No End to Innovation

Stephen DeAngelis

March 29, 2011

Almost everyone has heard about or read an alleged 1899 statement by U.S. Patent Office Commissioner Charles H. Duell that goes: “Everything that can be invented has been invented.” No credible source for that statement can be found. A man named Samuel Sass, while working as a librarian for General Electric, was asked by a company scientist to investigate the quote. His research turned up a 1940 paper written by Dr. Eber Jeffery. In that paper, Jeffery reported the closest thing he could find was an 1843 statement by Henry L. Ellsworth, who as commissioner of the Patent Office, wrote in his annual report to Congress: “The advancement of the arts, from year to year, taxes our credulity and seems to presage the arrival of that period when human improvement must end.” Bill Buxton, Principal Scientist at Microsoft Research, doesn’t believe that mankind will ever arrive at a “period when human improvement must end.” [“The Problem with Great Ideas,” Bloomberg BusinessWeek, 9 June 2010]. He explains why:

“Everything reaches its past-due date. … You might think that your great new product and innovation will be different, will have longevity, and that the associated business will continue to grow. But, quite apart from the fact that your product or process will inevitably provoke innovation from your competitors, expectations always grow faster than the ability to deliver. In his 1980 book, Unpopular Essays on Technological Progress, Nicholas Rescher persuasively argues that the faster expectations are met, the faster they escalate. In fact, he wrote, ‘progress produces dissatisfaction because it inflates expectations faster than it can actually meet them.’ So the bad news is that our great new idea will satisfy neither customers nor society in the long term. The good news is that no matter how well we do, there is a constant and ongoing need for design and innovation.”

Buxton recommends that we accept the sobering fact that all innovations eventually must be replaced and move quickly from one great idea to the next. He continues:

“Here’s what to do when an idea or product gets traction and starts generating a bunch of revenue. First, show restraint on the self-congratulation front. Next, invest a significant proportion of your resulting windfall into sussing out your next great idea. Keep moving and don’t count on the continued success of your original one.”

If you don’t keep moving, Buxton warns that “there are many smart, determined, hungry creative entrepreneurs out there, and they want to eat your lunch.” His bottom line: “Great ideas need to be displaced, even when they still have the allure of the cash cow.” The problem, according to Buxton, is that innovators seem to have a difficult time being the disruptive innovators in areas they helped create. He provides examples of this conundrum from the computer industry:

“IBM was one of the only companies to innovate over successive generations of technology. As the mainframe market started to dwindle, it moved to workstations, to PCs, and along the way extended its innovations to the disk drive industry and services. Hence it remains an important player in the industry. As for the other early pioneers? Digital Equipment Corp. pretty much invented the mini-computer market in the 1960s and dominated through the 1970s, yet it wasn’t able to bridge the transition to workstations. Apollo Computer, founded in 1980, was the largest manufacturer of networked workstations; its importance faded with the rise of ever-more-more powerful networked PCs. Neither company was able to make category-changing transitions—that is, the kind of innovation to which they owed their initial success. Shadows of their former selves, both finished their lives as acquisitions (by Compaq and HP, respectively).”

Killing a cash cow seems counterintuitive, but Buxton says that even cash cows eventually run out milk. He writes:

“Here’s the sentence that should immediately set off alarm bells for those who don’t want to head to the cemetery of one-category wonders: ‘We can’t pursue that idea, because doing so will cannibalize our existing revenue stream.’ If you hear this phrase, stop whatever you are doing and give what lies behind these words your undivided attention. In general, here is my advice: If you can’t change the minds of those uttering it, you should head for the door. The reason is simple: If you can see a way to shoot yourself in the foot, so can the competition. So the only course of action is to do it yourself. At least that way you get to choose when to pull the trigger and which toe you can live without. Rather the toe than the business.”

Normally, self-inflicted wounds are a bad thing; but Buxton makes a great point. Although he doesn’t claim to be a fortune teller, Buxton claims that you don’t need a crystal ball to see how the future will unfold if you don’t innovate. He writes:

“The ambitious, smart young team that developed the new concept leaves the company and joins a startup. They develop the concept and within a few years put their previous company out of business. This story plays out year in and year out. … The moral of the story: Design and innovation are as important in the strategies and tactics of the boardroom and the executive suite as in the engineering and design divisions. While they are no substitute for strong and enlightened leadership, they sure can help.”

One of the reasons that companies invest large sums in basic research and development is that R&D helps shape the future in which they must operate. There is a caveat here. In a post entitled First to Market vs. Late to the Game, I noted that a growing body of research suggests that being first to market with something doesn’t necessarily translate to long-term success. But Apple, which has recently been at the top of the list of the world’s most innovative companies, has shown that a company can keep reinventing itself through innovation.

 

As a side note, governments have good reasons to invest in research and development as well as companies — even in economically stressful times. “Michael Faraday, who, when asked what good was electricity, told a government minister that he didn’t know but that ‘one day you will tax it.'” [“The Joy of Physics Isn’t in the Results, but in the Search Itself,” by Dennis Overbye, New York Times, 28 December 2009]. I suspect that future sources of government revenue are currently being discovered by scientists working in obscure labs on subjects that have little to do with the struggles of daily life.

 

Returning to the subject of innovation, George Coulston, vice president of global research, development and engineering for tooling producer Kennametal, agrees with Buxton that a continuing flow of new ideas is important; but, he says, they are not enough. In an interview with Jill Jusko, Coulston said, “It is easy to have ideas; there’s no shortage of them out there. It’s much more difficult to define an opportunity, build a business case around that opportunity, really vet out customer requirements and then work your way through all the commercialization issues.” [“Good Ideas Aren’t Enough,” Industry Week, 17 November 2010] Jusko continues:

“Successfully introducing new products into the marketplace is a notoriously challenging endeavor for most manufacturers even as they promote the importance of innovation to their companies’ growth. And simply having a good idea is not enough. … Indeed, opportunities to misplay innovation extend well beyond the ideation phase, but so, too, do opportunities for improvement. The challenge, then, is to translate those opportunities to misplay innovation into opportunities to improve the business side of innovation.”

At the end last year, IBM published a list of five innovations that the company believes will change the world [“IBM’s annual list of five innovations set to change our lives in the next five years,” by Ben Coxworth, Gizmag, 28 December 2010]. Coxworth reports, “While there are no flying cars or robot servants on the list, there are holographic friends, air-powered batteries, personal environmental sensors, customized commutes and building-heating computers.” Frankly, some of these technologies seem to be too immature to “change our lives” in as little as five years — specifically, holographic technology. One reason I say this is that consumers have not embraced 3D televisions the way that manufacturers had hoped. Nevertheless, I think it’s fair to say there is no end to innovation.