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Innovative Connections

Mike Parsons and Mary RoseOctober 2009

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About us

• Our collaboration• We represent a ‘new

combination’• Mike Parsons –

businessman, Karrimor, OMM Ltd, Entrepreneurial fellow IEED

• Mary Rose, academic, business historian

• Invisible on Everest : Innovation and the Gear Makers (2003)

• Innovation a result not an objective

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Beyond Invisible on Everest

• Shared knowledge and trust

• Innovation Courses• Innovation for Extremes • www.innovation-for-extre

mes.org• A new business OMM Ltd• IEED

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Overview

1.Innovation is 2009’s buzz word2.What is Innovation and why does it matter?3.Innovation is not new4.Innovation as a 'Dance of Two Questions' 5.Innovation as new combinations 6.Innovation and global warming 7.Innovation as survival

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Why do governments promote innovation?

• Engine of economic growth

• Key to productivity growth and economic prosperity

• International Competitive Advantage of nations, regions and firms

• Competitive pressures and innovation

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What is innovation?

• WHAT INNOVATION IS NOT• It is not just ideas• It is NOT just new• It is not just the responsibility of R and D

departments in big companies• It is not just new products • It is does not take place in isolation

o NB the myth of solo inventors • Innovation means different things to different

people

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Inventions v innovations • The patent office

is full of inventions that never see the light of day.

• 1-3% were successful

• These we call innovations because they succeeded and were commercialised

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So how do inventions become innovations?

• Process complex and often messy

• Imagination to see new connections

• People the heart of innovationo Networks of skill and

knowledge from outside firm

o Customers• Global network and ICT

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Innovators are not lone geniuses

• Few innovators are loners

• Networks allow:

• Knowledge and resource sharing• Greater potential for boundary crossing• Between individuals• Between firms• Between organisations

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Innovative connections• Isaac Newton:• ‘ If I have seen further than

other men, it is because I have stood on the shoulders of giants

• Thomas Edison and Menlo Park USAo Brilliant people networker  :

investors, technicians, scientists, manufacturers

o built on what others did

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Innovative Connections: Not just new knowledge

• ‘Anyone who wants to design for the future has to leaf through the past’

   André Malraux quoted at the BMW Museum, Munich

• Past and present knowledge and skill

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Why is past important ?

• Product and process development are path dependent and this affects selection 

• Designs and choices affected by past knowledge, skills and shaped by users

• Combinations of old and new knowledge contribute to innovation

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Why might inventions not become innovations?• Solutions to non

existent problems

• High costs• Not user friendly • No market or

user group• Ahead of

international standards, eg. Fax Machine, 1907

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Innovation is about more than new products

• Processes• Business models• Systems• Services

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McDonalds

• Did not invent hamburger• Did invent a system of standardised

delivery• A process innovation

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Google

• Larry Page and Sergey Bin didn’t invent search engines

• New approach to search engine funded by advertising revenue

• Business model

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Innovation is not just 'new to the world'.......Radical innovations have significant implications for the environment all companies operate in. 

Radical innovation  can also occur• at the level of the sector• even at the level of the individual company

Innovation is NOT just 'new to the world' but may be within    -sectors    -individual firms

Often new combinations

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A different way of thinking about innovation

 Innovation is not just about 'new to the world'

These changes could be of 4 types- • product or service, • process, • paradigm (shift from what's known understood and trusted)  • positioning (brand)

 they may be interrelated degree = ranges between incremental and radical

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Innovation Space

Source: Tidd.J, Bessant. J, Pavitt. K: Managing Innovation, 3rd ed, Wiley

INNOVATION

POSITION(brand)

PRODUCT(SERVICE)

‘PARADIGM’

( BUSINESS MODEL)

PROCESS(Incremental… radical) (Incremental… radical)

(Incremental… radical)

(Incremental… radical)

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Innovation did not begin with the ‘Information age’ or even the industrial revolution

• Fire • Protection from

animals• cooking, • light, • warmth• war and

destruction.

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Innovation is as old as mankind :

• Fire – in use for at least 500K years• Basic tools 1.5 m years ago• The Wheel 5000 years ago• The Mechanical Clock • Printing • Steam Engine• Steel• The Internal Combustion Engine • Electricity• Telephone• Synthetic materials • Radio• Television• Atomic Bomb• Computer• Internet

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Man's Innovation Journey 

• 60,000 yrs ago man* left Africa; (fishing skill?)

• 30,000 yrs ago; central heated caves in the Pyrenees

• 20,000 yrs ago; end of last great ice age (clothing)

• 10,000 yrs ago beginning of farming to support  cities and so grew great civilizations............

• Where? the great river valleys of the Indus, Nile, Euphrates & Tigris, Yangtze, Danube and coastal settlements of the Greeks 

• their civilisations came ..............and went

• why? • * 'man' meaning 'anatomically modern humans';  

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Innovation is about ingenuity, creativity, curiosity and survival

• What fosters creativity & what stifles it ?

• Innovation embedded in ancient civilisations – though with very different objectives

• Civilisations with advanced technologies have existed AND disappeared

• Could it happen again?

