Curiosity killed the cat…. …but grew the economy

I see that Lymbix’s relatively simple idea made the NY Time’s list of big ideas.

ToneCheck, an e-mail-outbox filter that works as a sort of emotional spell-check, offers typists a chance to reconsider their words before hitting “send.”

How many times have we received or sent emails where the tone was misinterpreted.  They say that communications is 80% non-verbal so email cuts out 80% of the content the receiver of the message typically uses to decode what is actually meant by the content.  People fill in the blanks as it were based on other factors such as did they have their morning coffee yet.

We have debated ad nauseum innovation and how to stimulate it in New Brunswick but it seems to me it all comes down to curiosity.   At the NBIF dinner last year when they started showing all the inventions that were patented by NB inventors I can’t remember one in the last century.

This involves a complex multivariate calculus.  Curiosity can be ephemeral (gee, I wonder if I could build a little program to check for tone in an email) or driven by a hard need (if I don’t figure out how to reduce my cost of production I will be out of business in 24 months). 

Then comes tenacity.  I remember that guy from Riverview who was adamant he had a better design for a bicycle seat that wouldn’t cause male ‘problems’.  He peddled that idea for years and finally got traction.

Access to funding is also in the mix.  It takes a certain kind of money to spend on something that might kill the cat a few times before hitting the jackpot.   I dislike the gambling metaphor but it fits.  A person who has won the jackpot once or twice is far more likely to go hard at it again to try and win another.  The same with risk capital.  I can handle 8 losses if I am reasonably certain the 9th idea is going to come up all aces.

We’ve talked about cultural influences as well.  In a province with a high out-migration of younger people we speculate that a lot of the curiousity leaves as well.  There is a direct correlation between education levels and out-migration – and education has some loose correlation with this stuff.

Of course necessity is the mother of invention.  One NB company installed a biomass boiler as a way to lower its massive natural gas bill.   A rapidly escalating cost associated with a production variable is a wonderful motivator to get innovative.    

This last point is why I am hopeful New Brunswick is ready for an innovation agenda.   There are companies across this province who are going to need to dramatically decrease the unit cost of production in response to rising wages, a high CDN dollar and a tightening labour market (for some Romanian immigrants is also a solution but this is a kind of innovation as well).   Our IT and service companies with export markets are going to have to get far better at developing international markets.  That takes innovation as well.

Hopefully our contact centre industry will be innovative and respond to the rise of social media.  New Brunswick could be ideally positioned as the epicentre for corporate social media interaction (millions of telephone and email interactions between companies and clients happen in New Brunswick every week so it isn’t that hard a leap to see this migrating to social media interactions) but it takes effort on the part of the industry and, I would say, economic developers to make this happen.  We need to get out front of this.

In the end, curiosity leads to miserable failures.   We never hear about the miserable failures of Alexander Graham Bell.  We never hear about Isaac Newton’s miserable failure at alchemy.   We do, however, hear a lot about their successes.

9 thoughts on “Curiosity killed the cat…. …but grew the economy

  1. Right now there are somewhere between 15,000 and 20,000 New Brunswickers that are assigned to interact with customers either by telephone or email. This is everything from million dollar jet fuel orders from ExxonMobil to telebanking to getting a hotel reservation. In a Web 2.0 world, that is supposed to migrate entirely to social media. If I have a problem with a warranty, I use the company’s Facebook site (for example). Some of this activity will (and is) be automated (i.e. booking hotel reservations) but a huge amount of social media will always be people to people. My point is that it would be a natural migration for NB to be a place where companies have their staff that interact with their customers via social media. It would be even more interesting to have firms here building applications to service the industry (like Radian6).

    The economic development application would involve trying to convince the firms already here to put their social media interaction teams here and to make the province attractive for firms outside to locate here. That might involve the community college setting up a diploma program in social media interaction. It might mean a tax credit program to invest in technology. It might mean other things as well.

