How Can We Promote Innovation?

Last month I attended a conference celebrating the Lemelson-MIT innovation awards, where this year's two winners gave talks on their inventions and in the process tried to inspire younger students to be more creative. I was there because the Global Innovation winner was an old friend and colleague of 35+ years, Ashok Gadgil; the general prize was given to Stephen Quake of Stanford, whose medical innovations have not only advanced pure research but have spawned several startup companies that are making use of them to save lives.

Innovation is the cornerstone of efforts to create greater prosperity and protect the natural environment. This fact is undoubtedly why MIT tries to promote it. But it also raises the question: what does it take to inspire and empower innovation?

I have read a little of the literature on this subject, and have found it mostly impossible to understand. Why is it that Silicon Valley and similar environments inspire innovation, while other areas don’t, and even chase innovators away? We seem to lack an understanding of this question that is robust enough to spur policy actions that will enhance innovation. And this lack of knowledge is a big problem, since the nation, and indeed the world, is in need of new ideas on how to jump-start the economy and promote fully sustainable growth. We need to encourage innovation, but we don’t seem to know quite how we can do it.

One reason I think why the innovation discussion has been so sterile has been that it is hamstrung by an unspoken assumption: that if you build a better mousetrap the world will beat a path to your door. That assumption is false most of the time: certainly for environmental technologies, innovation does not usually lead to career success, either in terms of esteem or money. Environmental innovations are thwarted by a vast array of market failures that virtually assure that even if you invent a better technology, you are unlikely to make it commercially successful.

If you want an environmental innovation that also helps create jobs and reduce poverty to succeed, you not only have to invent something but you also have to develop policies that will make the market accept them. That is what Ashok has done with his wood-saving Darfur Stove and his low-cost water purification system designed to allow access to safe drinking water for the world’s poorest populations.

But not many people are able to do both the science and the policy advocacy. If we want to inspire scientists, engineers, and business people to innovate and to bring the innovations to market, we must make it profitable for them to do this.

There are several dimensions to doing this.

First, we need to pay more attention to the issue of how innovators are rewarded or punished in real world social and economic environments.

In many (most?) cases, innovation is unconsciously discouraged by judging people on their success rate. Both of this year’s Lemelson-MIT winners stressed the fact that many failures are needed to lead to one eventual success.  Professor Gadgil said:  “Aim to fail quickly, inexpensively, and often -- rather than getting locked onto a bad pathway, or fearful of trying anything at all.” And Professor Quake started his presentation with a long list of all of his failures of initiative in high school and college. So even though he worked in a professional environment that rewards innovation already, he needed personal encouragement in order to get into a position where he could take advantage of that market environment.

It is significant that both Lemelson winners talked so much about failure. I think it is important to do so in discussions of innovation, because many (again, most?) workplaces don’t allow for failure. Failure stands in the way of promotion, or even job retention. Better to try projects with a 70% or better chance of success—project that are straightforward and not very creative or profitable/beneficial—rather than take a 10% chance on something that will change the world. If we as a nation want to encourage innovation, we need to change organizational behavior to create a place for people who want to try very ambitious and creative projects and who recognize that most of these creative projects will not succeed.

In my own career, a career in which the professional recognition I received was based primarily on innovation, I found that it was dangerous to try things that had a high likelihood of failure, and did not dare to try anything more ambitious until my career record was well established in my thirties.

A second factor that must be overcome is the American attitude that I call “too good is no good”. Perhaps the reason that Stephen Quake did not do well in before well into his college career is that he was being smart: successful scholars succeed at the price of social acceptance. If you want to have lots of friends, and find a girlfriend or boyfriend, the best path is not innovation but sports. The word “nerd” illustrates this attitude.  It is a strongly American attitude; I imagine Ashok Gadgil escaped most of the problem by growing up in India.

But “too good is no good” is a dysfunctional attitude when America is not longer an unquestioned leader in science and engineering, but has to compete with people and companies from a long list of countries that try harder to promote innovative behavior.

Second, we need to assure that inventions that clean up the environment or reduce pollution while saving money are actually profitable to make and sell. The fact that the product is good is not in itself enough: the National Academy of Sciences notes that there are hundreds of billions of dollars of sales of existing products and services for energy efficiency in buildings alone that are going begging due to these failures of the market.

How do we realize all of these savings, and in the process encourage innovations in an area that we will have made profitable for innovators? We know how to do this: a package of environmental regulations, disclosures of environmental and cost information, and financial incentives, can overcome the failures of the market and allow these invigorated markets to produce new jobs and new growth while cleaning up pollution. Not much is written about the role of environmental regulations in encouraging innovation. This lack of discussion is a problem because it diverts discussion from one of the few policies that we KNOW can promote innovation and competitiveness, and also because it allows polluters and their apologists to assert simple-mindedly-- and without any evidence--that regulation retards innovation.

Third, we need to look more systematically at what it takes to encourage innovation. American culture, while it may discourage achievement in some ways (for example, favoring the high school football star to the nerd), also encourages individualism and individual initiative. We need to look at how different cultures respond to potential innovators, both in terms of social customs and in terms of market incentives.

The stakes are too high to proceed in the dark.