By Dan Hebert, PE, Senior Technical Editor
Think about the last time you made an innovative improvement to your machines automation system. Did you invent and patent a basic new technology, or instead did you take an off-the-shelf product and use it to make your machine better?
It probably was the latter, and thats why real innovation depends on more than just inventions and patents.
In addition to applying technology thats been invented elsewhere, you have to get your customers to accept and apply your innovative machines to improve the productivity of their manufacturing operations. In the end, which party was the most important to the innovation: the original inventor of the technology, the machine builder that employed the technology to improve their machine, or the customers that employed the innovation to increase their manufacturing productivity?
Traditional thinking says the innovator invents and patents new technologies. The innovator almost always is a technical person, often an engineer or a scientist. Because China and India graduate a gazillion more technical people than the rest of the world put together, they will be the innovators of the future, while every other country falls behind.
Amar Bhidé of Columbia Universitys business school argues in a paper titled Venturesome Consumption, Innovation and Globalization that an innovation does not occur until it is put to productive use. This puts the U.S. in the lead because it is the country best at commercializing innovation. Although Bhidés paper primarily covers innovation in consumer markets, his studies are very relevant to our machine builder industry.
Academia and the media are awash with studies and articles that claim the U.S. needs to be the world leader in nearly every area of basic technology. These studies and articles predict dire consequences from any slippage in technological leadership. Virtually none of them discuss an inconvenient fact that the U.S. worldwide technical leadership has been slipping for decades. This slippage has been accompanied by a corresponding gain in productivity and per capita GDP relative to much of the world.
Japanese per capita incomes reached 80% of the per capita incomes in the U.S. by 1989; after that, relative incomes in Japan have actually fallen a bit, says Bhidé. The growth rate in output per hour during 1995-2003 in Europe was just half that in the U.S.
Traditional theories about technological leadership suggest that European and Japanese incomes should have been catching up with U.S. incomes due to substantial increases in their share of PhDs and scientific articles.
Bhidé identifies two main reasons that technological leadership is not tied directly to productivity. The first is that the success of new firms is seldom based on proprietary use of new inventions. My studies of over 500 new and emerging businesses over the past 18 years suggest that few entrepreneurial venturesincluding those characterized as high techundertake cutting-edge upstream R&D, claims Bhidé. Rather, they combine and distribute innovations generated by others. They play the role of system integrators or value-added resellers. This is a pretty good description of how machine builders use innovation to improve their automation systems.
The second reason is innovation does not occur without venturesome and resourceful customers. Customers must be willing to take a chance on new products and services. To use Bhidés terminology, venturesome consumption is key to innovation.
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