My colleague and chief economist of Business Week, Mike Mandel, has a provocative piece out saying that the promise of innovation in the US has not been met over the past decade??nd is a main reason for the current financial and economic crisis. This is a must read article.
Boiled down, Mike argues that most of the major innovations of the pasts decade has not lived up their potential as economic generators. He lists technological breakthroughs in biotech, cancer treatments, cloning, fuel cells, gene therapy, new drugs, miniaturized silicon-based machines, satellite-based internet, speech recognition and human tissue growing. All were promising in 1998. All failed to live up to their promise. Or did they?
Economists and policy-makers tend to confuse invention with innovation. Innovations are significant changes that add value to people and organizations. Breakthroughs in science and technology per se do make for innovative changes in society. So it is not the failure of innovation over the past decade that is the problem but the failure of technological and scientific breakthroughs to become innovations that is the issue.
So why? My answer that engineers and scientists often forget the social aspect of invention. They come up with new things in labs but do not link them to the needs and desires of people. So they stagnate in labs, waiting for someone to understand the culture, to tie the breakthroughs to society. Go to any period of great technological and scientific change, such as the late 19th and early 20th centuries, and you'll find a one, two, even three decade-long pause between invention and innovation. Scientists are often clueless on how to apply their inventions and it takes years for that application to be found, often by those who aren't the inventors.
Paul Saffo of Stanford recently gave a speech where he said that if you want to find the best opportunities for economic growth and investment coming out of the current recession, look to technological and scientific breakthroughs made two decades ago. Bio-tech and social media are two of his picks.
So Mike, I think I agree with you, kind of. We've had a terrific period of invention over the past decade. But we need to bring in the designers and their empathetic, user-centric, anthropological approaches to innovation to turn them into growth generators.
I hope the policy-makers in Wsshington understand this.
What do you think about his conversation?