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Last Updated: Monday, 3 April 2006, 21:56 GMT 22:56 UK
Real world innovation
Peter Day
By Peter Day
Presenter, BBC Radio 4 and BBC World Service

This is not a blog, but interventions are always welcome.

I got an immediate one from an impatient emailing professor after the last column on innovation and the universities.

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He thought it was damaging nonsense to suggest that universities should not try to make too much money out of spin-out companies based on their research.

His own department had earned 40m for Oxford University from ideas generated in the lab, with another 10m on the way.

Now the thesis I was quoting from was that of Stephen Allott, chairman of the Trinamo high tech consultancy. And the research he was going on was by Professor Barry Bozeman of Georgia Tech.

Both men are convinced, Stephen Allott by experience and the professor by data, that business innovation is not for the most part lurking in academic labs, in Britain or the USA.

Instead they say it is generated by the friction between real life needs and clever people trained (naturally) in the universities, but then moved out into companies.

'Too important?'

The British government has pinned very high hopes on sweating the latent assets of the universities. Great when it happens, obviously.

But Stephen Allott thinks this is the wrong approach to a national problem.

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This thing "innovation" is important; maybe a matter of life and death for an advanced industrial nation such as the UK. Maybe too important to be left to the universities.

Classic innovation is an invention that changes the world, such as the telephone. But few are like that.

Most are incremental, clever people building on each other's advances.

Austrian economist Peter Drucker used to say that it was not the primary inventor that made the money, but the person who devised a way of closing the 10-degree gap in the circle that leaves many inventions dangling.

'Healthy paranoia'

Innovation is getting more and more important as a component of corporate and national wealth.

In the 19th century, an innovation in a product or process could easily last for 50 years or more. New ideas were few and far between.

Now we are jaded about that potent word "new".

As a motivator it can be fixed to anything: packaging, pricing, management, makeovers. Chocolate bars extended into ice cream flavours are "new" too. Advertising experts say "new" is still the label that gets attention.

But innovation goes deeper than that. Innovation is about a real response to the market place (which is fairly obvious). It is also about configuring an organisation so that it is ready to respond.

That is difficult, because success is a great insulator. "If we're doing well with our current approach," says the successful business, "We just have to keep on doing it."

Not so says a hardened expert such as US businessman Andy Grove, who says "only the paranoid survive".

Success is the siren song that leads to failure, that insulates companies from what may be about to go wrong.

Paranoia is one of the corporate requirements at Samsung Electronics of South Korea.

It is a company whose pretensions to be another Sony used to be laughed at in the high tech world.

The huge investment Samsung announced last year in chip fabrication plants is likely to knock Intel into the position of world number two chip-maker.

Vital marketing role

For years I could not understand why you met so many marketing experts in Silicon Valley, that hub of American innovation.

Marketing, who needs marketing when the genuine innovations pouring out of the Valley are so self evidently potent? Don't they sell themselves?

And then it dawned on me: the nerdish brains who do the inventing in Silicon Valley are not very good at the people skills that their inventions may need to get backing and customers.

Even more important than that, they are often so focussed on their own precious inventions that they may be scornful of the need for them.

Marketing experts join up the invention with the need: a powerful marketer can tell the inventor when to modify his invention, how to adapt it to the market place.

Inventors and marketers are two halves of the same start-up walnut in Silicon Valley.

At Apple, Steve Wozniak needed Steve Jobs, no matter how uncomfortable it was.

This is a reminder that innovation is about meeting unmet needs.

To do it, it is important to find out the needs, as well as the answers to them.

Innovation is generated in the market place, even more than in the lab.

And for business to survive in Britain, innovation has to happen over and over again.

The universities will help, but it is the climate of creativity in other places that will enable us all to survive in a global world where "new" is still a potent word.

Like the Silicon Valley start-up, the whole company has to be built around innovation: not just an invention and the application of it, but also the opportunity for it to happen, over and over again.


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