Wednesday found me, yet again, in London, this time for a one-day meeting organised by the Royal Academy of Engineering called Radical Innovation in Nanomaterials (PDF link). The speakers were a mix of industrialists and innovation theorists, if I can put it that way, with me thrown in for light entertainment. I must say I find the idea of finding or creating a theory of radical innovation which would allow one to manage it predictably a bit hard to accept. But that’s presumably why I’m a humble academic rather than a high-flying business leader (or perhaps more pertinently, the multi-millionaire author of airport business books).
The talks from the industrialists were perhaps more interesting, not least because the underlying message coming out from all of them was so similar. On the face of it, the companies represented couldn’t have been more different. There were two global giants, the US based chemical company du Pont, and the Europe based pharmaceutical major, GlaxoSmithKline, and one relative minnow – the recently floated UK nanomaterials company Oxonica (whose CEO’s proud boast was that they are the only European pure nanotech company with products generating significant revenue). But the changing environment they were talking about was the same, and one that very much resonates with my comments earlier this week. It’s an atomised world in which innovation and intellectual property is generated by many different organisations – in universities and research institutions, in small start-up companies, but less and less in big corporate R&D labs. Core functions like production are increasingly outsourced, and companies like Oxonica flourish best as brokers, identifying useful intellectual property whereever they can, working with contract manufacturers to realise physical products, and then finding other partners – typically large consumer oriented companies – to develop markets for them.
It’s a model that fits well with prevailing neo-liberal orthodoxies about taking the globalised division of labour to the extreme. Of course it’s a model that must take for granted the absolute integrity and fungibility of intellectual property. I can’t help feeling that this leads to some major potential fragilities, given the difficulties that international patent law is currently going through. The other question that it seems to leave unanswered is this: if production is outsourced and essentially commoditised, who is going to drive the radical innovations, not in the products themselves, but in ways of making things? The orthodox answer, of course, is that competition by itself will do the job. Maybe.
Dear Richard
I agree with you on the fact that the modern technology companies are absolutely unable to drive the innovation. The time of grand IBM and Marconi companies that invested in blue-sky research has passed. Most commercial R&D nowdays is product oriented. Have a look at Reith Lectures (lecture 3) on BBC4 by Alec Broers.
http://www.bbc.co.uk/radio4/reith2005/
It seams that noone is doing any fundamental research apart from University academics. Even this is coming under threat due to the drive of most Universities to attract commercial funding.
Denis
It’s certainly true that there’s no longer any corporate long-ranged research. One perhaps shouldn’t look at the past with too rose-tinted a set of spectacles, though, as the old model of big corporate research labs also had its downsides. The old retort “not invented here” certainly inhibited some important innovations, and there are plenty of examples of great inventions that the old giants just didn’t seem to be able to bring to market. I sometimes wonder at least half seriously how many nanotechnology startups you could get going just by going through the records of the old ICI corporate colloid science lab at Runcorn, which had an amazingly productive period 20 or 30 years ago in terms of innovation, but which the company seemed singularly unable to capitalise from.