December 21, 2016 | Written by: Trevor Davis
Categorized: Industry Insights
Innovation for the people, by the people
I am by nature cheerful. I come from Birmingham in the UK which likes to brand itself as the heart of England (it is in the middle and people are friendly) so it is in the blood. But for many this holiday season, being cheerful is hard because of poverty, environmental degradation or war.
A few weeks ago, I was asked to give a talk on the UN Sustainable Development Goals (SDGs), a subject close to my heart and important to IBM as a company (we actively support 5 of them through various initiatives). The SDGs are also a core concern for many FMCG companies. Unilever, for example supports Goal 6 (ensure availability and sustainable management of water and sanitation) through the actions of the Lifebouy brand and initiatives to improve hand-washing. P&G also support the same goal with their Children’s Safe Drinking Water Program. Likewise Coca Cola through their partnership with WWF pledged to conserve freshwater resources and became the first Fortune 500 company to replenish all used water globally in 2016.
For me, this desire to support sustainable development in the broadest sense is what keeps me in the industry. More importantly it has driven a new wave of innovation across the world as companies look forward to the Circular Economy and a world where sharing is more important than owning.
Yet as an expert on innovation I find the word itself to be very problematic. Many years ago my boss came to me and said I need a quick and easy definition of innovation to put on a slide; can you find one? I have a strong research background so I did what all researchers would do-I looked through the published literature and to my horror found over 140 definitions before I gave up.
Of course the slide still had to be made so I went with the simplest one that I could find: new ideas that add value.
With years of hindsight I recognise that I had created a new problem-what do I mean by value? If I ask the CEO of a major corporation I’m sure they will express it in financial terms as their shareholders would expect. But it isn’t as simple as that. Try asking a mother in a famine trying to feed her child. Or a child refugee on the long trek from northern Africa to a family in the UK. Or a subsistence farmer in Kenya. Or a woman fleeing from domestic violence. Value is really a balance between the needs and expectations of multiple stakeholders.
Also, when I set out to write that slide, there were no social media or digital technologies, no Sustainable Development Goals, no Arab Springs. A good friend of mine looking at my definition of innovation said it was defective because it did not take into account the zeitgeist or context. What was innovative in 1985 now looks mundane in 2016. The IBM PC was an innovation in 1981 and now it is a door-stop.
Academics tend to look at innovation in a different way. There is something called the standard linear model of innovation that imagines an orderly process like dropping a ball bearing down a funnel. It starts with observations in nature, then moves on to government funded primary science, then out into industry for exploitation. Eventually the innovation becomes a practical solution for some end-user and value, usually financial, is created. It’s a long and slow process. It gave us the internet and CERN, and many other massive infrastructural developments.
But that is not how I experience much of the innovation today, where venture capital can flow to teenagers, such as Nick D’Aloisio, who used open-source software to create an information summarisation app in his bedroom and sold it to Yahoo a few years later for $30m dollars.
It is not all about apps of course. Take the social business Rambler Fashion, an innovative street wear fashion label designed and made by young people living on the streets in Amsterdam, London and São Paulo. The young designers get help to build their portfolio and get a design fee when their clothing is sold.
Or how about The Breakfast Revolution in India, a social enterprise that has used frugal innovation techniques to create low-cost, nutritious food to address malnutrition and dietary deficiencies for tens of thousands of people.
Or Plasticbank who “make plastic waste a currency to help the world’s most disadvantaged people” and are turning waste plastics into 3D printing filament.
A final example, Taqanu, an early stage start-up seeking to reinvent the way we go about identity and banking so that financial services are available to all in society. They are using open-source blockchain technology and mobile devices in a way that for me is a prime example of today’s zeitgeist – more socially motivated, frugal and agile in development, and crowd-funded.
In my view innovation is becoming more bottom-up, driven by needs that are broader than novelty in pursuit of profit. For millennials and Gen Z, the social element can be a more powerful motivator than money.
Going back to my original attempt to define innovation, I found (and continue to find) innovation confused with new product development i.e. tangible physical products. So much of what we associate with innovation today is a system of products and services enabled by digital technology. And that digital technology in turn brings something else with it; data – lots of it.
Some of you will have heard about IBM Watson. This is a technology that can analyse and interpret really big data, including messy unstructured text, images, sensor data from the Internet of Things, audio and video. It’s an important step along the route to artificial intelligence that IBM calls “cognitive computing“. Uses to date, range from better shopping advice to cures for cancer, and it has the potential to be a significant disrupter as it can unlock the value hidden in data that previously only human beings could read and interpret. An example in support of Sustainable Development Goals is an IBM initiative called Green Horizons. This uses the Internet of Things to take real-time data from environmental monitoring stations, meteorological satellites and traffic cameras and then uses Watson to predict air quality and find ways to tackle serious pollution problems in cities such as Beijing and Johannesburg.
