What is Innovation and Why is it so Hard?

While the EU talks a good talk about innovation, most regulation seems to stifle the innovative spirit with a precautionary penance. Does Europe understand what innovation is? Do we share an entrepreneurial spirit across Europe or are we hidebound by contrapreneurs? Do we need to have an “Innovation Principle” to prevent precaution from choking our capacity to grow and prosper? This blog might make some interesting conclusions.

There has been some talk in Brussels over the last two decades about the need for more innovation, better regulation to promote innovation and means to improve investment in research so that innovative solutions may thrive. In other words, the very word “innovation” is thrown around a lot (from Lisbon to Copenhagen), but what I don’t hear very much about is perhaps the answer to a more basic question: What is innovation?

We know what innovation is not: it is not something you can make through regulation (however much EU civil servants try to legitimise their regulatory leverage). It is not the same as invention. It is not something easy, technically or socially – it seems to come out of a complex system. It also seems to be perceived differently in every field of research and technology. But what can we say, positively, about innovation?

Problem-solving or cool designs?

Innovation usually is seen as a solution to a problem or a new advance that we want. In other words, innovation is socially driven (no matter how amazing a seed design may be, if Europeans express that they don’t want it, research developments won’t find their way into products, markets or more research investment). Innovations are often not that sexy or exciting but rather iterations on what we have.

Invariably, when I ask my students, they’ll tell me that Apple is the most innovative company. This doesn’t strike them as strange given that Apple has never actually invented anything. The genius of Steve Jobs was to benchmark what was out there (be it the PC, mouse, MP3 player, tablet, smartphone or wearable technology), iterate on it, add some design features or add-ons that can be marketed and sold as a high-margin innovative brand. Apple markets design and a cool packaging. Their greatest innovation? Perception.

Inventions tend to happen by accident (or by allowing researchers the time to make mistakes). One thing is certain – it is hard to plan insight and inspiration!

Wasting Away Again in Regulatory-ville

Brussels seems to think that innovation should be planned, regulated and encouraged by civil servants and administrative wonks who have never worked in a risk-taking business. Washington seems to think that innovation should occur within a business structure, with the bureaucrats entering only after the companies and markets show a certain degree of success. What I see in both arenas is the amount of time wasted by researchers to provide data to comply with regulations imposed by individuals without scientific backgrounds.

std-test-tubesIt saddens me to see so many good scientists wasting away doing regulatory compliance (checklists, replication runs, repetitive assays …). Every EU regulation creates a cottage industry of independent labs to service industry compliance needs. There is no creativity in these labs, no thought, no chance to make mistakes in open research and explore new avenues from dead-end experiments. Rather than becoming world leaders in discovery and innovation, regulatory scientists are languishing as bottom feeders in a self-contained bureaucratic ecosystem.

And as research is a very mobile sector, it is proven to be quite easy to move scientists to innovation-friendly countries. Thus European biotech researchers moved from Europe to Massachusetts a couple decades ago. Now their children seem to be packing their bags and moving to Asia. Economies that lose their innovators lose more than simply opportunities – they lose sight of the future.

Apples and Lettuce – The simpler, the better!

Some of the greatest innovations are simply modifications based on traditional practices. The sharing economy (car-sharing, individual taxi services or spare bedrooms for rent) is not a particularly earth-shattering innovation – it is just taking a new technology and putting it in old bottles. Groupon was merely harnessing the Internet as a means to distribute coupons to absorb excess stock or services.

When I was working in the chemical industry, at one point I had the responsibility to communicate Solvay’s strategy of innovation. One of the questions I often asked was: How do we measure innovation? Every company has to justify its expenditures (get a return on investment) so I felt this was an important question. Generally, we benchmarked our sales revenue from new, innovative products against our competitors and against internal targets. So the best way to judge the value of innovation is to see how sales increased on products that were not on the market five years earlier.

I take this method into the classroom and ask my students what has been the single greatest innovation over the last 25 years (as increased sales of a product that had never existed a few years earlier). I often get the usual answers: mobile phones, search engine advertising, solar panels, medical devices … these have all, no doubt, created new industries, great products and enormous revenue. My students though are often shocked when I tell them that the single greatest innovative product in the last 25 years, in terms of sales in new markets, is, in fact, lettuce! Yes, … lettuce!bagged20salad20large-560x0_q80_crop-smart

My students  are often shocked when I tell them that the single greatest innovative product in the last 25 years, in terms of sales in new markets, is, in fact, lettuce! Yes, … lettuce!

