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Innovation

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From Innovation to Market

America is the world leader in innovation, but many of the innovative ideas that are hatched in American start-ups, labs, and companies end up going abroad to reach commercial scale. Apple, the superstar of innovation, locates its production in China (yet still reaps most of its profits in the United States). When innovation does not find the capital, skills, and expertise it needs to come to market in the United States, what does it mean for economic growth and job creation? Inspired by the MIT Made in America project of the 1980s, Making in America brings experts from across MIT to focus on a critical problem for the country.

MIT scientists, engineers, social scientists, and management experts visited more than 250 firms in the United States, Germany, and China. In companies across America--from big defense contractors to small machine shops and new technology startups--these experts tried to learn how we can rebuild the industrial landscape to sustain an innovative economy. At each stop, they asked this basic question: “When you have a new idea, how do you get it into the market?” They found gaping holes and missing pieces in the industrial ecosystem. Critical strengths and capabilities that once helped bring new enterprises to life have disappeared: production capacity; small and medium-size suppliers; spillovers of research, training, and new technology from big corporations. (Production in the Innovation Economy, also published by the MIT Press in 2013, describes this research.)

Even in an Internet-connected world, proximity to innovation and users matters for industry. Making in America describes ways to strengthen this connection, including public-private collaborations, new government-initiated manufacturing innovation institutes, and industry-community college projects. If we can learn from these ongoing experiments in linking innovation to production, American manufacturing could have a renaissance.

How Information Technology Is Reshaping the Economy

A wave of business innovation is driving the productivity resurgence in the U.S. economy. In Wired for Innovation, Erik Brynjolfsson and Adam Saunders describe how information technology directly or indirectly created this productivity explosion, reversing decades of slow growth. They argue that the companies with the highest level of returns to their technology investment are doing more than just buying technology; they are inventing new forms of organizational capital to become digital organizations. These innovations include a cluster of organizational and business-process changes, including broader sharing of information, decentralized decision-making, linking pay and promotions to performance, pruning of non-core products and processes, and greater investments in training and education.

Innovation continues through booms and busts. This book provides an essential guide for policy makers and economists who need to understand how information technology is transforming the economy and how it will create value in the coming decade.

Essential Practices for Successful Innovation

Innovation is the ruling buzzword in business today. Technology companies invest billions in developing new gadgets; business leaders see innovation as the key to a competitive edge; policymakers craft regulations to foster a climate of innovation. And yet businesses report a success rate of only four percent for innovation initiatives. Can we significantly increase our odds of success? In The Innovator’s Way, innovation experts Peter Denning and Robert Dunham reply with an emphatic yes. Innovation, they write, is not simply an invention, a policy, or a process to be managed. It is a personal skill that can be learned, developed through practice, and extended into organizations.

Denning and Dunham identify and describe eight personal practices that all successful innovators perform: sensing, envisioning, offering, adopting, sustaining, executing, leading, and embodying. Together, these practices can boost a fledgling innovator to success. Weakness in any of these practices, they show, blocks innovation. Denning and Dunham chart the path to innovation mastery, from individual practices to teams and social networks.

Today--following housing bubbles, bank collapses, and high unemployment--the Internet remains the most reliable mechanism for fostering innovation and creating new wealth. The Internet’s remarkable growth has been fueled by innovation. In this pathbreaking book, Barbara van Schewick argues that this explosion of innovation is not an accident, but a consequence of the Internet’s architecture--a consequence of technical choices regarding the Internet’s inner structure that were made early in its history.

The Internet’s original architecture was based on four design principles: modularity, layering, and two versions of the celebrated but often misunderstood end-to-end arguments. But today, the Internet’s architecture is changing in ways that deviate from the Internet’s original design principles, removing the features that have fostered innovation and threatening the Internet’s ability to spur economic growth, to improve democratic discourse, and to provide a decentralized environment for social and cultural interaction in which anyone can participate. If no one intervenes, network providers’ interests will drive networks further away from the original design principles. If the Internet’s value for society is to be preserved, van Schewick argues, policymakers will have to intervene and protect the features that were at the core of the Internet’s success.

