The 10 Top Reasons Why The 10 Top Reasons Don’t Really Matter

You have to love this……… from The Heart of Innovation blog.

10. Analysis paralysis.
9. Reason is highly over-rated.
8. If you need more data to prove your point, you’ll never have enough data to prove your point.
7. You already know what to do.
6. You’re going to follow your gut, anyway.
5. “Not everything that counts can be counted; and not everything that can be counted counts.” (Einstein)
4. By the time you put your business case together, the market has passed you by.
3. “Conclusions arrived at through reasoning have very little or no influence in altering the course of our lives.” (Carlos Casteneda)
2. The scientific method came to Rene Descartes in a dream!
1. “Time flies like an arrow. Fruit flies like a banana.” (Groucho)

Breaking down the Silos – Open Innovation

There have recently been two excellent, short articles in BusinessWeek about how we need to “break down the barriers” internally and externally within, and between, organisations. The first is from Saul Kaplan, and he gives some excellent examples from both the private and public sector. Read here.. The second article is entitled “Smashing Silos” by Evan Rosen. Read it here.

It all comes back to the paradigm that connectedness and sharing, in itself, will accelerate innovation. I have been a proponent of this for a long time, but it takes articles such as these to reinforce the concept. Why is it that is it necessary for something to be repeated 100 times before it sinks in?

Is Mush actually mush – or is he right?

Have you seen Jaron Lanier’s article in the Wall Street Journal on January 8th? What do you think of his viewpoint? Do you agree? I have underlined the most controversial bit…….

Here’s one problem with digital collectivism: We shouldn’t want the whole world to take on the quality of having been designed by a committee. When you have everyone collaborate on everything, you generate a dull, average outcome in all things. You don’t get innovation.

If you want to foster creativity and excellence, you have to introduce some boundaries. Teams need some privacy from one another to develop unique approaches to any kind of competition. Scientists need some time in private before publication to get their results in order. Making everything open all the time creates what I call a global mush.

There’s a dominant dogma in the online culture of the moment that collectives make the best stuff, but it hasn’t proven to be true. The most sophisticated, influential and lucrative examples of computer code—like the page-rank algorithms in the top search engines or Adobe’s Flash— always turn out to be the results of proprietary development. Indeed, the adored iPhone came out of what many regard as the most closed, tyrannically managed software-development shop on Earth.

Actually, Silicon Valley is remarkably good at not making collectivization mistakes when our own fortunes are at stake. If you suggested that, say, Google, Apple and Microsoft should be merged so that all their engineers would be aggregated into a giant wiki-like project—well you’d be laughed out of Silicon Valley so fast you wouldn’t have time to tweet about it. Same would happen if you suggested to one of the big venture-capital firms that all the start-ups they are funding should be merged into a single collective operation.

But this is exactly the kind of mistake that’s happening with some of the most influential projects in our culture, and ultimately in our economy.

Digital collectivism might seem participatory and democratic, but it’s painting us into a corner from which we will have to concoct an awkward escape. It is strange to me that this isn’t more obvious to many of my Silicon Valley colleagues.

The U.S. made a fateful decision in the late 20th century to routinely cede manufacturing and other physical-world labors to foreign competitors so that we could focus more on lucrative, comfortable intellectual activities like design, entertainment and the creation of other types of intellectual property. That formulation still works for certain products that remain within a system of proprietary control, like Apple’s iPhone.

Unfortunately, we were also making another decision at the same time: that the very idea of intellectual property impedes information flow and sharing. Over the last decade, many of us cheered as a lot of software, music and news became free, but we were shooting ourselves in the collective feet.

On the one hand we want to avoid physical work and instead benefit from intellectual property. On the other hand, we’re undermining intellectual property so that information can roam around for nothing, or more precisely as bait for advertisements. That’s a formula that leaves no way for our nation to earn a living in the long term.

The “open” paradigm rests on the assumption that the way to get ahead is to give away your brain’s work—your music, writing, computer code and so on—and earn kudos instead of money. You are then supposedly compensated because your occasional dollop of online recognition will help you get some kind of less cerebral work that can earn money. For instance, maybe you can sell custom branded T-shirts.

We’re well over a decade into this utopia of demonetized sharing and almost everyone who does the kind of work that has been collectivized online is getting poorer. There are only a tiny handful of writers or musicians who actually make a living in the new utopia, for instance. Almost everyone else is becoming more like a peasant every day.

Managing IP and Open Innovation

One of the biggest challenges in an Open Innovation environment is the management of intellectual property. Indeed, IP management is a real inhibitor to companies implementing OI – the IP challenges seem somewhat overwhelming. Indeed, I will shortly be teaching IP Management with a specific innovation focus to students at the University of Sydney.

A recently published article address some if these issues. It says that the key is:

• to understand the benefits of embracing these models of IP development;
• to have executives and board members agree on and commit to a clear business plan with respect to same; and
• to have the right people in place to execute the plan.

Different models of collaborative IP development are
used today, including:

• participation in R&D consortia;
• collaboration between different companies for a
• variety of strategic reasons;
• collaboration with universities and other public
• research institutions; and
• the ‘open science’ model, where IP rights become
• superfluous as access is generalised and data is
• shared with little or no limitations.

The Case for Backshoring – Returning to the Fold

For years, the NCR Corporation simply followed the pack. Like many other large U.S. manufacturing companies, in the past couple of decades the maker of automated teller machines (ATMs) relied heavily on offshoring and outsourcing to trim factory costs. By making much of its equipment in cheaper offshore locations in the Asia/Pacific region, and by hiring Singapore’s Flextronics International Ltd. to make other equipment, NCR could slash hundreds of millions of dollars in plant expenses and be reasonably certain that its ATMs met quality standards.

But recently, NCR has rejected this strategy — at least to a degree. In 2009, the company decided to move its most sophisticated lines of ATMs from its plants in China and India, and from a Flextronics facility in South Carolina, and instead manufacture the machines in Columbus, Ga., not far from the NCR innovation center, where its new technology is on display. The reason: The company was concerned that outsourcing distanced its designers, engineers, IT experts, and customers from the manufacturing of the equipment, creating a set of silos that potentially hindered the company’s ability to turn out new models with new features fast enough to satisfy its client banks. “I think you’ll see more of this occurring,” says Peter Dorsman, NCR’s senior vice president in charge of global operations, who says he has been contacted by dozens of U.S. companies studying whether they should make similar moves. “You’ll see a lot more people returning manufacturing to America.” Read entire report.

New Accenture Study on Globalization released at World Economic Forum

A combination of intensified globalization brought on by recent turbulence in the global economy and the acceleration of new information technologies is driving companies and governments to look for new business models to meet increased demands for efficiency, competitiveness, short-term agility and long-term growth. This is one of the key findings of a study released today by Accenture at the World Economic Forum.

