Futures-Diagnosis

Diagnosing the future of the Internet and innovation and their social impact

February 6, 2010 • 5:17 pm 0

Big Potatoes Principle 1: THINK BIG

As a preview to the launch of Big Potatoes: The London Manifesto for Innovation, here is the first principle concerning reclaiming ambition in innovation.

The full entry of China and India into the world economy doesn’t just mean billions more consumers aspiring to Western lifestyles. It also means that the world can benefit from billions of innovating brains. It’s a moment to broaden horizons, expect much more, and expand every kind of ambition.

First, though, Britain and the West need to recover a sense of what innovation is and just how much it can do.

Defining innovation and its potential

Innovation cannot be reduced to technology: while it embraces improvements both in process and in product or service, these often accompany changes in organisation. [1] However today technological innovation is weak in private services, weaker still in public services, and takes second place to changes in business model – different ways of taking money from customers. In particular, business expenditure on research and development (R&D), taken as a fraction of GDP, has been stagnant in America and Europe for 15 years or more. [2] In that faltering context, where the Organization for Economic Cooperation and Development talks up what it calls ‘the central importance of non technological innovation’, [3] it’s essential to uphold the powerful improvements, above all in productivity, that new techniques can bring.

When Adam Smith published The wealth of nations in 1776, he didn’t know that the title to his famous passage, ‘The division of labour in pin manufacturing (and the great increase in the quantity of work that results)’ would be on the back of every £20 note. Nor could he have realised how much bigger, with China and India, is the stock of ingenuity that mankind can now mobilise. [4] Yet today all corners of the Earth can rightly hope to move on toward a global division of labour far in advance of what we can imagine. By itself, that won’t lead to more time for leisure or more equality. But with more than one billion people going hungry for the first time in 40 years, [5] the need for productivity step-changes just in agriculture, irrigation and food distribution has seldom been greater.

In innovation there can be no skipping over the need for professional expertise. Still, with the opening up of Asia, more people can now specialise more deeply in particular lines of work – something that will also allow multidisciplinary initiatives in innovation to be more successful. The Internet and machine translation make international collaboration easier. So, after all today’s ignorance about the whereabouts of toxic assets, the world now has a chance finally to move toward the much vaunted, prematurely announced ‘knowledge economy’.

Scale is beautiful

Of course, Britain will not make digital cameras any time soon. Conversely, China will not forever build coal-fired power stations unequipped with carbon capture and storage. But between the nations of the world there is now an opening to share profound insights, agree on vaulting objectives, and take wealth to a qualitatively higher level: to provide more growth, and a better kind of growth.

The first principle of a new, innovatory global division of labour for the 21st century is that scale is beautiful, not smallness. In mobile telephony and electronics, miniaturisation has its place; but to lower the cost of handsets enough for world’s poor to be able to afford them, still larger, more automated production lines are needed. To make the most of sources of renewable energy, which are very diffuse, demands scale undertakings, not David Cameron’s kind of roof-mounted home windmill. Even without attacking the world’s deteriorated and substandard housing, UN estimates suggest, the world must build no fewer than 4000 houses an hour – if its increasing population is to be housed and its slums replaced. [6] More than a third of a century after Ernst Schumacher’s Small is beautiful (1973), it’s time to wave goodbye to humility, parochialism, and the dogma of ‘act local’.

Innovation must set its sights high, and can never do things by halves.

Innovation is, at its best, Big Potatoes.

[1] In the classic account of the Austrian economist Joseph Schumpeter, ‘long-term improvements in output and cheapness’ came from new technologies and methods of production or transport, but also from new consumer goods, new markets, new sources of supply and new forms of organisation. See Joseph Schumpeter, Capitalism, Socialism and Democracy (1942), Unwin Paperbacks, 1987.

[2] See Organization for Economic Cooperation and Development (OECD), Main Science and Technology Indicators (MSTI): 2009-1, 13 July 2009, on http://www.oecd.org/dataoecd/9/44/41850733.pdf

[3] OECD, Policy Responses to the Economic Crisis:  Investing in Innovation for Long-Term Growth, June 2009, p16, on http://www.oecd.org/dataoecd/59/45/42983414.pdf

[4] On top of the populous East, a mere billion people in the West now have, in their leisure time and their widespread access to the Web, an opportunity to volunteer to collaborate on innovation for between two and six billion hours a day. See Yochai Benkler, The Wealth of Networks: How Social Production Transforms Markets and Freedom, Yale University Press, 2006, p55.

