Monthly Archives: September 2015

Success in innovation ecosystems

Based on own experience I came up with an informal list of items that I think are key to an innovative ecosystem for it to thrive over a significant time period. It doesn’t attempt to be anything more than a practical checklist to a first characterization approach. What I would start looking into is:

. Size and critical mass

. Specialization

. Distance to power

. Strategic vision

. Open innovation culture

. Technology approach: adoption versus invention

. People involved

So let’s start with size and critical mass. Like it or not, size does matter. Regardless of how innovatively appealing your products may be, it is unrealistic to try and compete on your own in a global market if you are a micro-SME, as is the case with a huge number of businesses in Europe (http://ec.europa.eu/eurostat/statistics-explained/index.php/Glossary:Enterprise_size).

The way out of this “size trap” is, I think, either scaling up product and company or else being exceptionally good at productively networking with other SMEs outside your internal market. Both solutions are costly for an SME in terms of capital and culture, but if they manage to succeed they will most likely have a competitive advantage toward bigger corporations typically less agile and market responsive.

An ecosystem populated with such SMEs will soon start seeing internal and external synergies exploited and will capture the interest of similar companies from other regions. The process will hopefully grow exponentially and beyond a certain point there will be no turning back, thus consolidating the innovative environment.

In connection with this I think a reflection on the public SME support programs throughout Europe should be made. Are we putting the right means in place or rather helping SMEs survive staying small and local?

A good approach here may be the SME Instrument (https://ec.europa.eu/programmes/horizon2020/en/h2020-section/sme-instrument), which I consider an ambitious innovative concept in the right direction. We will soon see its deployment and phases 2 and 3 results.

Far from being an expert in the matter, I would think a similar logic is applicable to the size of research groups and their competitiveness at global level. It seems not so evident: http://www.nature.com/news/bigger-is-not-better-when-it-comes-to-lab-size-1.16866

But then again, this raises further questions. I will just leave one on the table. Are number of publications and their impact indexes the right indicators to measure productivity in research? This is indeed connected to the next item in my list: specialization.

Debunking innovation myths. Why some do better than others

Territorial indicators on innovation performance are periodically made available by different organizations (http://antonioviader.com/innovation-policies/metrics-monitoring). In European regions that score poorly there is a typical reaction to each report. Scarce public investment in innovation is the recurring argument put forward by many to account for bad results.

I think this is an oversimplified and incomplete view. To foster innovation at regional level there needs to be an adequate ecosystem allowing for it. Low public investment (not to be confused with expenditure) is frequently part of the problem but not the only nor the most contributing factor. Investment (both public and private) is a necessary condition, in the same way water is a requisite for life as we know it. But just watering desert sand will unlikely grow anything.

In following posts I will write about some of such lagging ecosystems’ attributes and how I think they could be more successful. The first element I want to tackle here is what I call the “Lost in Translation” effect. It has not much to do with Sofia Coppola’s awesome movie, but the name just fits in nicely. Too many innovation regional policies I have seen are designed by merely transplanting lines of action that have proven successful elsewhere. But they fail when deployed at home because a thorough analysis of territorial capacities and characterization was not seriously taken into account.

An illustrative example of this is, I think, the myriad of Silicon Valley clone candidates that have been planned and embeded in regions all over Europe trying to replicate its success. The problem is that SV constitutes a unique natural ecosystem resulting from dozens of interrelated factors that simply cannot be forced to occur again in the same combination. Among them there is, yes, a huge public investment (mainly emanating from the impact of science on the military industry after WWII). But equally important, if not more, in the making of SV was the academic profile of Stanford compared to the traditional European and Ivy League universities or the affordable housing for high-tech workforce and available business space. These and many more ingredients combined created an environment where a genuine “no fear” culture could thrive and resulted in the entrepreneurial success everyone else tries to translate. Understanding this helped me realize why it’s so hard to get the next Apples and Googles in Europe.

I think we need to forget about translating and quickly come up with a genuine European approach to innovation. Unlike many, I’m optimistic about it. A competitive advantage could precisely come from our regional diversity properly managed. This opens up questions regarding specialization, governance structures and critical mass that I intend to address in following posts.

I will be more than happy to hear your experiences and opinions, specially if they are different to mine. As I said, I think diversity is a great innovation driver.

Innovation, just another hype?

Everyone seems to be into the whole innovation thing lately. However, I have seen more than one C-level business person without a clear insight on why innovation is relevant to their company.

Needless to say, with some politicians, public officers and so called policy makers my experience is way more deceiving. In some environments innovation is merely utilized as a trendy excuse, useful enough to create structure and budget around it.

In my next posts I’ll give my view on the reasons that contribute to such a scenario and the dramatic consequences I think it will lead to.

I would be very interested in sharing similar (or different) experiences and opinions you may have.

Cheers,