According to the study (download here), based on a survey of more than 400 business leaders globally as well as a year-long field analysis of business and technology developments, such maturing technologies as cloud computing, mobile communications and collaborative computing will offer companies the “hidden wiring” required to compete in a multi-polar world, one in which emerging markets are challenging the traditional strengths of more mature economies.

Throughout the global economic crisis, emerging markets have demonstrated resiliency and weathered the storm as well as — if not better than — more mature markets due to strong local growth, highly competitive cost structures and an ability to serve customers at low price points. This challenge has not been lost on the executives polled by Accenture: 88 percent conceded that their companies have not done enough to develop effective strategic responses to the new disruptive business environment.

When asked which factors will have the most significant impact on their business over the next five years, 41 percent of the executives surveyed said it would be the growth in size and reach of new players in emerging markets, followed by an increase in IT capabilities (35 percent) and slower economic growth in developed markets (27 percent). Respondents also said that the most significant challenges raised by future developments in information technology would be managing complex networks of suppliers, business partners and customers (37 percent), followed by protecting proprietary information and data (28 percent) and competition for technologically and analytically skilled employees (27 percent).

The study, “From Global Connection to Global Orchestration: Future Business Models For High Performance Where Technology and the Multi-polar World Meet,” finds that in the aftermath of recession, new economic value will be created through a combination of the effective use of new technologies and strategies to address the dynamics of globalization. Business leaders surveyed by Accenture highlighted the growth in size and reach of new market players from emerging markets and the increased capabilities that new information technologies provide as the two developments that will have the most significant impact on their business over the next five years.

“Together, these forces are accelerating the need for companies to master five competitive and interdependent dimensions of business: new consumers, talent, innovation, capital, and resources,” said Mark Foster, Accenture’s group chief executive, Global Markets and Management Consulting. “Our research shows that high performers in both developed and emerging markets are looking to leverage information technology with a certainty and pace that will give them the flexibility to adapt their business models and stay ahead of the competition as new economic circumstances arise.”

According to the study, economic power shifts between companies and individuals and between national economies are becoming more common, creating greater business complexity with more people to buy from and sell to, as well as more competitors. At the same time, this complexity is fostering more ways to create economic value. Accenture has identified six market-shaping interactions that have the ability to create new economic value:

– Co-production with customers. Companies are finding more opportunities to engage with customers and suppliers in such areas as co-producing products and sourcing ideas as a part of the innovation process.

– New bridges between producers and consumers. Intermediaries are using technology to build new bridges between producers and consumers, helping companies extend the markets they serve, particularly in emerging-market economies. Nearly sixty percent of business leaders surveyed for the study said that greater consumer connectivity would have a significant or very significant impact on competition in their industries over the next five years, with the proportion even higher among business leaders from emerging markets compared with those from developed markets (68 percent compared with 56 percent)

– New forms of business-to-business (B2B) commerce. New forms of B2B activity are becoming technologically possible, advancing the promise of “e-markets” first discussed a decade ago. Hong Kong-based Li & Fung, for example, has used information technology to transform itself into a global, horizontal provider of services traditionally performed internally by retailers and wholesalers — services such as supply chain management, production and operations. This is an especially powerful trend that is helping make cost structures more variable in a volatile world.

– Consumer-to-consumer content. Technology is enabling like-minded consumers to form clusters of cooperative structures that span multiple countries and regions in order to share information, evaluate products and services and conduct purchases. Accenture’s research reveals that 57 percent of executives believe the growing bargaining power of knowledgeable consumers will significantly affect competition in their industries over the next five years. Business leaders in emerging markets are especially alert to this trend, with 67 percent expressing this view, compared with 52 percent of executives in developed markets.

– Peer-to-peer production. Individuals can form groups that provide products and services to reduce the market power of existing suppliers or to exert greater control over the way a product or service is produced or consumed. International peer-to-peer microfinance platforms are making possible new forms of lending to small entrepreneurs in high-growth economies.

– Cooperative consumption. The growth of social networking and digitization enables consumers to form clusters that boost their bargaining power. Shanghai-based Liba.com, founded in 2003, which sells everything from paint to ceiling lamps, now has 1.6 million members. Liba.com has 300,000 unique visitors a day on its website and produces approximately 30,000 transactions a month during group buying events in Beijing, Shanghai, Guangzhou and elsewhere.

According to Foster, in order to create new forms of economic value and growth, companies can take advantage of any or all of these new combinations of production, collaboration and consumption to reshape their business models ahead of the competition.

“Responding to the newly complex and competitive ecosystem will require businesses to re-evaluate the roles they have played and the sources of value that they have followed traditionally,” Foster said. “However, organizations also have a great opportunity to harness these new market forces to their advantage to optimize, extend and transform their business models.”

Cisco Launches 2nd I-Prize Global Innovation Contest to Find Next Potential Billion-Dollar Idea -> Cisco News

Cisco Launches 2nd I-Prize Global Innovation Contest to Find Next Potential Billion-Dollar Idea -> Cisco News

SAN JOSE, Calif., Jan. 27, 2010 – Cisco today announced the launch of the second I-Prize contest, an open global innovation competition in which entrepreneurs worldwide can collaborate and submit their proposals with the potential to be Cisco’s next billion-dollar business idea. Following last year’s competition, which drew nearly 2,500 entrants, this year innovative thinkers will have access to an expanded portfolio of Cisco® collaboration solutions to build on as they share their ideas with other participants around the world. The winning team will be eligible for $250,000 in prize money.

Organizations call for greater open innovation to advance sustainability

Announced at a CEO breakfast at the World Economic Forum in Davos, Switzerland, a number of high profile organisations – Best Buy, Creative Commons, IDEO, Mountain Equipment Co-op, Nike, nGenera, Outdoor Industry Association, salesforce.com, 2degrees, and Yahoo! – called on other corporations to join them in committing to opening up their IP to fast-track the development of innovative solutions to sustainability challenges. The 10 founding partners of GX share a commitment to the power of open innovation and collaborative networks to fuel sustainable innovation by making their patented technologies available for research and licensing.

By making private intellectual property visible and usable, the aim is to accelerate the development of green innovation. The launch of GX is the first step in a journey towards more sustainable innovation, and the more companies that post their IP the faster the journey. More information can be found at http://greenxchange.force.com/

Is Open Innovation Over? What do you think?

Have a read of the excellent discussion going on around whether or not Open Innovation is actually “over”. Read here.

The Year in Innovation

The Year in Innovation – from Business Week
The innovation industry took a hit this year, as executives dialed back on initiatives—and paid the price. But some encouraging trends also emerged

By Michael Arndt

In 2009 the world was no longer flat; much of it was flat broke. Deflated by slumping sales and income, companies roundly did what innovation consultants say they never should—they cut spending on research and development. The U.S. drug industry, historically one of the most lavish spenders on research and development, announced the elimination of a record 69,000 jobs this year, up 60% from 2008. At many companies, quick hits and line extensions replaced more costly, though potentially more rewarding, investments in game-changing inventions. Read complete story.