[5] United Nations, The State of Food Insecurity in the World 2009, October 2009, on ftp://ftp.fao.org/docrep/fao/012/i0876e/i0876e.pdf

[6] Figure derived from United Nations Human Settlements Programme, Financing Urban Shelter – Global Report on Human Settlements 2005, 2005, Tables 1.2 and 1.3, p5, on www.unhabitat.org/pmss/getElectronicVersion.asp?nr=1818&alt=1

Filed under: Innovation , ,

February 2, 2010 • 12:10 am 4

BIG POTATOES: THE LONDON MANIFESTO FOR INNOVATION

Without doubt, the launch of Apple’s iPad was another over-hyped media circus. Yes, it provoked some debate about the nature of innovation today. (For example see this piece in the New York Times in defence of ‘elitist and individual’ innovation versus this piece in the Guardian which attacks Apple’s proprietary approach as ’stifling open innovation’). Interesting, but this is small potatoes. What is notably absent is a serious public debate about innovation and the future of economic growth. Which is precisely what Big Potatoes: the London Manifesto for Innovation aims to do and which will be publicly launched at the end of this month.

WHY BIG POTATOES?

The Credit Crunch has so far failed to spur any major innovations. Worse, there is no public debate on innovation. Instead, our political leaders focus on symptoms — ‘greedy bankers’ and the parallel financial universe, lack of ‘consumer confidence’. They also prefer dying business models to the great and necessary challenge of creating new industries. What we have is a great evasion – a systematic failure to face up to the innovation crisis that threatens to rob future generations of economic growth.

This is why a group of us decided to come together to create a new 14 point Manifesto for Innovation which we hope to make a key issue in the forthcoming UK general election. Beyond that we hope to make this a global debate, for innovation is an issue that faces humanity. The Manifesto authors are: Nico Macdonald, Alan Patrick, Martyn Perks, Mitchell Sava, James Woudhuysen and myself.

We believe innovation is an indispensable premise for improving the quality of life. It is first, a means to a better life; but it also dignifies human beings, and sets them apart from animals. In innovation, humans find uses for things that seemed useless, and new uses for things they thought they knew the uses of.

During today’s economic downturn, innovation will be more important than ever. The sooner far-sighted strategies are developed and implemented by government, business and other agencies, the more a better world will be within humanity’s reach.

It is not innovation that creates inequality, but the social choices of institutions. We distinguish innovation from fiscal, regulatory, legal and cap-and-trade responses to today’s challenges. Unlike these technocratic measures, innovation has the potential, at least, to increase wealth and opportunity for everyone: it is not a zero-sum game.

The Big Potatoes Manifesto is call to arms: for leadership and risk taking, for accepting failure and unexpected outcomes as the necessary and inevitable path to success, for bold and ambitious experimentation and an end to the instrumentalist short-termism which has institutionalised a culture of limits. This Manifesto is designed to improve the climate for innovation and represents a clarion call for a new generation of leaders that can inspire new gymnastics in the mind and new ingenuity in the lab and factory floor.

14 points to raise the debate

The Manifesto consists of the following 14 points:

  1. Think big!
  2. Go beyond the post-war legacy of innovation
  3. Principles, not models!
  4. In praise of ‘useless’ research
  5. Innovation is hard work
  6. For success, expect lots of failures
  7. Regard chance and surprise as allies
  8. Take risks
  9. Innovation demands leadership
  10. Innovation is every body’s responsibility
  11. Trust the people, not regulation
  12. Think global, act global
  13. The spirit of innovation knows no limits
  14. By, with and for humanity

The Manifesto will be publicly launched at the end of this month. If you are interested in reading the Manifesto and/or getting involved, or attending the public launch, please visit us here and register your interest.

