A single strand of RNA has brought humanity to its knees. For all our technological sophistication, we spent much of 2020 in conditions that would have been familiar to our medieval forebears: in quarantines, locked down amid a new and poorly understood disease.
The challenging search for solutions to the Covid-19 pandemic is forcing us to rethink innovation, and question whether our obsession with its role in modern society has done us all a disservice. Indeed, many of the sacred cows surrounding this process have stood in the way of the kind of collaborative efforts needed to bring new goods, services and technologies to scale. They have – albeit inadvertently – made it harder, not easier, to bring to market new solutions, from much-needed medical devices, to technologies that make our production systems more sustainable.
The ultimate sacred cow is the very idea of innovation. Too much energy has gone into dissecting and codifying it, as if it were an end in itself – an activity separate from other business functions. As a consequence, the plucky startup is the epitome of progress, with corporations scrambling to ape it by embracing an “innovation culture” fuelled by free gyms, healthy snacks in the lab, and flexible reporting lines. But this structured upheaval is not a blueprint that is transferable between sectors: someone who cut their teeth in a software startup should refrain from lecturing others on how to innovate in pharmacology or in the energy sector.
Charming origin stories of titanic founders coming up with the big idea against all odds often become an integral part of a company’s brand identity. But this way of looking at change has led to excessive focus on the front end, when the so-called “ideation” happens; bringing something new to market, especially a new physical product, relies on a succession of insights, learning-by-doing and breakthroughs over time, many of which occur much further downstream.
Tesla’s innovation came not from a singular eureka moment, but through the iterative adaptation and deployment of existing manufacturing and battery technologies to create a more affordable and appealing product. For the perils of too much emphasis on front-end ideation and not enough on iteration and deployment, the blood-testing startup Theranos provides a major cautionary tale. Once valued at $9 billion (£6.9 billion), its founder Elizabeth Holmes is still facing charges of allegedly fleecing investors and defrauding doctors and patients with hyped claims about its medical technology.
A related obstacle is the overvaluation of intellectual property. In a limited number of cases – say, the sports drink Gatorade – the value truly resides in the initial design or the invention. But fixating on the patented or patentable idea can hinder effective partnerships when scaled production is the goal. Startup graveyards are filled with reluctant inventors clutching onto their patents, even though the promised millions could only materialise if those items can reach mass production. This mindset could also lead to an underestimation of the cost of regulatory compliance and other institutional barriers. This is particularly true if you are producing hard-tech or a physical product.
Early stage innovation myopia afflicts private and public sector actors alike. Governments have undeniably played key roles in financing early stage research. While it is true that they get too little credit for these investments, the question is whether more resources should instead be directed to support the scaling of new technologies. Clearly, governments should not only invest in budding R&D projects, but also help tackle scaling challenges through piloting, standard-setting, public procurement, and demand-creation in order to bring down the costs.
Mythologising “innovation” has reinforced the go-it-alone, winner-takes-all mentality that exacerbates the systematic neglect of collaboration. Working with established players can be of critical value, not only because of their power to spoil, but also because they possess valuable knowledge of regulators, and the ability to resolve many of the challenges faced when scaling.
The rapid rise of plant-based food producer Beyond Meat, with its myriad linkups with retailers, restaurant chains, and (briefly) meat giant Tyson Foods, testifies to the efficacy of a collaborative approach. And innovation is not the preserve of startups. Apple’s partnership with Anglo-Australian mining giant Rio Tinto, and American aluminium producer Alcoa to produce zero-carbon aluminium shows how a trio of major corporations can come together to drive innovative, more sustainable production.
It is critical to harness the capabilities of all relevant players – startups, large corporations, universities, governments – in order to create a more collaborative ecosystem able to boost the provision of desirable goods and services. This will be essential in the race for the Covid-19 vaccines, which is set to be a major test case of this comprehensive collaborative approach.
Instead of following some prescribed script, would-be innovators should be asking themselves whom to work with to remove the barriers to scaling. Coming up with an idea is the easy bit. Scaling is the toughest nut to crack.
Bernice Lee is executive director of the Hoffmann Centre for Sustainable Resource Economy at Chatham House. Jeff Carbeck is chief executive officer of 10EQS, a businessand technology consultancy
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