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Innovative Connections<br />Mike Parsons and Mary Rose<br />October 2010<br />1<br />

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About us<br /><ul><li>Our collaboration

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

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We represent a ‘new combination’

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Mike Parsons –businessman, Karrimor, OMM Ltd, Innovator in Residence, IEED

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Mary Rose, academic, business historian

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Innovation a result not an objective</li></ul> <br />2<br />

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Beyond Invisible on Everest<br /><ul><li>Shared knowledge and trust

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Innovation Courses

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Innovation for Extremes

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www.innovation-for-extremes.net

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A OMM Ltd a business start-up 2005

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IEED</li></ul>3<br />

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Overview<br />What is innovation and why does it matter?<br />Innovation 2010 Buzz Word<br />Innovation is not new<br />Innovation as a ‘Dance of Two Questions<br />Innovation as new combinations <br />Innovation and Survival<br />Innovation and Global warming<br />4<br />

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Why do governments promote innovation?<br /><ul><li>Engine of economic growth

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Key to productivity growth and economic prosperity

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International Competitive Advantage of nations, regions and firms

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Competitive pressures and innovation</li></ul>5<br />

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What is innovation not? <br /> <br /><ul><li> It is not just clever ideas</li></ul> <br /> <br /> <br /> <br /> <br />6<br />

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What Innovation is not<br />It is not just new technology<br />7<br />

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What Innovation is not<br /><ul><li>It is not just new products </li></ul> <br /><ul><li>It is does not take place in isolation

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NB the myth of solo inventors </li></ul> <br /><ul><li>Innovation means different things to different people</li></ul>8<br />

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What innovation is not<br /><ul><li>It is not just new or new to the world</li></ul> <br /><ul><li>It is not the same as invention</li></ul>9<br />

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Inventions v innovations <br /><ul><li>The patent office is full of inventions that never see the light of day.

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1-3% were successful

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These we call innovations because they succeeded and were commercialised</li></ul>10<br />

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So how do inventions become innovations?<br /><ul><li>Process complex and often messy

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Imagination to see new connections

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People the heart of innovation

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Networks of skill and knowledge from outside firm

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Customers</li></ul>11<br />

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Innovators are not lone geniuses<br /><ul><li>Networks allow:

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Knowledge and resource sharing</li></ul> <br /> <br />12<br />

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Innovation inside and outside companies<br />Not just in R&D Departments of large companies<br />13<br />

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Where does innovation occur?<br /><ul><li>Supply Chain

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Lead users

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Collaboration with other companies

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Collaboration with universities

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Employees</li></ul>14<br />

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Networks and knowledge sharing<br /><ul><li>Boundary crossing and moving out of silos

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Between individuals

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Between firms

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Between organisations</li></ul>15<br />

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Innovative connections<br /><ul><li>Isaac Newton:

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‘ If I have seen further than other men, it is because I have stood on the shoulders of giants</li></ul>16<br />

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Innovative Connections<br />Thomas Edison, Menlo Park, USA<br /> <br />creator of lighting system <br />not the lightbulb <br />Great networker;<br />with <br />investors, <br />scientists,<br />politicians <br />technicians, <br />manufacturers<br />17<br />

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Innovative Connections: Not just new knowledge<br /><ul><li>‘Anyone who wants to design for the future has to leaf through the past’</li></ul> André Malraux <br /> quoted at the BMW Museum, Munich<br /><ul><li>Past and present knowledge and skill</li></ul>18<br />

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Why is past important ?<br /><ul><li>Product and process development are path dependent and this affects selection

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Combinations of old and new knowledge contribute to innovation</li></ul>19<br />

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Influence of past<br />Innovative designs shaped by past knowledge and skills <br /> <br />Remington's First Typewriter<br />20<br />

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Influence of past <br />New combinations of old and new can be radical<br /> <br /> <br /> <br />Weaving Light <br />21<br />

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Why might inventions not become innovations?<br /><ul><li>Solutions to non existent problems

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High costs

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Not user friendly

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No market or user group

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Ahead of international standards, eg. Fax Machine, 1907</li></ul>22<br />

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Innovation is about more than new products<br /><ul><li>Processes

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Business models

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Systems

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Services</li></ul>23<br />

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McDonalds<br /><ul><li>Did not invent hamburger

