Saturday, March 3, 2012

Leadership "Call to Action": Sustained Innovation Requires a Stable Ecosystem of Infrastructure

A question that keeps many an executive up at night is about how to ensure that their organization continues to stay relevant with innovative products and services. This is a question I address throughout my recent book, Living in the Innovation Age. My book provides practical advice on how organizations can spur innovation and embark on their innovation journey but ultimately places the responsibility for instilling an open, participatory, and collaborative culture of innovation squarely on the shoulders of top leadership.

I just read an interesting story about the rise and slow decline of the Indian global economic leadership in Businessweek (March 5 – March 11, 2012). According to Akash Kapur, the author of the article and the upcoming book “A Portrait of Life in Modern India,” the last couple of decades have seen two very different models of economic development in Asia. Known collectively as “Chindia”, China and India have emerged as the two economic powerhouses of Asia over the past two decades. Each, however, has achieved its result in a very different manner. China has gained world dominance through a state-led and subsidized system that relied heavily on manufacturing. India, on the other hand, has led through the development of the private sector relying on a thriving high-tech and service industry. Additionally, unlike China, from the very beginning, these private industries had little support from the Indian government.

So, how are India and China faring? While China is still very much a world power contender, the story for India has taken a turn for the worse. The Indian miracle that once was has now been interrupted. The contrast in stories could not be stronger - China has continued to succeed because of the state while India was surviving despite its government. Now it seems though that the government ultimately got the upper hand. As Kapur states, the country’s recent travails, have shattered the illusion that the private sector can thrive without a functioning state. Policy and regulatory confusion, and rising social and environmental problems, are all reminders that sustainable growth isn’t possible without an ecosystem of sound institutions and responsive government. In many ways it is now apparent that the advances of the last couple of decades were built on shallow foundations.

The same discussion applies to innovation. Innovation requires a stable ecosystem of infrastructure – policy, culture, people, processes, and technology – to survive and thrive in the long term. While innovative “onesies and twosies” can happen in almost any organization, a pipeline of continuous innovation requires top management to take a leadership role in investing, creating, nurturing, and sustaining an innovation ecosystem.

The United States too has been struggling with keeping up as an innovation leader in the world. I cited results from a report published in July 2011 by the Information Technology and Innovation Foundation in my book on the state of the innovation-based competitiveness of the US as compared with a group of 44 countries. The report rates the innovative abilities of the 44 countries using 16 key indicators from six broad categories – human capital, innovation capacity, entrepreneurship, IT infrastructure, economic policy, and economic performance. Overall, the news was not so good for the United States ranking fourth behind Singapore, Finland and Sweden and, worse yet, near the bottom of the list in terms of countries where innovation is seen as improving.

Still, there is a silver lining for the US. Based on the above discussion about the need for a robust ecosystem of infrastructure it would be premature to count the US out just yet. In a recent Harvard Business Review (March 2012) article titled “Choosing the United States,” authors Michael Porter and Jan Rivkin report the results of a survey of nearly 10,000 Harvard Business School alumni that they had conducted. The silver lining was that the survey revealed that while the US has many areas that it needs to fix or improve, it still was far ahead of any other country in terms of innovation infrastructure, intellectual property (IP) rights, quality of higher education institutions, and an environment that promotes and supports entrepreneurship.

The bottom line – The message to organizational leaders is clear. Take responsibility for innovation and proactively engage in creating an ecosystem of infrastructure that encourages and nurtures innovative ideas and the innovators who execute on them.

1 comment:

  1. Great insight! America must renew it's commitment to innovation. I concur that Washington must craft fresh strategies that will allow the U.S. to thrive.