Innovation Today - Notes From The Road

I am back from Vancouver where attended the Cisco Connect Roadshow event where I was able to get a feel of what they think is innovation of today thanks to the excellent presentation of Victor Woo, General Manager, Industry Transformation at Cisco Canada: "Fueling Innovation with the Internet of Everything". Notes below are some thoughts arising from and illustrating Victor's talk and other sessions.

Thanks to widespread Internet adoption and over 10 billion connected devices around the world, companies today are more excited than ever about the Internet of Things. Add in the hype about Google Glass and the Nest Thermostat, and nearly every business, including those from traditionally low-tech industries, wants to get on the cloud, track a group of devices, and gather data. The question, however, is not if a device can be connected, but why the company is connecting a previously “dumb” product to the cloud. Or stated differently, if a company invests in making my toaster talk to my lawnmower, is that really a good business model and why?
Companies that are successfully adapting and innovating Internet of Things platforms are focused on identifying meaningful opportunities, not just technologies.

Various forms of post-implementation maintenance will become more common, and may change how you deal with your vendors. The Internet of Things (IoT) goes well beyond human Internet users. Some predict that by 2015, not only will 75% of the world population have access to the Internet, so will 6+ billion devices.
Traditional business models focused on the sale of an item, with post-sale revenue coming from maintenance. The maintenance was usually an on-call service without real-time monitoring. Many will still follow this business model, however this model is vulnerable to shrinking profit margins in very competitive markets.

The world we live in is becoming increasingly complex and increasingly connected.
More than 12 billion people and things are communicating today via the Internet; yet it is estimated that more than 99% of objects are still unconnected.
Advanced standardization of communication protocols and the consequent rapid global adoption of IP and the Internet is moving from the information age into the networking age. The Internet provides the technical and human network to connect people with processes with data and things. As the Internet of Everything (IoE) connects the unconnected, it is expected that more than 50 billion smart objects will communicate freely over the Internet by 2020 and early indicators show that it might be a conservative estimate.


Acknowledgement:  Victor Woo, Rick Huijbregts, Gary Audin

The History of Innovation

It is important to review history to understand how radical innovation works with technology to transform people's perception and create new previously unexpected opportunities. In the recent post I talked about how an evolution of engine made it possible an evolution of the modern aviation. But there is another, crucial component of an aircraft, without which the machine would be useless - its control. It is what allows an airplane to ascent, change direction, stay in flight and safely land. Ability to control an airplane was in fact a real innovation of Wright brothers - and not the invention of an airplane as many may believe.

      Interestingly, in a speech to the Aero Club of France, 5 November 1908 Wilbur Wright admitted: "I confess that in 1901, I said to my brother Orville that man would not fly for fifty years. . . . Ever since, I have distrusted myself and avoided all predictions". How things change! The next year already Wrights became engaged in the legal fight for establishing their priority of the first controlled flight and anything related to it. Their opponents derisively suggested that if someone jumped in the air and waved his arms, the Wrights would sue him ...

Today we are talking about the "Internet of Things" (IOT). The term was was coined in 1999, but Mark Weiser at Xerox PARC with John Seely Brown led visionary research in the late 1980's on what is now called the IOT and used the term "ubiquitous computing" as the third generation of computing. Their paper, "The Computer for the 21st Century", was published in the September 1991 issue of Scientific American. In the early 1990's, Steelcase from Grand Rapids, Michigan built and patented several inventions of what is now called IOT before becoming a charter founding member of the M.I.T. consortium called "Things That Think" (TTT) created in 1995. Start-up companies such as Echelon were founded in the early 1990's to commercialize IOT technology. GE changed their business model to a manufacturing/service model and began building products with embedded networked "smarts" in the 1990's and recently identified the "industrial Internet" as a $32 trillion opportunity. GM launched OnStar(tm) in the 1990's. IBM now promotes the concept of  "smart planet".

Today radical innovations are built with a new fourth generation of innovation theory and practice that replaces the linear stage model with an iterative nonlinear model. The linear model is only effective for incremental innovations within the dominant design (DD) that governs an industry or market. 4G creates a new dominant design. It was first described in the 1998 book, Fourth Generation R&D.  The USA Department of Energy is now practicing these principles which is Innovation Hubs. A similar concept is utilized in the Research and Innovation Centre concept at the newest Russian University Slolkovo Tech  set up by M.I.T. Economics changes with 4G to replace neoclassical and Keynesian economics with "Innovation Economics". 4G changes financial accounting to measure both tangible and intangible capital. 4G is based on capabilities which are built as people garner knowledge, tools, technologies and processes. It is a natural extension of the principles exercised by Systems Architecture.

Systems Architecture is concerned with formal tools and methods to define the elements and their interfaces of complex, large-scale technical and non-technical systems. It helps to structure and link the capabilities to build new technologies, organizations, business models and infrastructures.