By WARREN PARKER*
Imagining the future is enormously challenging: how to know what is not known? This question is at the heart of how we manage science-led innovation.
Clayton Christensen, author of The Innovator's Dilemma, put it like this: "Markets that do not exist cannot be analysed. Suppliers and customers must discover them together.
"Not only are the market applications for disruptive technologies unknown at the time of their development, they are unknowable."
This is contrary to most, if not all, of what is taught in business management and marketing courses. In fact, for new technologies that markedly change the way business is done - hence the term disruptive - Christensen contends that planning better, working harder, becoming more customer-driven, taking a longer-term perspective - all classical management responses - will probably make the situation worse.
This has important implications for Government science policy and the relationship between industry and researchers.
First, traditional investment disciplines are likely to completely miss the mark in assessing future technology aimed at economic transformation.
Markets often do not materialise as expected and new technologies are often used in ways not imagined by the inventor -the computer, for example.
This does not mean evaluation and analysis should not be applied to a possible innovation. But the main questions asked are not going to be 'How big is the market?' and 'What is the gross margin?'
For businesses used to a short-term market focus this can be difficult to accept.
Second, some brilliant technology or practice can fail or take a long time to reach acceptance if it is launched before the market is ready, or if insufficient capital is available to market it.
Artificial insemination was developed in the 1950s and had transformed dairy cattle breeding 25 years later, but it took money and time for it to gain acceptance.
Innovators need to persist and have the resources to relaunch a second or possibly a third time. Flexibility and learning from experience are important attributes for the managers of such technologies.
Third, the temptation to wait until someone else has tried to create a market is strong, as this transfers the market establishment costs to others.
But this tactic can be risky as the largest profits are often made by those who are first to market.
Some farming commentators suggest New Zealand should wait until others have further progressed biotechnology, saying we are too small to compete against the multinationals.
The problem with this approach is that once key intellectual property has been sewn up by others it may not be available to be licensed to our farmers or scientists, or be easy for them to circumnavigate, because alternative biological processes may also be protected.
The risks of waiting and seeing are high. We need to take the lead in some areas of innovation.
Finally, and most critically, there is the need for New Zealand (both the Crown and business) to invest in and support blue sky strategic science and the special people capable of doing this work.
By its nature, this is high-risk stuff, but as shown by the now globally distributed electric fence technology, the pay-off can be substantial. I can recall my own scepticism in the late 1970s that two wires pegged 15 to 20cm off the ground could keep cattle in paddocks, let alone become a multimillion-dollar export industry.
The Government's intention to support more strongly the curiosity science that delivers breakthroughs and new industries is to be applauded. History shows the rewards from agricultural research have been large and from unexpected sources.
Business and the Crown should heed Christensen's advice and temper the traditional investment tools for evaluating the merits of funding research, even though that is not going to be easy for some managers to accept.
* Warren Parker is science general manager at AgResearch Ruakura Research Centre.
<i>Rural delivery:</i> Innovative science bigger than managers' dictums
AdvertisementAdvertise with NZME.