Filed under: Innovation , ,

January 19, 2010 • 3:40 pm 2

R&D IN 2010: GOING EAST – ITS OFFICIAL

According to the National Science Foundation’s Science and Engineering Indicators 2010, the US while leading most areas of science and technology, has experienced a gradual erosion of its position. This is primarily because of the rapidly increasing capabilities among East Asian nations, such as China, and the fruition of the European Union’s efforts to boost its relative competitiveness in R&D, innovation and high-tech.

The data begins to tell a ‘worrisome’ story: Science and technology are no longer the province of developed nations

The report, which a top White House official called the ‘State of the Union for science, engineering, mathematics and technology,’ is required to be submitted to the president and Congress by Jan. 15 of every even numbered year, with the most previous report issued in 2008.

‘Not just about where we stand, it’s about where we are headed’

The report notes some important shifts that indicate that the US’s leading position is now facing serious challenges:

  • 2007 was the year China caught up to the U.S. in the number of researchers and doctoral degrees in natural sciences and engineering;
  • While the U.S. continued to be the largest R&D performing nation – representing one-third of total world investment – Asia has narrowed the gap, largely due to the sustained annual increases by China;
  • China is now the third-largest R&D performer in the world behind the U.S. and Japan and is moving ahead of Germany, France and the UK;
  • For several Asian economies, including South Korea, Taiwan, China and Singapore, increases in R&D investment have been accompanied by notable increases in the rate of growth in the number of researchers;
  • While the U.S. continues to lead the world in research output, China has become the second most prolific contributor to the world’s peer-reviewed science and engineering research articles, which is up from 14th place just 10 years earlier;
  • The U.S. economy had the highest concentration of knowledge and technology intensive (KTI) industries, such as biotech, among major economies; While those industries accounted for 38 percent of the U.S. gross national product (GDP) in 2007, China’s KTI industries created 23 percent of GDP – up from 21 percent in 1992;
  • Productivity growth has been higher in China and other Asian nations than in the developed economies;
  • The U.S., the EU and Japan – with similar shares of high-value patents – accounted for nearly 90 percent of the total world’s patents – Asia’s patent share increased from 1 percent in 1997 to 6 percent in 2006, with South Korea accounting for almost all of that growth;
  • The U.S. share of patent applications in 2008 declined to 51 percent, with gains for second- and third-ranked Japan and the EU;
  • The U.S. has a comparatively higher-than-average share of patents in aerospace and the four health areas of pharmaceuticals, biotechnology, medical equipment and medical electronics, with Asia relatively weaker in those technologies. However, Asia’s patent share has risen over the past decade with pharmaceuticals and biotechnology.

SHIFTS IN INVESTMENT?

The report notes that overall spending on R&D in the U.S. was $398 billion in 2008 – up from $373 billion in 2007, or a growth rate of 6.7 percent. Importantly, the business sector accounting for 73 per cent of R&D performance and funding. The academic sector was the second-largest performer of U.S. R&D, with an estimated $51 billion in 2008, or just under 13 percent of the U.S. total.

But the federal government, the second-largest funder of U.S. R&D, provided an estimated $104 billion, or 26 percent, of the U.S. total in 2008. With the financial crisis this will definitely change.

The report confirms what has been argued in this blog for some time: namely, that science and technology activities are shifting toward Asian economies. What we are seeing is a relative decline in the US. But unlike other areas, R&D declines cannot be simply reversed. It is difficult to see how a decline in R&D capacity can be arrested other than a radical revamp which so far, is noticeable by its absence in the US and Europe.

Filed under: R&D and Innovation, Science and Innovation ,

January 6, 2010 • 6:37 pm 2

NEXUS, SHMEXUS! YOU CANNOT BE SERIOUS!!!

I was hoping to start posting in the New Year with something positive in the hope that the innovation landscape of 2010 would improve. But alas, experience has triumphed once again  over hope.

Things started looking up with the opening of the Burj Khalifa, the world’s tallest building which opened with a dramatic fireworks ceremony in the Gulf emirate of Dubai yesterday. At last, I thought, a project which re-establishes ambition in architecture and contains some construction innovations which will impact construction in the years ahead.