    Nova Scotia and PEI are trying to build animation and multimedia/gaming clusters. Maybe we should be leading in the area of social media.

  2. Innovation has, unfortunately, become an overused buzz word. However, innovation in its truest meaning is absolutely critical to the New Brunswick economy.

    Innovation is best defined as the process of generating ideas that produce economic or social value. It is the value aspect that is grossly overlooked. In the examples in your post, rather than focus on the inventions themselves, you talk about value; markets, customers, productivity and competitiveness. We need more of this focus on value. Unfortunately, ‘innovation’ policies tend to support invention or knowledge generation and overlook the market driven opportunities like you describe. These policies have resulted in a wealth of research capacity; it is time to shift our focus to the value component.

    Here is a simple way to differentiate between invention and innovation:

    Invention is the conversion of cash into ideas.
    Innovation is the conversion of ideas into cash.

    As you are probably are aware, the Conference Board recently reported that Canada is in its 4th decade of failing innovation performance and OECD puts us near the bottom of their rankings. To turn this performance around, we do need an effective innovation agenda; that is one that focuses on value by supporting market-driven innovation.

  3. To add to that, actually, Newton’s alchemy was FAR from a ‘miserable failure’, as it led directly to his theory of gravitation as well as numerous theories on the properties of light. In science, the point is that there is no such thing as a ‘miserable failure’, far more is learned from experiments that don’t work than experiments that do.

    Not sure if that relates directly to ED, although there is definitely a real lack of discussion about government policies, without that its hard to design ANY experiments. And what is left is certain groups pushing their agenda and things like ‘workfare’ are trotted out.

    But more than experimentation, there needs to be dialogue about policies that we KNOW work. Thats interesting about the health premium tax (although I’d like to learn more about that), which means it may be a good idea to apply to New Brunswick. Its a progressive ‘premium’, which means those at lower incomes don’t pay as high a rate as those at higher ones. That means it would reverse Graham’s generous tax break for wealthy NBers. And as you mention, it wouldn’t affect equalization. I remember the first year that it was brought in, and actually it was SO successful that Ontario’s surplus that year was huge-and to be fair to the low tax right wingers, it very likely led to McGuinty’s political largesse within within the public service.

    For social media, I disagree that there needs to be a ‘focus’. All we know about computer technology is that IF you are going to build a ‘product’, software or even hardware is definitely the way of the future. These are worldwide products, easily exported from a server, which means what you need is a population that knows how to program, develop, and sell. There is no way of knowing what is the next ebay or facebook, that should be fairly obvious to anyone. But knowing HOW to build an ebay or facebook should be the main aim of any progressive educational system. The main benefit of this is that you don’t need to throw tons of money at it, you need to do what should be done in the first place-give decent educational opportunities.

  4. ” that is one that focuses on value by supporting market-driven innovation.”

    That’s fine as far as it goes. But I’ve never been really sure what market-driven means, at least in the practical aspect of deciding where to put your research or marketing dollars. There are I believe many cases of products being successful in the marketplace when they were found to meet a largely unanticipated need. In other words, value is often hard to determine in advance (although, trying to define value does employ many managers in the public and private sectors – the famous pony-tailed and ear-ringed men-in-suits).

    I am not sure we should spend too much time worrying about what might or might not be successful in the market place. I think you have to have two components – the innovators on the one hand, and the people who can see the market for the innovation on the other hand. Sometimes those are the same individuals; sometimes the need spurs the innovation. We need to recognize that 1) many innovations/inventions will not be successful in the marketplace but recognize that those that do will often pay for those that do not, and 2) innovation and invention are both multi-step processes. The final product that hits the streets might have been the result of a decade-long effort; sometimes an effort that was originally pointed in an entirely different direction.

  5. I agree with Richard 100%. There is no way of knowing what innovative idea will make a market splash. If the guy from Facebook had gone around to angel investors talking about his idea he’d have been laughed out of the room.

