INNOVATION NATION: Innovation is not just about going digital -- it’s about a state of mind

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Was there ever a better innovation than sliced bread? Photo by Chris Hondros/Getty Images

Malcolm Turnbull taking the reins in Canberra has brought a focus on innovation and the technology sector.

Innovation and technology are closely connected, but it’s important to remember that being innovative does not necessarily mean using technology.

Innovation has been conflated with technology for as long as there has been technology. A look at a list of most innovative companies for instance, will often be full of technology firms.

And to some extent this is perfectly reasonable. Technological innovations from hand tools to the internet are part of what sets people apart from other animals.

The world has enjoyed an incredible run of economic growth since the industrial revolution. Advances in medicine and agriculture have allowed the human population to grow more in the past two hundred years than the entirety of human history that preceded it. Technology allowed us to escape the Malthusian Trap.

Leaders in the technology industry have publicly embraced this conflation of innovation and technology.

Venture capitalist Marc Andreessen famously claimed in 2011 that software would eat the world. And it wasn’t long before he was proved correct, as 131 year old Kodak filed for bankruptcy in 2012. It was put out of business in part at least by Instagram, a software platform that saw 5 million new photos a day, but was staffed by just 9 people.

Earlier this year Jana Matthews from StartupAus outlined what was needed to make an innovative economy, including an agency to commercialise research, more access to capital, and a “national network of entrepreneurship centres”. These are all suggestions intended that would help the growth of technology companies.

But what if we thought of innovation not as simply a technological shift, as something intrinsic to technology, but a process or state of mind which includes technological advances, but as a subset, not the whole?

A quick survey of people in the technology industry reveals wide-ranging conceptions of innovation.

Craig Blair, partner at venture capital firm Airtree Ventures thinks of innovation in terms of problem solving. For Blair, innovation is “trying to solve existing known problems in a unique way, or solve unique problems period”.

Blair thinks the idea of innovation has been co-opted by technology, and especially software. Really, this is backward. Software isn’t the innovation, software is a tool.

“Software is just the enabler. It just enables you to innovate at a faster pace. Get feedback loops, use data to try and learn and solve problems in a quicker way” explains Blair.

Bill Bartee, a co-founder of venture capital firm Blackbird Ventures, thinks innovation comes in two forms: taking an old way of doing things and doing it better, or creating something new that the market hasn’t seen before.

Again, technology isn’t a headliner in the definition, but similar to Blair, Bartee thinks of technology as an enabler for the actual innovation.

The example Bartee offers is Uber, which has created an entirely new marketplace and a way of thinking about transportation. The innovation wasn’t the app itself. Apps and routing had existed before, but bringing it all together into one package that made ridesharing frictionless.

Professor Don Scott-Kemmis from the University of Technology Sydney has written extensively about innovation and has a similar definition to Bartee. He defines innovation as the “application of an idea that creates value”.

The idea only needs to be “new to the context”, and not necessarily new to the world, industry or country. So innovation can include transplanting an idea that works elsewhere; in other countries or other fields.

An example is the developer Mirvac, who is experimenting with ways of bringing together people from different departments to tackle problems, bombarding problems with different experiences and expertise to create something new.

Its this kind of experimentation that Scott-Kemmis is talking about when he says we need to create the right culture for an innovative state of mind to take root. Other methods for an innovative culture Scott-Kemmis suggests are constant learning, collaborating, not punishing failure, and celebrating success.

Another (connected) qualm of those in the industry is that conflating innovation with technology distracts from the bigger picture.

Murray Hurps, right, with some of the Fishburners crew.

Murray Hurps, the General Manager at Australia’s largest startup space, Fishburners, says there is too much “innovation for innovation’s sake”, and not enough focus on creating scalable businesses.

“Do you have a significant addressable market? Are you using technology to capture that market quickly?” asks Hurps, thinking of software in a similar vein to both Bartee and Blair.

“You can innovate in either of these areas, but starting out with innovation as a goal seems to be a meandering path to a useful outcome.”

Adventure Capital’s Stuart Richardson. Image: Supplied.

Stuart Richardson, founder of the co-working hub York Butter Factory, thinks “innovation” is overused, and the way it is used masks a more pervasive issue – short-termism. The important issues are relevance and survival, he says, and they are longer term processes. Additive change takes place over a longer horizon.

“Moonshots and true, world and perspective changing innovation take significant foresight and courage – along with patient capital,” says Richardson. “Successful entrepreneurs take a longer-term view and delay gratification.”

In the end, companies are successful because of innovative mindsets, such as “openly challenging the ‘its always been done this way'”. And this is a mindset that can be adopted by any businesses, whether technologically focused or not.

Innovation is the process of taking a new approach to solving a problem. If we look at this through arguably the most cliched of innovations – sliced bread – the problem was unappealing bread hunks, the technology was a bread knife, and the innovation was sliced bread.

The technology wasn’t new, it was adapted.

And as both Bartee and Blair point out, the technology is just a means to the end. We don’t celebrate the bread knife, we celebrate the end product.

So fostering innovation is about focusing on more than just technology. Innovation isn’t confined to “going digital” by investing in machines or providing services online. Certainly, because technology is moving so rapidly in the modern era there is plenty of scope to apply it to problems but innovations, and their related productivity gains, can be much broader than that. Innovation is a mindset. It’s about solving a problem, of which technology may be part of the solution.

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