Patent Filings in the US drop

CNN reports that the US patent Office has come out saying tht U.S. innovation slowed this year for the first time in 13 years as the recession cut into budgets, and costs to protect inventions rose.

The number of patent filings in the United States fell 2.3% in 2009 to 485,500 from 496,886 last year, according to a preliminary estimate by the U.S. Patent and Trademark Office. That makes 2009 the first year since 1996 in which businesses and inventors filed fewer patents year over year.

“That’s unfortunate because [patent filings] are a reflection of innovation,” said David Kappos, director of the Patent Office. “Innovation creates so many jobs and so much opportunity for our country. It is absolutely key to our long-term success in the global economy.”

At the same time, U.S. patents issued to inventors and businesses in foreign nations jumped 6.3% for the year. That’s a worry for Silicon Valley, which has been a global leader for decades.

Most blame the recession for the drop in U.S. filings. As a result, many companies are opting to hold off on bringing new ideas to market until the economy improves substantially.

“Our patent filings were down 25% this year, and it was a direct macroeconomic issue,” said Joe FitzGerald, deputy general counsel for tech security firm Symantec. “The overall company reduced spending, and patent filings are a very controllable expense. We might have filed four patents, but we filed three and made sure they were strategically significant.”

Modeling a Paradigm Shift: From Producer Innovation to User and Open Collaborative Innovation

Excellent paper from Harvard on the paradigm shift from closed to open innovation. Points made include the following. Full text here.

• When it is technologically feasible, the transition from closed producer innovation or single user innovation to open single user or open collaborative innovation is desirable in terms of social welfare and is worthy of support by policymakers.
• Free dissemination of innovation designs is associated with the open model. Open innovation generates innovation without exclusivity or monopoly, and so should improve social welfare, other things being equal.
• Intellectual property rights grants can be used as the basis for licenses that help keep innovation open as well as closed.
• Policymakers should seek out and eliminate points of conflict between present intellectual property policies designed to support closed innovation that at the same time inadvertently interfere with open innovation.
• As design costs fall, many more innovations will originate with single users.
• Open collaborative innovation projects thrive on low communication costs.

What is Open Innovation? – a starting point

If you are new to open innovation, have a look at the following video. The music becomes a little tedious, but it is a great place to start.

Bangalore blooming into innovation hothouse

Great article about how Bangalore’s innovation capability is accelerating. Key points as follows:

• Google’s Map Maker, Intel’s six-core Xeon processor, Microsoft’s search engine Bing and HP’s Dynamic Smart Cooling Technology have all been designed or have key components built in the city. IBM and Microsoft have tens of thousands of employees based in Bangalore. Cisco is developing next-gen intelligent networking technologies in the city.
• About 60 per cent of the country’s R&D talent is based in Bangalore. Many of the nearly 700 India-based captive multinational R&D centres are located in the city. That is not counting the R&D outsourced to large Indian software companies such as Wipro Ltd and Infosys Technologies, both headquartered in the tech hub.
• 3M, General Electric and Honeywell see a 15 to 20 per cent revenue growth in the Asia-Pacific geographies in the next three to five years
• The swing to greater research happened a couple of years ago when Cisco set up its globalisation centre in Bangalore, making the city virtually its second headquarters outside its base in Silicon Valley. In an unprecedented move, the company then relocated its number two executive, the Dutch-born Wim Elfrink to Bangalore. Companies like Cisco and Nokia are not just shifting R&D to India, they are also shifting R&D management to India and that is the game-changer, says Navi Radjou, executive director of the Centre for India & Global Business at the Judge Business School, University of Cambridge.
• Costs in Bangalore are still comparable to other global R&D centres such as Shanghai in China, the Ukraine and Russia. An analysis of cost per fulltime R&D employee in Bangalore and Shanghai showed Bangalore holding a 15 to 17 per cent cost advantage.

Globalisation shapes Employees skills

From CNN

Responding to globalization of the workplace, employees worldwide are developing a new suite of cross-cultural and language skills that will equip them to prosper in a more multinational environment, according to recent findings from a global workplace survey.

The survey, by global workforce solutions leader Kelly Services (NASDAQ: KELYA) (NASDAQ: KELYB), finds that individuals across all generations believe the experience they gain in a globally oriented environment will be critical to their careers.

Gen X (aged 30-47) reports the most direct experience within a global business environment, while Gen Y (aged 18-29) is driving the trend toward globalization, making international experience central to their job selection and promotion. Although baby boomers (aged 48-65) receive less formal support and training than their younger colleagues, they still feel they can succeed in a globalized workplace.

The findings are part of the Kelly Global Workforce Index, which obtained the views of approximately 90,000 people in 33 countries across North America, Europe, and Asia Pacific.

Employees around the globe are recognizing how to thrive in a workplace with fewer international barriers, according to Kelly Services Executive Vice President and Chief Operating Officer, George Corona.

“Exposure to the international workplace is becoming the norm as more highly skilled people develop the capacity to export their talents wherever needed around the globe,” Corona says. “In this environment, the ability to work collaboratively with multinational teams is a critical requirement that we expect to become more commonplace.”

Key findings of the survey reveal that:

--  81 percent of Gen Y believe it is important to their career prospects
    that they become more globally oriented, followed by Gen X (78 percent) and
    baby boomers (71 percent).
--  69 percent of Gen X have recently worked closely with colleagues from
    a different country or culture, followed by Gen Y (67 percent) and baby
    boomers (66 percent).
--  84 percent of Gen X feel that they possess the skills to work in a
    more globally oriented workplace, followed by Gen Y (82 percent) and baby
    boomers (81 percent).
--  In deciding where to work, exposure to a global environment is
    considered 'extremely important' by 32 percent of Gen Y, 30 percent of Gen
    X, and 26 percent of baby boomers.
--  Only 35 percent of Gen Y receive formal cross-cultural or language
    training from their employers, followed by Gen X (33 percent) and baby
    boomers (27 percent).     

Although Gen X and baby boomers have more international experience, Gen Y more readily embraces that experience as a factor in determining future job choice and career progression. Gen Y also receives the bulk of employer-provided training.

“We are seeing a generation emerge that is very confident operating in a global environment. This will lead to many more transferrable skills, and a business dynamic where human capital can be deployed seamlessly to almost any location on short notice.

“Given the significant role this will play in transacting future business and attracting new talent, we expect to see many more firms devoting resources to equip staff with the language, culture, and flexibility they need to be successful in a truly global context,” Corona concludes.

For more information on the survey results, please visit www.kellyservices.com.

