Innovative Connections Mike Parsons and Mary Rose October 2009

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

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

Beyond Invisible on Everest Shared knowledge and trust Innovation Courses Innovation for Extremes www.innovation-for-extremes.org A new business OMM Ltd IEED

Shared knowledge and trust

Innovation Courses

Innovation for Extremes

www.innovation-for-extremes.org

A new business OMM Ltd

IEED

Overview Innovation is 2009’s buzz word What is Innovation and why does it matter? Innovation is not new Innovation as a 'Dance of Two Questions' Innovation as new combinations Innovation and global warming Innovation as survival

Innovation is 2009’s buzz word

What is Innovation and why does it matter?

Innovation is not new

Innovation as a 'Dance of Two Questions'

Innovation as new combinations

Innovation and global warming

Innovation as survival

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

Engine of economic growth

Key to productivity growth and economic prosperity

International Competitive Advantage of nations, regions and firms

Competitive pressures and innovation

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 NB the myth of solo inventors Innovation means different things to different people

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

NB the myth of solo inventors

Innovation means different things to different people

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

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

So how do inventions become innovations? Process complex and often messy Imagination to see new connections People the heart of innovation Networks of skill and knowledge from outside firm Customers Global network and ICT

Process complex and often messy

Imagination to see new connections

People the heart of innovation

Networks of skill and knowledge from outside firm

Customers

Global network and ICT

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

Few innovators are loners

Networks allow:

Knowledge and resource sharing

Greater potential for boundary crossing

Between individuals

Between firms

Between organisations

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 USA Brilliant people networker : investors, technicians, scientists, manufacturers built on what others did

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 USA

Brilliant people networker : investors, technicians, scientists, manufacturers

built on what others did

I nnovative 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

‘ 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

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

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

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

Solutions to non existent problems

High costs

Not user friendly

No market or user group

Ahead of international standards, eg. Fax Machine, 1907

Innovation is about more than new products Processes Business models Systems Services

Processes

Business models

Systems

Services

McDonalds Did not invent hamburger Did invent a system of standardised delivery A process innovation

Did not invent hamburger

Did invent a system of standardised delivery

A process innovation

Google Larry Page and Sergey Bin didn’t invent search engines New approach to search engine funded by advertising revenue Business model

Larry Page and Sergey Bin didn’t invent search engines

New approach to search engine funded by advertising revenue

Business model

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

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

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

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

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

Innovation did not begin with the ‘Information age’ or even the industrial revolution Fire Protection from animals cooking, light, warmth war and destruction.

Fire

Protection from animals

cooking,

light,

warmth

war and destruction.

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

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

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';

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';

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?

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?

10 th Century China Cultivation of rice Replacement of the scratch plough with iron plough Seed drills, weeding rake and deep tooth harrow

Cultivation of rice

Replacement of the scratch plough with iron plough

Seed drills, weeding rake and deep tooth harrow

10 th 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

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

10 th 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

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

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

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

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.

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.

Path dependence and rail tracks 60% world railways standard gauge : width 1,435mm or 4 ft 8½in Why?

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

Deepening wheel ruts and the width of a carthorse Roman Chariots Wheel ruts and broken axles Mineral extraction First Railways

Roman Chariots

Wheel ruts and broken axles

Mineral extraction

First Railways

Deepening wheel ruts and the width of a horse

Railways in Europe, United States and much of Asia

21 st century

Past, future radical change and economic cris is

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) Internal Combustion Engine New Materials and New Syntheses Communication and Information 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 Carbon emissions tripled since 1950

There was a concatenation (chaining together of ) events, science, technology, medicine world had ‘a different programme to guide its future’. (Smil 2005)

Internal Combustion Engine

New Materials and New Syntheses

Communication and Information

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

Carbon emissions tripled since 1950

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

Radical innovations have shifted economic systems: Energy generation power from water steam from coal electricity from steam turbines and oil electricity transmission

Radical innovations have shifted economic systems: Communications

Radical innovations have shifted economic systems: Materials

What Implications for 2009 ?

The earth at night 2007

Global Warming

US Coastal Areas and Global Warming

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

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)

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?

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?

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.

Business Model threatened : Newspapers and publishing Wednesday 3 June 2009 The Guardian Magazines and newspapers face 'lethal threat' [from recession and internet] Advertising Circulation

Wednesday 3 June 2009 The Guardian

Magazines and newspapers face 'lethal threat' [from recession and internet]

Advertising Circulation

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?'

Creativity and stepping out of line

Entrepreneurship; the recognition and assessment of opportunities and threats

More than just a spark of an idea

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

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

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

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

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

'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

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.

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.