Why should we invest in innovation?
Why should we invest in innovation and where to start.
- We are creating the independent potential of our economy, covering the complete value chain – from concept development and R&D up to the final product reaching global markets.
- By investing in innovation, we are creating new demand (innovation addresses latent demand), which make our investment projects less susceptible to fluctuations in the economic cycle.
- We are creating new jobs, both for high-level and low-level employees. An innovative economy generates demand for research, new ideas to be tested, scientific equipment, laboratory and prototype testing equipment, workshops and industrial plants manufacturing such equipment, and eventually – when these ideas and products take shape – for completely new industries.
- Once created, innovation potential restores and multiplies itself as it comprises policies and regulations which reward people for using their knowledge and experience creatively at all stages of the innovation life cycle – from concept development to commercial implementation.
- Although the investment cycle is indeed long (10–15 years in the real sector), after a certain time, once enough innovative lego brick emerge, synergies appear and next innovative projects gather momentum. IT is a good example. The transistor was invented in 1947 and integrated circuits in 1958, while the first personal computer was created in the mid-1970s and the first iPhone – in 2007. In the IT industry, a ‘long period of time’ means at most three years because this is the pace at which new innovations typically emerge. However, except fracking, the energy sector still has not seen any game-changing innovations. What we have has been known for more than a hundred years.
- We should begin with creating a development mission for the society and allocating specific funds to it. Since it is impossible to plan innovation, we must replace a growth plan with a mission which should define the developmet direction in a technology-neutral fashion, i.e. without setting the path to the objective.
- It should also be ensured that the allocated funds are not used to finance day-to-day needs, which always seem more pressing and more effective than long-term initiatives.
- In education and science, the motivation system should be modified in such a way as to promote teamwork.
- As far as public money is concerned, it should be given to specialist institutions commissioning specific research or implementation projects. It should be ensured that the commissioning party hires appropriate experts to evaluate, at the selection stage, which projects are in line with the country’s development objectives. At the execution stage, other experts should supervise contractors to make sure that they make every effort to achieve the objectives. High-quality experts should be given autonomy so as to avoid situations in which contractors (typically universities) take advantage of their superior knowledge to recommend certain projects.
- In a company, innovation spending should be allocated to a separate organisational unit, independent of both production and business development functions. Only in this way can we guarantee that the funds originally allocated to innovation work will not end up fuelling production OPEX or CAPEX at the end of the year.
- Companies should put in place remuneration systems which differentiate between work as a service and creativity and which would promote ingenuity and protect employees’ rights to their ideas.
- We must remember that investing in innovation is a long-term endeavour spanning multiple projects. Although most of these do not lead to commercial success, they should not be taken as failures, as the knowledge and experience gathered in the process will help future projects. What is important at the execution stage is the ability to gauge projects, dividing them into those which should be continued and those which should be abandoned immediately.
- We should stop judging innovative projects in terms of their financial results and take other criteria to measure and evaluate progress. In science, for example, the work done by universities is not evaluated in terms of its financial aspects. What counts is the number and quality of publications as measured through scores awarded to articles for appearing in internationally-recognised scientific journals.