Question: Are we innovating lesser now?

My school friend (from Glasgow) Ali has often been my soundboard. He has always asked me really easy sounding tough questions. Today I decided to think through one more.

Question 1: Innovation in earlier days was a lot in terms of impact. These days there are more experts but not so much innovation going on. Why?

It’s an interesting question. My instinct was to say, it’s not true. We are innovating. My instinct was that we are not just innovating, but we are innovating differently- driven by crowd-sourcing, communities, using by digital tools and networks and creating tangible impact. This is not the same as supply side innovation driven only by the industry. Consumers are creating innovative use cases and driving innovation bottom-up.

I also feel that ‘where’ innovation occurs is not only driven by the position in the value chain, but also by the geography and culture. US is a bigger innovator compared to say Germany because as several professors tell us, the culture in the US promotes or rather supports failure. If you don’t have the risk or shame in failing you are more likely to create innovation. If the culture in a country makes people ‘lose face’ on failure, there are going to be constraints. And while usually constraints drive creative problem solving, this one is likely to be a hindrance in taking the risks. 

why we innovate
From a tweet comment
The other aspect of ‘where’ is what also came about in a Twitter comment today: the need to innovate. In that sense my hunch is innovation is increasingly spreading bases, and emerging markets will likely capture a larger share– especially as they get more equipped with tools, share more and experience side-stepping through creative need-driven ideas (Wolf Ollins report on this very interestingly mentions the side-stepping phenomena. E.g. you don’t have access to funding, you side-step it and go to Kickstarter).

But these were my thoughts based on what I read and see around and also driven by the fact that I consider myself as a technology optimist. I promptly Google-d and also emailed Professor Janovsky to verify.

Google trends:
A small Google trend report on “innovation” had interesting results. Of course trends on Google only indicate ‘online’ interest at best and not real tangible impact, but I thought it could be a directional clue as well. I tried finding historic and expected trends for innovation and compared the U.S., India, Germany and South Africa (these are English speaking and Google is used as a primary online search engine). The results are not any different from what I had thought. South Africa and India have been higher up in the trend. However, I also see a convergence in recent times- though the averages are still higher for S Africa and India (the online population of India is still less than online population in the U.S. and South Africa is much lower by numbers). Furthermore, interesting results showed up in the ‘rising searches’ for each country. To me, the places/ actual regions in each country driving these trends was also interesting to find out!

Innovation trends by country

innovation trends by region
rising innovation trends by country

 Source: Google trends

However on companies:
Professor Janovsky recently wrote a paper on innovation (in German) and that probably directly addresses what Ali had asked- from the company perspective. I read the paper and am going to mention some of the points paraphrased in English alongside other research I saw.
  • According to research done for companies in Germany, Professor Janovsky argues that while globalisation has increased German exports by over 300%, the innovation has gone down
  • “True innovators” in the medium-sized companies (which are argued to be the stronghold of the German innovation) have halved in the last decade from 8 to 4%
  • There are different reasons indicated for this: the organisational demands on these companies due to globalisation (e.g. competition with low-cost Asian brands, commoditization etc.) are very high leading to new cognitive barriers to the innovation culture and causing a negative impact on innovation performance
  • Companies are trying to compete based on economies of scale- leading to standardized processes often with centralised decision-makers, both not doing innovation much good– as employees have a pressure to ‘conform’ and this can lead to reduced creativity
  • This is further complicated as companies go public– because that makes managers take up short term measures to show profits and not take up innovations that also cause loses in the beginning
  • While global working environments and different cultures- ideas can in fact cross fertilise, however, global working also enhances a sense of ‘control’ due to increased complexity. Projects once begun are tougher to stop– which is a pre-requisite to innovation that requires continuous reallocation of resources and strategies as a part of ‘exit strategies’ to be able to constantly reinvent
  • Lastly, change and reorganisation efforts, especially for big companies or big industries have multiple barriers that are hindering their innovation potential

Question 2 after jump

Question 2: Also, there were scientists who were experts in more than one area. These days there are experts in single area but not much innovation.

We do have an expert-overload (for instance digitally), but that’s because every ‘claims’ to be an expert. Probably because there’s no one to prove them wrong- in fact many get the expert status through over-measured statistics (how many likes, followers, comments, traffic) with or without credibility, quality or authenticity of the information and gyaan they provide. But if I were a social scientist, I’d probably say, if people are talking about it (or treating one as an expert) it is an indication of a sort of social power that they come with and thus can also not be ignored. It is more likely to be included in the cultural narrative, because it is garnering attention.

In McKinsey, a specialist (then) shared an interesting view with me. We start as generalists, then specialise and once we’re at the top, we need to generalise again. To a large extent I believe in it. At the top, one needs to be more aware and broadbased. But whether experts or generalists lead to more innovation isn’t something I have data on. 

Professor Janovsky told me this- “There is no empirical evidence for this. Personally, I am convinced that it is not an “either or”, we need the specialists, but with a more border-spanning attitude and capacity. There are numerous other factors impeding innovation, esp. those related to globalization; in the article mentioned-above, I indicated the arguments.”

What do you all think? It’s a very interesting topic for me, would love to hear more!

  1. d: yes the data on companies not innovation was german

    Hitesh- that’s a great point you make, most innovation does indeed fail when consumer needs are not considered in the initial/ different stages creating products/ services that sound awesome only to the ones making it and add no value to the real user!

  2. Great question… I dont think half the people who talk about Innovation ever understand what they are talking about. It has become another buzz-word like Synergy, Strategy and all those magical words that basically help sell in million ways. What I can share from my limited experience is the fact that innovation is often mistaken for invention, creation or some kind of magic that is so sexy that it will drive industries, countries or the entire humankind. All I understand is that innovation is value creation in its simplest and the most purest of forms. If you can create a value for “someone”, you are essentially innovating. The problem is of misfits and not of lack of potentials. Every time something fails its probably because there was no taker for that idea, product or a service. Innovation is where you can fit technology to the needs and problems and not vice-versa. I extremely recommend human centric design thinking processes that off-late has been used by engineers and designers to design for humans. In that sense I think we have massively graduated to understanding frugal and efficient ways to creating value for the customer and that I bet is innovation at its best!
    Sorry for the long post, but I still feel I wrote little 🙂

  3. Did you mean We as in Germany? I doubt if this country invented anything in the recent decades. They are better off refining and re-inventing.

  4. in fact that’s exactly what I’m saying. we are innovating, albeit differently. I used digital only as an example. However the company data ( that companies are innovating less) is emperical study based on German SMEs and large companies that have gone public.

  5. i fear your digital domain is skewing your results and perhaps your opinion. As we march towards Singularity via autonomous cars, artificial intelligence and decoding the human genome etc, not only do I think we are innovating but our technology is changing so rapidly in form and function that we cannot see steps like the steam engines in the past.

    You might want to hang out with a different crowd to see present day generation 🙂

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