zondag 21 juli 2013

Innovation drivers

Innovation is the true key to a more prosperous world.

What drives innovation? What enhances human ingenuity, creativity and the persistence to change? Can a government stimulate innovation? To my opinion, any governmental or institutional stimulation of innovation as such is simply impossible. People cannot be forced to innovate, on the contrary, innovation is more likely to flourish when true liberty is provided. Yet, some environments are more likely to evolve into innovation hot spots than others. How come?

Boundary conditions

I am convinced that innovation will evolve only by setting the right boundary conditions. Thus a fertile environment for innovation can be created. if such fertile environment is created, innovation will evolve naturally. It will evolve because it is embedded within our nature as human beings. The following ten conditions may help:

1. Respect of property

Respect of ownership and property is the most important boundary value for innovation and the will and spirit of people to create and enhance their life. If property is seized by any authority without repercussion, any successful initiative will suffer the thread of being seized. Dictatorships that do not respect property are the biggest innovation killers. Fighting these regimes enhances innovation!

2. Personal freedoms

freedom of speech, freedom of travel, freedom of interaction, freedom of religion, freedom of trade, freedom of starting a business, freedom of residence.

These freedoms sound very logical, though we should bear in mind that these freedoms are not that obvious. In western societies, these freedoms predominantly find their roots in the implementation of a trias politica. However, in current (also western) societies, I fear that the trias politica is under severe threat. The power of money is slowly corrupting the legislative and administrative powers and is merging with both of them to become one. This effect induces a thread of a new form of dictatorship, a dictatorship with no face, swallowing substantial amounts of global taxpayers money. This effect implies a severe thread to our most valuable asset: liberty.

The freedom of trade is in a shrinking economy at threat too. Governments trying to safe local manufacturers forget that only global competition urges local manufacturers to innovate and stay ahead. Protection makes any protected industry lazy and reluctant to innovate. In industry a healthy Darwinism is essential for a survival of the fittest, wherein those successful innovations win over the inferior ones.
Freedom of travel is essential for innovative ideas to find fertile soil. By traveling, people spread innovations and thereby enhance the diffusion of innovation. By traveling of people certain hot spots can find new brains, hands, harts and minds needed to reach its full potential.

Freedom to start a business is quite obvious. If one is not allowed to incorporate his innovation, well he will not manage to find investors, employees and most importantly he will not find much clients.

Any restrictions in these freedoms will reduce innovation.

3. Good infrastructure

Throughout historic development, innovative ideas were mostly derived from people sharing knowledge. By interchanging ideas, better ideas evolve. Good communication infrastructure will enhance innovative interaction and help interchange ideas and opinions.

In order to distribute both innovative ideas, innovative services and products based on these innovation a well functioning transport infrastructure is essential. A good infrastructure enhances diffusion of innovation and market penetration.

4. Good education

Without the proper knowledge and insights, obtained in early age, innovators can not come to the best innovations. The knowledge of the state of the art, is essential in obtaining insight in choosing directions for the right innovation. Good education is essential for gathering this knowledge and insights.

Good education is a combination of two things, inspired teachers and motivated pupils. The status of the worlds teaching class needs a serious upgrading, good and inspired teachers are essential for an innovative climate.

5. Innovator role models

In order to inspire young innovators, and to motivate young pupils, successful role models play an important role. They show that innovation can lead to success based on personal performance. Role models innovators can be like Zuckerberg, Mittal, O'leary, Rockefeller.

6. Skill/merit based social hierarchy

If innovators in early stage of their life are confronted with a merit based or skill based social hierarchy, they will incorporate a feeling that investing in knowledge and skills pays off. If a social hierarchy is skill based, future garage type innovators will be inspired and hungry for ascending the social ladder.

7. Poverty and the confidence to change

Poverty is a true innovation booster. As long as the poor innovator sees that by putting efforts in innovating and putting his innovation to the market, he can increase his income level and social status, he most certainly will innovate. If however his situation is hopeless for what ever reasons, because of increasing personal debts, because there is no possibility to start innovating because of lack of one or more personal freedoms, than the innovator is lost.

Not at all rich innovators were starting from a students dormitory or a garage. Now some of them are famous innovation icons.

8. Proper rewards for innovators

A good and functioning reward system for innovators, such as a temporary monopoly is essential for innovators to be able to regain a return on their investments. Temporary monopolies on innovations can encompass copyrights, model protection, patent protection and protection against unfair trade. These rights can temporarily block others from copying the profitable ideas without having to bear the development costs.

9. Fair legal enforcement system for temporary monopolies

If any innovation, being a book, a design a product a theater play becomes successful, others may be seduced to start copying the innovation. A good enforcement system is therefor needed to maintain on a temporary basis the rewards there where they should be, with the innovator.

10. Open markets 

For a good scale up of innovations, an open international market is essential. Innovation will hardly enter any closed market economy.

Any regime, country, state or institution setting these boundary conditions well, will automatically empower innovation, for the benefit of the globe.