Platt Perspective on Business and Technology

Innovation, disruptive innovation and market volatility 35: innovative business development and the tools that drive it 5

Posted in business and convergent technologies, macroeconomics by Timothy Platt on September 5, 2017

This is my 35th posting to a series on the economics of innovation, and on how change and innovation can be defined and analyzed in economic and related risk management terms (see Macroeconomics and Business, posting 173 and loosely following for Parts 1-5 and Macroeconomics and Business 2, posting 203 and loosely following for Parts 6-34.)

I have been working my way through a to-address list of topics in the past several installments to this series, that I repeat here for purposes of continuity of narrative (having already addressed specific points from this list in earlier postings, as parenthetically noted below):

1. Innovation and its realization are information and knowledge driven (Part 32).
2. And the availability and effective use of raw information and of more processed knowledge developed from it, coupled with an ability to look beyond the usual blinders of how that information and knowledge would be more routinely viewed and understood, to see wider possibilities inherent in it (Part 33),
3. Make innovation and its practical realization possible and actively drive them (Part 34).
4. Information availability serves as an innovation driver, and business systems friction and the resistance to enabling and using available business intelligence that that creates, significantly set the boundaries that would distinguish between innovation per se and disruptively novel innovation as it would be perceived and understood
5. And in both the likelihood and opportunity for achieving the later, and for determining the likelihood of a true disruptive innovation being developed and refined to value creating fruition if one is attempted.

My goal for this posting, as of when I first wrote Part 34 was to finish discussion of Points 1-3 and of Point 3 in particular here, at least for purposes of this series, and to then at least begin a discussion of Part 4 and its issues. With further thought, I realize that that goal was too ambitious for one posting, so I begin this here with the final thoughts (for purposes of this series), related to the first three Points of the above list. And I begin that by listing three topics points that I raised in passing in Part 34, but never actually discussed there:

• A basic assumption as to what types of already-held and routinely used business information would be required in a genuinely disruptively innovative context, as for example might be explored and pursued in an innovation-supporting service, department or more separate facility within a business.
• An implicit financial assumption that runs counter to what would more generally be automatically assumed when innovation, and the research and development that it calls for are considered. I will at least briefly address that “starter” assumption here, offering some references that delve into its issues. And I will offer a basic rationale for justifying this alternative point of view assumption that I offer here for purposes of this series.
• And a fuller reconsideration of timeframes in all of this, where outside forces can easily become the driving shaping factors for all of this but where within-business factors always have to be accounted for too – and where they can be less examined in any planning that takes place.

I will of necessity begin addressing Point 4 of the above to-address list in dealing with these issues and even if I approach them from a Points 1-3 perspective. Then I will continue on to example Point 4 and then Point 5 of the above list. And with that reorienting note for what is to follow from here, I begin with the basic assumption of the first of the above three bullet points:

• The more innovative an idea is and the more disruptively novel it is in relation to what a business more routinely does, the less it is going to have to draw on the information flow that more conventionally derives from, fits into and supports their business as usual.
• Innovation and particularly novel and disruptive innovation needs to find its own path, and with its own, new types of data and understanding.

According to that assumption, innovation can be walled off from business-as-usual for the most part, with its own separate accumulated body of proprietary data and processed knowledge and without real need of all that much routine business information in place – besides basic information as to where current products or services are breaking down if a New approach would be developed to address that. And even then, the information presumed to be needed might be very circumscribed, and to limit introducing the biases of the past into the creative process if nothing else.

This understanding would fit into and support a simple, basic default confidential and sensitive business information management system that would, for example, limit access to sensitive trade secret manufacturing knowledge to the people in production who have essential need of it. And this would also fit into and support the development of within-business research centers as essentially separate and independently run, if wholly owned facilities too, with their own pools of sensitive and confidential data and processed knowledge too.

It has been a long time now for this, but I have given talks at in-house but separately run and conceived research facilities of this type, and particularly in the pharmaceutical industry from early in my professional life when I was still actively doing basic biomedical research and before I turned professionally towards organizational issues and consulting per se. So I write here of systems that I have seen up-close and first hand, where I have gotten to know the people involved who work at and run them. I still saw myself as a research scientist at the time, but even then I was acutely aware of and interested in the business model implications of that approach to research and development. So I actively studied that aspect of what I was allowed to see in those businesses.

How does this assumption hold up and longer-term? I would argue that it would not, and certainly not in its pure information and knowledge partitioning form. Put slightly differently, and in terms of individual innovative initiatives:

• That assumption would only hold true, if it does at all,
• If and where a new and disruptively-different innovation under consideration does not fit into and contribute to the ongoing business for anything in particular that it has historically done, and even just in a peripherally connected new direction.
• Restated from a different direction, an assumption of validity to an essentially complete walling off of essential information flow between a business’ production systems and its research and development, cannot succeed if the New that would be developed is to be integrated into the business as a whole and into what it does, as a new part of a consistent and coordinated larger whole.

The pharmaceutical research facilities that I got to visit, as cited above, succeeded in bringing developed value to their parent businesses, precisely because the walls there were selectively impermeable where that was needed and selectively porous when that was.

I am going to continue this discussion in a next series installment, with the second of the “clean-up” issues that I am adding here to round out my coverage in this series of Points 1-3 from above.

• An implicit financial assumption that runs counter to what would more generally be automatically assumed when innovation, and the research and development that it calls for are considered. I will at least briefly address that “starter” assumption here, offering some references that delve into its issues. And I will offer a basic rationale for justifying this alternative point of view assumption that I offer here for purposes of this series.

Then I will discuss the third and last of those bullet points and move on to address Points 4 and 5 of the main topics list that I have been working my way through here, as repeated at the top of this installment. Meanwhile, you can find this and related postings at Macroeconomics and Business and its Page 2 continuation. And see also Ubiquitous Computing and Communications – everywhere all the time and its Page 2 continuation.

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