Innovation is a complex process, with many variables and constantly-changing forces at play. In this book, Eugene Fitzgerald and Andreas Wankerl provide insights into the true processes behind innovation, and presents a universal model that explains how key stakeholders (including innovators, investors, corporations, universities and governments) can contribute to, and reap benefits from, a robust innovation system. This free Inside Real Innovation summary outlines how innovation truly works, some of the challenges involved, and the solution to rebuild a healthy innovation pipeline.
Inside Real Innovation: An Overview
Innovation is the process of translating new ideas into useful forms that bring value to the marketplace. A robust innovation system is the foundation of national economic growth, and affects all its stakeholders. While the book is written primarily from a U.S. perspective, the insights are relevant outside of the US.
- Fundamental Innovations (FINNs) change industries and behaviours in ways that would’ve been impossible without the innovations, e.g. the first steam engines and first personal computers. Such innovations take at least 10-15 years before they can be successfully deployed in the marketplace, and the book explains why this is so.
- Incremental Innovations (IINNs) are minor improvements to what already exists, e.g. enhancements from Windows 8 to Windows 10.
FINNs and IINNs lie on two ends of the same spectrum. Specifically, FINNs create paradigm shifts that propel long-term growth and wealth. IINNs create more-immediate value and ongoing improvements which add up over time. We need the full range of innovations on the continuum for a thriving ecosystem.
The Innovation Crisis
The authors suggest that the true problem behind USA’s ailing economy is its shrinking innovation pipeline. Since the early 2000s, there has been a lot of IINNs, but barely any FINNs to propel new growth. Yet, this trend isn’t obvious because of Moore’s Law and VC-backed startups that create facade of exponential progress. Our full Inside Real Innovation summary covers these in greater detail. To fix the economy, we need to fix the innovation system.
The True Process of Innovation
The book reveals 2 important misconceptions about innovation:
- It’s not just science or technology. Innovation is about bringing new ideas to the market, in a way that delivers value. This requires an entire pipeline to shape the innovation and bring it to market, including 3 essential components: Technology, Market, and Implementation (I).
- It’s not a linear process but an iterative one. Innovation is not a linear process from discovery to development and profit. It’s an iterative process – an ongoing interaction between product, implementation and market – that eventually results in a convergence.
The authors integrate these ideas and components into a universal innovation model, that’s applicable to any innovation, industry or environment:
Here’s a quick overview of the components, ingredients and processes but you can get our 15-page summary for more details:
- 3 Components of Innovation. As mentioned earlier, innovation is about bringing a great idea to the marketplace. Our full Inside Real Innovation summary elaborates on the 3 components that must jointly drive innovation: Technology (T), Market (M), and Implementation (I), or “T-M-I” for short. Each of the T-M-I components contain multiple variables. As part of the iterative innovation process, the innovator must figure out whether the individual pieces will work, which pieces can fit with the other components, and find the optimal combination.
- 3 FINN Enablers. The FINN process is volatile and unpredictable, and you need 3 additional enablers with ample time for it to mature – Talent (Innovation skills, including interdisciplinary skills & knowledge, and the ability to learn and abstract), Investment (with different types of investors playing different roles at different phases of the innovation), and a Conducive Environment (macro-factors like individual mobility, ease of organizational adaptability, ability to retain earnings from innovation, and a strong rule of law).
All the elements above are crucial for successful FINN and you can get a detailed overview of these in our complete summary. To fix the economy, we need to rebuild the innovation system, incorporating these elements.
Innovation in Practice
Given the extremely long and convoluted process of FINN, it’s hard to capture the full process. Fortunately, one of the authors, Eugene Fitzgerald, was personally involved as the lead innovator of strained silicon (a technology that greatly enhances the performance of integrated circuits) for the entire innovation journey over 2 decades. This gives us a rare insider perspective of the FINN process, from the technology’s inception to its commercialization almost 20 years later. The book captures the people, inputs, environmental factors, random events and other variables , as the technology evolves across different innovation phases and multiple organizations. Our 15-page summary extracts the key highlights of this case study, and outlines how it relates with the model presented earlier.