Then there was the astonishing announcement as reported on the BBC that Nasa’s Kepler Space Telescope had detected its first five exoplanets, or planets beyond our Solar System. Aha, I thought, perhaps mankind’s ambition to explore and experiment beyond the known world will take a turn outwards…

Then there was the hullabaloo around Google’s announcement of its new handset, Nexus One . And as they say, things fell apart. Just a cursory examination of Nexus One coming from what has been one of the most innovative and dynamic companies in the world reveals that we’re still in the innovation doldrums.

An ‘i-Phone’ with half the battery life

Nexus One is simply a poor clone of the i-Phone with some incremental improvements and one notable shortcoming – battery life. The Nexus One comes equipped with a five-megapixel camera and a flash for taking shots in dark environments. (The 3G S i-Phone only has a three-megapixel camera and no flash). So the Nexus has a light sensor designed to detect how bright an environment is enabling the device to adjust its screen brightness accordingly, to save battery life, which is a very necessary capability given the remarkable fact that the Nexus One has half the battery life capacity of the i-Phone – which has always been the i-Phone’s achilles heel.

Of course one can discuss Android and the open ecosystem Google are building which will certainly triumph Apple’s closed system in the long-term. And there are many things to speculate about in terms of future business models.

But at the most basic level there is a fundamental question: Why does a company like Google not invest in research to help solve the achilles heel of all mobile communications: namely, short battery life?

What Goolge have signalled with Nexus One is that they are followers rather than leaders in the mobile communication space. More importantly, they are not solving key user problems but are thinking about their business models and focusing on their competitors instead.

The i-Phone at least transformed the mobile communication user interface by introducing an effective touchscreen and a navigation system that is instinctive and simple to use. Nexus One has not advanced this nor any other dimension of the user experience. While the device can be bought unlocked, the telephony experience at the heart of the device still remains tied to the existing mobile operator’s capabilities – capabilities that have not altered the communications experience in any significant way for the past Century.

From what I can tell from the launch as described by the Washington Post , the only really innovative thing was the Google demonstrators who appear to have been wearing white lab coats (see the photo gallery here). Cute indeed, but worrying. The biggest concern is that Nexus One represents Google’s descent into mediocrity, dressed up in white lab coats, but mediocre nevertheless.

The innovation prospects for 2010 are looking slim I’m afraid.

Filed under: Innovation, R&D and Innovation , ,

December 15, 2009 • 2:24 pm 2

INNOVATION & COLLABORATION: PROCESS TRANSFORMATION

A new study released today by the Business Performance Management (BPM) Forum and the Chief Marketing Officer (CMO) Council reported by CNN, titled Greater Innovation Through Closer Collaboration, finds that 21st Century business models have become increasingly dependent on partner networks to shape customer experiences, drive innovation processes and deliver products and services to global markets. But information systems and cross-company business processes, however, are strained to keep pace.

The report sponsored by Sterling Commerce and AT&T, is based on a survey of over 400 executives and managers across a wide range of industries, as well as over two dozen qualitative interviews with leading executives from global businesses.

While the report highlights the growing significance of cross-company collaboration it also points to the internal difficulties facing companies to effectively harvest their social capital, increase innovation and collaboration and expose this to partners and customers alike.

Thus the report details the following awareness of the importance of the external relationships necessary to their businesses:

  • 73 percent of respondents are investing in programs and systems to optimize the way they collaborate with partners;
  • 37 percent of respondents say their partner networks are contributing significant innovation, insight and value to their business, further emphasizing the return from program investment:
  • Executives are also responding to the pressure to transform customer experience and satisfaction as nearly 4 in 10 respondents report that their customers are demanding greater visibility into both their supply and distribution chains.

CROSS-COMPANY COLLABORATION STILL LOW

But the report highlights how information systems and cross-company business processes are not keeping pace with increased business interdependence to enable companies to achieve round-the-clock collaboration, shared innovation, improved productivity and cooperative customer handling:

  • Only 6 percent of respondents say they currently have end-to-end data and process integration across their partner networks, although 51 percent report at least some level of integration with select partners;
  • Some 64 percent of respondents say they have either no ability or an unsatisfactory ability to extend and leverage their internal systems to selling and service partners;
  • Some 75 percent say they have no ability or an unsatisfactory ability to extend and leverage their internal systems to suppliers and outsourced service providers;
  • Only 26 percent of respondents say they are effective in sharing customer data and insights with partners to enable innovation.

