by Dr Dorel Iosif
Cognisium
Vincent of Lerins, a 5th century monk said “Avoid the profane novelty ... For if novelty is to be avoided, antiquity is to be held tight to; and if novelty is profane, antiquity is sacred.” How were the intellectually elastic inventors, novators and free thinkers viewed in the 5th century? Pure heretics. They were promoting heresy against the dogma of faith but not only.
Fast forward twelve centuries, and we see the first evidence (albeit rudimentary) of what we would call today “open innovation”.
Prizes offered by the Europe’s greatest maritime powers such as Venice, The Netherlands, France and Spain inspired scientists like Galileo Galilei and Christiaan Huygens to take part in a competition to construct a device that would enable the navigators to find the longitude at sea. Galileo’s solutions were arguably among the first known outputs of an open innovation contest. He died in 1642 just before perfecting the longitudinal clock for the Dutch prize, but his son built it seven years later.
And so, the ancestors of “innovation” had a tough time for at least twelve centuries.
What does 'innovation' mean to you?
You may you think of 'newness' or 'difference.' But ultimately these terms are insufficient criteria for what constitutes the 'innovative'.
So, what does the word really mean? When was it first used, and what was it used to describe?
If that sounds interesting to you, read on for a deep dive into the history of innovation.
Etymological Roots of Innovation
In a corporate setting, an innovative product could refer to any addition to the product line that adds value. It may not be 'new', per se, but maybe seen as innovative from a customer's perspective.
Others would define innovation as a brilliantly executed take of an initial idea, however subtle the initial idea is. In business, it could absolutely obliterate existing categories or create new markets entirely. For example, the iPhone innovated in the handheld device industry, so much so that it became a market leader.
We also find the word in sociology, history, and the arts.
Canadian scholar and historian Benoit Godin argues that the word is primarily associated with the technological and the commercial. It has become symbolic of a technological or scientific panacea for solving modern-day problems. But when the term “novation” appeared in the 13th century, it was associated with “newness” and “new creations”.
Novation
According to Godin, innovation has etymological roots in "novation", a word that first appeared in thirteenth-century law texts. It was a pejorative term due to the conservative religious setting. Innovation in church doctrine was heretical. But in today’s Marine Corps Operating Concept (MOC), “innovate-adapt and win!” is the often-repeated mantra.
It was not until the 19th century that innovation took on the positive connotation it is associated with today. In fact, its modern-day connotation is rooted in the Renaissance era on how to positively “progress” and “invent”.
The prestigious reputation of knowledge, science, and research all helped the term "invention" come off positively.
What, then, is the connection between innovation and invention? How did we go from preferring the word innovation to its predecessor “invention”?
Imitation's Role in Innovation
According to Godin in his 2008 working paper, innovation as we currently know it, evolved from adjacent concepts like imitation and invention in antiquity.
Ancient Greek philosophers like Plato and Aristotle prized mimesis, or the imitation of nature. A rock one could see was but an imitation of the true ideal of a rock.
Imitation, therefore, had pejorative overtones; the image could not match up to the ideal.
Artists leading up to, in, and following the Renaissance era would de-problematize art as imitation. In these movements, artists prized the ability to imitate life and nature as closely as possible. This led to aesthetic developments in mathematical perspective, use of colour, and realism.
In the West, imitation was generally thought to be the opposite of invention. Godin argues that the two are but steps in the process of creative innovation, where both are necessary but insufficient in constituting innovation.
Creativity
Imitation and invention are both components of creativity, and creativity is a component of innovation. Innovators imitate old ideas (the iPhone imitating previous handhelds) and also invent (advanced technology that goes into the iPhone).
Imitation in the eyes of Renaissance artists was not about making exact mechanical copies. It was about creative copying and selective borrowing of previous ideas; in this form, it's easy to see how imitation would factor into innovation.
Imitation Into Invention
The next step forward would be from imitation to invention. Many Renaissance artists actually saw imitation as a form of the invention or the resurrection or rediscovery of old ideas.
The most influential idea in the modern definition of innovation is the concept of "combination." We imitate the best parts of past ideas and recombine them to invent something new.
From Imitation to Invention to Innovation
Imitation represents economic accessibility: not everyone can have a luxury handbag, but certainly, everyone can have a cheaper handbag made in its image. Someone invents the cheaper handbag, and there, they have innovated.
They've recombined old ideas, made them better, and made them more accessible.
Imitation is about accessibility and improvement.
The invention is about novelty.
Both go into innovation, which somehow becomes something more.
Changes to the Innovation Framework
When and how did the word 'innovation' become popular? Why? What about our society makes us unable to decouple from innovation?
Godin attributed the shift from invention to innovation to the words of Joseph Schumpeter in 1939.
According to Schumpeter, people invented with no thought of economic impact.
Innovation, however, occurred when people integrated inventions into successful business models, creating products that were useful to consumers.
