A key task for the project team was to define innovation and to understand its relationship with entrepreneurship, terms often used interchangeably.1 Drawing from the interviewees’ comments, this chapter articulates the distinction and linkage between innovation and entrepreneurship, followed by a more detailed characterization of innovation.
EXPLORING THE RELATIONSHIP BETWEEN INNOVATION AND ENTREPRENEURSHIP
There was general agreement on a first-order distinction between innovation and entrepreneurship: Innovation creates societal value (through an existing or new product, process, or service), and entrepreneurship involves realizing the market value of an opportunity, not necessarily an innovation, by making it commercially or socially viable.
I use a garden analogy sometimes. You plant a garden and you can grow these beautiful vegetables and fruits, but if you don’t have a plan for harvesting those and getting them to market and realizing the value that you’ve created, then they just rot in the field. I think that’s what happens with a lot of innovation. There’s great innovation that’s done without a plan for how to actually realize the value from that innovation. But can you have entrepreneurship without innovation? Absolutely, because . . . you can realize value from [opportunities] without having to create that value through innovation.
–Tom Miller
A number of interviewees and workshop participants viewed entrepreneurship as a way to bring an innovation to market. Jack Hughes put it this way: “an entrepreneur
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1 In this report, the term entrepreneurship is used to capture both entrepreneurship and intrapreneurship.
is someone who sees the potential of an innovation and decides to take the risk to bring it to market.”
Some innovators felt that innovations can lead naturally to entrepreneurships. Dean Chang explained his view on why it is important to focus primarily on innovation.
It’s really important to lead with “innovation” and have it evolve into “entrepreneurship” because innovation is the large end of the funnel that appeals to and actually requires participation by a much broader audience. Nonbusiness, nonengineering, and non-STEM people are every bit as important to include in that innovation process because the process is not as rich and has inferior outcomes without that diversity.
– Dean Chang
Yet another perspective relating innovation and entrepreneurship is that entrepreneurship is one way of innovating, i.e., entrepreneurship itself can lead to an innovation. Innovation in this entrepreneurial style is done “in the context of a startup—that is, finding the customers and gathering resources in an entrepreneurial style [and innovating] while solving the problem,” according to Robert Metcalfe.
Amy Salzhauer cautioned that not all innovations can stand by themselves and lead to entrepreneurial ventures. Typically, a successful entrepreneurial venture brings together multiple innovations. She explained: “I don’t think [innovation and entrepreneurship] necessarily go together. [People ask me to] comment on what they hope to put into place for their innovations out of their academic lab. But most innovations are not stand-alone companies. They don’t qualify for entrepreneurship that follows them all the way through the course of their lifecycle, but they might really do well to be licensed by an existing company or brought together with lots of other technologies to try and build something new. So I find that [how to create an entrepreneurial venture from an innovation] a fraught question, because [the innovators] have hopes that they’re just going to start a lot of companies and a lot of money will come in, and statistics don’t bear that out.”
In summary, although both innovation and entrepreneurship are focused on “value,” they differ fundamentally in that innovation focuses on its creation while entrepreneurship focuses on its commercial or social realization. Not all innovations lead to an entrepreneurial venture and not all entrepreneurships are based on one or more innovations. Figure 3-1 illustrates the various associations between innovation and entrepreneurship.
Perspectives about what constitutes innovation vary, but the 60 interviews revealed common features, illustrated in Figure 3-2. The innovators understood that innovation can result in a physical product, a process, or a service that impacts society in a timely manner; it must have impact in the present or near future, because unless the
FIGURE 3-1 Different ways of relating and differentiating innovation and entrepreneurship.
FIGURE 3-2 Characteristics of innovation.
impact is realized, it is not an innovation. Finally, innovations effect some improvement (beyond the creation of something new) and this improvement can be incremental or transformational.
Thus, the following characteristics of innovation emerged from the innovators’ comments:
- Innovation provides societal value
- Innovation is an improvement.
- Innovation occurs at the interfaces of different disciplines.
- Teamwork is important to the process of innovation.
- Innovation is part of an invention-value continuum.
SOCIETAL VALUE
The interviewees felt strongly that innovations must provide societal value. In the words of Ashifi Gogo, “Innovation should be helpful to society—it’s great if one makes
a discovery, but it’s even better if the discovery can be used to improve individual lives directly as we work to improve humanity’s state of being around the world.”
Part of the value of an innovation is linked to timely adoption—it should be useful in the near future. In fact, as Chad Mirkin clarified, unless the innovation is actually used by society, it cannot be called an innovation: “Once you decide that you have a technology that can impact the masses, then you have to ask ‘Where am I today and how far do I have to go for me to be able to do that?’ If the answer is ‘With a year and $3 million worth of funding,’ then that’s very reasonable if the market size is big. If the answer is ‘In 60 years, maybe, with half a billion dollars’ worth of funding,’ you’re probably too early, and that is not an innovation!”