Many of the most impressive feats of companies such as IBM, Google and Facebook have as much to do with the availability of big data than they do with software breakthroughs. Some of the machine learning algorithms that allow IBM Watson to hold a conversation with you or a car to drive itself were already known in the 1950s, but no one had the data to train those algorithms to do the things that are a reality today.
It is this combination of cognitive computing, more effective machine learning tools and big data that has made it possible for global companies such as Uber to design new and better experiences and disrupt the local incumbents around the world.
The same combination can also create rivals for existing NGOs and disintermediate charities with direct connections from donors to recipients. Charities such as charity: water talk about the “Human Face of Big Data” and feature data scientists in their blog. Change is coming.
And data is a resource like creativity- neither will run out any day soon, and neither recognise human boundaries. There is no reason why the next Mark Zuckerberg couldn’t come from a favela or a village in rural India. Take Varun Chandran, born in a farming village and a college drop-out, now CEO of Corporate360, a global B2B big data marketing business based in Kerala.
The importance of data in innovation is why a major contribution from IBM to the Sustainable Development Goals is through the UN Global Partnership for Sustainable Development Data. This is a partnership of over 150 organisations worldwide dedicated to catalysing the use of data for innovation and “harnessing the data revolution for sustainable development.” Poverty stricken communities produce creative people and data, small and medium sized business and NGOs produce data… and I could go on, but I’m sure you get the point.
Importantly, the tools to understand that data are being made more accessible-if you want to apply the latest deep learning technology you probably don’t have to get a PhD or even pay for it as there is code in open source and plenty of online training to help you use it. From our Smarter Cities initiative, for example, we have contributed tools and methods for making use of citizen generated data as part of the data4SDGs toolbox.
IBM is also a founding partner of the business-led Impact 2030 initiative. This is the only private sector coalition collaborating with the UN, National Governments, NGOs and Academia to align human capital investments in employee volunteering with the sustainable development agenda. IBM has selected 5 of the development goals and mapped volunteer/pro bono resources to support them frequently employing technologies such as Watson. An example is addressing the Health goals using Watson by creating systems that learn about local health issues and act as a community resource for the “last mile of healthcare.”
To summarise. Not only are we moving from a top-down, linear view of innovation, to a more inclusive, bottom-up approach which can work for everyone, but also to new models of innovation governance and organisation that blur public and private spaces, personal gain and social transformation.
If the old model relied on patents, hierarchies, corporations and governments, then the new model is better characterised by the creative commons, garages, hackers, makers and social entrepreneurs. If the value set of the old model has become discovery and exploitation for elites, then the new model is characterised by sharing, re-use and co-creation for all. The new model is end-user and community centric and more democratic. It is ready for a Circular Economy.
I am not suggesting that the old model is defunct. We still need big science and big infrastructures, but it is no longer the only game in town and the new approach places the means of production of innovation into the hands of the masses.
It is said that it takes a village to raise a child, but it takes an ecosystem to make innovation happen today. In some ways this is the defining feature of digital innovation in particular. Swathes of start-ups, micro-businesses, out-taskers etc all backed by venture capital, kickstarter campaigns and business angels.
In the late 1870s when Edison was commercialising electric lighting, it was the banker J.P. Morgan that provided the capital. Today he would be on Indiegogo pitching a minimal viable prototype over social media.
The internet and the web have made all this change possible, and social media and our many devices continue to fuel the flames with bigger and bigger data. Where next?
The way money and other forms of value flows around the world is about to change and this will open up new opportunities for innovation, particularly for those at the bottom of the pyramid.
The change coming has its origins in the murky world of Bitcoin, the infamous cryptocurrency. A concept called The Blockchain, which I mentioned earlier, is likely to dramatically reduce the costs associated with any form of transaction, removing many of the risks of entering into a venture with someone a long way away and sweeping away many of the intermediaries in Finance. Banks as we know them may disappear. Certainly it will make micro-financing and innovation between developed and developing markets easier.
To conclude then.
The internet and web facilitated disruptive innovation based on cloud-based platforms and big data. This has created business models no one has seen before including those that address social and economic development challenges in new ways. For example, initiatives like the one at Jomo Kenyatta University where IBM is building an open cloud data platform so that academics and social entrepreneurs can harness research datasets for social entrepreneurship.
Blockchain, to call out a specific technology, has the potential to be as disruptive for value in all its forms. IBM sees it as so important, that our CEO wrote an Op-Ed piece for the Wall Street Journal to that effect, and we are leaders in a consortium called Hyperledger to accelerate the change for all.
So much of the innovation we need today is directly or indirectly in service of development goals, and development ultimately needs ideas, talent and money. There is no limit on ideas and there is plenty of talent, and digital technologies such as blockchain are making it easier to bring those two together with capital. For example, I can easily imagine a scenario where digital reinvention will enable smallholder farmers, currently living “off the grid”, to become part of the global trading economy and co-create better solutions for irrigation or commerce. A true democratisation.
Surely, that will make for a better, more cheerful and safer world for us all.