Innovation Practice - Telenor

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tion for technology and innovation. His university
course certainly made a deep impression on a young
student.
Even if Dahl did little original research in this area,
his broad knowledge provided an opportunity for students
to learn that productive innovations have a long
history. No-one doubts that the 18th and 19th century
were filled with groundbreaking inventions of fundamental
sociological impact, from the steam engine to
the telephone. However, this drama of inventions and
innovations did not suddenly begin with e.g. James
Watt’s major improvement of a Newcomen steam
engine in 1769. The drive for innovation is not something
that appeared out of thin air one year. And it all
existed in a global context of world trade and technological
diffusions.
As a term innovation is found in French in the 13th
century, and it was later used by Dante, Luther and
Shakespeare. It first came to be widely used in the
15th century. Its modern use as mainly about technological
developments, stems from the early 20th century.
The roots are in the Latin innovatio, “renewing”
or “alteration” (Tertullian, 200 AD), used invariably
as a negative term in matters political or religious.
If you wanted to innovate in these areas, you had to
pretend you were getting back to the original state
of things, to ancient custom. This of course is also
a reminder that one should not view any innovation
automatically as positive. Besides the rather obvious
issue that inventions not always have been used for
the common good, it is also important to keep in
mind unintended side effcts, e.g. as related to environmental
issues or exploitation of people or cultures.
What is innovation?
Innovation is about the introduction of something
new, a new idea, method, or device. “It is a change
effected by innovating, a change in customs; something
new, and contrary to established customs,
manners or rites” (Francis Bacon). And in most
businesses today knowledge and new ideas constitute
a competitive advantage. It is necessary to create new
technologies, products, services or markets. Innovation
is a successful utilization of new – or old – ideas.
It implies creativity and dynamism. However it is not
necessarily about making completely new inventions
or major breakthroughs. As in Medieval Europe it
means more often that artisans, merchants and enterprises
are looking for improvements in – or better
ways of utilising, producing or trading – products and
services. When a culture or economy is more innovative,
it is more open to new ideas and technology, and
new ways of deploying them. Such increased flexibility
can lead to improved productivity and competi-
ISSN 0085-7130 © Telenor ASA 2004
Innovation and inventions are related,
though not the same
Innovation The successful introduction in the market
of an improvement or invention
Invention A creation (a new idea, device or process)
resulting from study and experimentation
tiveness and a higher standard of living. This is a vital
ingredient in businesses and organisations.
However difficult it may be to agree on one definition
of the term, most people today seem to view innovation
as a “natural law”. Innovation is something that
does happen, will continue to happen, and should
happen, as a matter of fact. In some areas this has
even been made into a formula, as with Gordon
Moore’s observation in 1965 on the exponential
growth in the number of transistors per integrated circuit.
The press called it “Moore’s Law” and the name
has stuck. At the moment this doubling of data density
happens approximately every 18 months, and it is
expected to continue for at least another two decades.
We observe the same kind of “law” in e.g. analyses
which show the general S-curve function for the
introduction and penetration of new products in the
market (Wulff, 1993) 1) .
Cut down to its most basic aspect, innovation is today
about making money. But it must be equally clear
that making money far from always is due to innovation.
It may be tempting to some companies to downplay
innovation, as it tends to have high initial cost
and rarely is profitable in the short term, especially
at times when it seems hard to find new ways to innovate,
or it seems at least even costlier than earlier 2) . It
does not help to inspire more innovation in industries
where competitors spend even less, or it is all perceived
as a “marketing game”.
Innovation is often reckoned as a child of capitalism.
New technologies and products are developed,
deployed and commercialised better and quicker in a
“free market”, than in any other economical system.
Still, despite this “natural law” and a “free market”,
not all companies or cultures succeed equally well.
To understand more of the deeper structures that
facilitate innovation we will take some time to reflect
on the roots and reasons behind technological growth.
Adam Smith’s analysis in the 18th century may have
constituted the philosophical foundation of capitalism
and free trade. The classic analysis of how capitalism
evolved is of course by Max Weber (1864–1920), in
The Protestant Ethic and the Spirit of Capitalism
(1904–05). His essay focused on the differences
Telektronikk 2.2004