Porter, etc), including the "market failure" paradigm. Popular literature as The Economist and Business Week spend much attention on the topic. Strange... Innovation is a multi and inter-disciplinary topic that touches disciplines as culture, social behavior, technology, marketing, governance, legal frameworks, etc. etc. Here some non traditional examples of innovaters

1 Governments innovate
Really? Yes. Governments are trying to be more transparenr, engage and inform citizens, increase efficiency, decrease bureacracy, improve their services and use the knowledge of the crowd for policy making.  Some examples: Voting by Iphone; using open source software in government and government crowd sourcing.

2 Individuals innovate
Ever heard of DIY? I am not talking about home improvement, I talk about advanced science and creating new businesses. With internet as a tool, can you see the difference between a multinational and a self-employed person? Open source (software) is a group of individual innovating together.

3 Dont forget NGO's
Many NGO's are rethinking their strategies. How to link, engage, activate and inform donors. How to decrease overhead costs. How to increase, measure and publish the impact? How to focus on core competences and link and outsource to other organisations?
Examples: Writing letters for Amnesty International is now sms or e-mail; webcam of oil-spill or using social media to create protest movements. Select in which firm you want to invest to using micro-credits. And what about Wikileaks?

Chris Anderson: How web video powers global innovation

Aho Report (2006) Creating an Innovative Europe

Charles Leadbeater on innovation (Old, 2005!)

Nothing new, an old talk with well known ideas. Still good not to forget.