INNOVATING BEYOND COST SAVING

The study reveals that outsourcing, supplier and demand chain partnerships are contributing far more to their businesses than just cost savings and operational capacity. The challenge is how to increase productivity across their value chains. As the report states:

Many companies see themselves at the hub of their own business network, but also say they are participating in the business networks of other companies. On the one hand, they are organizing, managing and collaborating with partners and vendors to coordinate their own value chain to customers. On the other, they are interacting in other networks that have their own set of customers. This intricate web of interdependencies is elevating the need for improved and agile cross-company integration and coordination, and for the creation of what we refer to as “Business Collaboration Networks.”

To create Business Collaboration Networks means serious investment in both internal and external systems to increase the productivity and effectiveness of key relationships, from improving supplier vendor management, global procurement and sourcing; customer handling and support; sales and customer acquisition; transportation and warehousing; order management and fulfillment; and product life-cycle management.

But on the key question of innovation, the report touts the familiar mantra of co-innovation.

While the attempt by 23 per cent of participants point to a move within their companies toward co-innovation as a major driver to transform their ability to collaborate more seamlessly with partners, the authors of the report believe this move will become an even more powerful driver in the years ahead. Nearly 40 percent of study participants believe their partner networks are already contributing significantly to innovation, insight and customer value.

But the move toward a more open and collaborative network model that embrace the ideas and innovative capacity of both customers and partners, if it is to be more than a gimmick, means substantial improvements in key business processes – internally and externally. This is the area where the real potential of Enterprise 2.0 really lies – in the internal transformation of processes and the flows of information between employees – to increase the collaborative capital underpinning day-to-day business. Otherwise Business Collaboration Networks will simply become another management mantra which will yet again be seen everywhere apart from in the productivity statistics.

Filed under: Economics of Innovation ,

December 4, 2009 • 1:07 pm 0

THE CORPORATE SHIFT FROM R to D AND SHORTERMISM

A new Booz & Company’s annual study of the world’s biggest corporate R&D spenders, reported on Strategy-business.com, finds that most companies have stuck with their innovation programs despite the recession. While many are boosting spending to compete more effectively in the upturn, the report confirms the shift from Research to Development (as noted on this blog in numerous posts), increased risk-aversion and  short-term pragmatism.

The Booz & Company’s report contains a number of important statistics about R&D spending and the trends underlying these. It found that the world’s biggest innovation spenders increased their R&D spending by 5.7 percent in 2008, a slower rate of growth than the prior year’s 10 percent increase, but in line with the group’s 6.5 percent increase in worldwide sales. On a quantitative level this increase in spending looks impressive given that operating income for the group fell 8.6 percent in 2008, and net income plummeted 34 percent.

More than two-thirds of the companies included in this year’s Global Inno­vation 1000 maintained or increased R&D spending in 2008 despite a third of the companies reporting a financial loss for the year. However, the recession has certainly had an impact.

Recessionary Effects

The Global Innovation 1000 have certainly not been immune to the recession. Overall, they spent $532 billion on R&D in 2008, a healthy 5.7 percent increase over 2007, but well below the 10 percent increase from 2006 to 2007. Total sales were up 6.5 percent, to $15 trillion — but again, it was a significantly smaller increase than the 10 percent gain this same group registered between 2006 and 2007. Thus the group’s R&D intensity — innovation spending as a percentage of sales — remained the same at 3.6 percent.

Not all companies maintained or boosted R&D spending. Caution appears to be high: more than a quarter of the Global In­novation 1000 cut their innovation budgets in 2008 while the top 20 innovation spenders increased re­search and development by only 3.2 percent, compared with 10.7 percent for these companies in the previous year. Further­more, the early evidence indicates that as companies entered 2009, spending on innovation slowed further. This has been fueled by steeper declines in sales and income: among the 522 companies reporting results for the first quarter of 2009, R&D spending decreased by 7.4 percent — which is still less than half the rate of their 18.5 percent decline in sales.

