Creating an Innovation Culture – for Spokane
November 16, 2010 1 Comment
In “Economic Gardening” I said that Spokane needs to foster a risk-taking “innovation culture”. But how do we go about establishing a community wide belief in risk-taking, innovation and experimentation? That’s tough.
I found this essay on the need to create an innovation culture in Ontario, Canada. The essay is from reports done for Ontario, and is hosted on the web site of Bill Buxton of Microsoft Research, Redmond, Wa and Toronto. Bill has a series of articles he has written on innovation for BusinessWeek and I will try to link to those another day.
I have excerpted some sections of that essay here:
We are in a race that does not have a finish line. Our competitors next door, and around the world, are not standing still. All of the provinces and states around us are continuing to improve their business and investment climate….. We must continue to innovate and to sharpen our competitive edge. In the race for quality jobs and investment, our goal is to get out in front and stay there.
In the new global environment, we must recognize that our capital – both financial and human – can migrate quickly. The critical challenge Ontario faces is to differentiate itself. That is, to rise above the crowd by creating an environment where good things are happening, where entrepreneurs and business people can grow and succeed, and where people want to live and work.
In Ontario, our key challenge – collectively and individually – is not merely to adapt to change but to anticipate it and take steps ahead of time to make the most of it. Underlying what follows is a belief that by following our current path, Ontario will – at best – maintain its position. In order to improve, it will take change to innovate – to break stride.
- The most wealthy nations and regions of the world are the most innovative;
- Most new jobs depend on innovation;
- Innovation is a renewable source of wealth, and The status quo is not a viable option.
The most wealthy nations and regions of the world are the most innovative.
…although high-tech, knowledge-intensive industries account for 39% of overall employment in Ontario, they generate more than two-thirds of new jobs in the province.
By their very nature, human ideas are unlimited, and are therefore renewable sources of wealth. Traditionally, natural resources were a key factor in determining a nation’s economic wealth. But as ideas have become more and more crucial in modern times, even nations with limited natural resources can become global economic leaders – as long as they can generate and apply new ideas.
Innovation means generating and adapting to change
First one invents, then one innovates. One may invent or discover a new product or a new way of doing things. But, from a social perspective, innovation occurs only when this new product or process becomes widely used.
Embracing change, though, means changing or replacing the old ways. This is something that does not go over well in Spokane (writing from personal experience!):
Innovations not only create new products, processes and institutions, but also destroy the status quo. The very role of innovation is to change or replace traditional ways of doing things. That is why innovation tends to face certain barriers, such as:
- lack of public knowledge;
- reluctance to accept change;
- concerns about the cost of change, and
- opposition by those who prefer the status quo.
Innovation is inherently risky.
To innovate, one must step beyond what is known and accepted by society. That is why it involves risks.
Innovation involves collaboration.
Innovation is typically made possible by entrepreneurs who build teams with experts in areas such as invention, technique, business and finance. There are countless examples of successful entrepreneurs who use their resources and commercial abilities to team up with “smaller players” with great ideas.
Innovation depends on:
- human capital (people and skills);
- organizational and physical infrastructure (corporations, schools, universities, colleges, and governments, communications systems, etc.);
- financial infrastructure (banks, investors and other sources of capital);
- legal infrastructure and civil justice system (intellectual property laws), and
- social or community capital (relationships between people and between organizations).
Innovation also rests on our culture – the values, rules, customs and incentives that govern the way we work and the way our institutions function.
In the world of innovation, culture comes down to shared attitudes, values and beliefs. It determines how well we encourage creativity, risk-taking, entrepreneurship, and networks to share knowledge and ideas.
The next section in the document summarizes the perceived resources of Ontario in terms of what the area has to offer. This is followed by some discussion about industry clusters:
Industries tend to cluster in certain geographic locations. Clustering helps companies reduce risks by creating communities of workers and suppliers that meet their needs.
When it comes to financing ideas, lenders tend to be hesitant because they have few hard assets to seize in case of a business failure. Clustered economic activity allows people and organizations to develop track records that become well known to others in the community. These track records are critical to one’s ability to attract the financing necessary to develop new intellectual properties. Clustering can also give employees, as well as those who are self-employed or entrepreneurs, some security in their job or work choices; for example, the option to move to another company or employer is enhanced when you have developed a track record within that cluster of companies. Good track records help entrepreneurs and innovators overcome these barriers.
As noted elsewhere in this blog, according to a study out of EWU, Spokane does not have an IT, high tech or bio-tech cluster today. I add that I believe the State government intends to purchase a bio-tech cluster for Spokane by funding huge health care sciences growth at WSU-Spokane. But without other elements, which remain missing, this may not become a self sustaining industry cluster.
