We need to innovate fast

I was pleased to read Prof. Vogt’s discussion paper in the Journal of Responsible Innovation that introduces the stimulating question “How fast should we innovate?” The author considers the fast pace of innovation in certain material products (intangibles, such as software, are not his focus) and remarks upon their short product life cycles in addition to the marginally incremental innovations that lead to an overuse of natural resources. Vogt brings up the notion of “slowing down” certain innovations, calls for a more systematic exploration of the role of time in innovation, and proposes efforts to moderate the use of chemical elements and to find materials substitutes. His proposal includes tax deductions, higher trade-in values, and more efficient re-cycling and re-purposing. Herein, I discuss Vogt’s ideas briefly and argue that effectively addressing issues such as the potential depletion of scarce natural resources due to certain innovations may actually require revising other more general aspects that characterize the increasingly complex process of global innovation and technological change.

Vogt’s call for a more systematic exploration of the role of time in innovation points to the need to reexamine the timing and speed of certain innovations, especially the short product life cycles that accelerate the use of scarce natural resources such as rare earth metals. Of course, product life times are already a central aspect of corporate strategies and, in the case of some popular electronic products and consumer companies, time plays a critical role.¹ Moreover, the notion of slowing down innovation is not entirely new. Other scholars have disputed the widely held assumption that faster innovation is generally desirable when it comes to, for instance, product development and market entry strategies. In particular, projects can be – and often are – slowed down when there are fewer opportunities to exploit through speed, in industries with lower competitive pressures, and when “external” factors require so (e.g. in the pharmaceutical industry, where companies are required by regulatory agencies to go through a number of trial phases), among other reasons. Additionally, new venture formation is often delayed until technical viability has been further investigated.

From the perspective of an increasingly globalized and competitive economy characterized by quickly changing markets, however, most industrial actors still consider innovation speed to be vital. This remains true despite the uncertainties and unpredictability that complicate innovation processes, making it difficult for these actors to anticipate what, when, and how innovations develop: For many companies, innovations are a way to “beat” competitors in a “race” that involves new technologies, product features and shorter time-to-market cycles. Accordingly, they hire industrial analysts to investigate research, development (R&D) and commercialization activities to understand the global innovation landscape and anticipate new developments, even as such analysts struggle to predict technology futures despite increasing amounts of data and tools available for this task. This is due to myriad factors, including technical, economic, social, and historical complexity and contingency, to name just a few (Arthur 1989; Bijker 1997; Dosi 1982; Hughes 1993). Therefore, in practice, one could say that the time of innovations is so uncertain that it cannot even be considered a parameter, strictly speaking.²

Furthermore, I wonder whether Vogt’s perspective captures this phenomenon at a global scale. For industrial actors, varying lead times could, in theory, benefit new product development, for instance by slowing projects down to explore larger areas of the solutions space, potentially producing better outcomes.³ Yet, how quickly or slowly innovations occur in such a landscape as technologies meet global markets might be influenced only indirectly – if at all. The short product life cycles observed in certain industrial sectors are only one feature of the broader and ongoing processes of technological change in which the overuse of natural resources is only one of many negative impacts.⁴ Any attempt to prolong product life cycles without considering other factors that affect these broader processes could be ineffective, especially if the purpose is to lessen the environmental impacts of innovation systems at global scales. Therefore, I suggest adopting a different – albeit not exclusive – perspective.

This is a higher level perspective that begins with identifying needs and setting priorities. Societies should be enabled to prioritize their desired innovations – such as materials substitutes and more environmentally sustainable products – and to invest in efforts that are meant to achieve them at the soonest. This would require concerted attempts to address a persistent policy question: why, even when societies agree about what the most important problems are, are they often unable to effectively speed up and direct innovation efforts toward those areas that really matter?⁵ Recent continuations of this debate in both scholarly literature and mainstream media list various reasons why societies do not solve “bigger problems” (e.g. space travel, energy generation, and vaccines) and what is holding back progress (Pontin 2012; Sarewitz and Nelson 2008). Among the usual culprits identified by commentators are markets, a lack of understanding of the (often social) nature of the problems, and failed institutions. I consider additional potential reasons below.

