Why the Innovation Conversation Needs to be Broadened Beyond Technology’s Influence

With increasing frequency, it seems that virtually any court decision, regulatory proceeding, or
legislativeproposal dealing with a new digital technology or service is accompanied by a predictable chorus. Chicken Little defenders of innovation argue loudly that regulatory change will have a chilling effect on innovation. Ironically, these loud calls have silenced a rational national conversation about innovation writ large. Innovation thus morphs into a conversation-stopper rather than a conversation-starter, particularly in the popular press and in the offices of policymakers. We need to be aware of this dynamic and begin treating innovation with all the complexity and nuances that this topic deserves.

The Stifling Innovation Narrative

The faux protectors of “innovation” invoke the concept to deflect substantive analysis of underlying concerns. They rely on our collective wonder about the rapid pace of technology innovation to elicit sympathy for entrepreneurs who are toiling away in their garages and basements working on the next iPhone or WhatsApp. Using this narrative as a rhetorical cudgel they contend that proposed judicial, regulatory, or legislative action might induce a sense of hopelessness among these innovators. This narrative implicates everyone in a process of stifling creative activity rather than letting the “natural laws of innovation” proceed unabated.

The Real Story about Innovation

To change the way we think about and discuss innovation, this concept needs to have a broader context when it is mentioned, something more than just technology innovation. Technology is important, to be sure (think Skype), but so are other types of innovation, such as services (PayPal), business models (Hulu), manufacturing processes (Dell Computers), content (Comedians in Cars Getting Coffee), and even corporate cultures (Zappos). Innovation also takes place in all sizes of enterprises, from an angel-backed start-up in Silicon Valley to giant companies such as Walgreens, which is in the process of converting its 8,000 stores across the US into health clinics where you can get flu, shingles and whooping cough shots or have a blood sample taken for virtual real-time analysis instead of the usual days-long waiting period.

This wider view suggests that innovation—even technological innovation—does not occur in isolation; rather, innovation helps to create interconnected ecosystems that typically produce and sustain a sum greater than the whole of its parts. Apple’s iTunes is much loved, of course, but absent a rational licensing scheme for those distributing content for it; a robust broadband infrastructure to enable rapid delivery of content; and a seamless way to make secure electronic purchases, would it really seem so innovative? To paraphrase the old campaign slogan: “It’s the ecosystem, stupid.”

Innovation is Complex Global Process

It’s also important to note that innovation is an essential aspect of a global marketplace. American laws and policies that support or deter innovation may have little impact in other countries. This is particularly true in places like South Korea that have helped shape their public and private sector policy thinking around innovation ecosystems rather than on technological innovation alone. There, a virtuous innovation cycle is based on Samsung Galaxy smartphones, catchy K-Pop music videos appealing to a youth demographic, and a vibrant mobile broadband connection.

The long tail of the innovation ecosystem suggests that we often are not in an immediate position to know its positive or negative effects until sometime in the future. We need more empirical research, case studies, and comparative analysis to better inform policymakers regarding what actually shapes innovation cycles. Innovation needs to be a real conversation starter, not just a dire warning that a particular initiative will have adverse consequences for our economy and our ability to enjoy the comforts of contemporary life.