MIT Europe 2010 Conference in Brussels, the report
November 22, 2010 Leave a comment
The Massachusetts Institute of Technology Industrial Liaison Program (MIT ILP) and Belgium’s largest employers’ organisation and trade association Agoria organized last October a 2 day conference titled Achieving Growth Through Strategic Innovation. Researchers from MIT, members of European institutions and industry representatives gathered at beautiful Egmont Palace in Brussels, Belgium, to share experiences and identify new opportunities coming from the innovation and researcher & development world. What follows is what I enjoyed most. At the end of the post, my own takeaways as usual.
The first day session was opened by the Organization for Economic Co-operation and Development (OECD). Paris based but supported by over 30 countries. OECD provide them insights about a broad range of topics, among others Economy, Sustainability, Governance and Innovation. OECD gave a talk about innovation in these turbulent time. First of all, innovation is more than technology and R&D. It includes a wider range of strategies: the organization, its processes and the generation of new ideas, to name a few. In brief, innovation is no longer a matter of researchers and scientists. Secondly, organizations no longer innovate in isolation and closed in their labs. Their technology may be developed cooperatively or acquired by third parties. This approach also known as open innovation has recently flourished thanks to Internet. Younger firms are more prone to adopt this new approach. On the other hand, it seems that public support is still too much focused on promoting only R&D investments. Moreover, there is a lack of legislation promoting the creation of new ventures which are the ones creating more occupation.
The second speech of the day was by Professor Yasheng Huang, from MIT Sloan School of Management giving an overview of the entrepreneurship in the emerging countries of India and China. To start with, in both countries new ventures came mostly from overseas investments. There is definitely a lack of local venture capitalists. Therefore, only the biggest projects are the one to be supported. Founding may vary from a minimum of 2 to a maximum of 100 million dollars. There are of course some success cases, very local firms grown exponentially in a relatively short period of time. But this has happened due to international market dynamics rather than national level strategies. This is the case of the Indian INFOSYS and the Chinese ALIBABA. The former was founded by seven computers engineers investing 250 US$ who have been able to ride the IT outsourcing wave coming from the western multinationals looking for new ways of cutting their costs. Similarly, the latter has taken advantage of the increasing number of local manufacturers selling their goods to Western ventures aiming at reducing their labor costs. However, the threat of India and China to the Western world in terms of innovation and research&development is very clear, numbers do not lies. China and India have respectively 600,000 and 350,000 college graduates in engineering. Whereas, U.S.A has ‘only’ 70,000 of them.
The third talk worth mentioning was given by Philips Healthcare and it was focused on the concept of meaningful innovation. The innovation becomes meaningful when it rides the current trends in human behavior and it is centered on the unmet needs of the human being. And to achieve that, we do not have to worry too much about the current limits of the technological know-how of our company. In the world out there, it is likely that someone else is already able to provide us a solution. To explain this concepts, Philips reported the case study of a person having a myocardial infarction. In this context, time is the most important factor: the sooner you understand how much serious is the heart attack, the more adequate is the treatment planning. Therefore, the journey of the person, from calling the 911 to going under surgery in the operating room, was shown and all the bottlenecks at finding the diagnoses were highlighted. As a result, the ambulance transportation from home to the hospital was claimed as the longest. The meaningful innovation seemed then quite obvious to Philips, a portable diagnostic equipment to be used during the transfer to the hospital. Some technology coming from third parties was necessary. But this was not considered as some kind of treat. On the contrary, it was an opportunity to access the market faster and more efficiently.
