Sowing the Seeds of Our Own Destruction

On a global scale, American innovation is sliding further away from relevance. Where do we go from here?

'I don't know what it is, but if it's innovative we'll manufacture a million of it.'
"I don't know what it is, but if it's innovative we'll manufacture a million of it."
andrewgenn

It has been almost three years since I have picked up a pen (mouse and keyboard?) to write for publication.

When asked, it seemed appropriate to try to help my friend David Mantey’s new venture get off the ground by stirring the pot with my musings once again – although I have never been sure that anything that I wrote for his previous publication did anything more than to provoke his readers into momentary frenzy.

He assures me now, that provocation is good, especially provocation of engineers, if it helps shake off lethargy and renew the innovative spirit.  

So here I am, agreeing to write a monthly article for IEN, mostly focusing on innovation, but he has assured me that I am allowed to occasionally wander off onto my favorite, more dangerous path, of the intersection of innovation and society. To you, new reader (and hopefully to some old ones who may find me), off we go.

I thought that I would start slowly without too much provocation and try to make sense of where the whole innovation movement has gone in the past three years.  First, let’s look as where we as a nation stand in a global comparison of innovation.

If you look around, various folk try to rate such ephemera, for example Bloomberg’s Innovation Index and the Global Innovation Index (GII), produced by a consortium of academic institutions, are two of the better, more scientific indices.

According to GII, the United States is in fifth place globally, but Bloomberg has our country slipping all the way down to sixth place in the most recent ratings. We have moved from number one in 2008 down to sixth place today. Let’s call it a straight 5.5 for good measure.

In order, Bloomberg places us behind South Korea, Japan, Germany, Finland, and Israel, while  the GII puts us behind Switzerland, the United Kingdom, Sweden, and the Netherlands.

Bloomberg’s rating is interesting because it indicates that the U.S. can only excel in a single category of the innovation measure, among them are R&D spending, manufacturing, hi-Tech companies, education, research personnel, and patents. Unsurprisingly, the only one in which we win is hi-tech companies.

The obvious reason is that this measure was not per capita, but was rather an absolute measure. So adding the value of Apple, Microsoft, Cisco, Google, Facebook, Oracle, Intel, and the smallest of these, Qualcomm, you get something like a $2.3 trillion dollar valuation. Yee-Haw!

I do find it ironic however that when these companies “make” things, such as servers, switches, routers, and such, most of what they make is made in China, by companies like that paragon of humanity, Foxconn. The next time you see a headline that claims that the Chinese are trying to send the U.S. into bankruptcy by buying our debt, ask yourself, “Where did they get all of that money?”

We have been sowing the seeds of our own destruction, it is plain to see. Notice also that Walmart, our biggest employer and one of the greatest causes of exported jobs, is not on said list.

What will it take to Make Innovation Flourish?

Let us proceed to less provocative arguments and look at the current movements in the world of innovation. I won’t dwell on the applications, like internet connected refrigerators, UAVs, and the Apple watch, which everyone obviously needs. You are all inundated with that stuff every day, mostly from your kids.

Rather, I would look at the mechanisms by which innovation is promulgated; how it flourishes; and most importantly how it can impact your lives over the next few months.

When I left the field, open innovation and the outsourcing of ideas was the hottest thing going. Everyone had a portal in which the big companies put a challenge out on the table and we all could vomit forth our ideas for fun and not so much profit. It was called crowdsourcing and it was great until the big guys asked for solutions to complex problems, even some less challenging ones as well.

It is amazing how quickly the newfound altruistic fall back on good old greed when we think we are about to give away a million dollar idea. Thus, herein lays the not so surprising bump in the road to crowdsourcing, the intellectual property (IP) issue always rears its ugly head.

Entities with great ideas and the technical expertise to solve complex technical problems are also smart enough to know such a solution is worth something (though often not nearly as much as they fancifully believe). Those who don’t understand the value of a solution are often not smart enough to create them. My apologies, Trumpitis infects even those of us who proactively guard against it.

On the other hand, I think the Open Innovation revolution, the opening up of corporations to outside thinking is proceeding apace. The notion that technology is moving so fast that corporations must look outside for knowledge and help with innovation has become the norm rather than an aberration. It has become a mechanism by which companies can amplify what they know internally by engaging outsiders.

To me, this always made sense and the NIH (Not Invented Here) mentality is slowly being retired along with some the older (and not so old) engineers who are more worried about protecting their rear-ends than finding a great solution to a problem. Open Innovation has been more or less assimilated into many corporate innovation and product development environments; it is now simply the way they do business.

Innovative Engineers, Your Time is Now

The most exciting evolution of the Open Innovation movement has been the realization that the growth of everything from technology breakthroughs, to the explosion of social media, to crowdfunding and crowdsourcing, from internet sales, to the millennial entrepreneurial movement has created a very disruptive marketplace.

In his book, Collective Disruption: How Corporations & Startups Can Co-Create Transformative New Businesses, Mike Docherty points out that from 1958 to 2012, a company’s average tenure on the S&P 500 shrunk from 61 years to 18 years. At that rate, 75 percent of the S&P 500 companies will be replaced by 2027 by new companies that have embraced disruptive technologies. This further proves that companies that rest on laurels and expect to survive are delusional. Corporate America’s old mantra regarding the low hanging fruit, for which they still seem so fond of, is not going to work in the future.

We are living in an exciting time to be an innovative engineer. For most of us older folk, we have a choice; we can sit and watch the young guys chase one new technology after another, or we can jump in and become part of it.

Younger folk typically have open mindedness, enthusiasm, and a willingness to experiment, but they lack what we have; which is wisdom built from years of experience of watching and learning how the world works.

Would it not be wise, if corporate America would only see fit to put the two groups together: The young guys with their enthusiasm and willingness to try anything, and the old guys who have the experience and archival knowledge to harness that enthusiasm?

What will it take? Veteran engineers need to open their minds to more possibilities, and the younger generation needs to be willing to respectfully tune their minds into the experience of the old warhorses.

For the record, this is a combination that no longer requires corporate America’s cooperation. With crowdfunding sites, such as Indiegogo, Kickstarter, and the enablement of small investors through the Jumpstart Our Business Startups (JOBS) act signed into law by President Barack Obama in 2012, disruptive technologies do not require a corporate blessing. Thank goodness, and may they continue to ignore that fact at their own peril.  

Mike Rainone is the founder and chief innovation officer of PCDworks, a full-service science and technology development firm that specializes in immersion innovation, a proprietary methodology developed by Rainone. He holds more than 20 patents, and has worked for leading international companies across a broad range of industries, including 3M, Baker Hughes, Halliburton, Kimberly Clark, LEGO, and PepsiCo. Contact him at mrain1@pcdworks.com and visit www.pcdworks.com.

More in Product Development