The Awards And Risks of Innovation: Embracing Destruction And Creation

The challenge of how we deal with innovation may not seem like much of a problem, innovation should always be a good thing. Innovation though is one of the effects of creative-destruction process. The challenge is making sure that one is on the right side of the dichotomy, the fear is in the inherent risk of the process. The New York Times article raises this question regarding The Risk of Innovation: Will Anyone Embrace It?.

Whether humans will embrace or resist an innovation is the billion-dollar question facing designers of novel products and services. Why do people adapt to some new technologies and not to others? Fortunes are made and lost on the answer.

The greater danger is how we as a society will approach innovation in the future. The issues found within this next New York Times article on Two Views of Innovation, Colliding in Washington - New York Times seem similar to some of the fair use issues discussed in this weblog regarding media, but applied to technology. The article points to a bias towards big business in Washington which could create massive obstacles for smaller innovators.

From the vantage point of a half-century, for example, it's clear that the formation of Silicon Valley involved serendipity more than intentional design.

It appears that the Senate leadership has sympathy for the large technology companies. Opposed to big tech is a small group of high-profile inventors, like the Segway designer Dean Kamen and the former Apple engineer and QuickTime co-inventor Steve Perlman, as well as venture capitalists and a growing array of smaller businesses that do not share the market power of the largest companies.

Schumpeter, who is seemingly being hailed by many lately as having the answer to entrepreneurialism in the future, was arguably in line with the folks in Congress abd had according to the Economist View post Robert Solow on Joseph Schumpeter,

a lasting bias in favor of big business. "American opinion is so anti-big business," he wrote, "precisely because big business has made the country what it is...: who is not a part of big business feels he does not meet the standard and by compensation turns against it." Clearly a successful innovation confers, in his view, at least a temporary monopoly. Without the lure of those monopoly profits, there would be no incentive for anyone to bear the risks of entrepreneurship. Schumpeter believed that large firms were both the source and the result of successful innovation; and so tampering with them would be dangerous. ...,

The Businesspundit on 1/19/08 offers two basic choices in meeting this challenge Adaptive Vs. Creative Strategy.

Strategy is, in general, adaptive. New market opportunities rarely catch entire industries by surprise. The moves of most companies are evident in advance, so it really becomes a game of small adaptations to new circumstances by offering new products, entering new lines of business, and using other basic strategic business moves.

This sounds like the bigger technological companies. In order to succeed, smaller companies are forced for all intentions to adopt a more creative strategic approach with all of its risks. Taking some ideas from the Businesspundit,

Almost all literature about strategic thinking is geared to adaptive strategy, which makes sense because that is what companies need most of the time.

This is where Schumpeter's concept of creative-destruction, and how it seems to be being commonly applied, makes the most sense to me. The innovation is not limited to only the product itself, but includes the strategy on how the new business is implemented. As the Businesspundit states,

Creative strategy involves strategic moves that come as a surprise. Because such moves are unexpected by definition, you can't plan for them. Think of Apple releasing the first iMac, and re-defining the playing field for home computers and how they are evaluated.

As a result, creative strategies, when they work, work really really well.

See the full article from Businesspundit for a more details and on how to enhance your chances for success .

The driving force behind innovation, however, remains individual intellects and passion. Businesspunditon 1/11/08 provides the Wozniak on Innovation podcast of Steve Wozniak's talk at the 2007 Ideafestival click here. Quoting the Businesspundit,

It is worth listening to, if for no other reason that Wozniak's contagious enthusiasm about technology. See full article.

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