A supply chain for innovation

Supply chain: the term suggests a pretty simple and manageable process that delivers a given product. It sounds rather well-defined: all process steps and all necessary ingredients are known in advance. And it seems linear: one process step’s output is the another step’s input. As long as you follow the recipe and put in the right ingredients in the right order, when you push the button, the machine will certainly churn out the product you want.

But what if your product is innovation itself? What does the supply chain for innovation look like, a supply chain that could deliver the innovation that a society needs? I’ve cast this question deliberately wide, extending it way beyond the immediate context of business investments to embrace the full breadth of policy making. And after juggling with a couple of ideas in the background for a while, time has come to move the question center stage.

To begin with, it’ll be helpful to frame the further discussion in two important ways: What is the product? And what is the main resource required to deliver it?

Innovation with a cause

So what is the product that an innovation supply chain is intended and expected to deliver? What is innovation? My working definition of innovation is essentially utilitarian: Innovation is the development and implementation of novel problem-solutions. Innovation has the purpose of solving problems, and only if those solutions are actually implemented will innovation generate value for society. Within these limits, the heart of innovation is in its novelty: there’s always something unprecedented. It could be as simple as a novel application of a known solution to a known problem; it could be a known solution applied to a novel problem, or a novel solution for a known problem; it could as challenging as developing and implementing a novel solution for a novel problem (see my earlier thoughts on the innovation landscape for a more detailed description).

This definition maintains a very wide perspective of innovation. It includes concrete tangible products as well as more fluid services. It embraces process improvements as much as new concepts of management or governance. It spans across all scales, from the individual to groups to business corporations to entire economies and societies, up to the global level of humanity. And it is not confined to mere monetary notions of value: of course it does embrace economic growth, but it includes technological progress and general improvements of the human condition equally well.

Knowledge as the driving resource

The second essential consideration to frame an innovation supply chain needs to tackle resources. More precisely, that’s the question about the dominant resource flow that the supply chain would need to manage. Supply chains for conventional products are usually are built on energy, material, or information flows. However, innovation does not fall into that category of a conventional product. Hence, I’ll try to describe an innovation supply chain that is constructed around the flow of knowledge. In that approach, and entirely in line with my definition of value outlined above, I’m leaning heavily on Joel Mokyr’s concept of useful knowledge, i.e., the Enlightenment idea that the human quest for knowledge should be driven towards yielding societal benefits.

An innovation supply chain would then need to ensure that useful knowledge flows ‘from and to the right places’. We could envision this flow broadly along the lines of generation, dissemination, and application of useful knowledge. Even though —or rather: because— these categories are interdependent and partially overlapping, they give a good idea of the complexity that this supply will necessarily have. In the most simple terms, you could think of the generation of useful knowledge as the source, as one end of the innovation supply chain. At the delivery end of the chain, you would then have the application of useful knowledge to implement a novel problem-solution. The dissemination then connects generation with application. But that would be a grossly simplified linear model.

Reality is a little more complex, particularly regarding the dissemination of useful knowledge. And that is due to the characteristics of knowledge as a non-rival resource: you can use it, and even share it, without depleting or losing it (I’ve quoted Thomas Jefferson on this matter repeatedly). That means the stock of knowledge grows over time and over generations; that is how Newton stood on the shoulders of giants. Consequently, the reservoir of useful knowledge at any time in any place is tremendously larger than what could be generated then and there. Hence the dissemination of useful knowledge cannot simply focus on the newly generated ideas. The major task of dissemination is making the existing useful knowledge available here and now, including that which has been generated in previous times and in other locations. That is indeed a massive volume, as it comprises knowledge along the lines of:

• What worked – previous innovations, the problems, the solutions, and the successful combinations thereof ;
• What didn’t work – past failures and unsuccessful attempts that might be useful in the future ;
• What hasn’t been used – discoveries, inventions, ideas that haven’t yet been employed for a purpose ;
• What hasn’t been addressed – unresolved problems, and problems not yet understood ;
• What do others do – within a given society and beyond its boundaries.

Such comprehensive awareness of ‘the useful knowledge that is out there’ is of course not easy to achieve, let alone maintain. But that comprehensive perspective is one of the core tenets of an effective and efficient innovation supply chain.

Navigating a policy ocean

Establishing this supply chain through a coherent set of dedicated policies will cut across many domains of governance, including research, education, industry, to name but a few. Developing these policies is real blue-water sailing, out in the open ocean, long-distance. And it’s more global than local, more Vendée Globe than Sidney-Hobart. Still, there are a few ideas that will help with navigating this wide open space.

To start out rather small, you might want to cut the challenge into bite-size pieces; that’s where Brian Arthur’s definition of technology as the orchestration of phenomena to a human purpose offers good orientation. This definition connects basic research (‘phenomena’) with engineering and enterprising (‘orchestration’) and value for society (‘human purpose’). Granted, those three elements do not comprehensively cover all innovation, and they are not mutually exclusive either. But they provide a decent mental model to start with, and they suggest initial ideas where to start building the innovation supply chain, and where to look for useful knowledge. This approach would focus on the generation and application of useful knowledge.

To start out really big, you might choose to begin with the dissemination of useful knowledge, taking the concept of social learning as orientation. This concept describes humanity’s skill to transmit knowledge over time (handing it done from generation to generation) and across space (sharing it widely, without the need for direct personal interaction). But more than just a skill, I believe that social learning is actually a human desire. And that should be embraced and employed. With today’s technology, we have powerful means to handle vast amounts of information, to distribute it, to make it widely accessible, and to store it. But so far the progress in information handling has not translated into superior knowledge management yet, despite all the talk about the advent of the knowledge economy. Any improvement on that front will definitely strengthen the innovation supply chain as well.

Obviously, this post can only scratch the surface of what an innovation supply chain could look and feel like; the topic is clearly a lot deeper and offers food for further thought. Which makes for a good theme to pursue at the beginning of a new year, doesn’t it?

My very best wishes for a peaceful and productive 2017!