He argued that invention was an act of “intellectual creativity” and novelty, whereas innovation was an economic choice or business decision.
Firms that adopt innovative strategies were not necessarily the inventors of what they were selling. Likewise, just because someone invented a new skincare product would not make that innovation if the product never made it to production and the market.
Entrepreneurship
Entrepreneurship is “the process by which individuals – either on their own or inside organizations – pursue opportunities without regard to the resources they currently control” (Stevenson & Jarillo, 1990: 23). Entrepreneurs are generally speaking, opportunity-driven and less resourced-focused.
Schumpeter's definition is key because it divorced innovation from the dovetailed imitation/invention concepts.
Henceforth, innovation became associated with capitalist entrepreneurship that would continuously refashion the economy.
He maintained that entrepreneurship "replaces today's Pareto optimum with tomorrow's different new thing," underscoring the centrality of innovation to capitalist economics.
According to Schumpeter, economic innovation could take 5 different forms:
New product launch or variation of another product
A new method of sales or production of a product
Opening a new market
Acquiring new raw materials
Restructuring industries such as destroying monopolies
In this way, innovation was to be a central driver of competition and dynamic economics.
Innovation Cycles
Schumpeter would go on to theorize about innovation cycles in 1942.
According to Schumpeter, business cycles operate under the emergence of key disruptive industries. These take place over lengthy periods of time.
For example, innovation cycles we have seen thus far include the introduction of steam engines, electricity, aviation, the internet, and more. These key industries had outsized effects on the industry and disrupted entire markets whenever they came to the fore.
A definition of innovation more in line with Schumpeter's would be the process of disrupting, or in his words "creatively destroying" current industries.
The first large wave of innovations started in the late 18th to early 19th century. Building on Hans Orsted and Andre-Marie Ampere’s work, Michael Faraday constructed the first apparatus that transformed electrical energy into mechanical energy. With the electric motor in place, the first industrial revolution was born (mechanisation).
Sixty years after, a second wave of innovations emerged. This time it was all about mass production, driven by steam and electricity.
The fourth wave kicked off the era of automation with short lived and frequent advances in hardware, software and digital networks.
Theorists believe that this last wave is giving rise to a new wave of innovations driven by artificial intelligence, machine learning, and connectivity and which will lead to the integration of digital, bio and physical systems.
Innovation Models. Open vs Closed Innovation
Post-Schumpeter definitions have seen a few approaches to innovation, mainly in the form of open vs closed innovation.
In this last section, we will discuss what these terms mean and how they lend nuance to innovation theory.
The current debate in innovation involves the relative benefits and trade-offs of open or closed innovation.
In an open model of innovation, firms may cooperate with each other to innovate instead of a traditional model where all business development took place within the boundaries of a firm (closed innovation).
There are pros and cons to both models.
Open Model Pros:
Knowledge decentralized outside of company research laboratories
Could discover combinations of products that would be hard to envision otherwise
May shore up core competencies that your team lacks
Possible completely new business models
Reduced cost of research
With an open model, you can expect reduced costs and more widely available information.
Open Model Cons:
Less control over product's trajectory as different firms have different goals
Possibility of revealing private information
More complexity in regulating innovation
Possible loss of competitive advantage for the controlling organization
At the same time, the cons of an open model include loss of competitive advantage or data leaks.
Closed Model Pros:
Management fully controls all innovation
Management controls product's trajectory
No information spread and higher IP protection lead to competitive advantage
This is your traditional business structure. The positives include full control of your product.
Closed Model Cons:
Limited corporate resources
Greater research and development expense
Risk of failure increases without external expertise and validation
Less information available
The trade-off is that your own resources are limited and you may be outcompeted by firms that cooperate and employ the open model.
A company's business model will determine which innovation model will be most advantageous or amenable to them.
For example, a firm like Apple is extremely closed. Even internal teams are siloed from each other, and the company is extremely private about its research and development. It is possible that this gives Apple its competitive edge.
The Coca-Cola Company, on the other hand, has competed by opening its innovation to the public. Coca-Cola gathers information from customers mixing their own drinks in a freestyle drink machine and uses this data to develop its products. This lessens the chance of failure.
This is not to say that the firms in the previous examples do not employ both closed and open innovative principles.
It is about balance.
Firms should take care not to disclose too much information such that they lose their competitive edge, while fully utilizing public discourse to gain as much information as possible.
Research from the University of Oxford by D. Gann argues that it is not true that “the more openness, the better” since it can be costly and it is not always easy to have a high degree of openness. The approach chosen by companies should depend on its coherence with the strategic, organizational and managerial contexts and on an acceptable balance between the benefits and costs.
Innovation's Evolution
For a buzzword, innovation is a surprisingly complex term that has its roots in antiquity. The history of innovation is much the history of art, economics, and more.
Whether the term keeps evolving is up to debate, but it seems like it is with the discussion of open versus closed innovation in a corporate setting.
For more expert breakdowns of innovation, visit our Freelancers' Hub here.