R. Graham Cooks cautioned innovators against deceiving themselves into believing that everything they do is socially meaningful or useful: “An innovator is this two-headed kind of a personality where you’ve got a cowboy on the one side who is unearthing new stuff, and on the other side you need to be careful that it’s not self-deception. In other words, if you feel that you have some penchant for innovation, then the big danger is that you’ll convince yourself even in cases where the work is trivial or doesn’t have the implications that you hoped it would have.”
Robert Dennard agreed: “Lots of inventions aren’t innovations. I have 62 patents, and only one or two are actually being used, and if it’s not used, it’s really not innovating very much. So innovation’s a breakthrough, something that’s really useful and it doesn’t have to be patentable, even.”
IMPROVEMENT
Innovations are typically viewed as “something new.” However, all the interviewees and workshop participants emphasized that innovations are improvements, not necessarily just new.
Laurie Dean Baird explained her approach to discern the value of an innovation: “If I look at something that’s new and ask ‘Is this innovative?’ then I ask ‘How was this problem solved before? What was the industry standard and how is this different?’ And if the answer is that, in addition to being new (the problem or solution), it takes the hassle out of something (i.e., it improves life), then it is innovative.”
I don’t see innovation being the introduction of something [that is just] new. There are many things new every day, and I wouldn’t say they all are innovative. I think to be innovative, something has to be better than the predecessor product, materially better, not just a small percentage better.
–Tim Cook
In terms of the scale of improvement, innovations can be transformational—for example, creating large-scale changes in the way technology is used or thought about. Mary Lou Jepsen said, “I think of innovation as doing some transformative work in an
area or in a combination of areas that trail blazes in a way that people recognize has moved the ball forward . . . in a way that is a leap.”
But it is not necessary that every innovation be groundbreaking or dramatically change the world. Bernard Meyerson referred to “continuous innovators”: “The danger is there are other types of innovators that are just as necessary, what I call the continuous innovators. These are the guys who come to work every day and make it 5 to 10 percent better, and there’s a terrible undervaluation of that.”
INNOVATION AT THE INTERFACES OF DIFFERENT DISCIPLINES
Innovators in all the areas represented—academia, large companies, small businesses, and the arts—agreed that innovation occurs at the interfaces of disciplines and requires the synthesis of knowledge from different fields. Yo-Yo Ma captured this aspect using the concept of the edge effect from ecology: “If you think about where new ideas can come from, you need proximity to density, and if you’re at the edge of something you see both sides; you already see over the wall. You could be part of one ecosystem, but you actually are constantly interacting with another ecosystem, and so you see the possibility of what another ecosystem can bring. And . . . if the center uses the knowledge at the edge, the center does benefit.”
Chapter 3 provides more detail about the impact of interfaces of disciplines on developing and enhancing an individual’s innovation capacity.
TEAMWORK
Innovation is the result of teamwork, a point often made by the innovators. And it depends on the work of the team as a whole, not the work of one key innovator and other “supporters.” Ivan Seidenberg observed: “I get comfort in knowing that life is cumulative, innovation is cumulative, it’s not individual. Let’s take some of the greatest examples: Let’s start with the example everybody’s using right now, and I knew him well. Steve Jobs is a genius, but he didn’t invent the computer; he didn’t invent anything that went into the iPhone, but he made it all work together . . . so what did he invent? Take another example: Bill Gates had enough common sense and enough vision to know that PCs couldn’t talk to each other, so he built operating systems to make them talk to each other, but along the way, they didn’t work very well when they first came out with them. They (Jobs and Gates) needed a full team and with their superior insights and innovative spirit they made something bigger than any one person could have made. So all I’m getting at is that there’s really no one innovator who can innovate all alone. I can’t think of any one person that gets it all right. Is there anybody? Is there anybody in the literature that gets it right the whole time?”
Chapter 3 deals with the importance of teamwork for innovation in more detail.
INNOVATION IN THE INVENTION-VALUE CONTINUUM
Innovation is part of a continuum between invention and value. Innovators may start with an invention and then innovate to create value from it, or start with a problem and solve it innovatively.
Innovation was described as the application of inventions to real-world needs. It can also be driven by the concept of marketability or trying to solve a problem. As Robert Fischell said, “Sometimes we see an invention and then we can apply it to another thing, but that doesn’t happen very often. Most times, we hear about something and it occurs to us that the way they’re doing it is not good, and so we innovate a better way.”
John Rogers characterized innovation in the context of technological and market factors: “it is often difficult to describe innovation as strictly one thing or another. It is very much a blend of technology push and market pull in terms of how the innovation is done, especially around completely new classes of technology.”
Analysis of the 60 innovators’ observations revealed that innovation is an improved product, process, or service that benefits society in a timely and, sometimes, transformational manner. It is a team activity at the intersection of different fields, bringing together diverse ideas, abilities, and/or methods to result in the creation of value.
The next chapter examines what defines and helps shape the people who become successful innovators.