Cool video on the value of ideation through to execution

Some Really Interesting Facts on Asia and Europe

Some interesting, perhaps little-known facts provide a useful contrast between Asia and Europe and demonstrate both the present-day reality and the scope of the future opportunity:

• GDP per capita in Asia (approximately US$15,000) is less than half the EU average, and there is a much wider standard distribution. A large population lives in poverty throughout the continent.
• While India and China are among the fastest-growing economies in the world, the latest figures on GDP per capita are $2,800 for India and $6,000 for China. They should both still be considered developing economies.
• The top GDP per capita countries (2008) in Asia: Singapore ($52K), Hong Kong, Japan, Taiwan, South Korea ($23K), Malaysia, Kazakhstan and Thailand ($8.5K).
• India has 22 official languages that are as distinct and different as the 23 EU languages; half a dozen different scripts are used. English is spoken by a mere 7 percent of the people in India. However, it is possible to get deep penetration into the Indian market with five key languages.
• There is very little content in local Asian languages on the Web, in general. Based on a survey done by Asia Online in 2007, less than 15 percent of the total content on the Web is in Asian languages. Almost 90 percent of the Asian language content is in Chinese and Japanese. There is a huge need for more local language content in Southeast Asia.
• China now has the fastest-growing patent office in the world. The World Intellectual Property Organization (WIPO) states that China is clearly an emerging scientific and technological power.The share of Asian country-based patent filings is now in excess of 50 percent of all patents filed across the world.
• India has more gifted and talented students in high school than the total school student population in the U.S. China has more students in science and technology college degree programs than India and the U.S. combined.
• McKinsey & Company has identified a “Rising Asia” as a stable long-term trend that will fundamentally change consumption patterns.
• Gartner (NYSE: IT) suggests using IT to reach the market. The research firm suggests that global companies use IT to “lighten” their Asian business model in order to address specific cultural, geographic reach, and supply chain considerations.
• Wealthy Asians are concentrated in major cities like Shanghai, Beijing, Hong Kong, Singapore, Kuala Lumpur, Mumbai, Delhi, Seoul, Manila and Bangkok.
• China is now the fastest-growing market for Bentley and BMW.
• Even countries like Laos, Nepal, Pakistan, Sri Lanka, Myanmar, and Cambodia — which have very low GDP/capita — are interesting markets for cellphones and basic commodities.
• An understanding of the critical perspectives of Buddhism, Hinduism and Confucianism can dramatically enhance communications strategies targeting most parts of Asia.
• Google (Nasdaq: GOOG) is not dominant in key Asian markets. In Korea, it has less than 2 percent search market share; in China, about 17 percent; and in Japan, about 20 percent. Local companies dominate because of their better understanding of local content, language and customer preferences. This suggests that standard U.S. approaches may not work well in many Asian markets.
• Chinese social networking startups have produced many innovations that have led to their becoming profitable much faster than their U.S. equivalents, like MySpace and Facebook. Asian innovation is gradually making its way to the West.
• Most of Asia has been relatively unscathed by the global financial and real estate market collapse. (source Commerce Times)

Hyundai and its Success at Globalization

Great story from the Korea Times. When Hyundai Engineering & Construction CEO Kim Joong-kyum took office early this year, the construction market both at home and abroad was not in good shape.

The financial crisis slowed down many large-scale projects overseas, while the domestic market continued to be bogged down by a record-high number of unsold homes. Orders were shrinking with competition at its highest.

All of this meant that the pressure was on for Kim, who was responsible for steering Hyundai E&C through one of the worst economic slumps in history.

Seven months into serving as the top chief, however, Kim has put most of the uncertainties and concerns behind by posting solid records right through the downturn.

Locally, the builder started ramping up efforts to win orders for housing redevelopment projects throughout the metropolitan area and mega public undertakings scattered nationwide.

Overseas, Hyundai E&C won a $1.3-billion gas exploration contract in Saudi Arabia in March. Then, in June and July, it won orders worth $600 million and $1.7 billion, respectively, in Singapore and the United Arab Emirates. Most recently, the company added a $190-million order to build a fertilizer plant in Qatar earlier this month.

The figures added up to hand over Hyundai E&C the market’s No. 1 position again last month after six years struggling to reclaim the top spot.

And many credit Kim for helping one of the nation’s oldest builders renew its industry supremacy.

The veteran Hyundai executive’s willingness to seek transformation and differentiation is what moved the 62-year-old company forward.

Since the first day of taking office, Hyundai E&C officials say that Kim was all about overhauling decades-old systems and practices. Everything from personnel line-up and global management to internal and external communication, the new CEO wanted changed and improved.

Kim said during his inaugural speech: “Hyundai E&C has endured a countless number of hardships throughout its history, but it continued to maintain its market leadership. At this time, what we need is continuous transformation in order to become a global top leader.”

Companies add Innovation Programs

It is very interesting to see company after company add innovation programs to their agendas. I don’t mean paying lip service to innovation – I mean really meaningful programs. We all know the success of P&G’s programs, and following them many companies have embraced “programs” around innovation – most of which have been successful.

Pitney Bowes is one such company. It believes that innovation is core to how they build the creative and financial capacity to invest in new market opportunities and new ways to deliver products and services. That’s why they’ve chosen to increase our innovation spending in this economic downturn. In 2008, Pitney Bowes generated just under US$900 million in free cash flow on $6.3 billion in sales. As it be­came clear that a recession was coming, and that it was going to be deep and potentially long, they realized they had the financial capacity to continue to invest in the business. They saw the recession as an opportunity to in­crease our innovation investment as a percentage of revenue so that we could be even better positioned to take advantage of market opportunities.

It will be fascinating to see how the return on investment of many of these programs turns out. Especially those investments made in the midst of a downturn. My guess is that they will be game-changing for most, successful for others, and will fail for a very few. Culture change, which goes hand-in-hand with innovation, is a catalyst for “turning the titanic” at any time.

Customers by far the best source of Innovation

A new report from Grant Thornton International Ltd reveals that customers and in-house R&D teams are now the leading source of innovation for U.S. businesses, while globally customers are an organization’s best source of innovation. When asked to name the origin of the best innovation ideas, U.S. business owners named customers (37%) and in house R&D teams (37%) as their leading sources of innovations followed by heads of business units (34%) and employees (32%). Globally, 41 percent of businesses say that customers are their leading source for innovation.

“In recent history the tech boom and the creation of internet social networking sites brought innovation and entrepreneurship into every American home,” said Harris Smith, Grant Thornton LLP’s managing partner for Private Equity and the Audit practice leader of the firm’s Southern California offices. “Without entrepreneurs and innovation, America couldn’t thrive.”

Regionally the report reveals that in Asia Pacific customer focus is a particular source of innovative ideas and products with nearly half of businesses (48%) citing customers as the source of the best innovative ideas, compared with 40 percent in Western Europe and 35 percent in North America.

