Scottish business must learn to love the shock of the new way of the world

Saturday, May 10th 2008 at 11.41pm

"What is innovation? It's not just about new ideas, it's not just about inventing, it's about succesfully exploiting the new inventions that we make. Do we have the frameworks in place not just to invent things, which we seem to be very good at in Scotland, but to succesfully exploit them? That's the big question."

Launching the second phase of the Sunday Herald's Digital Future series, Gordon Thomson's opening statement neatly framed the debate. Joining a panel of technology thought-leaders in Glasgow's Teacher Building to examine what role innovation should play in a national digital strategy for Scotland and how such a quality can be both fostered and advanced, the Cisco Scotland chief made no bones about the need for fundamental change.

Illustrating his point, he told the story of a Canadian gold mining company whose geologists had generated vast swathes of data in their hunt for precious metals, which one day the CEO - perturbed by his firm's lack of growth - published in their entirety on the web. Initially his colleagues were horrified by the prospect of putting all of their intellectual property online, but then mining experts around the world began to look, analyse and respond to the information, and within three years the organisation's revenues had doubled and profits had tripled.

It was a bold move, but by embracing a 21st-century ethos of collaboration that flies in the face of how things used to be done, the mining outfit had expanded and grown. If the country wants to find its own pot of gold, Thomson told the audience, then Scotland will have to follow suit.

"The world has changed dramatically over the last few years. Co-creation, collaboration are the big words in the marketplace, national borders are being knocked down through the use of technology and organisations are working with each other across boundaries because they want to innovate, they want to get to market first and they want to successfully exploit what they have created," said Thomson.

"If the most successful companies in the world don't feel that they can innovate alone, how do we believe as a nation of small businesses that we can? How do we believe that, at a national agenda level, we can innovate on our own without co-creating with other organisations and countries around the world?

"We need to make the switch from being great inventors to being great innovators, and I believe that, if we can't move to that concept in our heads, our problem could be stagnation."

We all know the list of Scottish inventions that have paved the way for the industrial age - it starts with penicillin, telephones and television and runs on until our audiences died of boredom. Yet it is a catalogue of genius that peters out somewhere after the second world war and, as the panel concurred, despite a litany of quality people and projects, the nation simply isn't churning out winners like it used to.

"Why do we not have a higher conversion rate of the patents being filed by Scottish companies? We have a disproportionately large amount of UK patents being filed by Scottish companies, and yet converting these into viable businesses is just not happening. I'm not trying to blame or point the finger, but why are these incredible things not making it to market?" asked Microsoft Scotland director Raymond O'Hare.

For O'Hare, the answer is to be found in Caledonian reluctance to embrace the culture of collaboration that Thomson had outlined. Advancing the argument that the national environment is ripe for change, Microsoft CEO Steve Ballmer's man in Scotland sees a disparity between the country's capacity for change and the rate at which it is actually doing so.

"People and businesses here are starting to consume innovation and embrace it much more quickly than has been the case, and there has been a real acceleration of that. In Scotland 80% of the population have mobile phones, 60% have internet connections and the over-65s are the fastest-growing technology market in the country, so there is a readiness and a willingness to consume," he said.

"So why have so few organisations in Scotland truly embraced flexible working, for example? It's an innovation that has had tremendous benefits where it's been properly applied in terms of finding and retaining staff, providing flexible hours for part-timers, its impact on the environment and broadly boosting people's morale, yet still there seems to be a reluctance even to innovate in terms of our working practices."

Graham Technology's Steven Thurlow echoed the view that a fundamental shift of approach is called for. As the man responsible for his company's multi-million pound R&D programme, he drew upon international experience to propose the promotion of both philosophical and practical change within the Scottish economy.

"In Japan they have a man who tours primary schools telling the kids how the future of the country depends upon their ability to continually innovate and excel. That kind of economic factor is embedded in the very fabric of the country, and the trouble with Scotland is that we tend to think we have a right to our place in the world, rather than emphasising the need to think and progress," he said.

" We also have to come to terms with the fact that innovation doesn't always work. WD40 the aerosol lubricant and cleaner is called that because its inventors' first 39 attempts at water displacement technology all failed, and we have to create not a fail-safe environment, but an environment where it's safe to fail."

Focusing on purely practical terms, Thurlow warned against thinking that innovation and technology are the same thing. Pointing out that, far from being the first MP3 player, and not even the best, Apple's iPod player was simply the device that first discovered the right combination of style, technology and marketing to make it a commercial success, he argued that if Scotland's business community learned to share and communicate about its complementary assets, the path from invention to market could be made a lot easier.

Such things are easier said than done, but there seems to be broad agreement that they are not impossible. While the possibility of creating a Scottish Business Wiki to enable greater collaboration and partnership was mooted, the need for public-sector initiation and investment was also underlined.

Similarly, O'Hare raised the potential to run nationally organised innovation boot camps, where inventors and other bright sparks could be put through a gruelling and "thoroughly unpleasant" masterclass series designed to properly prepare them for the process of getting their ideas to market.

The debate is set to continue, with two more events and an online debate scheduled for the near future. As Scotland gears up to approach the future anew, however, w00tonomy director Stewart Kirkpatrick points out that unless we start shouting about it, then the rest of the world just isn't going to hear about it.

"As well as strong technology there has to be ability to communicate, and this is where Scottish organisations fail. There are good services, but no compelling offerings to get customers through the door.

"While Scotland has a record of producing great journalism, great writing, great pictures and art, this has not yet translated to the digital sphere," he said. "Where is the innovation to produce interesting content? As a nation we have to continually grab the attention of the world market, and if we don't then the game is lost."

Videos of the debate can be accessed online from Monday May 11 at sundayherald.com/digitalfuture. A collaborative document and discussion will be online from Sunday, May 18

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Posted: Saturday, May 10th 2008 at 11.41pm | Comments: 120 | Permalink |

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