Innovation works best when people with different knowledge, skills and perspectives are brought together to tackle challenges. These “renaissance” teams can be created within organizations, firms and in geographic communities.
Highly functional networks in communities also benefit from the interaction of various skills. For example, bringing a new invention to market requires:
- creative thought;
- scientific ability;
- financial skills;
- marketing work, and
- customer acceptance.
This combination of business skills is what panel member Bill Buxton calls the New Multiculturalism.
Of course, the importance of networks in the geographically based community extends beyond individuals to organizations, both public and private. For example, it is well-documented that “innovative communities” foster close ties between universities, colleges and private sector research organizations
Missing from Spokane is what I call the “hip culture” although that term might not be the right term. Spokane lacks the “hip” culture that throws “flash mobs” in Seattle and other large cities, or the fun group of people that throw “Zombie Walks” and other odd but creative activities such as Honk Fest West.
This sort of zaniness is part of what makes creativity – and innovation – part of the culture in the hip metro areas. Other types of creativity lurk in Spokane but do not get the attention they deserve – the creative film makers at North by Northwest, for example. And we have a chapter of the Society for Creative Anachronism.
Related to that, Spokane tends to get infrastructure deployment of new technology later, often much later, than larger metro areas. Spokane, being a smaller community, was very late to have broadband Internet access available to all urban and suburban homes in the area (probably about 2006). T-Mobile’s partial “4G” cellular in Spokane (its not actually 4G and only covers about half the city and valley) is the only advanced 4G-like service available in Spokane. Does this matter? Yes. When people in Seattle are surfing the web at high speeds in 2000 – and Spokane is still mostly on dial up modems in 2005, it means we do not experience the web as others do and are unlikely to see and understand the opportunities made possible by the new technology.
The single most popular web post on this web site is the post about whether or not Trader Joe’s is coming to Spokane. Living in Spokane, I did not even know what Trader Joe’s is about – in fact, I’d never even heard of them. On a recent trip to the Seattle area, I spotted a Trader Joe’s and went inside. (Short story – Trader Joe’s is brilliant marketing of a small grocery store concept.) We are now too cut off in too many ways to see the leading edge of business, technology and cultural innovation. This is tragic.
Creating a business is about identifying a problem or need, and solving that problem or meeting that need. Each new creative fad, and each new technology creates its own set of opportunities. Early movers dive in to the gold rush and have opportunities to solve problems when the entry costs are still low.
But in Spokane, we often don’t see the 21st century opportunities until they’ve been established elsewhere for years. Trying to dive in at that point requires a lot more capital than is needed for the early movers. And serious VC money is no longer available in Spokane. Both of these problems – late awareness of opportunities, and lack of VC money, are big hardships for creating national or world class innovation businesses in Spokane. (The exception is health care, where the State government intends to fully fund ever expanding health care education, research and health care delivery, forever.)
How do we create an environment at the firm, organization and community levels that rewards those who take risks and those who look for new and more effective ways of doing things?
Innovation results from thought followed by action.
It depends in part on the personal abilities of the leading innovator. But innovation is also affected by the environment – where we live and work.
Culture reinforces the behavior and strategies we require to succeed in any given environment. But environment dictates culture, too. If we live in a business environment that favours innovation, then such behaviour will become prevalent. There is an old saying, which goes: “Necessity is the mother of invention.” The more demanding the environment in certain respects, the more likely the organization or individual is to respond innovatively.
We need to identify and deal with impediments to innovation, including:
- lack of skilled workers;
- lack of information on, and access to, technologies;
- lack of information on markets;
- lack of technology assessment and business supportservices;
- barriers to inter-firm cooperation;
- barriers to business, labour and government cooperation;
- barriers to university/college and business cooperation;
- lack of access to financing, and
- lack of a corporate or community culture that values innovation.
Many other jurisdictions have identified innovation as the key to competitiveness and are attempting to improve their innovative capacity. In the 21st century, the ability to innovate will separate the economic leaders from the rest of the pack. Advanced world economies know this and are seeking ways to use knowledge to create competitive advantages and a platform for further job creation and investment.
The good news is that everyone agrees on the need for innovation and “innovation cultures.” But by the time we reach the end of the essay, the solution to how we create an innovation culture is still elusive.
The LAST thing Spokane needs is yet another government, non-profit or consultant’s report telling us we need to embrace innovation! Well duh. Future investments in such studies should be directed to figuring out how to create – and fund – an innovation culture in Spokane!
The factors working against innovation are entrenched here, unfortunately. This is a culture where good enough is, well, good enough. Suggestions to try something new are met with “But we’ve always done it this way. Why change?”
Moving away from attitudes like this is what I mean by the challenge we need to confront in “Creating an innovation culture – for Spokane”.
- The Globalization of Startups (measuringmeasures.blogspot.com)