Companies and Innovation

The world is changing, some say more rapidly than before ** 4000 books a day ** ref 1 this implies that our ever expanding horizons gives us ever more opportunity to innovate. If we could visualise the effects of sharing science in an “Age of Reason”, from the founding of the Royal Society in 1660 to the present day what would it look like? Exponential!

Some definitions ref 2

Innovation is the creative use of what exists or what is known, to create something new and different: Introduction of something new; a new idea, device or method; New idea applied, something substantially different, positive implications; Advanced or ahead of the times.

Innovation Paradox: If it is truly and substantially new then by definition it must carry with it uncertainty and ambiguity.

Certain, Easy – I don’t think so

Along the way there have been some great stories, both successes and set-backs, not all ideas make it, some are born before their time. It is their lot to lie dormant or stumble from application to application until the right circumstances come along.

I often think of George Boole ref 3 whom I stumbled across some years ago in UCC. He was born in Lincoln in 1815, died in Co Cork in 1864, and gave us the mathematical foundation of computer science. He was a contemporary of Charles Babbage FRS (1791-1871) whose inference engine was completed posthumously. Boole died at the age of 49 leaving behind a calculus that was to lie waiting for Volta’s battery in 1800, and until the 1880’s for distributed power and then until 1948 for the US Army to build ENIAC. Who could have guessed?

In more recent times we can look into the history of PARC to see examples of the difficult road that ideas take on the road to innovation. Xerox has been criticized for failing to commercialize PARC’s innovations. I remember the Star with its icon-driven GUI back in 1988 when I worked at Xerox. It was the Mac before the Mac . The same technology was successfully spun out as a company and later sold to IBM. I also remember Interpress which was Xerox’s page description language, successfully implemented in their large printers, who needed another one called Postscript? Innovations are easy to spot with hind-sight, not so easy in the midst of the every-day. Sometimes an idea is in the wrong place or just too early for its time.

Organisational Myopia

People in the science and development game tend to think that when their “stuff” is done the project is “good to go”. Yet if you look at software companies you find that development resources account for about 50% of the staff. The other half comprise of departments including Human Resources, Legal, Marketing, Sales and Support. The mechanism to bring a product or service to market (allowing it to impact society) depends on all these groups.

Look at the course of a Ph.D. , the publications tend to appear two to three years into the research. Companies work on a quarterly financial reporting cycle, there is an order of magnitude disjoint in their respective reporting cycles. This naturally leads to a “constructive” tension between the two worlds. Yet without each other, scientific ideas would never turn into innovation and commercial products would atrophy.

Adoption Styles

Companies adopt ideas/innovations at various stages. Some do the science and work the idea all the way to a product. The pharmaceutical industry is a good example. Some larger companies buy up adolescent companies who have young, innovative products but few customers and a small sales organization. Other means of acquiring ideas and budding innovations are licenses, patents and partnerships. Some companies adopt multiple strategies.

Value

I am often asked to express research in terms of value to the organisation. Not an easy question to answer. How could one estimate the value in Postscript or in a GUI in 1988? Yes, it is much easier thirty years later, in terms of billions.

I break the cost and opportunity into three elements: First, what would it cost to employ a consultant to develop and guide our staff through the new knowledge to a process. Second, what savings have been gained in the use of the process. Third, what new opportunities have been opened up by learning the science rather than relying on the consultant. I would accrue these figures annually.

Conclusion

Fortunately, big companies play both games, they research and publish. Companies also purchase technology through licenses and acquisition. They guard core IP very closely, but can be quite open in areas not considered central to their development plans, where publication is a defensive strategy. This allows industry to participate in the research endeavor and act as a change agent though their commercial entity.

ref 1 Thanks to Thad McIlroy
ref 2 Thanks to Greg Oxton of CSI who introduced me to the idea-innovation paradigm.
ref 3 Thanks to Wikipedia for historical details.

February 11, 2011

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