Worrying trends:

Despite the quantitative figures reported, the qualitative trends underlying these trends gives grounds for concern. The report draws three trends out which confirm the most worrying longer-term trends. These are and I quote:

  • As a rule, companies are performing less pure and applied research. Instead, they are concentrating their R&D budgets on product development and engineering. This has been a trend for several years — indeed, 44 percent of survey respondents said they spend less than 20 percent of their R&D budget on basic research and advanced development — but it became even more pronounced during the recession. Managers hope to bring new products to market to take advantage of the upcoming recovery. Nearly 40 percent of respondents said their companies are shifting re­sources from basic research in order to prioritize new product launches.
  • The downturn has encouraged many companies — 40 percent, in our survey — to speed up their efforts to make the innovation process more efficient.
  • In response to the downturn, companies have become more risk averse; nearly half of survey respondents say that their companies are now more conservative than before. Companies are changing the criteria they use when giving new products the green light, tightening their relationships with customers and consumers, and watching their competitors, and the marketplace, more carefully.

The report highlights that every top executive interviewed said their companies are working hard to spend smarter — to get more bang for their R&D buck. What this means is an increased focus on improving the returns on innovation investments, in both the short-term and the long:

  • More than 40 percent of survey respondents said their companies were focusing on process improvements to change R&D spend during the downturn, and a similar number reported that they were getting better at killing bad projects;
  • More than a third of companies surveyed, for instance, said they were terminating more exploratory projects that lacked specific time lines; and,
  • More than 40 percent said their companies were focusing more on newer products that have the potential to grow faster.

While searching for efficiencies is to be expected, like it or not, there is a relentless logic at play here which despite the best intentions can only negatively impact on innovation in the future. Short-termism and pragmatism, trends that were in full evidence before the global recession, are now being entrenched into recession-based management practices. This is best expressed by Alan Grant, senior vice president for R&D in developing markets at Kraft Foods Inc. when he argues as follows:

For the past two or three years, we have been looking at our R&D portfolio, focusing on fewer, bigger ideas as opposed to lots of incremental little things. What the recession has done is change the filters through which we view the portfolio. Which of these products might we bring to the front and which might we choose to back pedal on, given the challenging economic times?

While short-term financial speculation got us into this mess in the first place, this report reveals just how far a short-term, risk averse and pragmatic approach is now being entrenched in the innovation practices of the world’s top global companies. At one level this is inevitable. Recessions focus the mind. But this report highlights how the recession is strengthening a risk-averse, short-term pragmatic business culture which, while recognising the importance of innovation, seems to be powerless to take the longer-term measures to guarantee it into the future.

Filed under: Economics of Innovation, R&D and Innovation, Risk and Innovation

December 1, 2009 • 12:37 pm 1

THE RISE OF ASIA’S CLEANTECH ‘SILICON VALLEYS’?

According to an article on Cleantechbrief.com Asian countries are poised to outspend the United States on clean energy infrastructure and technology by a factor of three-to-one through 2013.

A new report from the Breakthrough Institute and Information Technology and Innovation Foundation Rising Tigers, Sleeping Giant states that the governments of China, Japan and South Korea will invest $519 billion in clean technology between 2009 and 2013, compared to $172 billion by the U.S. government. Climate and energy legislation, passed in the United States in June, would contribute $28.7 billion of the $172 billion five-year total. China alone will spend $440 billion to $660 billion over the next 10 years on cleantech.

The report which highlights the investment gap argues that “the United States will import the overwhelming majority of clean energy technologies it deploys.” It states that apparently 85% of U.S. President Barack Obama’s economic stimulus cleantech grants went to foreign firms suggesting the US is now lagging significantly.

Whatever your opinion on cleantech the report is important because it highlights an investment trend in longer-term research in Asia. Asian governments are taking a much more direct and coordinated approach while the US is characterised by a more “sporadic regulatory approach”.

Why is this significant? Because Asian countries by pursuing a more systematic approach are creating innovation clusters which combine universities, manufacturers, R&D labs, suppliers and other firms much like ‘the Pentagon helped create Silicon Valley in the fifties and sixties’. Ironically, these clusters will be attractive to US companies who are already making large investments in countries like China.

