Monday, April 24, 2006

“Innovation: Our Competitive Edge”

A few months ago, Randall Kempner, vice president for regional innovation at the Council on Competitiveness, spoke to my firm about innovation . He contends, “the U.S. — in most regions and in most industries today — is not able to compete based on non-differentiated products or, for that matter, price. So the only thing that is left for us is to innovate faster and better than other countries.”

I found Randall's comments so insightful that I asked him for an interview so that I could share his observations with you. (By the way, he highly recommends Richard Florida's book, “The Creative Class,” for further reading on the topic.)

Your organization suggests that “in our global economy, place matters more than ever” for innovation to flourish. Why?

Kempner: We believe that regions are the place where innovation takes place, because innovation is actually a contact sport. In this highly-connected world, people still like to have personal interactions and know the suppliers, buyers and related institutions that enable new product and idea development.

Secondly, now that there are more places people can go, it has made quality-of-place all the more important in attracting the talented people that are the basis of innovation. You can live in the middle of Colorado on a mountainside with high-speed internet and still work as part of a world economy. That means that all the places that want to attract people to live there have to offer diverse amenities and a high quality of life, or people won't stick around.

What must regions do to survive and prosper in a “land of innovation haves and have-nots?”

Kempner: It begins with talent. Regions need to grow, attract and retain the most talented people that they can. If you're able to do that, companies will follow because they know that they need to be in places where people want to live … they will put headquarters and research centers where the smart people are.

When talented people are deciding where they want to live, one of the things that they will consider is whether a place is tolerant of people with different backgrounds, ideas and approaches. And not all cities, not all regions in this country can offer that. Those that can have been the most successful US regions over the last 10 to 15 years.

Those sound like long-term solutions, but are there things that regions can do to foster innovation in the short term?

Kempner: I'll just use Rochester , New York , as an example. Kodak has a bunch of orphan technologies. There you have a large company that has developed a bunch of patents and potential technologies that don't fit into their business strategy because the opportunities are too small or not in the company's core market. However, one firm's “small” $100 million dollar market is another man's fortune. But, as of yet, neither the region nor the company has found a way to get their technology into the hands of people that could actually do something with these opportunities.

In summary, it is making sure there are connections between regional economic actors and assets that enables the innovation that will expand regional prosperity.

What can communications professionals do to innovate at a higher level?

Kempner: My advice to communicators is the same as I would offer to manufacturers or bankers. Find ways in which your product or service can be differentiated in such a significant way that it actually creates greater productivity or a new model for the entire industry.

For example, Ted Turner, a brilliant communicator, is clearly an innovator. His idea of 24-hour news was a significant innovation which transformed an industry and made people lots and lots of money.

What can professionals in public relations do to encourage their clients to be innovative?

Kempner: One of the ways that companies have innovated and differentiated their products is by having a better public relations strategy. Look at some of the firms out there that are still able to maintain brand loyalty in this age when there is a multiplicity of brands.

By the very fact that public relations is often looking to the outside, it is dealing with customer needs … and that drives the greatest innovation. If companies don't recognize the need to engage their customers and other external audiences — if only to get ideas for where they should be innovating — then they won't last long in a global economy.

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Blogger Chas Martin said...

I both agree and disagree with Mr. Kempner. Location is important. Richard Florida has made that point and supported it well. Creative or innovative people will live where they feel their talents are fed and appreciated by a supportive community. Support can take many forms, from quality of life to quality of companies.
But, innovation is not location specific. See The New Creative Organization. Innovation, by its very nature, cannot be bound or contained by location. In a flat world, communities of interest are connected in the same way the readers of this blog are connected. It's the mix of ideas and intersection of talents that made the Renaissance work. But today, we don't all have to live in Florence, Italy to share, interact, inspire or create innovative solutions.
Location is nice. We should all be able to live where we choose. But, if a community, any community, is limited to its local creative class for innovation, we're doomed. The world is bigger than that.

Tuesday, April 25, 2006 7:43:00 PM  
Blogger Chas Martin said...

Randall Kempner referenced Dr. Richard Florida. If you wish to learn more about Florida and his ideas on the emerging creative class, I recommend three video interviews. Florida’s personality on video is far more compelling than his books (which are convincing by themselves).

Video Interviews:
The Emerging Economy - Rise and Migration of The Creative Class

The Flight of the Creative Class: The New Global Competition for Talent

Managing for Creativity (with Dr. Jim Goodnight of SAS)

Wednesday, April 26, 2006 12:07:00 PM  
Anonymous Anonymous said...


Actually, I think we pretty much fully agree. Local communities are not limited to their local creative class. You are correct that the connected world allows citizens to incorporate ideas from wherever they want.

So, innovation can occur across oceans, but I believe the most rapid innovation takes place when people are able to develop trusting relationships that lead to fast, effective collaboration through the development testing, and commercialization of new ideas. This is still easier to do when people are located in the same region.

Friday, May 19, 2006 12:25:00 AM  

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