Conceptualising Innovation: A theoretical and practical agenda

To my concern, this Blog has been on-line for nearly one year with no one signalling a very important element: what is this all about? Similarly to the report on 'Governing Modern Biotechnology in LDCs' this is the first of a series of posts which will define the way in which terms are used, as well as to provide some guidance for potential contributions from other authors in relation to the themes of this Blog.

A good start would be an explanation of the title. Innovation is considered an essential characteristic for progress understood as social and economic development. Since the seminal work of Schumpeter, the most famous economist of the Austrian School, innovation has by many been interpreted as a phenomenon of 'creative destruction'. A radical alternative to existing and established structures, processes and routines and as the first-best strategy to preserve economic advancement at the national level, competitiveness of the private sector and the well being of the population. Innovation, however, is not considered only in relation to scientific advancements and discoveries, but inscribed in the broader social, political and economic context where it takes place. According to Richard Nelson [*], public-private partnerships, expenditure on Research and Development and scientific excellence are among the factors which add on to the innovation environment of a nation by creating 'national innovation systems' or, to paraphrase Claudio Ciborra[**], its 'formative context'.

The formative context is indeed relevant also to assess another dimension of innovation. Alias the constellations of actors which gravitate around it. Entrepreneurs, venture capitalists, scientists and government sponsored research laboratories as well as other sources of innovations, which may not be associated with neither of the categories above. Innovations, irrespective of their source or domain, can have two effects in the contexts where they take place. One is advancing progress and the social good, say by formulating better or new processes, structures and/or syntheses which can improve living conditions of human beings and their quality of life. The other can be harm, destruction and agony. Examples of the former include advances in water management systems, coordination processes which reduce leakage of resources away from non productive uses and many applications of information technology and computing in science which, among other things, have led to the mapping of the human genome. The latter would comprise the atomic bomb, or as Francis Fukuyama and Piero Bassetti have pointed out, terrorists transforming civil airplanes into rockets.

In his lecture at the London School of Economics Piero Bassetti has punctually pointed out that innovation is different from discovery and research since discoveries become innovation only in the presence of actuating power, i.e. the transformation of the discovery from a theoretical assumption to a practical use, application or realisation. (The full text of Piero Bassetti's lecture). However, in the circumstances where 'innovation' has meant the sacrifice of people's lives, the interpretation of what innovation is and where its boundaries lie has become a pressing issue. For instance, since the attacks of September the 11th there has been a major foreign policy change from the US administration via the institutionalisation of preventive strikes. That was to justify the possibility of risk and danger occurring in the first place. This has happened in anticipation of other major policy changes also in the governance of domestic and foreign business activities, but not only in the United States, also in the European Union and among the major multi-lateral institutions. (See for instance the entry on 'Novel ideas on States and Development').

To remain within the realm of innovation, since risk and governance will be the themes of forthcoming posts, innovations have also become a good that can be bought, sold or protected from competitors trying to imitate it. Whereas in the past the main focus was on product specific and/or other 'physical' innovations, the novelty is that innovations related to intellectual property, software and services have become the most debated and controversial themes for countries adopting, implementing or renewing their legislation in relation to intellectual property and trade in services. There are two potential trends to note. One will be the uncertain impact on established methods of production and organisation in advanced nations. The examples of Napster and Peer-2-Peer technologies which have heavily affected the music industry in advanced nations are a case in point. The other is that these trends are perceived as important also for their likely impact on Less Developed Countries (LDCs) and their ability to develop as well as to improve their industrial base. In this regard see Part 1, Part 2 and Part 3 of 'Modern Biotechnology in Less Developed Countries: Governing Innovation in India's Agricultural Markets' and the entry on 'Innovation, Risk and Development'.

Concluding this first entry comments will be highly welcome for either of the following:

a) Opinions, ideas, feedback or comments about what was outlined.
b) Suggestions about reading material, documentation, or other source of information.
c) Provide an alternative view.

[*] Richard Nelson, Professor at Columbia University, has lectured at Bocconi University in Milan the 17th and 18th of June 2002 in a special two day workshop organised by the Giannino Bassetti Foundation. Speeches, interventions and other information are avalable at: www.fondazionebassetti.org/02/argomenti02-doc.htm#nelson

[**] Claudio Ciborra is PwC Professor of Information Systems and Risk at the London School of Economics and Political Science. His research has focussed on issues of technology, organisation, strategy and innovation. He also teaches at IULM, Milan and is Visiting Professor at the Oslo University. He has published many articles and books on information systems. His latest is titled "The Labyrinths of Information - Challenging the Wisdom of Systems".
http://is.lse.ac.uk/staff/ciborra/