Ecosystem (forward) innovation

This is a little blurb I wrote with some personal ideas on the debate on innovation which we are having within TNO through our new Strategy and Change program. The reason I am posting it here (besides the fact that I have no real time to work it out into a real publication anyway) is that some of this thinking also fits in very nicely with the much more broader and far-sighted approach to 'armed force' that I am pleading for in this blog. 

"In an increasingly globalized world where fighting poverty is not only a moral responsibility but also a strategy for confronting some of the major problems (diseases, malnutrition, insecurity [emphasis added!] and violence) that ignore boundaries and contribute to global insecurity, thinking about new ways of generating and sustaining growth is a crucial task..." 

I have always been fascinated by the ethereal essence of innovation. Why it seems to come so naturally, effortlessly,'organically' in a place like California (where I lived for a few (all too few!) years), while the rest of the world (including many defense organizations) works so feverishly - and often not very successfully - to emulate it. I was therefore delighted when happenstance recently provided me with two new opportunities to rekindle my interest in innovation policy.

The first one was the small role I played in a 'European-Chinese' conference on innovation that our Strategy and Change program organized earlier this year in The Hague with the Chinese Academy of Sciences. At that conference, I happened to chair a panel on Health and ageing, where I was just blown away by a presentation by Hans Hofstraat, Vice President of Philips Research. Hans has an extremely distinguished career as as an applied research scientist at Akzo-Nobel, as a policy maker at one of the most respected parts of the Dutch government (the fabled Rijskwaterstaat) and as a professor at the University of Amsterdam. So definitely no sleek snake-oil salesman he. His presentation reinforced two main points in my thinking that I had vaguely considered before but that somehow really 'clicked' there. 

• The first one was how the health sector has already made the shift from a focus on response to a focus on resilience - something that we in the defense and security field are just now starting to think about. In the old days, health care was called medicine. It was about doctors getting ever better at identifying diseases and then curing them after they occurred with ever shinier (and more expensive) physical technologies. To me this is how defense still thinks. We still call it defense (instead of security or resilience). It's mostly about the 'military' getting better at identifying conflict and then intervening to stabilize it with 'hard' (ever shinier, and ever more expensive) technologies. Yet the health sector has changed - as the presentation also clearly illustrates.  It's called health care now. It's increasingly much more about the health status of the citizens than about the doctors: "Addressing the needs across one‟s lifespan, enabling long and healthy independent living". It cuts across traditional stovepipes, involving other parts of the public sector (education, sector and the private sector) in novel and exciting new 'comprehensive' (he calls it holistic) ways. The previous paradigm provided no good value for money, so they changed (or - to be fair - are changing) the paradigm. It seems to me the defense world can definitely learn something from this and I will definitely return to this theme in future blog entries. 
• The second Aha-Erlebnis at this conference had to do with China and the immense opportunities it offers for forward innovation. In most of 'our' discussions on China, we 'securitistas' (I borrow the term from Richard Sakwa, one of the few remaining Russia-specialists in Western Europe)  manage to frame almost everything that China does as a diabolically manipulative and deliberate long-term strategic plan to 'take over' from 'us' - a plan that has to be resisted by all means necessary: the more protectionist, the better. And yet the private sector, which is confronted with Chine's irruption into the world's markets even more acutely than are our governments, is just jumping on the massive opportunities that are opening up there. Is overcoming all sorts of hurdles to make this vision happen - also bureaucratic ones. I was struck how the diplomats at this conference kept complaining about all sorts of impediments to engaging China in the way we wold like, while a number of Western businesses are present over there and seem to have learned to navigate those obstacles in more creative ways - and to make (a lot) of money that way.   

The second trigger was another - larger - event HCSS co-organized with TNO and Granaria called the World Foresight Forum, in which I had the pleasure to chair a fascinating panel on foresight in ICT (one of the panelists, Venkatesh 'Venky' Hariharan from Google India wrote an interesting blog entry on this panel and the forum). I had first raised the idea of setting up a foresight forum (which I affectionately called  'FoFo') with HCSS in 2008. Building on our growing HCSS research portfolio in the area of security foresight, my idea was first and foremost to organize a more security-focused alternative to 'Davos'  (which still focuses primarily - although not exclusively - on economic issues) and secondly - and in my mind even more importantly - to make security foresight more 'balanced', also in the sense that security foresight should look at both 'downside risks' AND upside risks.

