Cluster Buster

Zebras are beautiful. They are powerful. They exist in nature. But if someone told you that you could paint a white jackass with black stripes and call it a zebra, you would send them packing. The necessary and sufficient conditions for breeding zebras are two mature adults of opposite gender, springtime, and some privacy.

Economic clusters are effective. They are powerful. They exist in nature. So why do most economic policy makers think they can take some real estate, paint it with an anchor tenant and a name, and call it a cluster? The necessary, and often sufficient, condition for clusters is successful entrepreneurship.

Article by Daniel Isenberg on the website of The Economist about Clusters.

Image from Flickr user doug88888

Stephen Shapiro

"Innovation Mythbusters", video with Stephen Shapiro on BNET

Quotes: "Expertise don't lead to innovation", "Hire people you don't like" and "Best practices are stupid"

The future of internet

A nice infographic from Foreign Policy magazine:


Click here for more

Innovation in Law

Few fields seem so traditional and non-changing as the business of law firms. It seems that the way law firms operates today is the same as yesterday and will be the same tomorrow. Still there are several new trend, out of which a drastic industry change could come (or not of course).

1) From hourly rates to new price models. Not all legal services, but many can be standardized into fixed services with a fixed price. This could be of advantage for the customer who has transparency and clarity about costs in advance. Other ways of pricing can be sharing profits, bonus based on satisfaction of customer, blended fees, share of settlement (in case of litigation)

2) From high cost, visible location to low cost or virtual office. New technology platforms facilitate communications between lawyers and between lawyer and customer, cutting transportation costs, location costs etc.

3) Automatisation. Many search, read and find / summarize work is done now by in-house lawyers (often the young graduated at the bottom of the ladder). Much of this work will in the near future be done by computers scanning, searching and summarising texts. Of course there will still be a need for a lawyer to check and refine the outcomes of this process, but it will take the bulk work out of the hands of people and will do it better and faster. No more, 'I overlooked this obscure article'

4) Transparency and accountability. Customers feel ripped of because they don't have a clue where do these high tariffs come from. Just be specifying all the true (and hidden) costs, a customer might be more willing to pay these fees. Furthermore, specialized software that tracks the actual time spent by lawyers provide more accountability.

5) New business models. New pricing models, splitting sales and law services to different specialized groups, new global partnerships, from in-house lawyers to self-employed lawyers that group together into a new virtual brand, incentives for lawyers to finish work in less hours and splitting the saved costs between lawyer, law firm and customer.

6) Outsourcing. May only apply to large countries, but India counts more and more lawyers specialised in British or American law that can do a lot of the (pre)-work for an American or British law firm cheaper and faster (overnight!) from India.

7) Specialisation. Law firms tend to be general (covering all fields of law) or specific in one field of law. A new trend could be to be specialist in a certain industry (e.g. biotechnology, agriculture), in order to understand better the clients, their problems and challenges.

See for more information the following articles in The Economist 1, 2, 3, 4, 5, 6

Picture from flickr user IslesPunkFan

GDP is out, GNH is in

The idea that GDP is the best measure for the well being of a nation is becoming outdated. Sure, we haven't exactly found out how to measure it much better, but we can agree that GDP is not the right way. So we have to find new ways how to define growth and again go search for the things that matter to us. See for example this experience from an entrepreneur, who searched for redefining the added value for his personnel and for his customers that he as a company could deliver and how to measure this

For a simple explanation of the Gross National Happiness, see this video:



Also, several Dutch books have questioned both GDP and the challenge of eternal economic growth as good concepts to strive for, see: here and here

This relates to the debate about where innovation belongs. Many people see innovation as a sub theme in economics. It describes the way in which productivity is increased over and over again in order to obtain economic growth. However, we are starting to redefine innovation from productivity increase to all new created new value. And these new created values can be out of the economic domain (e.g. health, education, entertainment, religion, charity, good and transparent government, etc...). Therefore the innovation debate is very much related to the debate about GDP vs GNH. First we have to define our goals, what does make us happy. Then we can innovate our way to get there...

