03: Principles not Models

Innovation cannot prosper without curiosity, serendipity, unpredictable outcomes, inspiring vision, and sheer hard work. But these things are principles, not models of innovation. Market forces may limit innovation, but innovation is too big to be placed on a hockey stick of initial loss followed by profitability, or on a tapering S-curve of market saturation. Nor should the state insist that innovation fit into the straitjackets it lays down.

Nevertheless, in practice one model of innovation dominates today – that it’s wrong to focus on pioneering new technologies. [1] ‘High-level science and engineering’, one savant in America writes, ‘are no more important than the ability to use them’. [2] Britain’s National Endowment For Science, Technology and the Arts (NESTA), agrees with this. It tells us to emphasise ‘business innovation’, not the technological sort. [3]

Oh no, innovation cannot, must not begin with laboratories and R&D!

The same old tilts at the old, linear model

To justify the new, research-lite dogma, everyone attacks the ‘linear model’ of innovation, which saw it starting from R&D and moving on in a straight line toward commercialisation. NESTA attacks the linear model, hoping that the recession will shift innovation toward ‘more open, networked approaches.’ [4] But what’s new? For Britain’s doyen of innovation studies, Chris Freeman, no doctrine on innovation has been ‘more frequently attacked and demolished than the so-called linear model’. And he wrote that… in 1996! [5]

Today’s innovation theorists are not very innovative. America’s John Kao says that firms should network together elements from four international models of innovation. [6] In corporate strategy, too, Gary Hamel tells us to end ‘top-down, analytical’ methods and instead use models based on biological principles. [7] But why should innovation, a human enterprise, follow models based on IT or biology? More fundamentally: any theoretical model is merely an artificial device, a metaphor, an analogy, or a rough, formalised or simplified account. So in innovation, any model can, at best, only capture but one way to go. Being a model, the linear account of innovation certainly suffered from all the narrowness of the Cold War epoch, and will not do for the 21st century’s more service-based, more global economy. But continued attacks on it now only function as a cipher for a dangerous diversion: underrating the risky, expensive business of R&D.

Models as substitutes for technological innovation

In place of R&D, the übermodel of innovation today consists of business models. Yet these different ways of reaping revenues from the market – pay as you go, monthly subscription, leasing, lease-purchase, profits through consumables, licensing, franchising and, in the case of Enron, profiting not from energy supply but from derivatives – have a lot to answer for. [8] It’s true that innovation cannot be reduced to technology. But to downplay technology in favour of business models is a great mistake.

It’s also wrong to talk up an orientation to ‘users’. The demand side of innovation is important, but is now widely presented as an alternative to ‘technology push’. [9] The latest innovation here is ‘design thinking’ – an approach, one advocate argues, that ‘uses the designer’s sensibility and methods to match people’s needs with what is technologically feasible’. [10]

Design thinking, design sensibility, design methods – they all sound good. But the UK design community, at least, is, market research suggests, ‘apathetic’ about boosting its skills. [11] Anyway, matching people’s needs to feasible technologies is another cramped model of innovation. Google never started from people’s need to search for information. Technologically, its algorithms were feasible, but they were also new, and specially developed.

In fact, taking one’s lead from users exemplifies a wider trend. For much of the noughties, Harvard’s Henry Chesbrough has said that that firms should rely on others to innovate for them. Innovation must change from closed to open, basing itself on a ‘landscape of abundant knowledge’ lying not just with customers, but also with other companies, suppliers, universities, national laboratories, industrial consortia, and start-up firms. [12]

Who, though, would today want to boast of running a closed innovation system? Openness sounds hip, but in outsourcing innovation, it abdicates each organisation’s responsibility to lead and perform innovation itself. Now that we have found out about Bernie Madoff, but still don’t know where the banks’ toxic assets are, it’s clear that we don’t live in a landscape of abundant knowledge. In assuming what cannot be assumed, open models of innovation are complacent, self-serving, and a cop-out.

Innovation is none of these things. It is not just a combination of what has gone before, as some maintain. [13]

Innovation is based on new knowledge, or it is nothing.

[1] An important exception to this rule is Clayton Christensen. See his The Innovators’ Dilemma: When New Technologies Cause Great Firms to Fail, Harvard Business Press, 1997, and with Michael E Raynor, his The Innovator’s Solution: Creating and Sustaining Successful Growth, Harvard Business Press, 2003.

[2] Amar Bhidé, ‘Where innovation creates value’, The McKinsey Quarterly, February 2009. For more, see Bhidé, The Venturesome Economy: How Innovation Sustains Prosperity in a More Connected World, Princeton University Press, 2008.

[3] Charles Leadbeater and James Meadway, Attacking the Recession: How Innovation can Fight the Downturn, NESTA Discussion Paper, December 2008, p12.

[4] Ibid, p11.

[5] Chris Freeman, ‘The greening of technology and models of innovation’, Technological Forecasting and Social Change, No 53, 1996, pp27-39.

[6] John Kao, ‘Tapping the world’s innovation hotspots’, Harvard Business Review, March 2009.

[7] Gary Hamel, ‘Moon shots for management’, Harvard Business Review, February 2009.

[8] For more on business models, see James Woudhuysen and Joe Kaplinsky, Energise! A Future for Energy Innovation, Beautiful Books, 2009, Chapter 7.

[9] Useful, but tending to this view are Donald Norman, The Psychology of Everyday Things, Basic Books, 1988; John Seely Brown and others, Storytelling in Organizations: Why Storytelling Is Transforming 21st Century Organizations and Management, Butterworth-Heinemann, 2004; Eric Von Hippel, Democratizing Innovation, MIT Press, 2005.

[10] Tim Brown, ‘Design thinking’, Harvard Business Review, June 2008, p86. For more, see Brown, Change by Design: How Design Thinking Transforms Organizations and Inspires Innovation, HarperBusiness, 2009.

[11] Angus Montgomery, ‘Design community “slow to boost its skills”’, Design Week, 24 February 2009, on http://www.designweek.co.uk/news/design-community-‘slow-to-boost-its-skills’/1141384.article (subscription required)

[12] Henry Chesbrough, Open Innovation: the New Imperative for Creating and Profiting from Technology, Harvard Business School Press, 2003, and Open Business Models: How to Thrive in the New Innovation Landscape, Harvard Business School Press, 2006.

[13] See for example Frans Johansson, The Medici Effect: What Elephants and Epidemics Can Teach Us About Innovation, Harvard Business School Press, 2004; Scott Berkun, The Myths of Innovation, O’Reilly UK, 2007; Charles Leadbeater, ‘Shanghai: The Innovative City’, Speech to Mayor of Shanghai’s International Business Leaders Advisory Council, 5 November 2009, on http://www.charlesleadbeater.net/archive/shanghai-iblac-speech.aspx


One Comment so far. Leave a comment below.
  1. NESTA…..wow….don’t make me laugh!
    I remember when they started with a guy called David Putnam, well heeled well connected old boy of the establishment who got £200 million of taxpayers money for Science Technology and the Arts.
    The directors were all of the same background not an engineer or practical skilled person in sight and he proceeded to pump all the cash into film making, trash art, and non-sensical losers as he didn’t know what science and technology was. They dumped him in the House of Lords and put another guy in who had set his eyes on the House of Lords and then the whole business folded in on itself and went underground where they have stayed quietly living on the taxpayer, actually the interest on the original £200 million with little responsibility or accountability.

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