Platt Perspective on Business and Technology

Technology as the tide that raises all boats 8 – but often unevenly 5

This is my 8th installment to a discussion that I initially began as a single stand-alone posting in April, 2012, but that needs reconsidering. I focused in that posting, on a key issue that enters into a determination of how and when change rises to a level of significance so as to qualify as true innovation (see Outsourcing and Globalization, postings 25 and loosely following for Parts 1-7, and Part 1 of that in particular as the foundational urtext for this narrative.)

I have been at least touching upon a succession of issues in this series, that address the question of what qualifies as true innovation, and certainly in a changing product or service development context, and a change-demanding marketplace context. And that progression of postings has led me back to this series’ Part 1 and its issues, and to the puzzle of economy of scale in enabling innovation.

Business scalability and the processes and complications of actually pursuing that course have provided a recurring thread of discussion that has run through much of this blog. And in that regard, I cite a relatively lengthy series that I first started posting to this blog on July 8, 2012: Moving Past Early Stage and the Challenge of Scalability (see Startups and Early Stage Businesses, postings 96 and loosely following for its Parts 1-35.)

I decided to put that series in a directory devoted primarily to discussion of startups and early stage businesses, knowing from the beginning that I would address issues in it that would only arise well after any early stages in a business’ growth and development. And I chose to do that because I see scalability and the systematic growth and development of a business as a fundamentally strategically driven ongoing process – and as one that would best be planned for and prepared for from the beginning, and from the initial formally developed business plan in place.

I make note of that essentially-editorial decision here, in order to stress how strategically positioned the issues that I have been addressing in this series are, and to emphasize that point in particular here in this installment to it. And with that noted, I turn here to focus on one particular aspect of the complex change-driving process of scaling up a business:

• Innovation and the ongoing effort to innovate in order to keep a business as competitively strong and efficient as possible while growing it in overall scale.

For purposes of this series, I parse innovation here into two separate but nevertheless connected and interacting domains:

1. Innovation within the business and in how it is structured and organized and in how it functions, operationally, and
2. Innovation in what that business brings to market as products and services offered.

Part 1 of this series focused essentially entirely on the second of these visions of innovation, and on how the scale of change in what is brought to market changes over time, requiring larger and larger incremental increases in market-perceived value for any given change to be seen as a genuine innovation by purchasing consumers and end users. I begin this posting’s discussion by noting that the more competitively efficient and effective the businesses in an industry become on average and as a general rule, the more difficult it becomes to find and institute a new and novel next-step business process improvement in any of them that would rise to a level of significance so as to qualify as being truly game-changing and innovative too. Simple evolutionary change in what is already more routinely being done is very unlikely to qualify as truly innovative in this context and certainly in a fast-paced and competitive industry or sector – and even if essentially any change that offers increased value to a business would qualify as being truly innovative in a more settled and moribund one.

Setting aside consideration of older and more static industries and of markets that show no real change except perhaps shrinkage, and focusing on actively developing industries and their markets here:

• The more and the more rapidly the businesses in those industries change in order to keep up and push ahead, the larger and more pronounced a new next step change has to be for them, if it is to stand out as representing a new source of genuinely innovative value.

I briefly touched upon this concluding point in Part 7 and expand upon it here, with some organizing explanatory detail added, as this is an important consideration in understanding business innovation per se. I write fairly extensively about innovation here in this blog, and this has been a very important point of focus in my own professional life. I explicitly note here, how

• Next-step and next-step after that innovation becomes more and more challenging and particularly in rapidly changing markets with change-demanding target audiences and consumer bases, and for any businesses that seek to service their needs.

I add that it can and usually does become more expensive and more resource demanding to innovate over time too. And real innovative change comes more and more from disruptive change with anything less than that: anything seen as merely evolutionary and incremental in nature, simply seen as being more cosmetic in nature.