    I also disagree that Canada is ‘good on innovation just not market innovation’. That’s hardly the case. We know that this is a structural problem with our economy. Our financial services sector is dominated by five huge companies, our resource sector depends heavily on subsidies, and both of these sectors have a poor track record on innovation (I’ll add telecom). The big problem in Canada is the same problem Richard points out in NB-too few players with large monopolies and sector protection and so very little necessity to push innovation.

    If you stress cash to the next generation as the only worth of innovation, the future will be as grim as the present.

  6. David has given good examples of market-driven research; the manufacturer who is driven to reduce production costs, the e-mail user driven to resolve the message tone problem. Basically, ideas that originate from the market place rather than an academic curiosity.

    This type of innovation is often less newsworthy as it may not involve a patent, a thesis or the classic Eureka! moment. My point is, to improve Canada’s innovation performance, we need to improve our market-driven, or if you prefer, business-led innovation performance.

    Business expenditures on R&D (BERD) as a % of GDP (2008 data) are an indication of how Canada is doing in this regard:

    Canada 1.00%
    US 2.01%
    OECD 1.63%
    G7 1.84%

    New Brunswick business, and all Canadian businesses for that matter, need to invest more in research; government can encourage this with appropriate policy and programs.

  7. Good points Eric, but while I agree that canadian companies don’t do enough R&D, at a certain point it is THEY who are the problem. Canada already has considerable R&D tax credits and subsidy programs.

    Market place innovations are MORE likely to involve patents, not less. In academia, we have to be careful, psychological ‘innovations’ in the market place have been terrifying, and many academic pursuits were never intended to produce market products.

    I’m talking about something completely different-namely educating the next generation of innovators. I’d still posit that the main reason so many canadian companies invest so little is that most are foreign branch plants, and they really have no need to. You’ve got a brand new government that once again is talking about re-opening wood supply policies to allow more industrial access for virtually the same products they’ve been producing for a hundred years. So if you give practically free wood to a company-why would they change their product line or invest in development? It took a total market collapse for them to stop using NB trees for kraft paper, something that was recommended by unions over three decades ago.

  8. We are on the same page wrt policy. Government policy can influence business led innovation. You give a good example of such an opportunity.

    Regarding subsidies, there are two fundamental business research programs: IRAP and SRED. IRAP is chronically underfunded receiving about 3% ($200M) of the $7+ B Federal R&D expenditure. Yet another opportunity for improvement.

    SRED accounts for substantially more of the Federal expenditure, nearly $3B in 2009, but its effectiveness needs review.

    I agree business needs to recognize the importance of research investments, however, there is evidence that when government provides incentives, business responds. For example, BERD for aerospace is nearly 17%, pharmaceuticals 25%, ICT equipment 44%; all targeted areas for economic development. Unfortunately for New Brunswick, Savoie is correct that we lack the head offices that control R&D budgets; Quebec and Ontario accounted for 80% of Canada’s BERD.

    BTW, the remaining $4B of Federal R&D spending is spent on post secondary research resulting in OECD ranking Canada a top spender in this category.

  9. “Basically, ideas that originate from the market place rather than an academic curiosity.”

    Well, yeah, maybe. But those are ideas using, for the most part, existing technology. Isn’t there more bang for the buck in the new technology?

    “New Brunswick business, and all Canadian businesses for that matter, need to invest more in research; government can encourage this with appropriate policy and programs.”

    Well, I would not disagree with that, but as Mikel has pointed out, we already have a number of national programs to incentivize private R&D. Exactly what else is needed to get the private sector to do its share?

    Its my experience that when govts want to expand these kind of policies, they go to the ‘stakeholders’, i.e. corporate interests that have been talking the talk but not walking the walk, and ask them what should be done. I think this is akin to asking ‘yesterday’s man’ what to do about fixing today’s problem – he really does not have a clue. We should be asking ‘tomorrowman’ or ‘tomorrowwoman’ – but how would you identify them?

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