In addition, more than three in four businesses globally (78%) believe that the U.S. is the easiest country to create innovative products, services and business. The U.S. is the clear leader in this, with the next highest countries being China (22%), India (22%) and the U.K. (21%). Regionally, the U.S. is also seen as the leading country with 77 percent of Asian-Pacific businesses, 84 percent of North American businesses and 71 percent of European businesses saying it is the easiest country to create innovative products, services and business in.

“With the history of innovation in the U.S. spanning from the country’s earliest beginnings, it’s not hard to understand why businesses around the globe see America as the land of innovation,” said Smith.

To read the full Grant Thornton International global innovation report, Innovation: the key to future success?, or the North American, European or Asia-Pacific regional innovation reports, please go here.

New Book on Israel’s Success in Business Innovation

Policy 2.0 – Open Innovation in Policy Creation

More buzzwords? Policy 2.0? Well, its all about breaking down the barriers and enhancing collaboration. Hope Street Group believes that new online collaboration tools have an important role to play in surfacing new ideas and voices to make a positive difference on many issues, including teacher effectiveness. To that end, this summer Hope Street Group launched a virtual education policy team using Policy 2.0, their collaborative web platform. They recruited a diverse policy team of educators and professionals from the private and civic sectors across 17 states. Through an in-depth process of discovery and research over three months, the policy team devised targeted recommendations for improving teacher evaluation systems. Policy 2.0 allowed for connectivity between busy practitioners from across the country to a library of resources, to national experts, and to each other, through a tool that gave them a unique platform for engaging in education policy, with far-reaching implications.

They then documented their findings and took it to the White House.

Read the full report here.

Beyond Borders: Booze&Co Global Innovation 1000 Report Released

Booze&Co has released it’s report on global innovation, and it’s certainly interesting. Download it here. Some points worth noting:

• In 2007, the top 80 U.S. corporate R&D spenders deployed an estimated US$80.1 billion of their $146 billion R&D funds overseas. The top 50 European companies spent $51.4 billion of their $117 billion total outside the continent. In Japan, the top 43 Japanese firms exported $40.4 billion of their total $71.6 billion to other countries
• Companies that invest wisely in a multinational innovation footprint are gaining far better returns on their R&D investment than companies that exclusively keep their laboratories at home
• Booze Allen identified the 1,000 public corporations worldwide that spend the most on researching and developing products and services for their marketplaces. Those 1,000 companies spent a total of $492 billion in 2007 on R&D, a 10 percent increase over the prior year, and, once again, they found no statistically significant evidence that higher levels of spending guarantee better results.
• Between 2004 and 2007, global multinationals increased their total R&D sites by 6 percent, and of those new sites, 83 percent were in China and India. They also increased R&D staff by 22 percent; 91 percent of that increase was in China and India.
• Cost reduction is not the most important of the several reasons that multinationals are moving their R&D facilities abroad. Furthermore, it is receding in significance.
• Many companies are heading overseas in search of access to the burgeoning numbers of talented engineers and scientists around the world, and to the ideas that they are generating
• Global companies are learning quickly that specific countries are gaining specific skills (automotive engineering in India, electronics in China), and they are chasing that talent accordingly
• As companies sell their products and services in markets around the world, they find it valuable to site R&D closer to those growing markets
• Overall, their analysis suggests that companies taking a more aggressive posture in globalizing their R&D footprint enjoy stronger sustained financial performance. Of the 184 top spenders that they studied closely, those that deployed more than 60 percent of their R&D outside their home countries tended to perform better, over the past three years, on several performance indicators, including operating margin, total shareholder return, market cap growth, and return on assets. These results
  indicate that for these companies there is a payoff from greater deployment of capabilities and capacity on a global scale, and greater success in serving local market
  needs

Booze&Co’s top innovation 20

Innovation Special Report

There is report in BusinessWeek on Innovation. It’s entitled Growth Through Innovation. Headlines include:

Now Is Not the Time for Caution

The Design of Business

Hershey’s Arrested Development

Godiva Goes to the Supermarket

Slide Show: Obama’s 25 Ways to Rebuild America

San Diego Zoo’s Newest Exhibit: Innovation

Podcast: Defining Large-Scale Innovation

Want To Grow? Look At Your Business Model

Worth a read!

Design, Innovation and Crowdsourcing on a National Scale

Great example of the intersection of design, innovation and crowdsourcing on a national scale! Australia’s highest circulating advertising and marketing magazine B&T and crowdsourcing firm DesignBay are launching a competition to find a logo and tagline that could represent Brand Australia. It’s national branding on steroids. See brief here.

The competition is in response to the Australian Government’s recent announcement that it is looking for an agency to develop a new brand identity to embody Australia in the 21st century. The government through the Australian Trade Commission has set aside a budget of $20 million over four years to promote Brand Australia internationally.

The B&T/DesignBay competition, which is open to anyone anywhere in the world, will run over two weeks, with the winners and short-listed entrants announced in B&T magazine in November. The winning entry will receive a $2000 prize, with cash prizes also given to second and third-placed entrants.
A public vote together with the expert opinions of industry professionals and those of B&T’s editorial team and DesignBay staff will decide the winning entry.

Visit www.designbay.com/brand-australia-contest and complete the free registration process where a brief can be found. Anyone wishing to view the entries as they come in can do so at the same URL. The competition is open from 4pm on October 13, 2009, closing at 5pm on October 29, 2009.

B&T editor Tim Addington said: “We wanted to cast the net as wide as possible to get a fresh perspective on what a brand identity for Australia might look like in 2009, and which captures the essence of the nation as a great place for living, education, business, manufacturing and investment.”

DesignBay founder Alec Lynch said: “Australia’s brand is important. We want to find the best logo and tagline ideas that Australia’s creative talent and the world can come up with and we’re going to offer them, for free, to the government. We want to give people the opportunity to contribute to Australia’s brand and we want Australia’s brand to be the best it can be.”

Emerging Markets post Record Highs

Investor Mark Mobius said he expects emerging markets to surpass previous records, predicting a continued rally with “corrections along the way.”

“If the money supply keeps on growing we will continue to see a bull market,” Mobius, who oversees about $25 billion as Templeton Asset Management Ltd.’s Singapore-based executive chairman, said in an interview in Manila. “We are just halfway from where we were before and we will surpass previous highs.”

Emerging-market stocks rose to a 13-month high yesterday as investors sought higher-yielding assets on expectations of a global economic recovery. The MSCI Emerging Markets Index added 0.8 percent as of 11:52 a.m. in London today.

“We will see a pretty fast pickup in earnings and that’s what markets are anticipating,” said Mobius, who spoke in an investors conference in Manila. He said he prefers consumer and commodities industries in emerging markets.