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10th Century China  

• Cultivation of rice• Replacement of

the scratch plough with iron plough

• Seed drills, weeding rake and deep tooth harrow

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10th Century China (2)

• Blast furnaces -1500 years ahead of Europe

• Textiles – while spinning wheel appeared in China and West at same time (13th century) –it advanced at a faster rate in China and applied power to yarn production multiple spinning frame

• Water power –again paralleled Europe but 8th century AD Chinese were using hydraulic trip hammers, 1280 vertical water wheel

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10th Century China (3)

• 10th and 11th centuries Chinese built accurate clocks

• 960 AD the compass• Ocean going junks • Chinese invented

paper – 1000 years before it reached the West

• Porcelain• Gunpowder 10th

century AD

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Yet this wave of innovation did not evolve further what went wrong ?

• No such thing as physical property rights let alone rights to inventions

• Movable type printing press of much less significance with Chinese characters

• Increasing isolation 

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What can be learnt from the Chinese example ?

• Intellectual Property rights are of crucial importance to innovation.

• Innovation may be evolutionary but there are discontinuities.

• Established innovative nations and companies can lose momentum

• Innovations can be still-born• Isolation can eradicate innovation• Innovation needs an open minded and

tolerant society.

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Path dependence and rail tracks

• 60% world railways standard gauge : width 1,435mm or 4 ft 8½in Why?

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Deepening wheel ruts and the width of a carthorse

• Roman Chariots• Wheel ruts and broken axles• Mineral extraction• First Railways

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Deepening wheel ruts and the width of a horse

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Railways in Europe, United States and much of Asia

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21st century

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Past, future radical change and economic crisis

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Impact of the age of synergy : 1869 + 

Concatenation of events leading to radical change and the world economy today

• There was a concatenation (chaining together of ) events, science, technology, medicine world had ‘a different programme to guide its future’. (Smil 2005) o Internal Combustion Engineo New Materials and New Syntheseso Communication and Information o New business systems and processes

• United States especially rapid diffusion• Yet past knowledge and skill shaped• Laid the technological foundations for all late 20th and 21st

century innovations• Set the world on an energy intensive trajectory

o Carbon emissions tripled since 1950

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History is about Continuity and Change:75% of all around us today had its origins between

1866 - 1914

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Radical innovations have shifted economic systems:Energy generation power from water   steam from coal

electricity from steam turbines and oil

electricity transmission 

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Radical innovations have shifted economic systems:Communications

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Radical innovations have shifted economic systems:Materials

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What Implications for 2009 ?

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The earth at night 2007

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Global Warming

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US Coastal Areas and Global Warming

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'New Scientist' suggests that to debate the end of civilisation as we know it could be valuable!

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A new style of capitalism?

'A message that businesses may find they are surprised to agree with.' Financial Times

Jonathon Porritt grapples with capitalism's reality - a system capable of delivering sustainability and enhancing well being,  Adair Turner (Director General of CBI 1995-9)

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Mass manufacturing v Mass disassembly

• 1908 Ford T mass manufacturing and assembly. 

• 2008 - Mass Disassembly for recycling.

• Not so much - how could more recycled components be used

• but how to dis-assemble for recycling?

• Is the Patagonia 'Sugar and Spice' shoe the process revolution we need?     

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Innovating to Survive: End of the 'nice decade'

The credit cycle has turned and commodity prices are rising' Mervyn King, Governor of the Bank of England May 2007

August 2008 The UK is facing its worst economic crisis in 60 years 

October  09 Recession collides with technical innovation threatening established business models. 

  

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Business Model threatened : Newspapers and publishing

Wednesday 3 June 2009 The GuardianMagazines and newspapers face 'lethal threat' [from recession and internet] Advertising                         Circulation 

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So what is innovation and what does it involve?

• Creativity and stepping out of line  

• Entrepreneurship; the recognition and assessment of opportunities and threats

• More than just a spark of an idea 

its about 'The Dance of Two Questions'.......... 'what is needed and what is possible?'

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• Productivity declining some products and food China products labour intensive, but labour costs increasing in China -  Food yields improvement slowing - R&D decreased since 1996 - we had surplus food! CARS  - OIL to Electricity?Homes/offices  - new eco standards

• IT and carbon footprint

We are on the cusp of dramatic change?recession as a driving force for innovation?

ENERGY the new focus

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Messages to take away

• Innovation is about knowledge and people and making new connections.

• Personal/people networks are vital in making new connections

• Innovation is a chaotic process initially

• Successful innovation needs the chaos to turn to structures, systems and organisation.

• Innovation is about survival

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Knowledge and Imagination

•  'I have more imagination than memory but without memory I would have no imagination’

• A combination of memory and imagination CRUCIAL to innovation they combine past and future

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Our measures of success?

• If just one student could be inspired to become an innovator

• If just 10 of you could influence your future boss on how things are done

• And if all of you could be just a little bit more knowledgeable about innovation and innovative processes ………………

• Everything would be worthwhile and have made a contribution to understanding the innovation process……………

• team working and ability to work collaboratively.