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Did invent a system of standardised delivery

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A process innovation</li></ul>24<br />

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<ul><li>Larry Page and Sergey Brin didn’t invent search engines

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New approach to search engine funded by advertising revenue

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Business model</li></ul>25<br />

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Innovation is not just 'new to the world'.......<br />Radical innovations have significant implications for the environment all companies operate in. <br />Radical innovation can also occur<br /><ul><li>at the level of the sector

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even at the level of the individual company

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Innovation is NOT just 'new to the world' but may be within -sectors -individual firmsOften new combinations</li></ul>26<br />

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A different way of thinking about innovation<br />These changes could be of 4 types- <br /><ul><li>product or service,

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process,

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paradigm (shift from what's known understood and trusted)

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positioning (brand) </li></ul> <br />they may be interrelated degree = ranges between incremental and radical<br />27<br />

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Innovation Space<br />( BUSINESS MODEL)<br />‘PARADIGM’<br />(Incremental… radical)<br />PRODUCT<br />PROCESS<br />INNOVATION<br />(SERVICE)<br />(Incremental… radical)<br />(Incremental… radical)<br />(Incremental… radical)<br />POSITION(brand)<br />Source: Tidd.J, Bessant. J, Pavitt. K: Managing Innovation, 3rd ed, Wiley<br />28<br />

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Innovation did not begin with the ‘Information age’ or even the industrial revolution<br /><ul><li>Fire

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Protection from animals

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cooking,

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light,

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warmth

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war and destruction.</li></ul>29<br />

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Man's Innovation Journey <br /><ul><li>60,000 yrs ago man* left Africa; (fishing skill?)

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

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

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

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Where? the great river valleys of the Indus, Nile, Euphrates & Tigris, Yangtze, Danube

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

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why?

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* 'man' meaning 'anatomically modern humans'; </li></ul>30<br />

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Innovation is about ingenuity, creativity, curiosity and survival<br /><ul><li>What fosters creativity & what stifles it ?

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rulers

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type of society

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discontinuity - often of thousand of years

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progress is neither certain

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nor a straight line</li></ul>31<br />

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Creativity and Science <br />natural phenomena and their associated technologies long used for controlling and stabilising society <br /> <br />stars for forecasting the seasons, flooding<br />geometry for building and measuring land <br /> <br /> <br />The Greek civilisation was the first where used for changing<br /> <br />but was lost for a thousand years <br /> <br />re-emerging - 16th Century renaissance <br /> <br />32<br />

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10th Century China <br /><ul><li>Cultivation of rice

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Replacement of the scratch plough with iron plough

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Seed drills, weeding rake and deep tooth harrow</li></ul>33<br />

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10th Century China (2)<br /><ul><li>Blast furnaces -1500 years ahead of Europe

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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

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Water power –again paralleled Europe but 8th century AD Chinese were using hydraulic trip hammers, 1280 vertical water wheel</li></ul>34<br />

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10th Century China (3)<br /><ul><li>10th and 11th centuries Chinese built accurate clocks

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960 AD the compass

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Ocean going junks

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Chinese invented paper – 1000 years before it reached the West

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Porcelain

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Gunpowder 10th century AD </li></ul>35<br />

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Yet this wave of innovation did not evolve further what went wrong ?<br /><ul><li>No such thing as physical property rights let alone rights to inventions

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Movable type printing press of much less significance with Chinese characters

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Increasing isolation </li></ul>36<br />

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What can be learnt from the Chinese example ?<br /><ul><li>Intellectual Property rights are of crucial importance to innovation.

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Innovation may be evolutionary but there are discontinuities.