I was at not at all involved at all in the organization of the conference, and when I did see the final plans I  - as usually - was not surprised but still despaired about the way we 'framed' the whole conference. The 'Themes' (which are still up on the website) that were defined for the conference fully exuded the 'gloom and doom boom' that securistas have been peddling. In the current time period, this particular way of framing the future only pushes the profound disorientation that many people are experiencing into a much more negative direction than is warranted or desired. I have noticed time and time again the self-defeating tendency of the security and the defence community (and mostly the intellectuals, NOT the actual practitioners - whether they be soldiers or police officers) to focus on the negative at the expense of the positive. 

venky

In most countries innovation policy is typically framed as being about improving something (quality of life, GDP, GDP/cap,....) NATIONALLY by stimulating innovation NATIONALLY - primarily AGAINST others (making sure we stay 'ahead' by doing/producing/... things HERE faster, smarter, cheaper, ... THAN..., etc.) In management guru-talk, it's always been much more about competitive advantages (Porter) than about open innovation (Chesbrough). Incidentally, open innovation is NOT a changey-hopey kind of thing, but it is opening up out of calculated self-interest. Proctor and Gamble did NOT open up it patents or IBM does not license its IP to partners and competitors alike for the good of mankind, but to make more money this way.
But so to me personally, innovation is not - and should not be - an aim in and of itself. The ultimate ('distal') goal should always be to improve the quality of life of the people living within one's jurisdiction in the sense of giving individuals more opportunities to realize their innate potential. In the case of the country in which I have now been living for 12 years: how we can stimulate innovation that will benefit the lives and the development potential of the inhabitants of the Netherlands. But I really wonder whether our proximal goals for national innovation - the way in which we currently frame our innovation ambitions - are in sync with our distal ones.
As I delved into the literature, I was struck by the fact that it is still overwhelmingly OECD-based, as though there were no innovation elsewhere. I suggest that those who need convincing take a look at this youtube-video

• lit talks about horizontal innovation ('ok' - investing in R&D, fostering high-tech skills) and vertical innovation ('not ok' - favouring specific sectors and companies ) - but still all 'national <-> maybe 'forward innovation' (through ecosystems) smarter?
• greatest potential for growth (and thus for return on innovation investment (ALSO for the investor!!!!)) is NOT in the EU, but elsewhere
• Gerschenkronian advantages of backwardness were 'natural' (i.e. NOT competitive/Porterian); but we could even artificially (a-la Porter) stimulate this leapfrogging (by developing (/investing in) 'high-tech' solutions to 'backwards' problems)
• => if we want to improve NATIONAL levels of x, y, z -> invest in promising 'innovation ecosystems' ABROAD (will create more wealth - both 'there' and (thus) 'here')
• [also refer to John Kay's nice new book about 'obliquity']
• step beyond 'new structural economics' (idea that 'old' industrial policy was bad; but 'new' industrial policy ok)
• some principles:
• should be in step with a national economy’s comparative advantage (see current KIA-priorities)
• facilitate, don't steer
• should be OUTWARD-looking (with government 'new style' support)
• not only physical, but also social technologies [Nelson] (e.g. most of the research behind the iPod was done by other firms, but Apple reaped huge profits from its skill in design, systems integration and marketing)
• also ties into our de-stovepiping agenda (e.g. has to include foreign affairs AND line ministries)
• concrete
• (historically: think England vs US and not Germany vs rest)
• think Brasilian agriculture (miracle of the cerrado), the miracle of 'telephone lady' , 'Lighting Africa' and apply that to other African, Chinese, etc.counterparts => pick sthg you're good in, invest in R&D in applications of existing technological knowledge ABROAD (in growing areas), develop an ecosystem WITH them, and support THAT (intelligently)
• would require a truly whole-of-government (cross-stovepipe) approach:
• if the area picked is in an unstable area, see whether defense/KMar could make a contribution
• use education money to bring people from that region over to study/do research here (and vice versa)
• use development aid money wherever appropriate
• make sure other line ministries contribute know-how (legal, policy, etc.)
• Fourth period of growth [first 3 - Cameron, 1993, also read Morris 2010 for the longer term - and see the many historical instances Gershenkronian advantages making HUGE impacts on innovation)?
• 1: up to the middle of the 18th century: static living standards, despite population growth - Malthusian conditions.
• 2: from about 1750 to the 1820s: some improvement in living standards, demographic transition, (proto-)industrialization
• 3. (initially in England at the end of the first quarter of the 19th century), modern 'national' economic growth with natural spill-over (but still state-centered in a 'realist' (of the 'vulgar' zero-sum type) way and primarily industrial ) (+ over rival (industrial) goods?)
• 4. (?) not just 'spill-over' (natural), but 'push-over' (stimulated), heterarchical ("the end of the line"), liberal, and post-industrial (+ over non (or less)-rival goods - knowledge, ideas?)