Apart from Brazil, Russia, India, and China, Pakistan and Turkey are “quite interesting now and we are adding to some of our holdings on a slight basis,” Mobius said. He said he is “bullish” on oil, driven by rising crude demand in China and India. He declined to name companies.

The “secular bull market” that pushed emerging-nation equities to the highest level relative to developed world stocks in 15 years has further to run, Jonathan Garner, Morgan Stanley’s chief Asian and emerging-market strategist, said this week. See full report from Bloomberg.

Clinton talks about effects of globalization

Former President Bill Clinton spoke to a sold out crowd at the Pasadena Civic Auditorium in the USA on Monday, lecturing about the current political climate while detailing the advantages and pitfalls of living in an increasingly interdependent world.

Entering to an enthusiastic standing ovation in the 2,900-seat theater, Clinton shared his take on globalization and its effects, focusing on the challenges he believes an interdependent world faces.

“While we’re all connected, this is a very unequal world and in most places it’s growing more unequal,” Clinton said.

Clinton discussed pervasive discrimination that remains against women in most parts of the world as well as the growing income disparity in the U.S. He spent a

significant amount of time arguing for health care reform.

“We’re the only rich country in the world that can’t figure out how to give everybody health insurance,” he said, calling our current system “embarrassing.”

Clinton also addressed humanitarian intervention in the world, arguing that such intervention increased national security by improving the image of the country abroad.

“Anything we do to make chances slightly more balanced makes people think more of us,” Clinton said, adding that he recently returned from a humanitarian visit to Haiti.

The “How” of Open Innovation

I want to alert you to an recent excellent report on the “how” of Open Innovation. The report is a product of two years work within the Cambridge Open Innovation Network. This network is funded by Unilever and the Cambridge Integrated Knowledge Centre. The report aims to answer the question “I want to implement Open Innovation – where should I start and what should I do?”. It provides and overview of existing approaches to Open Innovation and outlines how a company can start to implement a strategy to match the organisation’s needs.

Unilever has been a long-standing proponent of Open Innovation. Not only does this report talk about the theory of Open Innovation, but it draws on Unilever’s experience, and contains the results of 36 interviews and workshops.

An excellent document. Download it now.

The Rise and Rise of China

For decades, China followed the dictum of its late supreme leader, Deng Xiaoping, to keep its head down abroad and focus on development at home. But earlier this decade, emboldened by success and mindful that their globalized economy needs stability, communist leaders started pressing for a place among the nations that manage world affairs.

These days, Beijing is claiming a bigger voice in global economic forums such as the Group of 20 and is getting more deference in the United Nations, which could mean protection for friends such as Iran and Myanmar. Its military spending is the world’s second-highest, behind that of the United States.

Explosive growth in China and India, coupled with Japan’s clout as the world’s No. 2 economy, has long been expected to shift economic power from the United States to Asia as this century progresses. The financial crisis and resulting Great Recession are accelerating that process.

“China certainly comes out of the crisis stronger rather than weaker, and it’s the opposite for the United States,” says Stephen Roach, chairman of Morgan Stanley Asia.

Even some Americans have begun declaring this the “Chinese century” since it began nearly a decade ago. But while they and others fear the rise of China in international relations and the global economy, the reality is less dramatic: Beijing is still getting its own sprawling, chaotic house in order and is in no position to supplant the United States as global leader in the near future.

At the same time, Beijing’s power remains undefined: On an unfamiliar global stage, it is unsure what role it wants to play.

“China is very likely to be the second-most-powerful country — if it isn’t now, then within a decade,” says Kenneth Lieberthal, director of the Brookings Institution’s John L. Thornton China Center in Washington.

For the United States, it’s a mixed blessing. The American and Chinese economies are intertwined, and the success of one depends on the health of the other.

The United States is China’s biggest trade partner. China sent $338 billion in goods here last year. Beijing is Washington’s biggest creditor, with more than $800 billion invested in government debt. American automakers look to China’s growing market to propel future sales.

The financial crisis set back U.S. growth by years and will add trillions to the federal debt over the next decade. But China avoided the worst of the crisis. Its banks are healthy and, with the help of a 4 trillion yuan ($586 billion) stimulus, this year’s economic growth is on track to top 8 percent. See complete ap story..

Goodyear and Open Innovation

Seems that Goodyear, the tire company, is embracing open innovation in the quest to find innovation in their product offerings. Goodyear sponsored “Innovation Events” where they laid out their plans for the future and brought members of their ecosystem “under their wing”. Goodyear innovators will continue to team with leading research and testing institutions like Sandia National Labs. However this new initiative allows Goodyear to also tap into their close working relationships with their suppliers to encourage joint technology development that will help the tire maker bring “game changing” products to market at an even faster pace.

Since the April meetings, these suppliers have proposed nearly 200 initiatives in the areas of acquisition cost, materials management, conversion cost and new product development that can have a direct, positive impact on Goodyear’s product innovations. These initiatives will serve to enhance Goodyear’s overall R&D expenditures, but more importantly, they will significantly enhance the company’s supply chain.

“When fully aligned with Goodyear’s new products engine, the combined effort should accelerate significantly the introduction of relevant new innovations,” Kihn said.

“Innovation in difficult times makes more of a difference than ever,” stated Bert De Graeve, Chief Executive Officer of Belgium-based Bekaert Corporation, a global leader in drawn steel wire products and applications. “We greatly appreciate Goodyear’s commitment to long term collaborative innovation with its suppliers. The definition of a good supplier goes well beyond a cheap supplier for the next quarter and Bekaert is ready to take on the innovation challenges outlined by Goodyear’s executive leadership,” he said.

Goodyear and the supplier companies will facilitate the application of new innovations into new tire products while protecting each other’s intellectual property through a series of new, or enhanced technical and commercial agreements. “We want to ensure that the commercialization of any innovation occurs at the appropriate stage of a product’s development,” Kihn said. “And we also want to make sure that there are sufficient incentives provided to our suppliers so that they concentrate on the most marketable innovations.”

Goodyear is one of the world’s largest tire companies. It employs nearly 70,000 people and manufactures its products in more than 60 facilities in 25 countries around the world. Its two Innovation Centers in Akron, Ohio and Colmar Berg, Luxembourg strive to develop state-of-the-art products that set the technology and performance standard for the industry.

Step-Change: Collaborating To Innovate

Open Innovation is all about breaking down the barriers internally within an organization, but most importantly between an organization and its partners. Most organizations do this very poorly – they talk about “partnering” and “ecosystems” and “win-win” but at the end of the day, they treat their partners with contempt, purely as a vehicle for revenue.

This must change. As globalization and selling into adjacent markets become more and more relevant, the establishment of truly meaningful partnerships becomes essential and not a desirable nicety.

A recent study confirms exactly this. It has been undertaken by Logica in conjunction with the London School of Economics. I quote the key findings here because I passionately believe they are absolutely valid, and that we must all take them to heart if we are to success in a globalized economy.