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Established innovative nations and companies can lose momentum

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Innovations can be still-born

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Isolation can eradicate innovation

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Innovation needs an open minded and tolerant society. </li></ul>37<br />

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Path dependence and rail tracks<br /><ul><li>60% world railways standard gauge : width 1,435mm or 4 ft 8½in Why?</li></ul>38<br />

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Deepening wheel ruts and the width of a carthorse<br /><ul><li>Roman Chariots

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Wheel ruts and broken axles

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Mineral extraction

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First Railways</li></ul>39<br />

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Deepening wheel ruts and the width of a horse<br />40<br />

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Railways in Europe, United States and much of Asia<br />41<br />

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21st century<br />42<br />

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Past, future radical change and economic crisis<br />43<br />

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Science + technology = Innovation<br /><ul><li>Fire – in use for at least 500K years

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Basic tools 1.5 m years ago

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The Wheel 5000 years ago

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dramatic acceleration of Innovation from 1800

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SCIENCE explained natural phenomena

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wind = wings = flight = energy

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lightning = electricity

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Technology harnesses the science behind natural phenomena

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creates devices which change our world</li></ul>44<br />

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Impact of the age of synergy : 1869 + Concatenation of events leading to radical change and the world economy today<br /><ul><li>There was a concatenation(chaining together of ) events, science, technology, medicine world had ‘a different programme to guide its future’. (Smil 2005)

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Internal Combustion Engine

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New Materials and New Syntheses

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Communication and Information

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New business systems and processes

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United States especially rapid diffusion</li></ul>45<br />

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From 19th Century to Present Day<br /><ul><li>Yet past knowledge and skill shaped

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Set the world on an energy intensive trajectory

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Carbon emissions tripled since 1950</li></ul>46<br />

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History is about Continuity and Change:75% of all around us today had its origins between 1866 - 1914<br />47<br />

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Radical innovations have shifted economic systems:Energy generation<br /> Before 1860 : <br />power from water<br /> <br />steam from coal <br />electricity from steam turbines and oil <br />electricity transmission<br /> <br />48<br />

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Radical innovations have shifted economic systems:Communications<br />49<br />

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Radical innovations have shifted economic systems:Materials<br />50<br />

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What Implications for 2010?<br />51<br />

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The earth at night 2007<br />52<br />

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Global Warming<br />53<br />

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US Coastal Areas and Global Warming<br />54<br />

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'New Scientist' suggests that to debate the end of civilisation as we know it could be valuable!<br />55<br />

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A new style of capitalism?<br />'A message that businesses may find they are surprised to agree with.' Financial Times<br />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)<br />56<br />

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Mass manufacturing v Mass disassembly<br /><ul><li>1908 Ford T mass manufacturing and assembly.

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2008 - Mass Disassembly for recycling.

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Not so much - how could more recycled components be used

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but how to dis-assemble for recycling?

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Is the Patagonia 'Sugar and Spice' shoe the process revolution we need? </li></ul>57<br />

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Innovating to Survive: End of the 'nice decade' <br />The credit cycle has turned and commodity prices are rising' (Mervyn King, Governor of the Bank of England May 2007)<br />August 2008 The UK is facing its worst economic crisis in 60 years<br />October 09 Recession collides with technical innovation threatening established business models. <br /> <br />October 2010 UK expenditure cuts, threat to science research <br />58<br />

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Business Model threatened : Newspapers and publishing<br />Wednesday 3 June 2009 The GuardianMagazines and newspapers face 'lethal threat' [from recession and internet] Advertising Circulation <br />59<br />

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So what is innovation and what does it involve?<br /><ul><li>Creativity and stepping out of line

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Entrepreneurship; the recognition and assessment of opportunities and threats

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More than just a spark of an idea </li></ul>its about 'The Dance of Two Questions'.......... <br />'what is needed and what is possible?'<br />60<br />

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We are on the cusp of dramatic change?recession as a driving force for innovation? ENERGY the new focus<br /><ul><li>Productivity declining some products and food

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China products labour intensive, but labour costs increasing in China - Food yields improvement slowing - R&D decreased since 1996 - we had surplus food!

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CARS - Oil to Electricity?Homes/offices - new eco standards

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IT and carbon footprint </li></ul>61<br />

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Messages to take away<br /><ul><li>Innovation is about knowledge and people and making new connections.

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Personal/people networks are vital in making new connections

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Innovation is a chaotic process initially

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

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Innovation is about survival</li></ul>62<br />

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Knowledge and Imagination <br /><ul><li> 'I have more imagination than memory but without memory I would have no imagination’

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A combination of memory and imagination CRUCIAL to innovation they combine past and future</li></ul>63<br />

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Our measures of success?<br /><ul><li>If just one student could be inspired to become an innovator

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

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

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

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Team working and ability to work collaboratively. </li></ul>64<br />