Picture by Flickr user GreyArea

Myths of Innovation

The author of the book "The Myths ofInnovation" gives a presentation at Google about his (by that time) new book. Some interesting thoughts are the concept of chronocentricity: We always think that our times are more special and unique than any other time. We think about the speed of change in our times to be faster than ever before. Which is what they thought in almost all earlier times as well.

Innovation in Management

Almost all our management tools are from the beginning of last century. Now when change changes faster than ever, we need new thinking about management. I fully agree with Gary Hamel talk. Other examples I've seen are organisations in which people decide their own salary, the famous 20% rule of Google and of course new truly flat organisations (no more job titles).



And another video on leadership and modern management.

Ar įmanomas verslas be inovacijų?

Interview held with IQ magazine about innovation, Lithuania, and the Lithuanian Innovation Centre

Books on Innovation

A list of interesting books on innovation:

Dutch books on innovation:

Books on other topics, related to innovation:

Marketing & Innovation:

Economics & Innovation:

Environment & Innovation:

Globalisation & Innovation:

Organisation and Innovation:

Foresight & Innovation:

Science & Innovation:

Hope & Innovation

Psychologist Jose Antonio Rosa talks about the role of hope in innovation and the lessons he learned about innovation from 'the other 4 billion' (the bottom of the pyramid).

Managing the right balance of hope is important to spur innovation. You need enough hope to create 'healthy delusion' to be creative and try new thinks of which others say it cannot be done. Too much hope creates too much delusion and ends up often in criminal behavior.

Furthermore, he observes the obvious that no one can innovate on his own (see 'where could ideas come from'), but in communication and in community.

Marketing = Innovation

Jeremy Gutsche (founder of trendhunter.com) talks about how to innovate through branding, marketing and new trends, identifying new changing consumer wishes especially in times of crisis.

Innovation in Government

Some people say that a government has to stay far away from innovation, since they don't understand it and should leave it up to business. But governments also have to look at processes, organisations, services to citizens (information, accountability, communication, and other public services) and find new ways to improve them, hence they need to innovate. On the other hand, a government has to be reliable and has limited space for failure. Therefore it is very risky to try something new. A solution can be the 'safe-fail' method of trying in a small area, where the costs and consequence of failing are limited.

An interesting example is the open data initiative. Although it is currently facing tough times because of budget cuts and the trouble is faces in really making a change, it is interesting to see it in a larger trend of increasing transparency and giving more power to the citizens.

A recent article (in Dutch) stresses the role of innovation for governments. Unfortunately the title is very hopeful, but the article is very weak without news, arguments or useful insights.

Fortune Conference: "Innovation transforms the enterprise"

Some interesting thoughts about innovation from the Future Conference on Innovation (see video down)

1) Innovation spurs during crises, not during 20 % free time (immune system of company is down, but don't let the people in the crisis solve the problem)

2) Ideas don't work, people do

3) Big ideas will fail, things always work out differently. Plan, go, adjust

4) The true asset of a company is not it's people. People come and go. It's the company culture. If a star does not fit with the culture, the star has to go

5) Large teams don't innovate --> too much compromise

6) 'Herding cow syndrome' - Large companies don't do small projects, there would be too many to manage. Since disruptive innovations start from small projects, large companies hardly develop disruptive innovations. Small projects that change focus & tactic through trial & error week to week have difficult getting support in large 'PowerPoint culture' companies

7) Some barriers inside the company for creativity is necessary to filter the persistent good ideas

8) In large firms people's behavior changes from 'an appetite for success' to 'afraid of failure'. How to reward failure? Allow failure?

9) Entrepreneurs that have failed learned more lessons than entrepreneurs that have never failed and think they can 'pitch a perfect game' (lucky or played safe)

10) PowerPoint makes it look like you know, while actually you don't know (about growth plans)

11) Keep the company mission interesting in order to sustain innovation.