The book ends with a review of how the American Innovation System has evolved, so we know where we stand today, why the innovation pipeline has dried up, and what must be done to rebuild it. We’ll now take a quick look at what the solution entails.
Building a New Innovation System
Given the various inter-connected components of the innovation ecosystem, it will be ineffective to merely increase research funds or encourage entrepreneurship. To fix the entire ecosystem, we must involve 2 groups of inter-dependent stakeholders.
- Nation-state players must undertake the early iterations of FINN, as these can’t be profitably addressed by free market players. Specifically, 2 nation-state stakeholders are crucial in their research & education roles, viz. (a) Universities (to provide early FINN research and train innovators), and (b) Governments (to fund early FINN research and facilitate the various stakeholders). However, the old ways of funding/ research are sub-optimal – the book explains the refinements/ changes needed for a new system to work.
- Free market players must complete the later iterations of FINN to realize the profits (which can’t be achieved by nation-state players). Since corporations’ research timeline is much shorter than the 10-15 years required for FINNs, there’s a 3-10 year gap to be filled by (a) individual innovators (to acquire innovation skills and be self-sufficient for the initial 3-10 years), (b) free-market investors (to become savvy about innovation and ROI), and (c) corporations (to invest in and cultivate innovations-in-progress)
Getting the Most from Inside Real Innovation
This is a must-read book for innovators, investors, corporations, universities and government institutions, who wish to harness long-term growth and wealth from innovation. For more details, do check out our complete book summary bundle which includes an infographic, a 15-page text summary, and a 31-minute audio summary.
About the Authors of Inside Real Innovation
Inside Real Innovation: How the Right Approach Can Move Ideas from R&D to Market – And Get the Economy Moving is written by Eugene Fitzgerald & Andreas Wankerl.
Dr. Eugene Fitzgerald is an author, scientist, professor, and entrepreneur. He’s the Merton C. Flemings SMA Professor of Materials Engineering at the Massachusetts Institute of Technology, and from 2007-2012 was a Visiting Professor of Management in the Johnson School at Cornell University. He was a Fellow in the Singapore-MIT Alliance and directs MIT’s Low Energy Electronic Systems Center in SMART (MIT’s research institution in Singapore). He has created and led a series of fundamental innovations. As a serial entrepreneur, he has founded or co-founded 5 start-up companies.
Andreas Wankerl was the Operations Director for the Innovation Interface, and is Senior Lecturer at MIT. He received his BS and PhD degrees in Electrical Engineering from Cornell. After four years of managing international sales and customer relations in the semiconductor equipment industry, he returned to Cornell to earn his MBA and to start the Innovation Interface. He is also founder of Iterandis UG, which provides practical innovation tools and training for industrial innovation globally.
Carl J. Schramm is an economist, entrepreneur, and former President and CEO of the Ewing Marion Kauffman Foundation, a private philanthropic foundation. Schramm founded and cofounded several healthcare finance and IT companies, served on 2 Department of Commerce innovation committees during the Bush and Obama administrations, advises government leaders worldwide on economic expansion, and serves on the Prime Minister of Singapore’s Research Innovation and Enterprise Council. He is currently University Professor at Syracuse University.
Inside Real Innovation Quotes
“Real innovation more often begins with a confluence of factors coming together in the minds of innovators.”
“At the heart of the matter is the fact that innovation is a process performed by people, not by organizations.”
“By adapting the innovation process to fit managerial needs, instead of adapting managerial methods to fit the needs of the innovation process, corporations gradually ceased to innovate in areas important for future markets.”
“The innovation pipeline needs to be restructured, not just repaired.”
“Ultimately, it is not any systems or policies that innovate. It’s people like you.”
“The potential innovator takes charge of training herself through experiential learning and she will also generate her own innovation investment.”
Understand the true innovation process and build long-term competitive advantages!