Vogt discusses one of those big problems, the possible depletion of certain natural resources, and puts forward a number of ideas to tackle such a problem. His main ideas are establishing chemical elements as commons, whose overuse can be regulated if necessary, and a regulatory-driven extension of product life time. More specific measures to prolong product lifetimes include tax deductions, higher trade-in values and exploring more efficient re-cycling and re-purposing of trade-in products. Related actions would also seek to make companies replenish public funds for infrastructure projects that were later turned into commercial products.

As both a scholar as well as someone who attempts to be a conscious consumer, I share Vogt’s concern with short product life cycles and marginally incremental innovations due to their negative impact on resources used in, for example, semiconductors and electronic gadgets. But I also observe potential issues in direct attempts to prolong them. Practically, this kind of intervention would require making tricky decisions about categories of products and industrial sectors that need to comply and when they would need to do that. They would also require determining materials, measures of used amounts (net of recycled/repurposed quantities) and what “overuse” is. And, they would involve defining what a “short cycle” and an “innovation threshold” is in each case.⁶ Moreover, consider that the answers to all these questions would likely change over time (presumably, quickly!) as new technologies are introduced. Secondly, I concur that these measures would likely be challenged as “heavy-handed” government interventions, as Vogt warns. Corporations would resist their implementation on the basis that they represent an attempt to impose direct changes into business models. Finally, from my suggested global perspective, Vogt’s proposed measures appear as a solution applied to the consequences of the problem and not to the problem itself.

On this point, it is necessary to dig deeper and focus on what is in fact leading us to unwanted innovation impacts in an effort to tackle the underlying causes instead of trying to moderate those impacts. For instance, in addition to other factors previously mentioned as obstacles to more effectively addressing large societal challenges, the global innovation landscape is largely influenced by corporate law and corporate practices, which focus public companies’ attention on quarterly results and on sizable executive compensations, making them seek, in Vogt’s terms, “opportunities to incentivize more profitable hardware purchases” in the pursuit of short-term gains. Another obstacle is (uneven) competition, which works against collaboration and intermediate arrangements, and which remains, despite the important enabling role played by government-funded R&D, the main driver of innovation and a key contributor to nonessential technological paths and trivial technology applications. For example, large well-resourced players (particularly those that develop “platform” technologies, which are used by many companies as the base upon which other applications are developed) can introduce product features that are arguably unnecessary, as they do not offer significant benefits to consumers and indirectly set de facto industry standards that other firms follow, inducing unwanted innovation pathways.⁷ Finally, path dependencies, which result from a combination of structural rigidities in industrial sectors and established corporate interests, are arguably more responsible for locking in negative social and environmental externalities associated with innovations than is the rapid pace by which those innovations develop.

If the purpose is to induce more meaningful and responsible innovation across industrial sectors – including those causing overuse of scarce natural resources – these kinds of factors need to be addressed. To such an end, I suggest that policy makers and other actors consider one or more of the following “innovations” in governance:

1. A new, globally coordinated incentive scheme using innovation prizes⁸ to reward desired innovations by promoting both cooperation and competition. This scheme should complement the patent system (which is also badly in need of reform) and could incentivize R&D on materials substitutes or platform technologies for next generation products that minimize the use of scarce materials such as rare earth metals.

2. New types of business entities with, for example, limited life spans, whose sole purpose is solving a concrete technological problem profitably rather than finding problems that need solutions that could produce profits.⁹ This could help create a new generation of more “responsible entrants” into certain resource-intensive markets.

3. Capital markets for business entities with double-bottom-line goals (e.g. California B Corporations), in which companies are evaluated on the basis of financial gains and other societal or environmental benefits. This could help those new entrants raise funding for more sustainable R&D projects.

4. A global technology intelligence system that reveals accurate patterns of innovation activity, provides insights into the nature, magnitude and impact of key problems and technologies, and offers companies – from developed and developing countries –intelligence on valuable and responsible market opportunities. This could help direct the attention of new entrants and existing companies toward opportunities for responsible product development.¹⁰

Needless to say, these ideas would need further consideration. They are also likely to be challenged, but to a lesser degree as they do not involve increasing regulations or direct interventions in existing businesses (on the other hand, it might take them longer to produce significant effects). These “innovations” would actually add new (competitive but also cooperative) opportunities for alternative, more sustainable innovation pathways that could represent improvements over existing organizations, processes, and practices.¹¹ Moreover, these ideas involve a decentralized effort in which multiple – local, national, or international – bodies of governance could play a role. They could also involve new international forums to engage stakeholders and evaluate the possibilities and the economic and geopolitical implications of global-scale measures such as establishing chemical elements as commons. Tools such as anticipatory life-cycle assessment (Wender et al. 2014) could prove to be valuable in this process.