1. Innovation is even more important in economic recessions. Innovations can be changes in IT operations, business processes or in products and services offered or in the business model of how the firm competes. To survive and thrive through a recession requires sustainable change. A focus on cost-cutting alone, or even cost-efficiency solves short-term problems, at the expense of building the future business.

2. Innovation using the external services market is increasingly realistic as both clients and suppliers are maturing their ability to go beyond traditional
outsourcing relationships and build the collaborative arrangements necessary for innovating. This means clients can move from contract administration and
outsourcing management to a new phase of collaborative leadership. They can also develop a new performance agenda.

3. Innovation with large-scale, long term impact requires deep collaboration within clients, and with and across their external suppliers. Without this, innovation, and the consequent high performance, cannot be delivered.

4. Collaborating to innovate requires a step-change in objectives pursued, relationships with suppliers, and how work and innovation is conducted. Our
study of effective practitioners suggests distinctive practices for success. These can be classified into a fourfold framework – Leading, Contracting, Organizing and Behaving.

5. Leadership shapes the context for collaboration, innovation and high performance and is primary. Leadership deals with adaptive challenges, and must be at all levels in each of the collaborating parties. Leadership also changes the approach to risk in order to share and manage down risk and manage in opportunity.

6. New forms of contracting are required for collaborative innovation to succeed. Such contracts share risk and reward in ways that incent innovation, collaboration and high performance to achieve common goals.

7. Organizing for innovation requires more co-managed governance structures and greater multi-functional teaming across those organizations and people
responsible for delivering results. Teaming now requires the ability to collaborate within a client organisation, between client and supplier and between suppliers in multi-vendor environments.

8. Leading, contracting, and organising in these ways incents behaviour and enables collective delivery of superior business performance. Collaborative innovation is most effective when it generates high personal, competence-based and motivational trust amongst the parties. High trust is a key component and shaper of the collaborative, open, learning, adaptive, flexible and interdependent behaviours required.

3M and a Culture of Collaboration

I have talked for some time in this blog about how collaboration powers innovation, and how most of us do not truly collaborate.

One of the key issues in collaboration internally within an organisation is having a culture of collaboration. The challenge with establishing such a culture is to align incentives as part of that culture – more often than not, this does not happen, and while evryone runs around talking about colaboration and innovation, their KPIs and remuneration is securely centred on the “ME”.

BusinessWeek has run a story on how 3M successful harnessed their culture of collaboration to their benefit. While the example in this article is not very compelling (it is of a worker using a corporate skills” directory to find an expert) the lessons learned are reasonable, and I quote them in full here.

Support networks. Build Web-based social networks that help employees with a problem find those with an answer. Support grassroots networking initiatives such as 3M’s TechForum—an employee-run group that organizes speaker events to stimulate thinking and also serves as a kind of mixer, where scientists from different labs or divisions can connect in person.

Build collaboration into your employee evaluation system. Reward employees not just for developing an innovative technology, idea, or process, but for spreading it. No company reaps the benefits of collaboration if their employees or managers are hoarding innovation in order to look good at the next quarterly meeting.

Encourage curiosity. 3M allows employees to spend 15% of their time on projects of their choosing, giving them permission to develop ideas or technologies that may be outside of their regular work focus. Such policies increase the odds of collaboration, as the path of curiosity often leads employees beyond their knowledge base, to a place where they need the advice and insight of others.

Create innovation funds. Group or department managers focused on core-related projects often don’t want to spend money exploring or developing innovative ideas. To overcome this common roadblock, companies should create an alternative source—3M calls these Genesis Grants—that employees can go to for funding of innovation projects that don’t fit neatly into existing departments.

Don’t underestimate the value of physical proximity. When 3M’s Post-it Note team wanted to accelerate product development, it had the team’s marketing, financial, and other nonmembers move into the same building with the tech folks. If different functions have to be housed in different buildings, pay for a shuttle service that makes it easy for employees in different departments to visit each other.

Two articles on Innovation from McKinsey

Excellent articles worth reading. The first talks about how we measure innovation. Always a difficult topic. Can innovation be measured? “Yes, yes and Yes” sites the author. McKinsey argues that innovation impact can be measured, and even provides some metrics.

The second article talks about the potential need for a national strategy on Innovation. To quote:

With a national strategy, as well as efforts to seed creative chaos from the bottom up, the Obama administration could put America on the right path for the long term. Unleashing, channeling, and connecting millions of innovative minds across all regions, all disciplines, and all walks of life is the most important form of long-term stimulus the president can provide. It is the key to nurturing our national coral reef.

The Culture of Innovation

You know, and I know, that without the right culture of innovation in an organization, the push to become more innovative will undoubtedly fail. You have seen this happen, and so have I. But building a successful culture of innovation is very difficult – only a few companies have been successful where many have failed.

With the release of the Nano, the Tata group has recently been in the “innovation spotlight”. I love what Tata has done in terms of really disruptive innovation – very few companies would have the audacity to attempt what they have. And it turns out that the culture of innovation at Tata is one of their many strengths.

Read this article to find out why.

Collaboration Study – Findings from Cisco

In December 2008, Cisco conducted the first formal segmentation study of collaboration tool users. Their objective was to understand how today’s workers collaborate, which tools they use, and how they believe those tools affect productivity, innovation, and cost savings.

The survey studied 800 people in a wide variety of U.S. medium-sized and enterprise organizations who:
● Spend at least 20 percent of time at work using a network-connected computer
● Use a mobile phone or handheld device
● Participated in two collaborative activities within the past month
The researchers conducted a segmentation analysis, separating individuals into distinct groups based on a large set of attitudinal and behavioral variables.
There are some excellent findings here – see them in this article.

Platforms for Collaboration Powering Innovation

Many of you know that I am a strong advocate of the notion that increased collaboration powers innovation. There is an excellent article by Professor Satish Nambisan from Stanford on exactly this topic. He proceeds to outline some of the governance models that are required for effective collaboration. Most of us ignore these sorts of models and just plug our day-to-day activities into the framework we call “collaboration” – with very mixed success.

Here is his abstract. Enjoy reading the entire article.

Some of the brightest ideas for social change grow in the spaces between organizations and sectors. Yet few organizations have systems that make collaboration happen. To foster innovation, organizations need to develop places where they can come together and work creatively—that is, platforms for collaboration. In this article, a management expert identifies three kinds of collaboration platforms— exploration, experimentation, and execution—and then outlines what organizations can do to put these platforms to work for them.

How do you motivate people to innovate?

Excellent TED talk on what motivates people. Worth watching for sure.

The Value of Online Collaboration – Where do we miss the boat!

