Vijay V. Vaitheeswaran - Need, Speed, and Greed: How the New Rules of Innovation Can Transform Businesses, Propel Nations to Greatness, and Tame the Worlds Most Wicked Problems

Need, Speed, and Greed

How the New Rules of Innovation Can Transform Businesses, Propel Nations to Greatness, and Tame the Worlds Most Wicked Problems

Vijay V. Vaitheeswaran

For Michelle and Keila

Contents

Welcome to the Ideas Economy

I have worked in over sixty jobs in my life, says Trevor Rose, an Australian tinkerer, describing a lifetime of frustration in the workplace. I couldnt think of a line that says I am this, because I have done a million and one tiny little things, none of which was really a career in the way most people experiencemeaning the money was absolute rubbish.

Yet Trevor is a born innovator. He has always had bright ideas, and he loves solving problems. He even put himself through most of a university course in engineering and computer science a few years ago, until the money ran dry and he had to drop out. But employers often do not take him seriously, so he has not had the chance to shine. After all, if you got a rsum at your firm from a prospective hire that said the candidate had dropped out of college and had gone through dozens of jobs, would you give him the benefit of the doubt?

A decade ago, that would have been the end of the Trevor story. He would have remained just another bright spark whose talents withered on the vine thanks to the elitist approach to innovation taken by the worlds corporations, governments, and leading universities. But there is a happy ending, thanks to todays global innovation revolution.

As Need , Speed , and Greed will show, there is a powerful change under way in how innovation happens. This new approach is transforming how intellectual capital connects with financial capital, knocking down ivory towers along the way. Thanks to the globalization and Googlization of the world economy, clever ideas from every corner of the world now have the chance to be taken seriouslyeven if they come from people without fancy credentials. Governments, charities, and corporations alike are increasingly turning to open and networked models of innovation, such as the use of incentive prizes, to solve difficult problems.

An American company that has pioneered this approach is InnoCentive, a spin-off from the pharmaceutical giant Eli Lilly. The company has developed an Internet platform that allows organizations grappling with thorny technical problems to post them as challenges on its website. Because the InnoCentive site is open to all comers, regardless of academic credentials or job title, it attracts millions of creative people from around the world. The one who best solves a given challenge wins a cash prize, which can range from a few thousand dollars to millions of dollars.

After his money troubles forced him to drop out of his college courses, a forlorn Trevor Rose was browsing the Web one day when he encountered InnoCentive. He stumbled across a challenge posted by a private charitable foundation looking for a better method to deliver banking services in the developing world. He knew absolutely nothing about that industry, but he was intrigued enough to work on the problem. But so did many others around the world, including actual experts in development issues and in finance.

Astonishingly, the Aussie outsider beat them all to the punch. According to the officials in charge, his winning entry proposed a mobile software application that batch processes expected spends and syncs those predictions up with actual expenses on a transaction basis. Put simply, he worked out how simple software could match up what people are likely to spend with what they actually end up spending using their mobile phones in banking. How did he do it? When I read the further details, it just started me thinking, and before I knew it, there I was writing down the solution that came to mind. OK, it took a bit of scribbling on paper and drawing diagrams and nutting things over... but thats part of the process I get hooked on and why I love to solve problems.

He won the challenge and took home $2,000. But the modest prize was not the only bounty on offer, explains Alpheus Bingham, a cofounder of InnoCentive. The ability to get ones ideas connected with organizations that can scale them up and make a difference in the real world matters, he argues. So too does the recognition that comes with the prize.

Trevor warms up to the idea of making a difference: I do like the possibility that something I thought of might help someone in a country where the economy is very tough already, and perhaps make their lives easier in some way... I hope so. But he goes on to explain that this wasnt the main reason he attempted the challenge. For him, the main motivation was the chance to overcome a lifetime of frustrated attempts at innovation. Thats why he continues to tackle other peoples problems. He even won another InnoCentive cash award recently, for figuring out a better method for removing hair roots for a commercial client.

Trevor sums up the Ideas Economy nicely: I like the idea of being an InnoCentive solver because for me its like a little billboard that will say to those who doubted me in life that maybe they are wrong and I am a lot cleverer than I look.

Something New Under the Sun

Innovation matters, now more than ever. With manufacturing accounting for less than a third of economic activity in many rich countries, knowledgethe currency of the Ideas Economyis now paramount. The United States and the rest of the rich world will not be able to compete with rivals offering low-cost products and services if we all do not learn to innovate better and faster. But if we do so, there is every reason to think that the world may yet embark on a postindustrial revolution, one that will put the world economy on a much more sustainable footing for the future.

Innovation is the key to global competitiveness, but it is not necessarily a zero-sum game. Those wailing today about the rise of China and the loss of Americas innovation edge give you only half the picture. Yes, our own failure to invest in infrastructure, education, and other pillars of the innovation economy hurts our economybut the rise of the East need not. On the contrary, because the well of human ingenuity is bottomless, innovation strategies that tap into hitherto neglected intellectual capital and connect it better with financial capital can help both rich and poor countries prosper. This rising tide can indeed lift all boats, but only if we make the effort to patch the holes in our vessel first.

Although the word innovation is often used to refer to new technology, many innovations are neither new nor involve gadgets. The self-service concept of fast food popularized by McDonalds, for instance, involved running a restaurant in a different way rather than making a technological breakthrough. So innovation is not the same thing as invention. These days much innovation happens in processes and services.

Novelty of some sort does matter, although it might involve an existing idea from another industry or country. For example, Edwin Drake was not the first man to drill for a natural resource; the Chinese used that technique for centuries to mine salt. But one inspired morning in 1859, Colonel Drake decided to try drilling (rather than digging, as was the norm back then) for oil in Titusville, Pennsylvania. He struck black gold, and from his innovation the modern oil industry was born. A useful way to think about innovation is that its fresh thinking that creates something valuable , whether for individuals, firms or society at large.