How Crisis Reshapes the Semiconductor Industry

For decades the semiconductor industry has been a driver of global economic growth and social change. Semiconductors, particularly the microchips essential to most electronic devices, have transformed computing, communications, entertainment, and industry. In Chips and Change, Clair Brown and Greg Linden trace the industry over more than twenty years through eight technical and competitive crises that forced it to adapt in order to continue its exponential rate of improved chip performance. The industry’s changes have in turn shifted the basis on which firms hold or gain global competitive advantage.These eight interrelated crises do not have tidy beginnings and ends. Most, in fact, are still ongoing, often in altered form. The U.S. semiconductor industry’s fear that it would be overtaken by Japan in the 1980s, for example, foreshadows current concerns over the new global competitors China and India. The intersecting crises of rising costs for both design and manufacturing are compounded by consumer pressure for lower prices. Other crises discussed in the book include the industry’s steady march toward the limits of physics, the fierce competition that keeps its profits modest even as development costs soar, and the global search for engineering talent.Other high-tech industries face crises of their own, and the semiconductor industry has much to teach about how industries are transformed in response to such powerful forces as technological change, shifting product markets, and globalization. Chips and Change also offers insights into how chip firms have developed, defended, and, in some cases, lost global competitive advantage.

Although technological change is vital for economic growth, the interaction of finance and technological innovation is rarely studied. This pioneering volume examines the ways in which innovation is funded in the United States. In case studies and theoretical discussions, leading economists and economic historians analyze how inventors and technologically creative entrepreneurs have raised funds for their projects at different stages of U.S. economic development, beginning with the post-Civil War period of the Second Industrial Revolution. Their discussions point to intriguing insights about how the nature of the technology may influence its financing and, conversely, how the availability of funds influences technological advances.These studies show that over the long history of American technological advancement, inventors and innovators have shown considerable flexibility in finding ways to finance their work. They have moved to cities to find groups of local investors; they have worked for large firms that could tap the securities market for funds; they have looked to the federal government for research and development funding; and they have been financed by the venture capital industry. The studies make it clear that methods of funding innovation--whether it is in the auto industry or information technology--have important implications for both the direction of technological change and the competitive dynamism of the economy.

Techno-Cities of the Twentieth Century

Industrialization created cities of Dickensian squalor that were crowded, smoky, dirty, and disease-ridden. By the beginning of the twentieth century, urban visionaries were looking for ways to improve living and working conditions in industrial cities. In Invented Edens, Robert Kargon and Arthur Molella trace the arc of one form of urban design, which they term the techno-city: a planned city developed in conjunction with large industrial or technological enterprises, blending the technological and the pastoral, the mill town and the garden city. Techno-cities of the twentieth century range from factory towns in Mussolini's Italy to the Disney creation of Celebration, Florida. Kargon and Molella show that the techno-city represents an experiment in integrating modern technology into the world of ideal life. Techno-cities mirror society's understanding of current technologies and, at the same time, seek to regain the lost virtues of the edenic pre-industrial village.

The idea of the techno-city transcended ideologies, crossed national borders, and spanned the entire twentieth century. Kargon and Molella map the concept through a series of exemplars. These include Norris, Tennessee, home to the Tennessee Valley Authority; Torviscosa, Italy, built by Italy's Fascist government to accommodate synthetic textile manufacturing (and featured in an early short by Michelangelo Antonioni); Ciudad Guayana, Venezuela, planned by a team from MIT and Harvard; and, finally, Disney's Celebration—perhaps the ultimate techno-city, a fantasy city reflecting an era in which virtual experiences are rapidly replacing actual ones.

