Technology Strategy and Innovation

3M is seen as one of the world’s most innovative companies:

Innovation is defined in the following video by participants in the 2010 Lisbon Council:

One of the main theories of innovation is Diffusion of Innovations Theory. It argues that innovations are communicated through channels over time and within a particular social system. People have varying degrees of willingness to adopt innovations – the theory categorises people as follows:

–innovators – venturesome, educated, multiple info sources

–early adopters – social leaders, popular, educated

–early majority – deliberate, many informal social contacts

–late majority – skeptical, traditional, lower socio-economic status

–laggards – neighbours and friends are main info sources, fear of debt

The following video explains Roger’s Diffusion of Innovation theory:

This is also illustrated in the following chart – over time adoption of technology moves from the early adopters to the wider population:

Some innovations will be more successful than others and the next chart illustrates the Information Systems Diffusion Variance model. It argies that IS implementation success is as a result of three factors; technical compatibility, ease of use and how much people perceive that they need the product:

Disruptive innovation is innovation that helps create a new market and value network. It will disrupt existing markets and displace earlier technology.

Typically disruptive innovations are not expected by the market. Clayton Christiansen describes disruptive innovation:

“Generally, disruptive innovations were technologically straightforward, consisting of off-the-shelf components put together in a product architecture that was often simpler than prior approaches. They offered less of what customers in established markets wanted and so could rarely be initially employed there. They offered a different package of attributes valued only in emerging markets remote from, and unimportant to, the mainstream”

The next chart shows the impact of disruptive innovation – first appearing in low quality use areas and accelerating upwards.

The second type of innovation is known as sustaining innovation, It does not create new markets or value networks, evolving existing markets with better value. Typically, companies compete with each others sustaining improvements. Sustaining improvements can be discontinuous or continuous. Christiansen and Raynor describe sustaining innovation in their book “The Innovators Solution”:

“A sustaining innovation targets demanding high-end customers with better performance than was previously available… The established competitors almost always win the battles of sustaining technology. Because this strategy entails making a better product that they can sell for higher profit margins to their best customers, the established competitors have powerful motivations to fight sustaining battles. And they have the resources to win.”

The next video discusses the distinction between sustaining and disruptive innovation:

Many people are critical of our innovation record in Canada. They note that Canada has only 1.36 % of global patents while the US has 30 %. In 2009 the Conference Board of Canada gave Canada a “D” for innovation. It is argued that we are bad at turning science into products and that we have a low appetite for risk and that this pervades our culture, private sector, government, financial institutions and education. It impacts our standard of living. Successive governments have sought to encourage companies to invest in innovation but private sector research and development has declined in the recession. Universities are criticised too though the University of Waterloo is lauded for its policy that allows researchers to own the products that they create.

Michael Bloom from the Conference Board discusses the contribution that education and skills development can make to innovation:

Various studies illustrate Canada’s innovation record and rank us versus other nations. The following study from INSEAD, the Global Innovation Index rankings places Canada in 8th place:

PWC argue that government in Canada needs to do more to encourage innovation:

The Coalition for Action on Innovation in Canada, chaired by John Manley, a former government minister, presents a ten point point plan for innovation in Canada:

1. Make R&D tax credits open to public companies and businesses that lose money.

2. Create government-sponsored “co-investment funds” with private investors to finance emerging companies.

3. Adopt the world’s strongest intellectual property regime.

4. Launch pilot partnerships between retired entrepreneur coaches and startups.

5. Enlist more retired executives to help the government dole out R&D funds.

6. Use the federal government’s buying power to spur adoption of new products and services.

7. Set a national target of a 90-per-cent high-school graduation rate and boost master’s and doctoral graduates.

8. Help foreign graduate students gain permanent immigration status.

9. Form a national network to share know-how among existing clusters of innovative companies and industries.

10. Create an independent advocacy group to push innovation by Canadian companies.

Charles Leadbetter has advised the UK government on innovation policy and argues that the internet has changed how innovation will happen – he calls it “We think”:

In a recent TED talk, Leadbetter expands on this theory:

Work has also been undertaken by the Conference Board on the skills that are thought to be required for innovation. They say that we need research that generates new ways of thinking and new knowledge, the ability to apply knowledge and skills, adopt new technologies and processes and adapt to change. The literature is relatively weak in this area and some argue that it is likely to depend on specific industries. The Conference Board’s Innovation Skills Profile details their thoughts on the skills needed for innovation:

The following video asks the question “Where do good ideas come from?” and explores how new ideas develop:

One Million Acts of Innovation is a Canadian organisation that seeks to encourage Canadian organisations to innovate. The following video is an interview with one of their founders, Taimour Zaman:

Finally, Charles Leadbetter undertook a global project to examine innovation in education. The following video provides examples of what we might see in the future: