Forfas National Innovation Conference

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Forfs Irish National Innovation Conference

TOTAL INNOVATION: FROM

CREATIVITY TO PROFIT

BRIEFING DOCUMENT

August 2001

Kieran OHea


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CONTENTS

SUPPORTING STATEMENTS ........................................................................................................................... 3

1. FUNCTIONS OF FORFS......................................................................................................................... 4

2. TOTAL INNOVATION: FROM CREATIVITY TO PROFIT ........................................................................... 4

3. CONFERENCE OBJECTIVES..................................................................................................................... 5

4. WHY SHOULD YOU ATTEND? ................................................................................................................ 6

5. BACKGROUND PAPER ........................................................................................................................... 6

6. EXAMPLES OF PUBLIC INITIATIVES, BEST PRACTICE AND CASE STUDIES .......................................... 10

Public Initiative: Australia - National Institute for Innovation (NII) ....................................................... 10

Public Initiatives: Environmental Policy - USA ........................................................................................ 11

Best Practice: 3M ..................................................................................................................................... 11

Best Practice: The Idea FactoryInnovation Reinvented .................................................................. 11

Best Practice: du Pont - Stimulating Creativity at the Company ............................................................ 12

Best Practice: Competition Based Innovation (Nokia)............................................................................ 12

Case Study: Blocks to Creativity .............................................................................................................. 13

Case Study: Du Pont................................................................................................................................. 13

Case Study: Prudential............................................................................................................................. 13

Case Study: Design ID - Irish SME ............................................................................................................ 14

Case Study: Intrepreneurship (Oticon).................................................................................................... 14

Case Study: Intrepreneurship (3M) ......................................................................................................... 14


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SUPPORTING STATEMENTS

Ireland, if it is going to move to the next level of economic sophistication, will have to design its own

products and create its own unique advantages if it is to continue to grow at the same levels as in the

past Prof. Michael Porter.

Where will be in ten years time if other countries provide comparable and attractive tax regimes, if other

countries can be just as efficient in their manufacturing production, if other countries have bright,

intelligent workforces? Dr. Chris Horn

Manufacturing and the economy are very strong (in Ireland) but the situation cannot continue without

doing research and adding value Dr. William Harris

The power of creativity rises exponentially with the diversity and divergence of those connected into a

network Prof. John Kao

Creativity adds value to competence Dr. Edward de Bono

If you can dream it, you can do it Walt Disney


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1. FUNCTIONS OF FORFS Forfs is the National Policy and Advisory Board for Enterprise, Trade, Science, Technology & Innovation in

Ireland. It is the body in which the State's legal powers for industrial promotion and technology

development have been vested. It is also the body through which powers are delegated to Enterprise

Ireland for the promotion of indigenous industry and to IDA Ireland for the promotion of inward

investment. The broad functions of Forfs are:

Advise the Minister on matters relating to the development of industry in the state. To advise on the development and co-ordination of policy for Enterprise Ireland, IDA Ireland and such

other bodies (established by or under statute) as the Minister may by order designate.

Encourage the development of industry, technology, marketing and human resources in the State. Encourage the establishment and development in the State of industrial undertakings from outside

the State.

Advise and co-ordinate Enterprise Ireland and IDA Ireland in relation to their functions.

2.TOTALINNOVATION: FROM CREATIVITY TO PROFIT

Innovation can be instrumental in positioning Ireland at the forefront of the knowledge economy,

providing it is practised more effectively, more extensively and in a more sustained fashion. In fact, if

practised properly, innovation has the power to impact all areas of the business chain, taking companies

on a journey from creativity to profit. Are these statements simply flights of fancy or the basis of future

industrial policy? This question and others will be raised and debated at the 7th

National Innovation

Conference.

We are at a point in Ireland today where we must begin to seriously assess the combined role of creativity

and innovation and their potential impact on our future industrial development. The private sector must

be presented with compelling evidence that creativity and innovation are essential to its future growth.

The public sector on the other hand must propose initiatives that will be adopted by industry, a llowing a

true innovative culture to develop. This includes making sure that the right physical and information

infrastructures exist, that a strong research base and talent pool can be created, and that a favourable

political and regulatory climate is in place.


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The 2001 Conference provides a timely opportunity to address these issues, through discussion,

scenarios, case studies and best practice examples. Concepts will be presented for debate and validation.

One such concept, Total Innovation, describes a scenario in which creativity, ideas and new ways of

thinking are systematically practised and leveraged in education, business and the creative industries.

Through structured workshops, the conference will investigate this scenario by examining how businesses

could work with each other, with the educational establishment and with the creative industries to

develop a national innovation programme that adds real value to our society.

3.CONFERENCE OBJECTIVES Explore the full implications of innovation and its impact on industrial development from

creation to commercialisation.

Insure that national leaders keep focused on the fundamental role that science and technologyinnovation will play in underpinning the nation's long-term prosperity.

Build consensus around the importance of innovation that will expand Irelands investments inR&D as well as provide high quality education to all children.

Determine the public and private initiatives that need to take place in order to most effectivelyleverage the technology, talent and capital that are at our disposal.

Start a process of consultation leading to the development and implementation of a NationalInnovation Agenda.


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4.WHY SHOULD YOU ATTEND? Delegates attending the conference will have the opportunity to contribute to policy

development in the area of innovation and creativity.

They will be encouraged to participate in the debate on how Ireland can stay competitive in theknowledge economy.

Participants will be able to learn from case studies and examples of best practice described bythose that are already practising innovation and leveraging creativity in the enterprise.

They will have access to experts who can advise them how to add value to their organisations bydeveloping and implementing their own innovation and creativity programmes.

The cross-disciplinary nature of the conference participants, coming from industry, education,the arts and the creative industries

1, will provide unique opportunities for networking.

5.BACKGROUND PAPERInnovation thrives in a culture that is not afraid of risk-taking, promotes the value of experimenting and

rewards enterprise. We in Ireland need to create the right culture to support us in our efforts to become

better innovators. While doing this is primarily in the interest of indigenous enterprise, we also need to

create the type of environment that will continue to attract inward investment into Ireland. In doing so

1The term Creative Industries is used in this context to define a range of

professions with a high creative element, including music, f ilm, writing,

animation, multimedia, software development, content development, graphic

design, product design, advertising, architecture and any other form of design


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we must not only learn to understand the types of business that are shaping the knowledge economy but

also what it is that will encourage such companies to do business and prosper here.

The 2001 Forfas National Conference will debate the merits of, and identify the consolidated effortneeded, to organise and focus the creative energies of f irms, their management and staff in order to

develop an overall vision of an innovative future, underpinned by appropriate public initiatives. Such

actions will be designed to have an impact on all aspects of education, enterprise and our creative culture.

The conference will focus on adding value to companies and the economy through creativity and creative

thinking, and on developing a value culture in Ireland. Artists, scientists, educators and business leaders

will explore and validate the concept of TotalInnovation, which could harness the power of creativity

and creative thinking in an integrated and sustainable programme across all sectors.

As part of a Total Innovation programme, thinking skills could be included on the educational syllabus

and in company training programmes. The programme could also feature creativity audits and incentive

schemes for innovation. For the purposes of illustration, two possible schemes are described below:

Intrepreneurship2 Programmes: Companies are encouraged to identify and pool innovativeemployees into teams. The teams participate in an external programme where they develop

ideas for new products and services. They are then integrated back into the company where they

implement what they have developed. Alternatively they may choose to set up a new company

in a joint venture with their employer.

Spin-In Programmes: In this scheme, universities encourage students to develop new ventureswhile still completing under-graduate studies. The students are given access to college facilities

(servers, etc.) and work in cross-disciplinary environments. This measure is proposed in reaction

to the growing number of teenagers who are opting out of conventional education to set up

garage companies, particularly in the Internet and digital media sectors.

2The term Intrepreneur refers to an employee of an SME or large

corporation who takes direct responsibility for turning an idea into a profitable,

finished product through assertive risk taking and innovation.


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The Total Innovation concept challenges the perception that disciplined thinkers cannot be creative

thinkers and vice versa. It could help a powerful climate of innovation and a thriving intellectual

infrastructure to develop. Such an integrated set of initiatives public and private - would not only be

timely. It would be a bold and innovative strategy in itself.

In his book New Thinking for the New Millennium, Dr. Edward de Bono remarks on how we can analyse

the past, but we have to design the future. Ireland is at a turning point. We can continue to take pride in

analysing the success story that has brought us to where we are today but it is how we design our future

that will take us where we want to go tomorrow.

The energy and creative spirit that has got us this far must deliver greater commitment to infrastructure

investment, R&D, intellectual capital and the innovative development of the Creative Industries, so that

all of our citizens can benefit from the new Digital Economy3.

The 19th

century may have been Britain's century with the industrial revolution; the 20th may arguably

have been America's with the ushering in of the information age; but the digital century that we have just

stepped into may well be anyone's century.

Lean and agile contenders such as Ireland, Finland and Singapore can ignore their physical size, for in the

digitally powered knowledge economy, it matters less. In addition, the creative, supportive ambiance that

we have begun to forge in Ireland may prove to be our differentiator, pushing us to advantage among the

world pack.

To make the most of its inherent advantages in the new economy, Ireland must build its future on a

foundation of research and creativity. Initiatives such as Science Foundation Ireland and the Digital Media

District are cornerstones of this foundation. However, we need an initiative of equal measure in the area

of innovation, in order to exploit the potential value-added that will be generated.

Unfortunately, the approach by both companies and the public sector towards innovation in Ireland has

been relatively superficial up to now, failing to penetrate the core of our education system, our working

3The term Digital Economy covers the whole range of processes,

mechanisms, and facilities that control, constrain, or support economic

activities amongst partners operating in a market based on digital transactions.


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practices and our culture. Ideas have been under-estimated and creative thinking has not been widely

taught or practised. Neither has it been widely acknowledged or rewarded, even in the era of the Celtic

Tiger.

True innovation at all stages of development is not a part of our culture and is rarely found in Ireland. It

has not yet become a cornerstone of our economy. We are still not renowned for being a nation of

innovators, even though as a nation we are creative and exhibit a strong desire to question and improve.

Total Innovation could leverage this asset and herald an era of sustainable achievement based on

valuing the power of our own ideas and rewarding them appropriately. It is an integrated programme

covering all stages of development:

Innovation in how we produce graduates who can think not only logically but also creatively,

Innovation in the strategies that drive enterprise and the economy,

Innovation in the workforce that breeds entrepreneurial skills and team spirit,

Innovation in the products and services that differentiate us from our competitors and guaranteecontinuing competitive advantage.

The creative industries, such as music, film, design, advertising and architecture, using their knowledge

and expertise, have gone further than most in harnessing talent and innovation in their practices. For

cultural reasons, however, the creative sector has been set apart from the big boys such as Finance and

IT, sectors that have traditionally been relied on to drive the economy.

Interaction between the creative industries and the other sectors are usually more cosmetic than

strategic graphic design, advertising and website design being good examples. The linkages that would

see the strengths of the creative industries spill through into more significant applications in business,

science and technology have not been forged.


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The creative industries have a huge roll to play in creating an innovative culture and in the rollout of a

Total Innovation programme, as best practice exemplars and as consultants, teachers and practitioners.

Their participation in the 2001 Forfas Innovation Conference is therefore central to its success.

The results of the conference could directly contribute to the development of a framework under which

expressions of interest could be invited describing suitable projects that could be carried out in the

context of a national innovation agenda.

Such a framework would be based on a call-to-action across all sectors and include a national awards and

recognition system to provide incentives for our innovators to pursue their ideas through

commercialisation and to promote innovation champions.

The initiative would require involvement of leaders at the highest level in business, government and the

education sector.

6.EXAMPLES OF PUBLIC INITIATIVES , BEST PRACTICE AND CASESTUDIES

PUBLIC INITIATIVE : AUSTRALIA - NATIONAL INSTITUTE FOR INNOVATION(NII)

A key initiative and one that captured the attention of Australians was the creation of the National

Institute for Innovation modeled on the Australian Institute of Sport. Australias NII coaches business,

government and community enterprises in innovation; researches and transfers knowledge on best

practices and latest thinking; thinks about tomorrows possibilities, creates an elite group of innovators on

a world stage and is action oriented it causes things to happen.

The National Institute of Innovation takes a deliberate role in technology diffusion and market shaping

that propels Australia into economic activities that are high growth and high value-added, the real

generators of tomorrows prosperity and business success.

It learnt lessons from East Asian countries like Taiwan and Singapore2

scouring the world for latest

technologies relevant to Australia, forging licensing, joint ventures and other collaborative relationships,


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diffusing these technologies widely through the Australian private sector, and facilitating consortia

(including SMEs) to commercialise these innovations. The end goal was to set up the climate for

Australian firms to choose the path of technological upgrading and investment in continuous

improvement, rather than to take the easy option of cost cutting or competing in declining industries

using old methods with fewer and fewer productivity returns.

PUBLIC INITIATIVES: ENVIRONMENTAL POLICY - USA

US legislators, frustrated in their efforts to make factories reduce contaminated emissions into rivers,

used lateral thinking to solve the problem. Companies had been used to taking water in upstream, using it

in their production processes and pumping it back out downstream, with limited concern for the

environment. Under the new legislation, they were obliged to take their input downstream of the factory

and output the recycled water upstream. In this way, they were effectively re-using their own effluent.

Companies soon realised the consequences of their own inadequate pollution control policies and

contamination levels in the rivers dropped dramatically.

BEST PRACTICE: 3M

In 3M's famous project system, an idea is brought forward by a team of three - one from marketing, one

from research, and one from manufacturing. The commitment of the three members with functional skills

means the venture has already passed through three different screens, and thus the project is given the

benefit of the doubt and

is supported. The formation of the team points to the presence of an entrepreneurial leader who can

attract talent and skills. This core team can then stay with the project until it becomes a full division.

BEST PRACTICE: THE IDEA FACTORY INNOVATION REINVENTED

Businesses require an ongoing cycle of value creation to remain competitive and relevant. Happy

accidents and brilliant surprises aren't enough; the power to create new value in the face of evolving

demands and resources requires both the capacity to understand the nature of change and the ability to

turn that understanding into meaningful products and services. The key to success in a transforming

world is a systematic process of innovation: from Idea Creation to Venture Creation to Value Creation. The

Idea Factory based in San Francisco and Amsterdam helps companies to build and embed this innovation

system, making it the key to the organization's continued success. It assists in the development of new

ideas, then builds upon them using processes from design, theatre, and business strategy to create new

value. The Idea Factory is a non-linear assembly line where according to its founder John Kao, clients can


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expect a little C.G. Jung, some electronic travelling, art, partnership, and an ever-present methodology for

shaking things up, all for application within their organization.

BEST PRACTICE: DU PONT - STIMULATING CREATIVITY AT THE COMPANY

Dr. David Tanner, former R&D director of du Pont Industrial Fibers Division and director, du Pont Center

for Creativity & Innovation.

It is vital to set aside quality time specifically for people to learn the techniques of creative thinking. This

first step satisfies an essential criterion for cultural shiftthat is, it gives status to the effort. Resources

that companies can use to focus in on this subject include in-house seminars, books and articles on

creativity, and outside creativity experts. By rewarding and recognizing individuals and teams who apply

creative thinking techniques and deliver bottom-line results, you reinforce the central importance of

creative thinking. Even units in the organization that have less participation in formal creativity programs

will think and act more creatively because the general environment has improved. They will recognize

that management is supportive of creative thinking, provides freedom in doing the job, encourages risk

taking, and doesnt punish mistakes but rather focuses on learning from them. Many creative thinking

techniques offer processes for deliberate, systematic approaches to problem solving and opportunity

searching. Techniques like lateral thinking are applicable to all disciplines and in all situations. In this way,

creativity can help accelerate the process of innovation.

BEST PRACTICE: COMPETITION BASED INNOVATION (NOKIA)

A key factor contributing to Nokia's strength in telecommunications equipment manufacturing is that

Finland, unlike many other countries has always encouraged competition in the telecommunications

carrier industry. In the 1960s and '70s most European telecommunications operators still purchased their

switches from national equipment suppliers and the expensive research needed was in the hands of just a

few companies. In the Finnish market a unique competitive situation reigned. Since the country's first

telephone connections were established in the 1880s there has been a number of telecommunications

carriers/telephone companies in Finland. (These included customer-owned local telephone companies,

which were permitted to operate in their own local area.) Neither they nor the Finnish PTT (Post,Telephone and Telegraph Administration) automatically bought their equipment from national suppliers.

Since entering the telecom markets, tough international competition and demanding customers have

helped Nokia constantly develop its business and products.


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CASE STUDY: BLOCKS TO CREATIVITY

According to Floyd Hurt of Floyd Hurt & Associates in Charlottesville, Virginia, frequently "the penalties for

failure are greater than the rewards of success." Hurt also maintains that employees feel they are morelikely to advance if they do nothing at all. "This is even more the case for middle management," he claims.

"They are judged on their ability to make a profit, not by introducing new products or services. Company

founders tend to perpetuate a rigid environment by responding negatively, fearfully or, at best, with

indifference when employees have the courage to innovate." In 1990, one Irish company had 3,000

customers, all in one sector and all highly profitable. Advised by the marketing manager that a one-sector

policy was short sighted and that they should start to pursue opportunities in other sectors, the directors

of the company did not see the need and chose not to do so. Disenchanted, the marketing manager

resigned but within a few years his prediction proved to be correct. The market changed and the company

lost most of its core business, a position from which it has never fully recovered.

CASE STUDY: DU PONT

Lateral thinking4

at du Pont led to a process breakthrough for drying polymer fluff. The old process used a

reciprocating belt system with 70 moving parts, which frequently broke down. A lateral thinking session

resulted in a major new design concept, reducing the number of moving parts by 80% and significantly

improving process continuity. The lateral thinking technique used was reversal, which triggered the

provocation, the reciprocating belt is stationary. This shifted thinking into an entirely new direction,

leading to the new design concept.

CASE STUDY: PRUDENTIAL

Another variation of creative thinking, that of questioning conventional wisdom, was applied in recent

years with devastating effect in the insurance industry by Ron Barbaro, a man who has since become

president of Prudential Insurance in America. Searching for a new product idea in his field, he played with

the apparently absurd notion "You die before you die". From this, he derived the much less absurd and

ultimately usable concept that in case of life-threatening diseases, insurance companies should make an

advance payment to the living insured. And that has since been widely adopted.

4The concept of Lateral Thinking was first suggested by Dr. Edward de Bono

and is defined as seeking ways to solve problems by apparently illogical

means.


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CASE STUDY: DESIGN ID - IRISH SME

This small graphic design company was struggling to survive in a market characterised by too many

competitors and too few profits. The business was not growing and with the designers doubling asaccount managers, levels of efficiency and quality were low. Meanwhile, the burgeoning cluster of high-

tech companies in the area was bemoaning the lack of a design company that understood technology. By

thinking objectively, and seeing an opportunity where others didnt, Design ID decided to align itself more

with the high-tech world of its neighbours. It employed an account director with technical savvy, adopted

a more quality driven approach and invested in a network of computers. The company quickly developed

an exclusive market, trebling its turnover in one year and opening offices nation-wide.

CASE STUDY: INTREPRENEURSHIP (OTICON)

Oticon, the highly successful Danish hearing aid manufacturer, was aging and dying when the company

was turned upside down, and the employee choices became the new management structure. Now

employees volunteer for tasks and projects all over the company, sometimes working from several teams

and learning many skills that add up to whole-business effectiveness. They have dissolved bureaucracy by

establishing a voluntary network within the organization based on the internal market choices of people

and teams. And since becoming more entrepreneurial the company's profits have grown sixfold in two

years.

CASE STUDY: INTREPRENEURSHIP (3M)

One of the most famous inventions of modern times, Post-it Notes was not a planned product. A man

named Spencer Silver was working in the 3M research laboratories in 1970 trying to find a strong

adhesive. Silver developed a new adhesive, but it was even weaker than what 3M already manufactured.

It stuck to objects, but could easily be lifted off. It was super weak instead of super strong. No one knew

what to do with the stuff, but Silver didn't discard it. Then one Sunday four years later, another 3M

scientist named Arthur Fry was singing in the church's choir. He used markers to keep his place in the

hymnal, but they kept falling out of the book. Remembering Silver's adhesive, Fry used some to coat his

markers. Success! With the weak adhesive, the markers stayed in place, yet lifted off without damaging

the pages. Today Post-it Notes are one of the most popular office products available.

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Forfas National Innovation Conference