Dr John Kao (author of Innovation Nation) is presenting the keynote speech at KMWorld and Intranets 2008 conference, talking about innovation.

What is Innovation?
John started with a focus on creativity for individuals, and then transitioned to a focus on innovation in teams, and then enterprise-wide innovation. His most recent viewpoint is innovation at a much larger scale, eg, at the level of a country, or the entire world. How does innovation work at a global level?
– What does stewardship look like?
– What is the system that actually works?

It requires different concepts and approaches at the different levels. Dictionary says “Innovation is filling a need that creates value.” That’s alright at a lower level, but doesn’t work at the society level.

John’s definition … “the set of capabilities that gives the progressive realization of a desired future state”. So you have a goal, and innovation gives you a way of getting there, of embracing transformation.

Innovation blossoms where there is diversity across divisions, departments, silos, etc. Eg, the new university in Denmark, which brings together three previously separate universities into a new combined one. Eg2, a government official who says that the nation’s innovation strategy is to “increase funding in science by x%” is missing the point; you have to fund the whole value chain of innovation, not just the experimentation. You can get the best academic science, but without an entrepreneurial process, you don’t get innovation. Every part needs the other parts.

Let’s look at the global value chain now. Many countries are beginning to specialize in certain aspects of the innovation value chain. Eg, India (best pharma research), Singapore (life sciences, with a 20 year strategy for 10,000 PhD scientists that rivals the US), Vietnam (ability to do clinical lab testing for certain classes of diseases).

John’s final point: It’s important to have a common agreement about what innovation means.

Why is Innovation Important?
There are many countries in the innovation game. A history lesson … after WW2, the US was the only player in the innovation game. Everyone else was struggling. In 1946, the US presented roughly 50% of the entire industrial output of the whole world. Now in 2008, many countries are racing for this innovation high ground … both small countries (Singapore) and huge ones (China). These countries usually have a federal group and set of people explicitly responsible for innovation.

Two parts of the book, Innovation Nation:
(1) the other countries in the world are making huge strides in innovation; and
(2) the US has taken the foot off the pedal of innovation.

Re #1:
– there used to be significant ideas in the US that were unique, eg, great universities, Silicon Valley, Wall Street, and venture capital. But now these are much more common place in lots of other countries. These are becoming globally distributed.
– international cities have become much more attractive. Eg, 300 Starbucks shops in Shanghai, 5 Apple stores in Singapore.
– the “American dream” exists in many other nations; and that’s a good thing.

Re #2:
– end of 1945, the US is the big player in innovation.
– in October 1957, the Russians got to space first. Very traumatic for the US. Eisenhower says, “Space is peaceful”, but “children should study math and science”. NASA got started. A science advisor was put into the White House. DARPA got started.
– now in 2008, the ratings of countries in innovation puts the US as #1 for innovation. This is based on current data. But … the longer term outlook is very troublesome. We need to pay attention to the warning signs.
– indicator #1, talent: (1) public education in the US is significantly in trouble. We spend $80K per child per year, but we rank below Latvia and Macau on certain evaluations. This is a big problem. Nationwide, about 33% of high school aged children do not finish high school. There is a huge disconnect between social aspirations and reality in this group. At the higher level, the US puts out huge numbers of PhDs. But … China puts out 600,000 engineers last year, and the US did 70,000. The Chinese engineers may not be as good as the US ones, but the law of large numbers is going to catch up fairly quickly.

(have to change machines … no power at this desk)