Inside Real Innovation

How the Right Approach Can Move Ideas from R&D to Market — and Get the Economy Moving

Eugene Fitzgerald, Andreas Wankerl, Carl Schramm

• Publisher: WSPC
• Year: 2010
• eBook ISBN: 9780000987211
• Topic: Business
• Subtopic: Business General
• Index: Business

Video — Prof. Eugene Fitzgerald talks about the process of innovation and introduces Inside Real Innovation.

Read more about the authors' interview/article with Inc. and Forbes.

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This breakthrough book gives a ground-floor view of the innovation process, showing how fundamental innovators really work. Then, it connects that knowledge to the bigger picture, explaining why the “innovation system” in the United States is failing to work as it once did, and what all parties can do to build a better system for the future.

Inside Real Innovation is written by distinguished practicing innovators. They debunk the concept of innovation as a linear process, from research to development to product in the market. They present a simple model for understanding it as a highly iterative process, in which you cycle repeatedly through many factors in the areas of Technology, Market and Implementation — until the right pieces come together. Co-author Gene Fitzgerald tells the story of his own major innovation, tracing it along the winding path into products we use every day. The authors then proceed to tell the larger story of how the vaunted American “pipeline” for carrying this process has been pulled apart.

The book is a must-read for anyone with an interest in a strong innovation system: investors, innovators and people in corporations, universities and government. Inside Real Innovation has become the course-book for a White House-recognised MIT course entitled 3.086x Innovation and Commercialization.

--> Contents:

• The Innovation Crisis
• Inside Real Innovation
• One Person, One Innovation at a Time
• Characteristics of Fundamental Innovation
• The Story of a Fundamental Innovation
• The American Innovation System
• Building a New Innovation System: The Free Market Side
• Building a New Innovation System: The Research and Education Side

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--> Readership: Students and academics studying and teaching innovation; business professionals and general public interested in innovation processes. -->

“We… hope that this book… will help innovators, investors, corporations, universities and government to plot potential paths for future high growth.”

The Big “So What”

Innovation is a complex process, with many variables and ever-changing forces at play. This book provides insights into the true processes behind innovation, and presents a universal model that explains how key stakeholders (including innovators, investors, corporations, universities and governments) can contribute to, and reap benefits from, a robust innovation system.

Introduction

Innovation is the process of translating new ideas into useful forms that bring value to the marketplace. A robust innovation system is the foundation of national economic growth, and affects all its stakeholders.

While the book is written primarily from a U.S. perspective, the insights are relevant outside of the U.S. In this summary, we’ll outline how innovation truly works, the challenges involved, and how to rebuild a healthy innovation pipeline.

“Even the best innovators cannot operate in a vacuum… Innovators have to think and plan and interact within this system, and their innovations have to travel through it in order to arrive, eventually, in a usable form at a marketplace.”

Fundamental vs Incremental Innovation

	Fundamental Innovations (FINNs) change industries and behaviours in ways that would’ve been impossible without the innovations, e.g. the first steam engines and first personal computers. Such innovations require many rounds of research, conceptualization, testing and changes. In addition, they also involve either (a) a new supply chain, with new players and a critical mass of new talents/ skills/ capabilities, or (b) integration of the innovation into mature supply chains, with incumbents’ buy-in and changes to entrenched practices. Thus, it takes at least 10-15 years before FINNs can be successfully deployed in the marketplace.
	Incremental Innovations (IINNs) are minor improvements to what already exists, e.g. enhancements from Windows 8 to Windows 10.
	FINNs and IINNs lie on two ends of the same spectrum, rather than in separate categories. Specifically, FINNs create paradigm shifts that propel long-term growth and wealth. IINNs create more-immediate value and ongoing improvements which add up over time. We need the full range of innovations on the continuum for a thriving ecosystem.

“If we want to restore the economy to real vitality… we need to deal with the fact that beneath the financial crisis, we have an innovation crisis.”

The Innovation Crisis

The authors suggest that the true problem behind USA’s ailing economy is its shrinking innovation pipeline. Since the early 2000s, there has been a lot of IINNs, but barely any FINNs to propel new growth. Yet, this trend isn’t obvious because:

• Moore’s Law - the doubling of transistor density in integrated circuits every 2 years - brings huge improvements in technological productivity; and
• Many venture capital (VC)-backed start-ups are creating a facade of growth. They manipulate numbers in hope of big returns from IPOs, rather than develop true innovations with sustainable growth/ profits.

To fix the economy, we need to fix the innovation system.

Part 1: The True Process of Innovation

Let’s start by correcting 2 misconceptions about innovation:

It’s not just science or technology. Innovation involves bringing new ideas to the market, in a way that delivers value. Hence, great ideas alone aren’t enough; we need an entire pipeline to shape the innovation and bring it to market. In Part 2, we’ll elaborate on the 3 components that must jointly drive innovation – Technology (T), Market (M), and Implementation (I), or “T-M-I” for short.

“All three elements - the nature of the product, the implementation into reality, the market to be addressed - are continuously being balanced against each other, and thought of in relation to one another.”

It’s not a linear process but an iterative one. People tend to think of innovation in a linear sequence like this: Discovery => Invention => Development => Product => Market => Profit. In reality, innovation is an iterative process - an ongoing interaction between product, implementation and market. The innovators go back and forth to take stock of what works and doesn’t, consider previously-unknown facts that they’ve learned, and concurrently consider all these factors to advance their innovation. Each iteration brings “innovation efficiency” to improve decision-making, optimize results and reduce wastage.

“While the iterative process may look and feel ‘messy’, its real aim is innovation efficiency.”

Innovation in Practice

In this segment, we’ll take a look at 2 examples of how a raw idea can become a viable innovation, before presenting all the innovation variables using the model from the book.

Innovation at Work (based on a fictitious character):

• Jane is an engineer who has a gut-feel about a technological solution. She starts by doing some initial research to find existing technologies that could contribute to her vision, and gathers enough preliminary info to hypothesize that a tech solution is indeed possible.
• Instead of continuing her tech research, she moves on to speak with the potential users, like the VP of Tech...

Table of contents

• Cover Page
• Title
• The Big “So What”
• Introduction
• Part 1: The True Process of Innovation
• Part 2: A Model for Innovation
• Part 3: Building a New Innovation System
• Other Details in the Book to Look out For
• About the Authors
• About ReadinGraphics
• About World Scientific