12) Small firm -> constant feedback from customers to engineers: 'this product sucks'. In large firms the distance between customer and engineer is too large. Solution is to bring customer physically to large group of engineers (zoo-like), not to let sales people make a PowerPoint through a survey

13) Most innovative ideas come from people under 30 (23, 24 years old)

14) Apps & Cloud become tools, not the product/services (and will therefore be for free)

15) You go to the customer as anthropologist, not as sense-taker (don't ask what he wants, see what he needs)

16) Innovation is a team sport, and it's a full-contact sport

The linear model is dead, long live the linear model

How come that when talking about innovation, people sometimes just stick to the topic of science and technology? I thought this seems to be a 'framework' stuck from the linear model of innovation which has been declared dead for more than two decades now, but apparently still lives on in the minds of people researching the topic of innovation. Even for well-known researchers innovation=knowledge economy = scientific output. Apparently they have never even heard of services and their ability to innovate without science.

See for example this article (in Dutch) about 'innovation', which is limited to science and valorisation of science results.

Picture from ©Thinkstock

3 Types of Innovation

Mukund Mohan identifies in an article three different strategies of innovating amoung three well known innovators:

Apple - Structured
Amazon - Unstructured
Google - Open

For this he uses the three necessary steps to innovate: Vision, Strategy and execution and he analyses how these are different used in the three companies.

Read the whole article here

Create a new Silicon Valley

How to create a new Silicon Valley in your own backyard? Naeem Zafar answers: "Invite a bunch of entrepreneurs into a room. Then leave."

He introduces five secrets to Silicon Valley:

1) A culture of collaboration
2) Aligned incentives
3) Critical mass of talent
4) Respect of intellectual property
5) A capacity to celebrate failure


Click for the full article here

Picture from Flickr user alifaan

Patents - Good or Evil?

Why patents in software turn more and more into monopoly games and do not enable new innovations.

Link to article from Glyn Moody here

[OKCon 2011] Glyn Moody - From Openness to Abundance from Open Knowledge Foundation on Vimeo.

Economist Schumpeter - on Innovation

An article in the Economist describes a new book by Clay Christensen “The Innovator’s DNA”. In this book, five habits of mind that characterise disruptive innovators are introduced:
1) Associating - Look for inspiration outside your sector. Best ideas come not at work
2) Questioning - Why things aren’t done differently?
3) Observing - Look at what happens, how people behave in real life.
4) Networking - Not to get contracts, but to get new ideas
5) Experimenting- Both with the products and with the business model

See for the whole article here

Harvard Business Publishing - Course on Innovation

For all courses 1-8 click here

What about the future?

Why would you have to know about the future as a company, if you are just struggling to survive today? What is important for any company is not if you are winning or losing the battle, it is more about are you in the right battle? If you still fight over some small market share, while competitors have found or created a whole new market you are loosing anyway. To know where is the new market, you have to know what would be in demand in the future, and therefore you have to understand the future.

More in this article.

Dosi on Schumpeter, Keynes and Innovation

In a video interview, prof. Dosi discusses topics related to finance, innovation, economics and has some clear interesting ideas. Really worth watching...

Innovation in Foreign Policy

In this article by Anne-Marie Slaughter in The Atlantic, she introduces a new term: "Do-it-yourself-foreign policy". The Do-it-Yourself (DIY) movement already has impacted research and innovation, this is a complete different trend. The involvement of citizens in the development and implementation of new public policies is a new trend enabled by new technologies and a greater awareness of citizens. That also the traditional 'behind the doors' foreign policy between states might also be affected (not abandoned) by these trends is new and worth mentioning.

For the article, click here

Are Patents good or bad for innovation?

Patents are often used as a indicator for measuring innovation. While actually, many statistics indicate that patents are very often unused, or used strategically to protect other patents.

An article about patents and their negative role on innovations:

Click here

Industry clusters: The modern-day snake oil

In an article in the Washington Post, Vivek Wadhwa warns against the top-down risks of policy makers that try to build new clusters. What is overlooked according to him, is that innovation is about people and their connections.

This line of thinking is fully in line with my thoughts. Innovation is the result of actions of people, not of institutions and secondly new clusters cannot be planned and executed top-down by policy-makers themselves. Clusters only become successful if it is believed, shared by the relevant people who have to make it into a success.

See article here

Roger McNamee

A speech of Roger McNamee, a technology investor, on some of the future trends in ICT, internet, media. He foresees a whole new market with HTML5, which levels the playing field (a whole new pasture, fist come first serve base).

