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LECTURE L05
INNOVATION
“I have not failed. I've just found 10,000 

ways that won't work.” 

– Thomas Edison
Adjacent Possible
The inventor must use the
components that exist in
his environment
Steven	
  Johnson
Combinatory Process
New technology is created 

by combining other existing
technology in new ways
Gall’s Law
All complex systems that work, evolved from 

simpler system that worked
The Law of Disappearing Technology
When some technique is
mastered, it will “disappear” as
something obvious and trivial, and
other more useful things that are
built on top of it
The Resistance Corollary
Even outdated things that
should “disappear” don’t
due to supposed importance
Complexity of Technology
Local and linear
Global and Exponential
Population
Population explotion
7 billion people
Prosperity
GDP per person
Matt Ridley: When ideas have sex
Slide from Matt Ridley’s 2010 TED talk
How does innovation happen?
Who invented…
Telephone
Phonograph
Combustion engine
Photographic film
Alexander G. Bell
Thomas Edison
Karl Benz
George Eastman
AC Motor Nikola Tesla
Safety razor King Camp Gillette
The Brilliant Scientist working in his lab
http://en.wikipedia.org/wiki/Nikola_Tesla
Nikola Tesla
Menlo Park	
  
1876-1881
Tomas Edison
Innovation
Change in Technology
Something newly introduced, 

such as a new method or device
Innovation
Innovation
Innovation
DisruptiveSustaining	
  
	
  	
   	
   Evolutionary	
  
	
  	
   	
   Revolutionary	
  
Innovation
Sustaining Technology – Evolutionary
An innovation that improves a
product in an existing market in
ways that customers are
expecting
Red Oceans - commodities
Innovation
Sustaining Technology – Revolutionary
An innovation that creates a new
market by allowing customers to
solve a problem in a radically new
way
May not be affordable enough to be
disruptive
Ford	
  Model	
  T
Innovation
Disruptive Technology
An innovation that creates a new (an
unexpected) market by applying a
different set of values.
Affordable so the impact is major
How does innovation	
  really	
  happen?
"We take the ideas we've inherited
or stumbled across, and we 

jigger them together into 

some new shape." 

– Steven Johnson
Exchange
“It is through exchange that
mankind has enjoyed huge rise
in living standards”
Matt Ridley
The Coffee House
The Medici Effect
Environment of the space

Where people meet
Where ideas have sex
The Liquid network
A good idea is a network.
Innovations happens with
collaboration
Steven	
  Johnson
The Liquid network
Innovations happen when
ideas are shared
Steven	
  Johnson
The importance of cities
The Hummingbird Effect
Unexpected consequence of 

new innovations
The Hummingbird Effect
The Hummingbird Effect
Smartphones
DIY Drones
iPad
Printed press
DIY Drones
Filming effects, harvesting
Games for 2-5 years olds
Spectacles
Sir Isaac Newton
The Slow Hunch
A lot of ideas linger on, 

sometimes for decades, 

in the back of people’s 

minds
Steven	
  Johnson
Source:	
  http://www.britannica.com/EBchecked/topic/187881/Douglas-­‐Engelbart
Douglas Englebart 1965 Apple Macintosh 1984
Any technology that is going to have significant
impact over the next 10 years is already at
least 10 years old
Source:	
  http://www.businessweek.com/innovate/content/jan2008/id2008012_297369.htm	
  
The 10/10 Rule
The 10/10 Rule
10 years to build a new

platform, 10 years for it

to be adopted
Steven	
  Johnson
What do the following products have in common?
LSD
Post-it notes Viagra
Teflon
Penicillin
Serendipity
The accident of finding 

something useful or good 

without looking for it
Steven	
  Johnson
"In the fields of observation chance
favours only the prepared mind”
- Louis Pasteur
Impact of innovation
Gross domestic product
The Forth Quadrant
1MARKET/INDIVIDUAL
2MARKET/NETWORK
4
NON-MARKET/NETWORK
3
NON-MARKET/INDIVIDUAL
Liquid network
The Slow Hunch
10/10 Rule
Serendipity
NEXT
Diffusion of Innovation

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