Today Frost & Sullivan reports that online collaboration is proving to be an effective way for businesses to save time and money on travel, while maintaining high level of productivity. The arising trend indicates that companies who discovered the advantages of online collaboration are unlikely to return to old ways of conducting business when the economic conditions improve. In addition, collaborating on the web improves the ‘green’ image of companies, as more firms are looking into ways to reduce the usage of limited resources, and are striving to become environmentally conscious.

The question in my mind is: is everyone “really” collaborating? By what measure? To what effect?

At a recent course I ran on Connected Innovation, i took a “hands up” poll. There were twenty people in the room. I asked only two questions. The first was “How many of you work for organizations where the mantra is “collaborate” and the CEO talks about how collaborative the organization is?”. Almost twenty people put up their hand.

I then asked: “And how many of you feel that you really are collaborating with your peers, sharing, and effectively solving problems together?”. Only TWO put up their hands!

We jump very quickly from “Let’s collaborate” to the technology of “collaboration”. But we ignore the governance models that are essential for true collaboration. Without these models, the use of technology is probably 50% effective, at best.

More on China and Innovation

Its is really interesting to see the press coverage China is receiving in the Innovation space. In this article from Forbes, the following statement is made:

“My hunch says that in the future anything that has to do with scale will likely come out of China or even India.”

Other points are:

1. If you combine the mobile access, people getting into the system, and the database 51Job has for employment opportunities, the numbers of the largest player in Japan or Monster.com look like peanuts.
2. What is the one core competence that China has which will drive innovation? One answer is scale.
3. I think that there will be some cleantech deployments that China might experience earlier and faster. Wind power is certainly one, as is the use of LED lights to reduce energy requirements. That may lead to innovation

There is a huge amount of activity taking place in China with respect to Innovation – especially Open Innovation. See other entries on this blog.

You should read the entire article from Forbes.

Govt 2.0 and Innovation

It’s very interesting to see the number of governments focussing on Government 2.0. Its refreshing really – policy makers stopping to think about how the recent trends in Open Innovation and Crowdsourcing can impact the way policy is defined. In my own country, the government has set up a specific Gov 2.0 committee. In the US, the talk is around openness and collaboration. It will be extremely interesting to see where this debate takes us, and whether an true Open Innovation approach can be adopted. To quote a recent Forbes article on this topic:

The White House is telling its agencies to pursue an ” open innovation“-approach to government, be visionary in their spending requests, and focus on “transformative” projects that help the climate, energy, life expectancy and the economy.

Read more from the entire article

Open Innovation in China and India

Excellent posting on YouTube of John Hagel III talking about innovation networks and Open Innovation in China. See posting below also on TSMC. Watch this space! As organizations in North America are struggling with the “how”, large Chinese corporates are implementing Open Innovation networks as we speak!

Guy Kawasaki talks Innovation

Worth watching this interesting and short video from Guy Kawasaki. Always entertaining.

Open Innovation Initiative in Japan

Interesting to see governments in various parts of the world actively supporting innovation – more specifically, Open Innovation. General Electric has just announced it participation as a founding member of a new Japanese initiative to significantly further innovation in that country in the areas of healthcare, clean energy and the environment. Specifically, the new venture is based on Open Innovation. A total of $9.5 billion will be available as assets of the fund. Read more.

Razorfish Digital Outlook Report 2009

Companies actually engaged in business model innovation include Virgin, whose prolific brand spans myriad industries; Netflix, whose monthly subscription service disrupted the prevailing product rental paradigm; and Spanish clothing retailer Zara, whose model for design-to-distribution revolutionized the industry.Beyond the innovation hype, real opportunities exist for companies and their brands to endure tough times — and perhaps even flourish through them — by reconsidering business models, especially as relates to digital. No longer simply a delivery channel, digital has evolved to be foundational to business strategy. Read more……..

TSMC and Open Innovation

When I was in Taiwan not so long ago, I was exceptionally impressed by TSMC’s foray into the Open Innovation space. You might like to read this article for an update. It is heartening to see an organization such as TSMC embracing the Open Innovation paradigm.

McKinsey and Innovation

Excellent discussion on Innovation from McKinsey.

Robert Atkinson, founder of the Information Technology and Innovation Foundation, and Iqbal Quadir, founder of MIT’s Legatum Center for Development and Entrepreneurship, debate where innovation is moving in the 21st century. At the same time, McKinsey’s Jonathan Bays and Paul Jansendescribe the use of prizes as a way to spur solutions to intractable problems, while Peter Diamandis, founder of the X PRIZE Foundation, shares his perspective on the same subject in an audio interview. There’s much more, including an excerpt from Richard Florida’s newest book, Who’s Your City: How the Creative Economy is Making Where You Live the Most Important Decision of Your Life

Henry Chesbrough in Brazil

Came across this excellent slide deck of s seminar Professor Henry Chesbrough gave at a symposium in Brazil last year. Thought you might find it of interest.

The value of Patents in Innovation

Patent systems are often justified by an assumption that innovation
will be spurred by the prospect of patent protection. However, little empirical evidence exists to support this
assumption. One way to test the hypothesis that a patent system promotes
innovation is to simulate the behavior of inventors and competitors
experimentally under conditions approximating patent and non-patent
systems. Employing a multi-user interactive simulation of patent and non-
patent (commons and open source) systems (―PatentSim‖), this studycompares rates of innovation, productivity, and societal utility. PatentSim
uses an abstracted and cumulative model of the invention process, a
database of potential innovations, an interactive interface that allows users
to invent, patent, or open source these innovations, and a network over
which users may interact with one another to license, assign, buy, infringe,
and enforce patents.

Data generated thus far using PatentSim suggest that a system combining patent and open source protection for inventions (that is, similar to modern patent systems) generates significantly lower rates of innovation (p<0.05), productivity (p<0.001), and societal utility (p<0.002) than does a commons system. These data also indicate that there is no statistical difference in innovation, productivity, or societal utility between a pure patent system and a system combining patent and open source protection. The results of this study are inconsistent with the orthodox justification for patent systems. However, they do accord well with evidence from the increasingly important field of user and open innovation. Read the study.

Cisco tries new Crowdsourcing Initiative

Having worked for Cisco in the innovaton space, and indeed continuing to do so on a contract basis, I have a soft spot for anything they do. Have a look at their new crowdsourcing initiative. To quote: Pass the Ball is all about the power of ideas, and the power of sharing. People working together to set ideas in motion and make things happen. Your idea really can change the world. Every time you start an idea or rate an idea, Cisco will make a donation to Teachers Without Borders, a global network of teachers bringing education to millions. What’s more, top-rated ideas will receive one year of free WebEx to help bring your idea to life through collaboration with people all over the world.

So go ahead. Pass the ball.

Netflix chooses winner to $1m crowdsourcing competition

Netflix uses crowdsourcing to boost growth. Another excellent example of harnessing the ecosystem for innovation.  Read more.