Who bears the risk of innovation failure?

Innovation is all about novelty, about charting new territory and sailing unknown waters. This implies that the outcome of any innovative endeavour is by no means certain, let alone predetermined. On the contrary, innovation clearly entails risk, and in fact two different types of risk: one is for the innovator, the other for the society he's working in. With only mild exaggeration, you might consider the first the risk of innovation failure, whereas the other is the risk of innovation success.

How innovation policy can embrace novelty …

Innovation policy is a complex composition of tools that influence the innovation capacity and success of a society. This set of policies usually does not cover the entire innovation landscape, but leaves the fringes of the landscape unattended. Today, I'll first focus on innovation policy that embraces novelty, i.e., policy objectives especially tailored to novel supply and novel demand. I consider this a forward looking innovation policy.

Funding innovation – a broken cycle?

Without a doubt, Clayton Christensen is one of the most prolific thinkers, scholars, and writers on innovation. He is probably best known for having coined the term “disruptive innovation”, but that is only the tip of the iceberg. He developed a theory of economic growth that builds on three types of innovation: disruptive, sustaining, and efficiency innovations. Let’s see.

Knowledge and the economy

Any endeavour that exceeds the skills and resources of an individual or that entails significant uncertainty and risk benefits from collaboration. At the same time, we have a very human inclination to share only the risk, while retaining the benefits for ourselves. This desire for selective sharing defines a love-hate relationship that applies to innovation as well.

What the innovator needs …

There's an abundance of management literature offering advice on how to foster innovation in a business context. However, there is very little discussion on how the innovator's success critically depend upon the boundary conditions defined outside the business context. Today, I'll focus on how that larger context is directly relevant for the innovator's success.