Everybody says that innovation is very important.
By Peter Day
01/04/2006
In the 20th century, it was the engine of growth (for individuals, businesses, countries).
In the 21st century, it may be the engine of survival for everyone.
The trouble is, nobody really knows what innovation is. Or how it happens.
Even so, we spend a lot of money trying to produce it.
In 2000, under the Lisbon Agenda, the European Union heads of states and governments bravely pledged to make the EU "the most competitive and dynamic knowledge-driven economy by 2010".
One way of making this happen was to try to increase total spending on research by companies and universities to 3% of Europe's gross domestic product.
UK chancellor Gordon Brown stressed the importance of promoting science and innovation in his 2004 budget speech.
Big assumption
It is assumed that in some way this research will be turned into ideas that will have commercial applications, earning money for the inventors, the company and the educational institutions.
But as Stephen Allott pointed out, this is a rather big assumption.
Mr Allott is interesting because of where he comes from and the people to whom he was speaking.
He is a Cambridge law graduate who has had a very successful business career, consulting at McKinsey and taking part as president and chief financial officer in the rapid growth of the London software company Micromuse, a striking British computing success story.
He now describes himself as a social and business entrepreneur, cofounder of a high tech consulting company called Trinamo.
Minor royalties
Mr Allot's audience was gathered at Hughes Hall, Cambridge, and many of them were very successful.
Cambridge has spawned hundreds of high technology companies in the past 25 years, many of them naturally growing out of activities taking place in the university laboratories.
But for all this striking activity, Silicon Fen has produced little direct benefit to the university, where professors and department members have only very recently had to share the right to profit from their intellectual property with the university.
This much irritated the previous vice chancellor Sir Alec, now Lord, Broers.
He says that despite all the activity in and around Cambridge, the university's intellectual property royalties were less than £1,500,000 a year.
How unlike the USA, was the assumption.
Outside innovation
Mr Allot is out to challenge the idea that innovation depends on universities.
He thinks that it is wishful thinking.
The (strangely sparse) research into it backs him up.
The expert is Barry Bozeman from Georgia Tech. His paper of technology transfer from universities is the most cited in his field.
In real life, only a few star American universities make much from "their" inventions, he says, insisting that innovations happen elsewhere.
Commercially able
Forget about encouraging commercial spinouts from university labs, insists Mr Allott, challenge current government policy head on.
Innovation comes when bright people trained in the universities are confronted by real life company problems in urgent commercial situations.
Out of this friction come solutions, which market forces will hurtle into production if they work.
He calls this "people centred" innovation, linking PhD students with companies hungry for their insights with a network of involved corporate supporters of university labs.
It contrasts strongly with the innovation machine model backed by Whitehall and the European Union: a linear extrapolation of university invention which Mr Allott calls the "idea centric" approach.
And it goes some way to explaining why some of the notable beneficiaries of Silicon Fen have been the consultancies clustered around the city and the university.
They perform the halfway house function of taking raw university researchers with good ideas and putting them through a commercial forcing house process by confronting them with the particular requirements of the market place, not the theoretical possibilities of a university lab bench.
This means, of course, that the university will not get the royalty flow from inventions produced on its premises.
But when the innovations produced in the white heat of the commercial world turn into commercial fortunes, the money will flow back to their alma maters in the form of hefty donations from grateful graduates.
In other words, universities should not try to spot winners, but concentrate on what they are good at: attracting and improving really bright people who will go on to change the world with their innovations.
If our future really depends on innovation, this is a very important observation, unpalatable to universities now busy trying to spin out their ideas.
Mind you, we still have to work out exactly what innovation really consists of. Like most buzzwords, it probably is not what it seems to be.