Innovation is often associated with high-end technology and futuristic solutions, while being seen as “innovative” is a tag that today investors, companies and economies like to pour their money into. “The word ‘innovation’ has turned into something of a buzzword whose application is so broad and nebulous that it often feels useless,” says Joe Dwyer, professor of innovation at Northwestern University and serial entrepreneur.
While innovation as a concept is appealing to people, organizations, and nations rushing to score a good spot in innovation rankings around the world, the idea behind it is also surrounded by misconceptions and lack of a fundamental understanding of what it is and whom it actually serves.
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According to the Oslo Manual, a set of guidelines for measuring innovation around the world used by the OECD, “an innovation is a new or improved product or process (or combination thereof) that differs significantly from the unit’s previous products or processes and that has been made available to potential users (product) or brought into use by the unit (process).”
But when trying to define innovation on a day-to-day basis, a definition accepted by everyone has yet to be formulated.
“We have a universal definition of what it means to be profitable,” says Nick Skillicorn, consultant and chief editor of ideatovalue.com, an online community around innovation. “Innovation is not something that we have a universal definition for.”
The Two Pillars
Despite the lack of consensus on what it is, experts say there are key ingredients that go into innovation. First is mindset, the belief that innovation is good and necessary; second is the appetite for innovation, the desire to come up with more effective ways of solving problems that experts say worldwide are triggered by either ambition or necessity.
“For the past 12 years, you see a number of small countries, such as Singapore, Switzerland the Baltic countries, that became innovative by necessity, (as they had) absolutely no choice especially when the world economy started to globalize,” says Bruno Lanvin, executive director of Global Indices at INSEAD and co-editor of the Global Innovation Index, a global ranking that has looked at innovation for the past 12 years. “Then if you look at the larger economies — the U.K., the U.S., China — the appetite is not triggered by necessity but by ambition (as) innovation is a critical element of competitiveness.”
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Another aspect of innovation lies in the education system, as most leading countries in innovation also tend to invest heavily in education and research.
“All the champions of innovation are countries, especially the U.S. and the U.K., who have top 20 universities and research centers,” Lanvin adds.
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Innovation also fosters misconceptions and false strategies experts say. A common one, for example, is the appetite for more ideas that end up overwhelming organizations without producing tangible results.
“(Companies) are imploding due to the weight of low-value ideas that they receive,” Shapiro says, and focus less on actual problems waiting to be solved.
Can Innovation Be Ranked?
Innovation is often said to be measured through various rankings that look at either innovative companies, products or nations. Innovation is hard to define and no universally accepted definition exists, perhaps explaining why rankings that examine innovation use different methods and criteria.
Some rankings look at hard data, such as the number of patent filings around the world or investment in new products and services, macroeconomic indicators and success in business. Some reflect people’s perception on innovation, the human factor behind the creation of products and services, education on how you allow people to become innovative, while others aim at combining both hard and soft data.
“It’s clear that there will always be more than one measure of innovation and some are better than the others but all are of value,” Lanvin says.
Critics looking at innovation rankings say the challenge starts with not understanding that innovation is almost impossible to quantify and pretending that rankings are an absolute measure for it. More useful, experts say, would be figuring the methodology behind every research and not taking it at face value.
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“You really need to step back and actually look at the formulas that they used so that you can have a better understanding of what they actually mean,” says Stephen Shapiro, innovation evangelist and consultant. “Remove the word innovation from it and (read) them as ‘this is a list of countries based on this criteria,’ not necessarily on innovativeness, because no one can agree on what that is.”
In addition, because innovation is almost impossible to measure, attempts to rank countries based on this criteria focus mainly on input and less on output because the output itself — the data on innovation attempts and successes — is hard to gather. Yet looking at the results of innovation attempts might paint a very different picture, experts say.
“The availability of the data becomes a lot harder and that’s why it’s so challenging to (look at outputs),” Skillicorn says. “(But) you could look at some publicly available information like the number of patents that are produced, how many new products are produced across a selection of industries, product launches (and) releases by the largest companies, having discussions with industry experts, looking at design awards, (etc.).”
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Patents pose a particular problem as not all patents are equal in value, experts say.
“A patent filed in Europe, Japan and the U.S. generally represents more fundamental and important innovation that some guy deciding to figure out a way to catch fish or something like that,” says Rob Atkinson, president of the Information Technology and Innovation Foundation. In addition, countries such as China that keep climbing the innovation rankings tend to be indulgent with the notion of patent itself. “(In China) they have way too many patents, they patent everything,” Atkinson adds. “They break everything up into two or three things to get a patent so that the government gives them money.”
Another concern is the size of the countries where innovation is measured. It should come as no surprise that a nation such as the U.S. ranks high, says Atkinson, since this is also a country of more than 300 million people. More innovation per capita actually happens in smaller nations such as Israel or Singapore, which usually share the top 10 with larger countries but are considerably more productive. “And (that’s) also why China gets dinged on these matters a lot because they’ve got 1.2 billion people and the vast majority of the Chinese economy isn’t very innovative.”
The Corporate Anti-Innovation Wave
Discussions increasingly arise on the importance of looking at results, and staying clear of concepts that simply sound cool, experts say. While “innovation” might still be a buzzword for investors and in setting global trends, private-sector companies are becoming wary of too much innovation.
“I now find antibodies inside organizations that are trying to fight innovation or at least what people believe innovation could be,” Shapiro says. “And I don’t think it’s because companies don’t want innovation, but because there’s a lack of clarity on what it is and how to do it efficiently. And this lack of efficiency is why the companies don’t want it.”
In the end, although innovation is an aspirational concept at a larger scale, at a smaller one it’s still all about the output, Shapiro adds, and notes investment of any kind is a double-edged sword.
“When you are making an investment, you clearly want to make an investment in something that is unproven, but seems to have some potential, whereas the corporations don’t want to invest in something that is unproven,” he says. People, companies and countries also seek security, and innovation should still be a sum of both, he adds.
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Why Countries Care About Being Innovative originally appeared on usnews.com
