Where does innovation happen?

I recently spent time poring over “Guns, Germs and Steel: A short history of everybody for the last 13,000 years”

The Pulitzer award winning book by Jared Diamond who explores why some nations survived and conquered others and how innovation developed over time within these nations.

Diamond argued that larger societies living in similar environmental conditions and locations made it more conducive to innovation, generating an advantage over other communities that were not as connected to each other’s ideas and inventions. It got me thinking about innovation within businesses and why some companies and even industries thrive while others stagnate.


Real eureka moments are rare

Diamond talks about innovation being a step change process during which one individual or business builds on an innovation created by someone else, possibly with a different end user benefit in mind. He mentions the gramophone and the light bulb as two of the great examples. Neither one was invented in a single eureka moment but were iterations of prior inventions, for a completely different purpose that preceded the final product. The inventors were, however, part of a society where these ideas could be shared easily amongst each other. These two examples are from the 19th century but he argues that this was the case throughout human history. From sowing grain and raising farm animals to supersonic rockets and Moly, the sheep, society has taken prior innovation and moved it a step further towards being useful in our everyday life.

Innovations in materials, food, tools and language all evolved as people created, learnt, shared, stole, adapted and used within their societies. Today, the technology industry is leading the pack of innovators. Born in Silicon Valley, tech companies developed into a large society, creating an environment ripe for innovation. There we see history being recreated for us daily, from Apple to Microsoft to the numerous startups in their orbit. People and companies are creating, learning, sharing, stealing, adapting and using technology everywhere and 24 hours a day. Each moment taking innovation to the next level.

Is bigger better?

But if the size of a society (or business) theory still holds for generating innovation, it would mean that larger companies, given their size, capital and density of population should be able to do “step change innovation” with a lot more success. But is this still the case? Why are smaller companies, disrupting more frequently and successfully?

As Jared Diamond famously said, “The rate of human invention is faster, and the rate of cultural loss is slower, in areas occupied by many competing societies with many individuals and in contact with societies elsewhere.”. What is the right structure for successful innovation currently where a global society means thinking and innovators are dispersed, and bureaucracy can discourage creation of ideas?

So, does this explain why smaller companies, supported by external funding and focused on resolving one idea at a time are better structured to improve the passenger experience? Aviation is a truly global endeavor, in every sense of the word. As a result, it seems to benefit and lose from its natural structure. Benefit, because it should quickly and easily build on ideas developed one continent and shift them to another. At the same time, the markets and service providers are all dispersed around the globe, focusing on specific needs for that market thus making significant step change a lot harder.   Something that nimbler companies, located closely to the specific market aim to resolve.

Taking a historical approach, there is no right or wrong answer in this, except that you need the skills, the capital and the customer focus to get the job done. If you are stuck in an internal traffic jam because your customers’ ideas are being not heard 10000 km away, you will be buying an innovator in a couple of years’ time.

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