How Software Platforms Drive Innovation and Transform Industries

Software platforms are the invisible engines that have created, touched, or transformed nearly every major industry for the past quarter century. They power everything from mobile phones and automobile navigation systems to search engines and web portals. They have been the source of enormous value to consumers and helped some entrepreneurs build great fortunes. And they are likely to drive change that will dwarf the business and technology revolution we have seen to this point. Invisible Engines examines the business dynamics and strategies used by firms that recognize the transformative power unleashed by this new revolution--a revolution that will change both new and old industries.The authors argue that in order to understand the successes of software platforms, we must first understand their role as a technological meeting ground where application developers and end users converge. Apple, Microsoft, and Google, for example, charge developers little or nothing for using their platforms and make most of their money from end users; Sony PlayStation and other game consoles, by contrast, subsidize users and make more money from developers, who pay royalties for access to the code they need to write games. More applications attract more users, and more users attract more applications. And more applications and more users lead to more profits.Invisible Engines explores this story through the lens of the companies that have mastered this platform-balancing act. It offers detailed studies of the personal computer, video game console, personal digital assistant, smart mobile phone, and digital media software platform industries, focusing on the business decisions made by industry players to drive profits and stay a step ahead of the competition. Shorter discussions of Internet-based software platforms provide an important glimpse into a future in which the way we buy, pay, watch, listen, learn, and communicate will change forever. An electronic version of this book is available under a Creative Commons license.

Technology, Culture, and Change in the British Bicycle Industry

The production of bicycles in Britain and the United States recently suffered severe setbacks. The renowned American Schwinn brand was downgraded to the mass market by its new owners following bankruptcy, and Britain's Raleigh came close to closure because of high debts and poor returns, saved only by a last-minute management buyout. In both cases, market share and credibility were lost to newer, more innovative firms, as well as to a recentering of the global bicycle industry in the Far East.

This book reflects on such changes by setting them within a sociological and historical context. It focuses on the British bicycle industry in the interwar years and in the 1980s and the 1990s—periods characterized by modernization of production and of industrial organization, by changing relations among players in the industry, by new developments in labor relations, and by changes in interactions between markets and product design. In particular, it traces the fortunes of the Raleigh Cycle Company from its beginnings as an innovative young firm, through massive expansion of its products and markets and the assimilation of many of its competitors, into further innovation amid market contraction and management inertia, and finally into a phase of global restructuring that has transformed and reduced its role within the industry.

The book explores the complex ways in which product design, production methods, industrial organization, and the cultures of cycling have interacted to create a succession of sociotechnical frames for the bicycle. At the same time, on an activist level, the book promotes a participatory politics of bicycle technology and a less car-centered view of personal transportation.

Creativity, Innovation, and Making Stuff

We live with a lot of stuff. The average kitchen, for example, is home to stuff galore, and every appliance, every utensil, every thing, is compound—composed of tens, hundreds, even thousands of other things. Although each piece of stuff satisfies some desire, it also creates the need for even more stuff: cereal demands a spoon; a television demands a remote. Rich Gold calls this dense, knotted ecology of human-made stuff the "Plenitude." And in this book—at once cartoon treatise, autobiographical reflection, and practical essay in moral philosophy—he tells us how to understand and live with it.

Gold writes about the Plenitude from the seemingly contradictory (but in his view, complementary) perspectives of artist, scientist, designer, and engineer—all professions pursued by him, sometimes simultaneously, in the course of his career. "I have spent my life making more stuff for the Plenitude," he writes, acknowledging that the Plenitude grows not only because it creates a desire for more of itself but also because it is extraordinary and pleasurable to create.

Gold illustrates these creative expressions with witty cartoons. He describes "seven patterns of innovation"—including "The Big Kahuna," "Colonization" (which is illustrated by a drawing of "The real history of baseball," beginning with "Play for free in the backyard" and ending with "Pay to play interactive baseball at home"), and "Stuff Desires to Be Better Stuff" (and its corollary, "Technology Desires to Be Product"). Finally, he meditates on the Plenitude itself and its moral contradictions. How can we in good conscience accept the pleasures of creating stuff that only creates the need for more stuff? He quotes a friend: "We should be careful to make the world we actually want to live in."

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