Continuous
invention and innovation
Continuous invention and innovation involve coming up with streams of new discoveries over a limited period of time. Turning out those new discoveries has to occur in a fairly continuous or systematic way, to meet the many challenges faced by an organization. Successive experimentation is therefore at the core of continuous invention. For the kinds of firms and organizations typical of technocapitalism, continuous invention and innovation are vital necessities.
Why are
continuous invention and innovation important?
Continuous
invention and innovation help reduce the risk and uncertainty surrounding new
products. Invention is possibly the
riskiest of all economic activities.
Coming up with a new discovery often involves much trial and error, with
no certainty over outcomes. It is
typically impossible to anticipate whether any new discovery will be successful
as a product. Many new products never
recover the cost of their research, even when their technological qualities or
advancement are substantial.
The reduction of
risk and uncertainty is particularly important for organizations facing
regulatory hurdles. In many
biotechnology firms, for example, the rate of approval can be as low as one out
of ten thousand new compounds. Such
atrociously low odds can only be offset by speeding up and turning out a
continuous stream of new discoveries.
As a result, continuous invention and innovation have become an integral
part of corporate strategy.
Adding to the risk
and uncertainty of invention is the fact that lead times between the
introduction of a new product and the appearance of its closest competitor have
substantially declined during the past two decades. Therefore, even products that can be marketed with some success
face the added challenge of one or more competitors within a very short period
after their introduction. This
situation can cut the potential revenues of a new product substantially,
forestalling the recovery of its research costs and its long-term
profitability.
Continuous invention and innovation can help remedy this situation by making it possible to come up with new discoveries and introduce new products more frequently. A possible result is a higher chance of more products finding no competitors in their market niches, even if for limited periods of time. Thus, the main strengths provided by continuous invention and innovation lie in speed and numbers. The larger the number of new discoveries being fielded in the market, and the faster it happens, the more likely it is that some of them will find no serious competitors over the short term.
Continuous
invention and innovation is also necessary because of the increasing cost of
research. In many activities, such as
biotechnology, nanotechnology, bioinformatics or advanced microelectronics,
laboratory equipment, facilities and other hardware costs are substantial and
can only be recovered by speeding up the pace of invention and innovation, to
turn out as many new products as possible.
Similarly, costs for research personnel can be substantial, given the
high level of skills required. For many
firms, it is impossible to ignore the need to pursue continuous invention and
innovation, and those that do so usually do not stay long in business.
Continuous invention and innovation in practice
Continuous
invention and innovation have found widespread adoption in many
research-intensive organizations, but they are most obvious in the kinds of
firms that are representative of technocapitalism. Gene-decoding firms, for example, sustain processes of continuous
invention, discovering new genetic data with the help of supercomputers and
bioinformatics. The large amounts of
new genetic data they discover are then patented. Later, the patented data are licensed to other organizations,
such as pharmaceutical firms, research laboratories and medical technology
companies. Some gene-decoding firms
have therefore become, through continuous invention, both owners and
clearing-houses of discoveries that can be licensed to other research
organizations.
The need to
sustain continuous invention and innovation has led some firms to adopt a
system of parallel experimentation in research. Parallelism involves undertaking non-sequential experimental
tasks simultaneously, to speed up the process of discovery. Parallel experimentation can be carried out
at various locations scattered throughout the world, connected by
telecommunications or the Internet, or it can be performed at a single
facility. It can save a substantial
amount of time for organizations in activities such as biotechnology, where
research and regulatory testing require a multitude of procedures that are
complex and time-consuming.
Parallelism has
also been adopted for research involving experimental designs. In software design, for example, code for
various components of new software can be written simultaneously, tested and
then assembled. The time savings
involved can be substantial. Such
savings, in turn, allow greater productivity in the design of new code and,
eventually, the marketing of a larger number of new products. Even some of the old sectors typical of
industrial capitalism have been adopting parallelism in their research
activities. In automotive design, for
example, the design and engineering of new models is now undertaken
simultaneously, cutting the time required to produce a prototype by as much as
80 percent, compared to the previous sequential approach.
The need to
sustain continuous invention and innovation has also been partly responsible
for the adoption of modularity in research.
The modular approach is most relevant for the invention and innovation
of complex systems. It divides research
departments into units (or modules) to undertake projects that will become part
of a larger system. Basic rules are
set, that will allow each of the projects to be linked later on as they reach
completion. Invention and innovation
can thereby occur simultaneously, by compartmentalizing projects into the units. Modularity can be found in research related
to complex systems, such as the design and engineering of supercomputers,
aerospace and telecommunications equipment.
The adoption of continuous
invention has also made it possible to increase the carrying capacity of many
products, such as microchips and computer memory disks, over short periods of
time. In microchips, for example, the
exponential increases in capacity that have occurred with regularity during the
past two decades (known as Moore’s Law), are largely a product of this
phenomenon. Those exponential increases
have, in turn, created a technological race from which companies involved in
advanced microchip research cannot escape, except at the cost of
liquidation.
In many firms, the
pressures to speed up invention and innovation have led to dualism in the
organization of research. As a result,
some firms undertake invention in what may be called a first-mover research
unit or group, where intensive experimentation occurs. Such units are usually charged with finding
discoveries that can be patented. Much
uncertainty and risk is involved in their operations, since it is difficult to
anticipate outcomes. Moreover, those
outcomes, even when they can be patented, may not become successful
products. Those units’ operations can
therefore be costly and very risky, but are vital if a company is to have any chance of coming up with its own new
discoveries.
A second kind of
research operation, the second-mover group or unit, then becomes involved with
innovation. Its activities may, for
example, involve tweaking existing products to improve their performance to the
level of competitors. In other cases,
the controversial practice of reverse engineering competitors’ products may
also be part of its scope, looking for opportunities to imitate successful new
products. Despite the potential ethical
and legal pitfalls involved, the financial rewards of second-mover innovation
have often been substantial. It has,
for example, helped some companies avoid the long, costly and uncertain process
of coming up with entirely new products of their own, by unfairly profiting
from others’ work. In other cases,
second-mover innovation has helped a company’s own existing products become
more competitive by improving their performance.
These are but a
few examples of how continuous invention and innovation are being introduced in
various activities of our time. From
the platform of experience this phenomenon is building up, new strategies aimed
at supporting technocapitalism are likely to emerge.
For publications on invention and innovation, and related topics, please see the Publications section of this website.
Copyright © Luis
Suarez-Villa