Vogt’s article is a timely reminder of the need to address the unwanted consequences of technological innovation. I hope mine, with its venturous ideas, further sparks this debate and the larger debate on how to design, develop, and introduce more sustainable technologies. Vogt contributes interesting ideas that could be advanced or at least complemented by those I briefly propose. Yet, my ideas adopt a more comprehensive, macro-level perspective as I consider the overuse of scarce natural resources to be the result of more general governance phenomena. In this context, the roles played by uneven distribution of natural resources, cultural diversity, and differences in needs (cf. Macnaghten et al. 2014) also cannot be overlooked. To conclude, if we adopt my viewpoint, consider pressing global challenges, and contemplate all types of innovations (including those needed to find better and more responsible ways to develop new technologies), the answer to “How fast should we innovate?” is “We need to innovate fast”.

Notes on contributor

Luciano Kay is Assistant Researcher with The Institute for Social, Behavioral and Economic Research (ISBER), University of California Santa Barbara. His current projects investigate the impact and potential of emerging technologies such as nanotechnology and synthetic biology on industry and the economy. Luciano has also investigated other diverse science & technology and innovation policy issues, including the use of incentive prizes or grand challenges to induce innovation. In particular, his book Technological Innovation and Prize Incentives: The Google Lunar X Prize and Other Aerospace Competitions (Edward Elgar Publishing) presents the results of empirical research on prizes used in the aerospace and defense sectors. Luciano holds a Ph.D. from the Georgia Institute of Technology.

Notes

1. Consider, for example, Apple Inc. and its different product lines. Probably no other company in history has received so much attention aimed at predicting its new product releases. Product timeline management has become an essential component of Apple's strategy.

2. I must add that, while innovation in macroeconomic models could be considered “timeless”, as Vogt points out, much of the policy, innovation systems, and management literature refer to the multiple time-related aspects of innovation phenomena. Much research has discussed, for instance, the implications of technology acceleration for policy, innovation waves and disruption in industry sectors, and the need for faster innovation in competitive environments. Moreover, time is implicit in the very notion of innovation, as it also comprises technology transfer, dissemination, and adoption – processes inherently dynamic – and not only research and development activities.

3. There is research that shows the opposite, however. Teams working under time constraints can actually become more creative.

4. Others are, for example, pollution and inefficiencies in the allocation of resources from a social justice viewpoint.

5. See Nelson (1977) for a classic treatment of this issue. More recently, consider the large share of startup companies, including the popular unicorns, that focus on developing frivolous “apps” or consumer services that do not involve more meaningful innovations.

6. Herein, I only consider the technical aspect to these questions. I do not even begin to touch upon the normative aspects, such as when certain resource-intensive technologies should be allowed, who should bear the consequences of banned applications of certain materials, etc.

7. Apple Inc. offers another illustrative example. In the pursuit of slightly thinner cell phone designs, it recently removed the traditional headphone jack and introduced wireless earphones, which forces the retirement of pre-existing, still reliable technology, causes accessibility problems, and imposes a new standard that smaller companies relying on such a platform need to adapt to.

8. Interestingly, where sponsors can set lead times for technology development but cannot guarantee outcomes is in innovation prizes. The deployment of a global array of innovation prizes could be an exceptional case in which a measure that seeks global impact can actually use time as a parameter. See, for example, Kay (2012a, 2012b) and Hayden (2013), for example, to elaborate on these caveats in the use of innovation prizes.

9. A new type of business entity could resemble the form of organization that some prize teams adopt. To raise funding, these teams present their efforts to find a solution to the prize challenge as an opportunity for sponsors to make a profit.

10. This idea is in part inspired by Arthur (2009). See also Pavie, Scholten, and Carthy (2014) for an interesting discussion on how responsible innovation could be transformed into a source of competitive advantage and trump the dominant business concern with financial performance.

11. Stronger efforts to raise awareness about these issues and engage the public would be vital for social acceptance of any kind of measure; efforts could include further dissemination of and public deliberation upon the kind of evidence Mazzucato (2015) and others contribute on how many government-funded R&D projects originate the technology and products that we later purchase from industry tech giants.