The conference wouldn’t have been complete without a talk about innovation as a mean to fix the global climate change. Professor Richard Lester, Head of the Department of Nuclear Science and Engineering, gave his point of view about what kind of innovation system we should build to respond to the risk of global climate change. Professor Lester firstly listed some inconvenient truths about the energy innovation problem . Firstly, the critical period for addressing climate change is the next few decades. However, the today’s low-carbon energy technologies are by large more expensive than the high-carbon incumbents. Therefore, the biggest innovation challenge through mid-century will be to bring down the costs and risks and improve the scalability of existing low-carbon technologies . In addition, if left solely to market dynamics, innovation will not occur fast enough because the costs and risks of climate change are not priced into energy markets. Government intervention will then be required and sustained over many decades to accelerate the energy technology transition. Finally, it will be impossible to achieve the decarbonization goal without an expansion of nuclear energy. Professor Lester then moved to show what is needed to tackle global warming. He proposed 3 different waves of innovation. The first should occur from now to 2020 and should be focused on increasing the efficiency of the present high-carbon solutions and on finding new ways of financing R&D activities. The second wave of innovation should go from 2020 to 2050 and should be dedicated to reducing costs and risks associated to the large-scale deployment of the existing low-carbon technologies that will happen over these 30 years. The last wave should start, then, in 2050 where we should see the fruits of the basic research begun 40 years before. According to Professor Lester, the winning technologies will probably be nuclear fusion and artificial photosynthesis, i.e. artificial systems that mimic nature’s process of photosynthesis and thereby produce a more efficient way of harnessing the sun’s energy than today’s photovoltaic panels. The talk ended with general design principles to be taken into account every time we deal with innovation systems: promote diversification because there is no single solution to problems especially when you are finding new ways of fixing them, promote competition in order for the best opportunities to emerge, tolerate failures and look for broad-based political coalition.
Guest speaker at 2010 MIT Europe Conference was MIT alumnus Ray Kurzwail. Probably already known to someone for inventing the classical music synthesizing computer that would revolutionize the music industry or after receiving in 1999 the National Medal of Technology from President Clinton in recognition of his development of computer-based technologies to help the disabled, he has reached his peak notoriety as author of the somehow controversial yet New York Times best seller The Singularity Is Near. His speech started by giving some thoughts about innovation. Firstly, innovation is completely up to the human being and it is based upon their passion to stand up and cross the hurdle. For an innovation to succeed it is fundamental to be in the right place at the right time. Therefore, for your innovation to succeed you have to understand where you are and what is happening around you. Then, he moved to explain his Law of Accelerating Returns. It basically says that technology innovation improves exponentially rather than linearly, as the common‐sense would suggests. In fact, Moore’s Law, saying that computer hardware performance doubles every 2 years, is only one example. There are figures showing that such a law also applies to biotechnology, nanotechnology and solar power technology. In particular, Kurzwail has seen that doubling time for watts taken from solar energy is less than 2 years. As a result, according to the Law of Accelerating Returns, we are less than 20 years (10 doublings) from meeting 100% of the world’s energy needs. Actually, Kurzwail gave us some more futuristic visions such as brain reverse engineering and nanobots, i.e. non invasive and surgery free neural implants capable of expand even more the human intelligence. You can download the latest version of the presentation he gives all around the world and judge for yourself here at http://www.KurzweilAI.net/pps/KurzweilPowerPoint.
Last interesting talk of the conference was the one given by Andrew Mc Afee, researcher at MIT Sloan School of Management who coined the definition of Enterprise 2.0, i.e. the use of emergent social software platforms, such as blogs and wikis, by organizations in pursuit of their goals. These platforms are a very efficient way of connecting and making the most out of the so-called weak ties. How many times does it happen, that you are familiar with that face, both of you work in the same organization but both of you do not have a clue about what the other really does? These tools improve the ability to interact with people who otherwise you would never meet and that could help with your still unsolved problems. Because, you had already asked your strong ties and they were not able to help that much. Secondly, if you are not familiar with Michael Polanyi ‘s tacit knowledge concept, we can all agree that we know more than we can tell. For example, have you ever taught riding a bicycle? It is not that easy. The only way to convert tacit knowledge into an explicit idea is to promote dialogues among the members and to share one’s original experience. There are figures showing that these tools do such a job quite well. To summarize, it is probably worth reporting a former HP CEO’s statement:”If only HP knew what HP knows, we would be three times more productive.”
- Innovation is not only referred to technology anymore
- In terms of nurturing and delivering innovation, China and India, due to their graduate in Science and Engineering army, represent the biggest threat to Western countries
- When looking at innovative products/services, do not think about what your organization can or cannot do. In the world out there, someone has probably already solved your issue. You may call that open innovation.
- Innovation principles: diversification, competition, tolerance of failure and broad agreement on goals
- support communication and share your knowledge/ignorance by any mean
Acknowledgements: This work was supported by ISTAO, The Adriano Olivetti Institute, founded in 1967 by Giorgio Fuà on the initiative of the Social Science Research Council of the United States and the Adriano Olivetti Foundation.