At this point my students usually start busily filling out their course evaluation forms. How could something as banal as lettuce be more innovative than mobile technology, Google, improved quality of life and the shift away from fossil fuels? To be more precise, I should say the “preparation and packaging of lettuce”. Prior to this simple innovation, consumers would have to buy a head of lettuce, wash it and prepare it – so people didn’t really buy a lot of this beneficial yet inconvenient produce. Now they can just open a bag and toss the fresh, healthy salad into a bowl. If you don’t believe me on the impact on sales from this new product, have a look at the bagged lettuce section the next time you are in your supermarket.

For many this implies that we need another means to measure the worth of innovation. Perhaps it is better to say that innovation is embodied in the inspirational, motivational persona of the entrepreneur.

Entrepreneurs and their enemies

The entrepreneur is seen as the innovator – the one who thinks out of the box, sees what others fail to notice and inspires others to join in the drive to change the world. It was said that Steve Jobs knew what I needed before I did. Elon Musk dreams big of hyperloops and spaceships, as does Richard Branson and Jeff Bezos. An entrepreneur, literally, reaches for the stars.

An entrepreneur, in the spirit of Brunel, solves little problems with big projects, sees the big picture in small details and has no patience for small-minded people with big egos. Not afraid to make mistakes, these rule-breakers look to technology to drive humanity forward, improve the quality of life and inspire change for the better. They are the risk-takers … not to become rich (although they are rewarded for their success) nor to have legacy (although we bestow that on them and make them larger than life).

Great business empires from GE to Apple to P&G were built on innovators and generations later, leaders in the corporate world know clearly that failure to innovate results in a failure to operate. But here is the issue. While we often celebrate great innovators and their success, there are those who resent the consequences of their innovations (while hypocritically benefitting from them).

Against the inspiration and leadership of the entrepreneur lies the cynicism and obstructionism of the contrapreneur who builds a following in raising fears rather than hopes. If entrepreneurs are the cures for society’s needs, the contrapreneur is the cancer, relentlessly spinning dreams into nightmares, building roadblocks and mobilising their terrified tribes into opposing fruitful innovations from GM technologies to nutritional food additives to pharmaceutical developments.

In Europe we have the ultimate contrapreneurial tool – the precautionary principle. By reversing the burden of proof (unless you can prove to me that your innovation is completely safe, you will not have licence to market it), precaution places a handcuff on entrepreneurs and limits innovation to merely finding alternatives to things a petrified population wants (subjectively) to ban.

Innovation and precaution

Recently there has been a call for a more reasonable use of the precautionary principle … in a manner in which it would not completely castrate innovation and economic development. It is called the Innovation Principle, but it should just be called common sense. It states: “… whenever policy or regulatory decisions are under consideration the impact on innovation as a driver for jobs and growth should be assessed and addressed”.

Basically the Innovation Principle means that before any regulation is passed to restrict a research process or technology, policymakers must consider the impact of losing the research. This is what I would call normal, reasonable behaviour. Assume a situation where an innovative nanotechnology could accelerate medical innovations, save lives and create economic opportunities. Before the technology is banned (because some activists are frightened by it), regulators must address the impact of not having the benefits of the science. This makes sense.

It makes so much sense that the European Council has just called for the Innovation Principle to be integrated into the Better Regulation strategy. On the same day as this press release, DG Santé Commissioner, Vytenis Andriukaitis, gave a speech in Ghent, Belgium where he stressed the need for more innovations in health and agriculture research, demanding the acceptance of biotechnologies to help Europe develop, grow and become sustainable. If only the European Commission had been able to call on the Innovation Principle 15 years ago when the precautionary folly was picking up speed.

Once again, this sudden positive feeling about a tide of reasonableness is welcome … but unexpected!

Of course … wait for it … the contrapreneurs are outraged! They fear that it will compromise the primordial use of the precautionary principle (ie, interfere with their ability to easily obstruct innovations they don’t like). What the Innovation Principle actually does is trim the grass where all of the snakes had been hiding, forcing them to come clean and admit that they have been anti-innovation, anti-progress contrapreneurs!

While innovation may be a difficult phenomenon to articulate, opposition to innovation can be spotted from a distance. Asking the EU to become more innovative and entrepreneurial may be a bit of a stretch for the next generation but stopping Europeans from being habitually anti-innovation should be as easy as applying common sense … call it the Innovation Principle.

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