The Eight Pillars of Innovation

Google Employee #16 (Susan Wojcicki) looks back on the efforts of Google to continue to develop and deliver innovations, from a small start-up to a large multinational. See came up with 8 pillars:

1. Have_a_mission_that_matters
2. Think_big_but_start_small
3. Strive_for_continual_ innovation, not_instant_perfection
4. Look_for_ideas_everywhere
5. Share_everything
6. Spark_with_imagination, fuel_with_data
7. Be_a_platform
8. Never_fail_to_fail

For the full story and explanation, click here

Start-up Pitch

What to include in your start-up pitch:

1. Cover Page
2. Summary
3. Team
4. Problem
5. Solution
6. Marketing/Sales
7. Projections or Milestones
8. Competition
9. Business Model
10. Financing

See: http://mashable.com/2011/06/24/startup-pitch-presentation/

Measuring Innovation

A blog entry about how to measure innovation. The blog introduces 7 metrics to measure innovation. Unfortunately, most of them are misleading, since the measure input (R&D spending, patent, invention) or macro-indicators with a very vague unclear link to innovation (GDP, energy captured, social development index and urbanization). Of course you expect that if a society is more innovative, this will lead to an increase in GDP. But the causal link might not be the other way around: countries with a high GDP are innovative (maybe just rich in natural resources). The same counts for urbanisation. According to Richard Florida there is an increase in creativity and innovation in urbanised environments. But this does not mean that the McDonalds restaurant in NYC is more innovative than the one in a ghost town.

See article:
http://globalpublicsquare.blogs.cnn.com/2011/06/08/how-to-measure-innovation/

Don' confuse cause and effect!

It is the dream of every policy maker: build in their region a new Silicon Valley. Many policy makers have tried to bring people together from business, science and relevant policy makers. In a next step with huge money state of the art infrastructures are build including nano-labs, biotech labs, broadband internet, nice office buildings etc. With huge subsidies and/or tax breaks some research intensive companies are attracted and than the policy makers wait till the benefits will manifest. And in most of these cases the initiative fails. Partly because nobody has thought about 'soft-infrastructure' - the services that provide support for new businesses (moving in or starting up) and provide an added value for locating in the valley. Just bricks and stones are not attracting new companies. A second problem is the huge competition between the different valleys. There is only one Silicon Valley in USA, while there are hundreds of wanna-be Silicon Valleys in Europe. A Third problem is that cause and effect might be mixed up. The innovative companies in Silicon Valley might not be innovative because of Silicon Valley, it might be the other way around, that Silicon Valley became innovative because of the companies there. The rule is: talent attracts more talent. As long as there are no talents in the valley, it is not attractive for other talents to go there. So it is not clustering that makes companies succesfull, it might be that succesfull companies together make a cluster.

For a similar argument, see this link

Informative article about Innovation Prizes

A great article about Innovation Prizes that analyses the rationale and the impact that such a price could have.

http://www.100open.com/2011/04/innovation-prizes-need-surprises/

'Stumbling upon the next great invention in an “ah-ha!” moment is a myth'

Article by the inventor of the Dyson vacuum cleaner, explaining the 1 % inspiration, 99 % transpiration than comes along with the process of innovating.

R&D is not innovation

Somehow, you would expect that people would understand the difference between R&D and innovation. Unfortunately these terms have been used so often together that people started to believe that innovation is the consequence of R&D. Although there might sometimes be a link between the two (just as there is a link between number of smart employees and innovation and many other factors), does not mean you can equal these terms.

http://www.nrc.nl/nieuws/2011/01/17/nederland-internationaal-in-achterhoede-met-rd/

What the statistics in the (Dutch) article actually say is that Finland, Japan and Sweden spent a lot of money on R&D. It does not say what the outcome of this spending is. As Swedish experts in innovation from INNOVA have indicated themselves is that all this high spending on R&D has not lead to economic growth or an increase of number of jobs. Probably it just indicates the importance of R&D intensive industries like automotive and ICT for these three top countries. These industries use heavy investments in R&D to innovate on their hardware and processes. Other industries innovate using another strategies that don't consist of heavy R&D spending.

Slideshow about Steve Jobs & Innovation

7 Innovation Secrets of Steve Jobs

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