How to cultivate innovation? – Part 1

Cultivating innovation is what every business leader must achieve to stay in business for more than just one product cycle. Therefore it’s no big wonder that there is an impressive library of management literature addressing the business of innovation. However, innovation is more than business, and the existing writing often misses that essential part of reality: the fact that business has a larger context that defines its purpose and its rules, the fact that business is embedded in society. And this societal context is highly relevant for cultivating innovation. The question only is: How?

Without a doubt, successful innovation depends upon the skills of the innovator (the individual’s abilities), and the resources, skills, knowledge and assets the innovator has access to (the business context). Yet beyond the reach and influence of the innovator, there is that cloudy concept of the circumstances that define the success of an innovation. One part of those circumstances is obviously framed by timing and demand: being too early to a market that isn’t mature enough to adopt your brilliant idea is as bad as presenting a solution that nobody actually wants. The other part is the rules of the game, and that’s what I want to focus my attention on: how can society shape the rules of the game for innovators to be successful, to make their vision come true. How does that cultivation work?

Let’s take this challenge one step at a time. What do we know already?

• Brian Arthur makes us aware of the mutual adaptation of technology and society. That concept clearly acknowledges a role for society in the way that technology (and innovation at large) will evolve. But Arthur is not precise about how that works, and how society could steer that evolution. To the contrary, he is convinced that society encounters new technologies and will co-evolve together with them; yet the exact path of that co-evolution is not predetermined and cannot be predicted.
• David Collingridge‘s earlier work on the Social Control of Technology confirms that view and goes a step further: the means for society to directly influence the concrete path of technology evolution are actually very limited.

So it seems that society does not have the means to directly steer on the path of technology development in anything like a deterministic approach. But if direct control is close to impossible, how about indirect influence?

• Ian Morris develops his own original idea of how society drives innovation in Why the West Rules? A historian and archaeologist, he looks back at 16,000 years of human development, and formulates his Morris Theorem that human sloth, greed, and fear are the key psycho-social drivers for innovation. And those drivers propel society forward on a relentless journey when change creates the need for yet more change.
• Niall Ferguson took a closer look at the last 500 years in Civilization – The West and the Rest. From his analysis, he identifies six novel institutions and associated ideas originating on the western edge of Eurasia –  competition, the scientific revolution, property rights, medicine, the consumer society, and the western work ethic. In his view, these six major innovations could explain why the West dominated the world for the better part of 500 years.

From these historic perspectives we get a clear signal that society does somehow drive innovation, and that innovation itself has massive impact on society’s prosperity and progress. This observation echoes Brian Arthur’s concept of the mutual adaptation and co-evolution, this time between innovation and society. But what’s still missing is a concept that could integrate these different elements in a comprehensive manner to explain what society can actually do to encourage, promote, foster, cultivate innovation. We have hints, but no storyline.

Seeking additional inspiration and ideas, I enjoyed Why Nations Fail? – The Origins of Power, Prosperity, and Poverty by Daron Acemoglu and James Robinson. They manage to combine the best of two worlds by blending Acemoglu’s economics perspective with Robinson’s view on development politics. As a result, they present a thorough analysis of 400 years of the economic and political history of some failed and some successful societies. And they derive a compelling theory of how the interaction between political and economic institutions can make or break a flourishing society.

Their’s is a tale of rules of the game, of the right balance between centralisation of power and pluralism, of broad participation in economic and political activity, of inclusive markets, innovation (sic!), and education as three drivers of prosperity, and of the delicate interaction of small organisational changes with significant political events that shapes the path of the further evolution of those rules of the game.

Acemoglu and Robinson describe the choices a society can make in organising its activities so as to achieve its objectives, painting a vivid picture of how difficult it is to create a flourishing, prosperous society, and how easy to deteriorate it. Their considerations offer a comprehensive description of the circumstances, which are beyond the reach of the innovator, but within which innovation takes place. Therefore, I’ll build on their ideas as I dig deeper into society’s means and limits for cultivating innovation. Stay tuned …