What Innovation entails, i.e., Neuer Kombinationen

Innovation is the source of new business. We need to understand what R&D efforts are needed to generate innovations in this era where the ecosystem is currently undergoing great changes driven by globalization.

Joseph Schumpeter, one of the leading economists of the 20^th century, defined innovation as “new combinations” (Neuer Kombinationen). He asserted that innovation refers to the new goods, new production methods, new markets, and new organizations that are borne out of these “combinations.” 

This points to a new way to change society, particularly the process of setting new values and bringing about change by coming up with new combinations from existing elements. I learned from my mentors that development is based on existing technology, i.e., it is made up of validated  technologies, and that including unvalidated technologies, i.e., those still in the research stage, is not allowed. An iconic example of using only validated, i.e., dependable, technologies is the Apollo Project, which aimed to land a man on the moon and bring him back to Earth. In that massive system development, only dependable technologies were used. The plan was implemented by combining existing technologies. But research is different. In research, the goal is to come up with innovations based on technological discoveries or inventions. If inventive technologies have foundational versatility, then combinations geared towards practical applications can be made from them later. This is the reason that in the development of scientific technologies, the wave of inventions and discoveries of technical elements and basic theories and the wave of systematization, although the latter did not come right after, came about through mutual interference.

NOTE: The field of communications is still experiencing the systematization wave.

Going back to innovation, the main thing is how to be able to come up with new combinations. As an example, in 1998, i-mode was born out of the combination of DOCOMO’s　always-on mobile packet network and microbrowsers.

 You can either seek out combinations around the world, or, more importantly, come up with attractive platforms that the world will seek out. To do this, open innovation and concurrent engineering must be practiced. In open innovation, a new system is designed from a combination of your own company’s and other companies’ technologies. In such cases, even the operation of the system can be delegated to other companies. In concurrent engineering, development of technology is carried out in coordination with the operations department and with a constant evaluation of its relationship with the market and with other companies. In other words, market search and technological development, which includes research, should be done in parallel. These two are indivisible activities and must be linked with investment activities.

When I was fresh out of university and entered the industry, I learned this saying, “The more half-hearted  you are as an engineer, the more conservative you become.” The average successful engineer would stick to his technology and work style of ten years ago and would not change and challenge himself to learn about new technical fields. He was content with the status quo. Since innovation is a process that brings about new values and changes to society, it revolutionizes the ecosystem. Around the world, convergence of terminal platforms and consolidation of network services on the Internet are advancing. There is no stopping the wave of innovation; there is the emergence of cloud computing, which enables a service delivery platform that can serve from millions to several hundred millions of clients, as there was the emergence of search services, internet shopping, electronic publications, social network services, and smartphone application stores. Ecosystems for these innovations did not exist ten years ago. Thus, innovation necessitates creation of new ecosystems rather than just adapting to them. In this era, there is no room for conservative and half-hearted engineers. It would be easy to find comfort in existing ecosystems, but this will not encourage innovation. I hope that we can have the readiness to challenge ourselves to create new environments and take up new technical fields.

To conclude, let me reiterate that what innovation entails is facing the challenge to pursue new combinations and to reconstruct ecosystems.