That stated, let’s reconsider the two numbered points as offered above, starting with the first of them. Point 1 is very generally stated, and could only be addressed in general terms in a much more extensive discussion than I am developing in this series as a whole, so I focus on one particularly relevant aspect of that line of enquiry here, restating that in the particular, more-limited context of this series:

• I am writing here, at least in the within-business context of innovation, about developing new capabilities and resiliencies into a business that would enable it to offer to market, the same or better products and/or services, or a larger and more comprehensive array of them or all of the above, at lower and more competitive price points than the competition can match.

Ultimately, a business survives let alone thrives on the basis of its being able to produce and bring to market something that consumers will want, and want enough to pay for. This leads to the revenue streams that pay their bills and that allow for and support all else. Competitive strength and capacity to retain and even expand market share, and retain and even grow incoming revenue and profitability depend essentially entirely on that business’ capacity to produce and ship out and sell. And impact upon this, net of costs of implementation and of any new risk incurred, is where the value of any business process or other internal-to-the-business, change and innovation would be measured.

What have I been writing about in this series? As new forms and channels of communications and connectivity arise and as markets become more and more globally reaching and immediately so, the rate of change in those markets and pressure to innovate and improve in businesses facing them increases and increases and increases.

• And the timing and pace demanded for new and next in product development cycles keeps shortening too,
• And for all but the most dead-end, moribund industries that are essentially entirely driven by legacy technologies – until they are disruptively challenged by unexpected disruptive innovation too or until they simply disappear.
• And this speeding up of change and innovation in advancing industries,
• And this speeding up of how pressure arises, that compels that change, and of the forces that drive it, serve to create what might be considered a pace-slowing back-pressure through demands that any next incremental innovative change has to be that much larger in scale to even qualify as representing true innovation at all.
• Some might see this as a source of friction, and of information development and availability issues. And challenges of the type that lead to economic friction, and more locally to business process friction do enter into this. But friction per se and its consideration, only address part of this phenomenon so I use a different term here.

And this brings me to a commonly cited technology development scenario that has been proposed by many now in various forms when predicting where change and innovation and its recurrence are bringing us: the concept of the technology development singularity. For a now somewhat dated but still interesting and informative benchmark document on this conceptual understanding and on what it means, see

• Kurzweil, R. (2005) The Singularity Is Near: when humans transcend biology. Penguin Books.

More recent variations on the approaching singularity concept have focused on the emergence and realization of specific technology development benchmarks such as the development of true, generalized artificial intelligence that matches and then advances to exceed average human intelligence – and then presumably any realized level of intelligence that any person might display and even as true genius. This would presumably mean technology in effect coming to take over its own development and at paces that humans could not achieve let alone maintain on their own.

If you were to graph the pace of innovation development over time, these conceptual models would start out with innovation developing and the curve representing that, rising slowly and even very slowly and over generations per innovative step. But the pace of change keeps speeding up and even if slowly at first, and certainly until the first industrial revolution. Then the pace speeds up even more and until an inflection point is reached as the pace of advancement finally reaches a turning point. Such a graph is commonly depicted as taking the form of one arm of a hyperbolic curve. And we have in fact reached such a turning point with the pace of innovative change much steeper now than it has ever been historically. What I am writing of here is a breaking force, or back-pressure to repeat a metaphorical term already employed here that would prevent that curve from ever too closely approaching the vertical of essentially infinitely fast change – which I would expect any futurologist: Kurzweil included would see as a cartoon description anyway.

I am going to continue this discussion in a next series installment with at least two areas of discussion still to address in it:

• Globalization and the scale of the marketplace, and its capacity to create and support progressively finer-scale niche markets even as it drives global conformity too, and
• The realities of the technology diffusion and acceptance curve, and the pressures of the marketplace that would limit and shape the pace of accelerating innovation acceptance and of innovation occurrence as well.

Meanwhile, you can find this and related postings and series at Business Strategy and Operations – 4, and also at Page 1, Page 2 and Page 3 of that directory. I also include this in Outsourcing and Globalization – and see that directory for related material. And I include a link to this posting as a supplemental addition to Section VII: Reexamining Business School Fundamentals (reconsidered), of Reexamining the Fundamentals too.

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