It is safe to say that the innovation most discussed at this first day of the WEF in Davos is financial innovation—the SIVs, CDOs and other nasty creations of Wall Street and London that haved cratered the credit markets and are now taking the US and global economy down.
So I decided to open my workshop on that note. The place was packed, overflowing with people. But I didn’t quite know how to get into a discussion of financial innovation. Tim Brown, from IDEO, and a panelist, came to my rescue. He said that innovation process that came out of Wall St. that led to SIVs and CDOs was flawed. “They didn’t do any prototyping. If they had done prototyping, they would have discovered that their products didn’t work. It was bad innovation practice.”
Lesson One from Davos: always prototype your innovations or you risk bringing down the global economy.
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