Private sector cleantech – China at the forefront

The success of Asia government strategy can already be seen in terms of the growth of private sector cleantech funding. Between 2000 and 2008 the US attracted $52 billion in private capital for renewable energy technologies; but China alone attracted $41 billion. However, China secured more private investment in this area than the US for the first time in 2008.

The report’s message is a big warning:

Small, indirect and uncoordinated incentives are not sufficient to outcompete Asia’s cleantech tigers…To regain economic leadership in the global clean energy industry, U.S. energy policy must include large, direct and coordinated investments in clean technology R&D, manufacturing, deployment and infrastructure.

The real question is whether there remains any belief or stomach for creating a new cleantech Silicon Valley in the US today. The short-term and increasingly risk-averse business and government culture of the past decades suggests this is not going to happen – unless fear of the East can be galvanised in a caricatured reenactment of the Cold War.

This report highlights how the shift away from longer-term thinking and the goals of pure research in the West is now being reflected in real investment and opportunity gaps. And this is just the beginning.

Filed under: Economics of Innovation, R&D and Innovation , ,

November 25, 2009 • 6:32 pm 5

BEST/INFLUENTIAL BUSINESS TECHNOLOGY BOOKS OF 2009

I am preparing an end of year review of the best/most influential business technology books of 2009 for spiked-online. So far I have the following on my list:

Julia Angwin
Stealing MySpace: The Battle to Control the Most Popular Website in America
(Random House, 2009)

Lawrence Lessig
Remix: Making Art and Commerce Thrive in the Hybrid Economy
(Penguin, 2009)

Scott Rosenberg
Say Everything: How Blogging Began, What It’s Becoming, and Why It Matters
(Crown, 2009)

Chris Anderson (Suggested by @prmack – thanks)
Free: The Economics of Abundance and Why Zero Pricing is Changing the Face of Business
(Random House, 2009)

Andrew Mcafee
Enterprise 2.0: New Collaborative Tools for Your Organization’s Toughest Challenges
(Harvard Business School Press, 2009)

Any further suggestions? I will post the review here once its published on spiked-online.

Thanks in advance.

Filed under: Innovation ,

November 12, 2009 • 12:39 pm 4

The rise of ‘China R&D plc’ – tomorrow’s global innovator

A new research report from Thomson Reuters titled, CHINA, Research and collaboration in the new geography of science highlights how significant the R&D shift is from West to East.

The report notes the following key trends:

  • China now ranks just behind the USA and Japan in terms of volume it allocates for Gross Expenditure on R&D (GERD). China is now ranked above all the individual member states of the EU and is the largest contributor to GERD in non-OECD countries;
  • China’s output increased from just over 20,000 research papers in 1998 to nearly 112,000 in 2008, The nation doubled its output since 2004 alone. China surpassed Japan, the UK and Germany in 2006 and now stands second only to the USA;
  • China is heading to overtake the USA in output within the next decade;
  • China’s research is concentrated in the physical sciences and technology. Materials science, chemistry and physics predominate. Looking toward the future, rapid growth can be seen in agricultural sciences and life sciences fields such as immunology, microbiology, and molecular biology and genetics;
  • The USA stands out in terms of collaboration with China., US-based authors contributed to nearly 9 percent of papers from China-based institutions between 2004 and 2008;
  • But, regional collaboration expansion is notable, especially with Japan, South Korea, Singapore and Australia.

As the report authors note these trends are of enormous importance:

China’s new areas of investment take it along a different path. What is evident in the Thomson Reuters data is the pattern of rapid growth now in areas where China has had less presence in the past: biological and medical sciences. If growth is as rapid and substantial and the outcomes are as effective as they have been in other fields then the impact of this new research on gene and protein research and process innovation will be profound and pervasive.

China is not hanging about

The report demonstrates that China is not sitting around waiting for initiatives to come from the West or anywhere else. It’s just getting on with it. The research China is undertaking in the physical sciences and technology, with Materials Science, Chemistry, and Physics predominant might be seen as a pattern of the past. After all, these are areas of China’s traditional core strength rooted as they are in an economy which still has a preponderance of heavy industry and primary manufacturing. But the levels of investment in materials and related physical sciences is providing China with a strong innovation platform for modernizing these industries today and more so in the future.

