Tagged: Innovation

Innovation – problem, idea, prototype, iterate.

ImageEveryone is talking about it. Businesses need it. The public sector needs it. Google has a lot of it. People are blogging about it (the irony isn’t lost on me here). It’s really big and disruptive, it’s iterative and small. Only some people can do it, while everyone can contribute to it. We all need more of it.

Apparently.

Over the past year I’ve studied innovation, read about how social enterprise/high-tech business/Apple/Samsung/GDS all bring innovation, been told to be more innovative, and written about innovation. It’s a huge subject, a lot of money is thrown at it, and it risks becoming perceived as the domain of the few.

Over the past weeks I’ve read a few things and had a few exchanges on Twitter that, for me, capture the essence of innovation. It’s not to say this is everything, but just that at its heart, innovation can be brought down to a few simple things and supported by a very simple process.

But what is innovation?

Its applied creativity. Its more than just an idea – an idea without implementation is just that – an idea. It usually comes from an idea that stems from a problem or a belief there is just a better way of doing something.

So where do these ideas come from – its hard to start innovating unless you have them?

In May the Guardian published an article by Rachel Burstein a research associate at the New America Foundation California Civic Innovation Project. She found that in local government strong personal networks help promote and develop ideas into innovations. This shouldn’t be a surprise to us. You only need to look at Silicon Valley. Yes there were skills, from Stanford Industrial Park, and yes there was money, from the defence industry. But critically there were social roots that fed the information technology revolution and allowed it to take hold. People knew each other, shared and pinched ideas.

So how do you apply those ideas and implement them?

After #ccbt @pdbrewer @reformattday @Heavy_Load @demsoc discussed how innovation is hard. Not the ideas part but the implementation bit. Recently Kirsty Elderton posted on the FutureGov blog her experience of working as a Prince2 practitioner and then also working with an Agile approach to developing a project. At its heart the development and implementation process can be simple. You have your idea, you kick it around with people, you prototype (and keep prototyping), then implement and continue to iterate. Makes sense doesn’t it?

But of it makes sense why can it be hard to do? As Kirsty says, there are ‘tensions’ especially in a world where often your commodity at work has been your professional background. The challenge is often that we have a lot invested in how we’ve always done things – some call it path dependency and I’ve posted about this before.

What’s changing, and arguably has been for some time, is that in a highly connected world needing new approaches to old problems, it’s not your professional background that matters – it’s knowledge and how this connects with others’ knowledge and creativity to promote and share ideas. That’s not scary – it’s common sense – and that’s innovation.

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Market churn, innovation, and the experience curve

Churn

There are a lot of articles about savings in local government about how much has been delivered and just how much more can be done? Has local government really been innovative in redesigning services or is local government reflecting its journey along the experience curve and there just isn’t much more room to save more.

The other common topic today, economic development, might hold some clues. National and Local Government often measure the success of their economic development strategies on the numbers of startups that are created. If we build a new business park they will come. If we fund startups more employment will result. This will be good, this means more confidence in the economy. The presumption is that more startups means more entrepreneurs seeing opportunity, which means more jobs, which means the economy is growing. Or does it?

Research suggests that his approach mainly produces market churn and it is only a small number of businesses that create most of the jobs. New companies set up and create jobs and these displace jobs in other companies who are less competitive. Churn is a mechanism by which labour markets reallocate workers towards more efficient ends. In this way, the churning of the labour market contributes to growth in the potential output of the economy. Or at least it would if those businesses were in a growing market. It doesn’t mean there a more jobs, or even that disruptive innovation is happening and new models of business or services are being found. When the market is maturing, or even reducing, businesses learn to do things more efficiently. That generally begins with making successively larger improvements and then successively smaller ones.

The exception to market churn, those businesses that create more net jobs, are those that are innovative and disrupt exising markets. They do something radically new that is significantly more efficient and/or meets the market’s needs more effectively, or even creates a new market. Interestingly evidence suggests these businesses are also more resilient though a downturn.

But how does this apply to local government and the impact of austerity? Have we seen a similar journey in how local government has delivered savings. A lot initially and then they get harder to find. The experience curve begins to flatten. What we may be seeing isn’t the creation of anything really different, we are just seeing market churn that pushes public services along the experience curve. Its just getting cheaper to do what has always been done. Costs are going down, salaries below inflation, jobs are being deskilled though the introduction of technology and changing practice, systems and processes are getting leaner. Simply, people doing fairly similar things for less and probably for a different employer. Will this improve services? If improvement means cheaper then probably not. If it means reducing demands, finding better ways of doing things then maybe, but its not looking promising.

This isn’t to lay the blame on anyone. NESTA, in their study on innovation in Whitehall found, for many valid reasons, public services have typically not been subject to the same kind of creative destruction seen in some private markets. The risks are high, decommissioning services isn’t cheap, writing off sunk costs is hard politically, and considerable social harm would result from the breakdown of the public services. Service closures could push demand elsewhere, undermining the actual efficiency and legitimacy of any cuts.

A lot is stacked against radical innovation, and so transformation, in public services. Is it just too much?