Jason Pontin at the MIT Technology Review wrote a great article on what is wrong with our model for innovation. My summary: without direction, market-driven venture funding chases and creates what is, essentially, profitable techno-fashion. It has become speculative gambling on the trendy and, paradoxically, aimed at incrementally irrelevant changes that make money in volume.
I wholeheartedly agree with Jason that we’re missing out on something important here. Disruptive innovation is being lost. Problem-solving is being lost, at least in the grand sense. Real, tangible value is being lost. The enormous effort of the bulk of mankind’s best technological minds is going to developing trendy trinkets and real-time knowledge of everyone’s daily habits, largely because it’s easier and more profitable to fund and brand wildly popular toys, and make people want them, than to solve hard problems with real, tangible value to real human lives.
This is very similar to the problem of speculative markets. In speculative buying, people purchase shares (or houses, or baseball cards, or tulip bulbs) because they think they can sell them for more than they paid for them, not because they think the inherent value is worth the price. This is what creates speculative bubbles, and leads to collapse when the music stops. The big difference, I think, is that trendy technology bubbles don’t lose net technology when they crash whereas financial markets lose net wealth, since it is essentially imaginary. Rather, when trend tech bubbles burst those companies just disappear. It’s the same as any fad. The disappearance of Furbies didn’t collapse anything. It just distracted technology effort for fashionable entertainment.
The solution appears to fall largely on leadership. Jason talks about aligning political leaders, public support, and public institutions. I think this principle can scale down as well. Even within an institution, a company, or a community, good leadership can “rally the troops” in support of a common goal to solve a common problem and provide common value.
Even within a company, lack of common support can be a huge problem. When product managers and teams are set adrift on their own they often compete rather than support each other (much like the naval air squadrons I’ve used as an example before on the topic of innovation). Relative success becomes more important than common success and that can mean fighting for the top spot on the mast of sinking ship instead of fixing the holes.
This does not mean a leader needs to pick the winners. What it does mean is that a good leader will be supportive of those they put in charge. It means giving the power and resources to get the job done (responsibility and not just accountability) and “selling” them to the rest of the organization. Instead, what I see more is bean-counting, criticism of imperfections, and cynicism. These are the enemies of innovation and largely of even value generation. Cutting budgets that are demonstrably paying themselves back is irrational. Cutting investment in the future to pay higher dividends today is a short-sighted race to the bottom, or rather the local top spot on the global bottom. (Once again, the mast of a sinking ship comes to mind.)
Perhaps I’m an innovation optimist, but I see value in such investment, and of supporting such endeavors. I spent 10 years in university leading up to my Ph.D. Not a single year of that decade showed a huge bottom line on my income and yet I came out the other side much better off for it, both in earning potential to myself and value to others, not to mention the huge personal benefit of understanding so much more of how things work. Value takes investment, and huge value takes huge investment and support. You don’t grow a great tree by planting thousands, starving them, and see which one wins the competition; you do it by giving it the best environment for success and by nurturing it every day.
So where are our innovation nurturing leaders? It seems the bean counters have convinced them to focus on their position on the mast and forgo the status of the ship.