More importantly, looking to the future, the notable growth areas are grouped in areas like Agricultural Sciences (the highest growth area which is understandable for the world’s most populous nation and its future food demands). But new areas are emerging too: life-sciences such as Immunology, Microbiology, and Molecular Biology & Genetics are expanding the most rapidly in terms of research paper output.

Long-term view not short-term pragmatism

The overwhelming picture the report presents is a country that is looking to the long-term. The levels of investment in higher education attests to a strong belief in the need to provide indigenous research capacities. The growth of China’s Higher education system over the past 25 years mentioned in the report is impressive:

  • The current number of students studying in Chinese universities has reached 25 million, a five-fold increase in only nine years;
  • There are more than 1,700 standard institutions of higher education;
  • 6% of them are Project 211 institutions (targeted as top universities), which take on the responsibility of training four-fifths of doctoral students, two-thirds of graduate students, half of students abroad, and one-third of undergraduates;
  • These institutions offer 85% of the State’s key subjects, hold 96% of the State’s key laboratories, and utilize 70% of scientific research funding.

An Asia-Pacific research base?

The report notes that the USA still stands out in terms of frequency of collaboration and co-authorship of research papers, with US-based authors contributing to nearly 9% of papers from China- based institutions between 2004 and 2008. It notes that the roster of contributing nations has remained largely stable between the five-year periods, although Italy and Russia have slipped slightly in recent years, while Sweden and the Netherlands have moved higher. Aside from Japan, Singapore currently occupies the highest rung of regional collaborators.

And it is this expanding regional research base that is really worth noting. As the report notes ‘Asia-Pacific nations are entirely happy to work with another’s (sic) excellent research bases now. They no longer depend on links to traditional G8 partners to help their knowledge development’.

This report highlights that China is rapidly developing a research capacity and a regional collaboration network that means it is developing an innovation capacity for the future which will no longer depend upon technology transfers from the West. It is not a question of quantity. China’s research into new materials will not only solve its problems, but perhaps provide the know-how to innovate for the entire world in this and other spheres.

As research spending declines in the West, this report highlights that we are going to be looking to the East to innovate to solve many of the key problems we will encounter in the Twenty First Century.

Filed under: Innovation, Science and Innovation ,

October 27, 2009 • 3:55 pm 0

A MISSION WITHOUT A VISION

If you were looking for an example of the loss of vision and a sense of mission in the West, then look no further than NASA’s new spectacular Ares I-X rocket, the world’s tallest at 327 feet high scheduled to blast off today, weather permitting.

This is the rocket that NASA has said will replace the aging ‘commuter bus’ known as the space shuttle. But, as The Washington Post article ‘Where will NASA’s next giant step take us?‘ put it, the debut of Ares I may have been ‘the biggest debut since King Kong’, but it ‘may turn out to be a rocket to nowhere’. Why? Because a blue-ribbon committee has said the Ares I is part of a NASA program that doesn’t make sense given current and future budgets. As a result, the Obama administration is close to killing the Ares I programme.

For the Time’s they are a changing

Just contrast this the Kennedy era where putting a man on the moon was undertaken because it was difficult and when it was recognised that the pursuit of conquering space, while risky, was worthwhile for the new knowledge discovered and problems solved along the way. Yes, this was in the context of the Cold War and the military’s pragmatism certainly started the West’s journey towards technological pragmatism and instrumentalism.

But that sense of mission, leadership and vision, in the face of enormous uncertainty and skepticism, stands in stark contrast to today’s mission without any vision or purpose. Then and now space exploration cost billions. But then there was a belief in science, innovation and a spirit of adventure. Today there is only concern about costs with little vision of what unknown benefits would emerge in the course of a new age of exploration.

It seems that it is not just the space shuttle that will be put out to pasture by the end of 2010, but America’s ambition and belief in progress. If Ares I launches today it is most likely to be an epitaph to a bygone era, rather than gleaming start of a new one.

Filed under: Innovation ,

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