A recent article in The Economist, “Innovation Pessimism: Has the Ideas Machine Broken Down?” discusses whether or not innovation is slowing down and failing to sustain growth. In dissecting the arguments of innovation pessimists and optimists, pertinent questions are raised, such as are we running out of big innovations? Is the lack of cheap energy inhibiting innovation? And, what might lead to an explosion in innovation?
The end of big innovations
Innovation pessimists, those who believe the most innovative days are behind us, argue that there have been only a few truly fundamental innovations, such as the ability to distribute power on a large scale. Other innovations have and will occur, but are unlikely to be capable of driving growth and revolutionizing the way we live as electricity, plumbing, petrochemicals, the internal-combustion engine and the telephone have. The Economist, however, argues that revolutionary innovations are on their way following the rapid increase in computer processing power. Just check out Google’s driverless car, which wasn’t possible only a few years ago. In fact, in 2004 the USA Department of Defense offered a $1 million award to the team whose driverless car completed their route the fastest, but none succeeded. Further, although there have been concerns about declining R&D productivity in the pharma industry, there is definitely cause for excitement regarding future innovations. The advancements in genomics and even the prospects for the 2013 drug pipeline suggest that R&D productivity in the life sciences is set to improve, revolutionizing the way we treat diseases.
Correcting the energy problem
Innovation pessimists also present strong arguments linking the alleged innovation slowdown to a productivity slowdown following as a result of rising energy prices. As proof, innovation pessimists cite the productivity slowdowns that occurred during the 1970’s and early 2000s. Yet, here too there is reason for optimism. As we discussed in our blog article on how to accelerate innovation in the energy industry, emerging technology and trends towards partnering suggest this industry will rise to the challenge. Innovations such as Spray-on Photovoltaic Windows, developments in wave energy or the shale boom have the potential to dramatically shake things up.
A coming explosion of collaboration and innovation
In the end, The Economist argues that there is reason for optimism, in particular because billions of the world’s poor will be moving up into the middle class and will have access to improved education. Suddenly, millions of great minds will be able to work in the modern economy and R&D rather than in subsistence farming. Great ideas will have an even greater impact as they spread across the globe. A similar idea has been proposed by Peter Diamandis who, in his Wall Street Journal article “An Explosion in Innovation,” argues that by moving from two billion people connected to the internet in 2010 to five billion in 2020, there will be an explosion of ideas, solutions and collaboration driving ten of trillions of dollars into the economy.
There are many reasons to suspect The Economist and Diamandis are on to something – the more minds that collaborate the greater the chances of success. Research by GE’s 2013 Global Innovation Barometer demonstrates that countries with higher levels of collaboration experience greater innovation success. More and more companies and governments are launching initiatives that take advantage of this concept. For example, there is a handful of pharmaceutical companies, including AstraZeneca, GlaxoSmithKline, Sanofi, that are taking part in the Innovative Medicines Initiative, which encourages public and private organizations to combine their data and expertise to tackle challenges in antibiotics research.
The innovations of today may be more difficult to achieve and may require more expertise than in years past, but the tools to promote and manage their development have also become more sophisticated. Combining more and better educated minds is how we can expect to succeed, which is why partnering and open innovation are crucial capabilities companies must master for their success both today and in the future.