The founder of the European Institute for Creative Strategies and Innovation says the world is at the beginning of a creative phase in which a wave of innovative products and services will emerge to meet the needs of people and society.
How do you define innovation?
It is the integration of state of the art knowledge into creative products or services that improve the human condition. Innovation is not just technology or knowledge; it is the process of using them to meet the needs of people and society. Steve Jobs said that innovation was technologically neutral: it is how technologies change lives that creates innovation. Indeed, people do not care about technology as such —women want to be beautiful, but they do not care what molecule makes it happen. Nobody says that they want an innovation: it is progress in society that they want.
What have been the most important innovations of the last 100 years?
The telephone, the car and contraception have changed everybody’s lives over the last century. However, much of what we see as 20th century innovations — the car and electricity for example — employ 19th century technologies. What happened in the 20th century was that those technologies were adapted for the masses, so that everyone could acquire a car, a telephone, a washing machine. These innovative products have made lives better: people live longer, travel more, have more free time and enjoy a better quality of life. Innovation uses scientific and technological advances to meet needs in ways that people see as progress.
How do innovations emerge in society?
It is process of what Joseph Schumpeter, the Austrian economist, called ‘creative destruction’. In a major innovation cycle, the old world disappears before the new world fully emerges. The old product or service is no longer successful, but it is not yet certain will be the new ones of the future. As Schumpeter says, innovation destroys value before creating new value. In France, for example, one factory is shutting every day, often involving moves to Asian countries where the same products continue to be made more cheaply. There is a lot of instability before the innovations emerge. And the innovative new companies are not really creating jobs: Wikipedia is a company run by 100 people, but since it was launched, HP has laid off 18,000 staff in Palo Alto.
How do companies adapt to innovation cycles?
Companies have to take the risk of investing in innovations. Innovation has created new companies: General Electric in the US and AEG in Germany are good examples. But if they do not continue to innovate, it will be the end — companies are born and disappear in the cycles. Even though a leading business perfectly manages a certain technology, when the technology changes, the leader cannot follow. No candle-maker has become a bulb manufacturer, no carriage-maker has become a car-producer, and the post office did not invent the email. I have never seen an instance of where you can avoid destruction before the creation of the new.
Kodak is a good example. It had 180 factories making film products which were innovative for their time, but its factories are closing fast. The airlines such as Swissair, PanAm and TWA which created a world of international flight have been swept away by airlines such as Easyjet and Ryanair which have become Europe’s biggest by serving the mass travel market. When I was teaching at the Sorbonne, the Swissair chief executive came to give a speech and said that the lowcost airlines could never succeed because they used the same planes, fuel and airports — they had no competitive advantage. Yet within six months, Swissair was grounded because travellers were still flying to the same places but at a lower cost. A new business model has disrupted the industry.
Great innovation waves in history
- The innovation during the era of Pericles in Athens coincided with enormous innovation waves in China and India — creating three great civilisations
- Medieval cathedral building in Europe — there were more than 1,000 innovations in a single Gothic cathedral
- The Renaissance saw the synthesis in Northern Italy of knowledge from China, India and the Arab world which combined with the birth of humanism putting people rather than God or the ruler at the centre of life — generating innovations such as venture capital, patents and designs that are epitomised by the work of Leonardo da Vinci
- The Belle Époque starting in the late 19th century gave the world the car, the cinema and the telephone as companies harnessed science and technology to improve the lives of everyone
- The modern era, still at the beginning of the synthesis of science and technology into innovations, seen in the internet and the iPod — creating something new by combining old technologies to meet needs not previously recognised, in a humancentric approach that Leonardo would have approved of
Which are most important countries for innovation?
In Europe, they are largely in the north of the continent: Sweden, Denmark, Finland, Switzerland, Northern Italy and of course Germany which is number one in technological innovation. Around a third of the world’s innovation capacity is in these countries — the southern European countries have different forms of creativity. Other important countries include the US, India and also China which dominated global innovation for millennia until 1500 and will come back to the fore. There are also poles of innovation within countries: Silicon Valley in California, even though it is in decline with 18 per cent of jobs lost in the last decade; the École Polytechnique Fédérale de Lausanne in Switzerland; Politecnico di Milano in Italy; São Paulo in Brazil; Shanghai in China; Helsinki in Finland; and Israel. It is multi-polar world for innovation, in which innovators are attracted by success in innovation: there are 90,000 Chinese people in Silicon Valley and 40,000 French people at Stanford, which is home to 12 international high schools serving expatriates. But ranking countries can be dangerous. Only 6 per cent of the innovation in an iPhone is American: 17 per cent is German — and only 3.5 per cent is Chinese, even though they’re assembled there. French people believe they have to buy Renaults to support the economy, but only 6 per cent of the innovation in a Renault is French. That is why a nationalist approach to buying products and services does not make sense.
What will the be the big innovations of the next 100 years?
Today we are in a scientific phase, just before the creative phase that will lead to the next big wave of innovations — you can say we are in the middle of a Copernican revolution. We are charging the battery of innovation as our scientific knowledge increases. There are 12 million researchers in the world today and as they translate their scientific knowledge into technological advances, they are taking out 2 million new patents a year. Next will come the development of products that we have never seen before, such as a car that drives alone or simultaneous translation into many languages, and medical treatments such as an artificial heart, vision for the blind or walking by those who have never walked before.
However, it is only in the later stages of the innovation cycle that we see the revolutionary products and services. Currently there are 9 million registered patents worldwide, but one in three are outdated within three months of registration. The first big success stories of this cycle are emerging: we already have Google, Facebook and Dropbox. But will they really turn out to justify their current value?