Having been able to participate on this Panel for the AAAS Forum on Science and Technology Policy, I can attest to the relevance and timely value of the strategies offered by both Rob Atkinson and Richard Bendis – building a National Innovation Strategy and leveraging a cluster strategy across the nation. These are necessary baselines should America even want to remain on the global innovation playing field.
Leadership in the Knowledge Economy, however, will require even more…
Simply stated, we have reached the law of diminishing returns on competitive strategy. There is a new game in town – the art of ‘collaborative advantage’. Some nations and regions are already learning how to harness this kind of positioning in the new networked interdependent world. China enjoys over a decade of experience with their Knowledge Innovation Program (KIP) – a cornerstone of their economic strategy. India – via its Confederation of Indian Industries - seeks to become the ‘crucible of global innovation’. The inauguration of KAUST – King Abdulla’s University of Science and Technology –sent overnight shockwaves across their region and the world.
This does not mean that we do not compete; we do. But now, we need to collaborate to compete.
Here’s the Problem:
We are living in an era of ‘kaleidoscopic change’. It is not the change of multiple variables, nor the speed of change of those variables; but it is the compounding effect creating a global management landscape with which we are unfamiliar. In this global economic meltdown, we are suspended – like in a trapeze parable. The old rules do not apply; and the new ones have yet to be innovated.
The challenges are operating on all levels simultaneously – the micro-, meso- and macro-economic levels. What we do as enterprises (or sectors) individually does and will affect what might happen regionally, nationally and internationally. In fact, as suggested by Tom Friedman, we need to focus on the unit-of-one – the entrepreneur.
But if nations in every corner of the globe are developing national innovation strategies – and they are; then the United States is playing catch-up to do so. This is not bad; it just means that we need to take a bigger picture perspective of the emerging global innovation landscape and our role in that future. The distinctive competence we have is not what made us successful in the past. Other countries have already learned from us; and they have moved on. One only needs to look at the plethora of global rankings – the ITIF Atlantic Century being the most compelling – to witness our slippage. So, shaping a National Innovation Strategy is essential; but not enough.
Similarly, if regions in every corner of the globe are developing cluster strategies – and they are; then, clusters alone are not enough to provide the necessary leap-frog positioning for the United States. Again, this kind of local interaction across the sectors is fundamental to being in the innovation game. In fact, if not executed well, these can become counterproductive. In Latin America, countries adopted competitive strategies against one another and – with few exceptions such as Brazil and Peru – do not even seem to be on the global playing field. If our states – as appears to now be the case – develop competitive cluster strategies, they end up competing with one another instead of harnessing collective innovation value. We’ve tracked the economic development initiatives across the nation and have found precious little interaction across the (arbitrary) state – or even national – boundaries. Where we do, some exciting things can happen.
Here’s a Solution:
We know how to compete; we do not know very well how to collaborate – at least systematically. We have numerous boards, councils, and commissions – even legislation with the America Competes Act – on competitive strategy. Maybe we need just one which explores, in earnest, the art of collaboration – the real competence of the 21st Century. To our knowledge, there is no World Knowledge Innovation Collaboration Index.
For 25 years, we have researched what might be the new innovation indicators of intangible/intellectual wealth. We’ve analyzed all the comparative ranking reports and competitive indices. Including those produced by the World Bank, the OECD, regionally like the EU and by think-tanks such as Milliken and INSEAD. Our conclusion is that in spite of commendable efforts, noone yet has the answers. For example: it is not the number of patents one has, it is what is done with those patents. It is not the number of graduates as much as it is what those graduates do with their degrees. It is not the number of entrepreneurship programs but the entrepreneurs themselves and their success in starting new companies – small business generation, as we all know, being the prime element of an economic engine.
Our global experts have been exploring how knowledge flows, not technology or finances. We’ve been analyzing Knowledge Innovation Zones [KIZ] worldwide – hundreds of examples form 40+ nations. We’ve developed a proof-of-concept cultivating zones of innovation across the Ministries of Egypt and discovered a P7 Blueprint of managing from purpose to prosperity.
In the process, we have evolved a Triple Knowledge Lens – the triangulation of the Knowledge-based ECONOMY (Markets, Business, and Commerce), Knowledge-based SOCIETY (Networks, Communities and Culture), and Knowledge-based INFRASTRUCTURE (Organization, Environment and Technology). We can now differentiate 15 value capital drivers and distinguish between brand capital, reputation capital, network capital and more – IP being only one variable.
This is the essence of The Innovation Superhighway – how the Internet and social media technology have enabled links across traditional geographic, company and virtual boundaries. We’ve discovered examples such as the new AaltoUniversity where three of Finland’s prestigious institutions have merged into a regional innovation ecosystem. The Øresund Region – including the construction of a bridge across the sea – now links Malmö, Sweden, and Copenhagen, Denmark, into a vibrant economic community yielding innovation ranking results. The Baltics Dynamics has managed an annual dialogue of innovation experts for over 12 years across Estonia, Latvia, and Lithuania.
Similar efforts can be traced in unexpected nations from Afghanistan to Zimbabwe.
Here are potential Benefits:
Knowledge – in the form of Intellectual Capital - is recognized as the asset to be managed – beyond land labor and financial capital. It is a multiplier asset – the more it is shared, the more it grows. Originally, the Knowledge Economy referred to high technology Companies or those in the Services Sector; but every company is a knowledge-driven enterprise – from the individual entrepreneurs to the large-scale multi-national company. Every worker is a knowledge-worker; so we have the chance to apply learning and developmental theories to the economic impact of society.
Innovation has been redefined according to the flow of knowledge – from the point of origin to the point of use or opportunity. What is less understood is how knowledge flows within the innovation system – how it is created, exchanged and applied (or commercialized) to create value. At least now, we are focused on the right questions rather than having precise answers to the wrong questions!
We can now move beyond benchmarking efforts into a new practice of ‘benchlearning’. Instead or rearranging the deck chairs on the Titanic or learning what is already being practiced – a prescription for mediocrity, we have the impetus to create the conversations which innovate new ways of harnessing resources – technical, financial and human. We can activate what John F. Kennedy  described as “an interdependent world – an age of internationalism as well as nationalization” and what Derrick de Kerckhove  suggested: “Our future can and should be more a matter of choice than destiny”
The Lisbon Agenda has failed – even in its new iterated versions. Why? The core strategy is to build the most competitive region in the world. The reality is that the answers to Europe’s woes – in spite of valiant efforts to cerate the European Innovation Union - are likely to reside outside the confines of the region. Who is likely to provide help? Instead, they should focus more on what has could become a strategic advantage – as painful as all may have been to-date – building collaboration across boundaries.
The World Bank provided a refocus on Knowledge for Development in 1999. The UN activity to-date seems to launch compacts and campaigns in schemes for the redistribution of wealth when the real secret to global prosperity lies in how we learn with and contribute to the success of one another. In economic terms, we are still only as strong as our weakest link; and this has never been more true than today.
The focus, therefore, needs to be on how best to create and leverage collaborative advantage. Competitive strategy on the Olympics playing field is welcome; but the ultimate form of competition is war – not an admirable goal. With knowledge as the asset to manage and innovation now creating the common language, perhaps a shared vision will emerge.
A Millennium Bretton Woods is inevitable. Our goals should be that the right people are at the table – those who have a fundamental understanding of the new game in town – how enterprises thrive and nations prosper.