Pinpointing centers of innovation is an ancient, time-honored exercise. During the 4th century BC, for example, seven maps were created that showed industrial hotspots in the Chinese state of Qin. Four hundred years later, Strabo’s Geographica mapped the business and political climate of the world’s known nations. And in 1909, economist Alfred Weber formulated a mathematical model that computed such variables as freight rates and labor costs in order to identify prime locations for factories.

In those simpler times, commerce was concentrated in areas with large populations, good transportation systems, and/or rich natural resources. It often took years for new economic frontiers to open and generations for breakthroughs to occur. Today, answering the question “Where will innovation take place?” is not nearly as simple.

A 2004 IBM study on innovation, called the Global Innovation Outlook (GIO), offers important clues. Based on the input of thousands of people from 96 public and private organizations in 24 countries, the study suggested that there are three key factors for innovation: common technical standards, collaboration, and customization. Specifically,

• First, it is critical that there be standard ways of exchanging information between members of each economic system and across economic systems.
• Second, more open collaboration between economic system members, and, at times, even among competitors, is necessary.
• Third, the primacy of the individual as a driver and user of scientific discoveries is paramount.

These qualities tend to be reflected in regions where multiple stakeholders—governments and businesses, nongovernmental organizations (NGOs) and venture capitalists (VCs), scientists and academics—invest, collaborate, and innovate as teams. Examples of such endeavors now dot the globe and will continue to proliferate.

So, where are the next hubs of innovation? Simply put, anywhere and everywhere these conditions are met.

Standards

When it comes to innovation, standards are as important as speaking a common language. GIO participants repeatedly identified standards as a prerequisite to unlocking new capabilities. They also cited a lack of standards as a major reason for systemic inefficiencies and escalating costs. There is growing recognition that standards need to be created with the same transparent processes inherent in good governance and that the standards that are produced need to be of as high a quality as any product. While governments ought not to get into the business of creating or controlling standards, they should actively participate in the process, ensuring that new standards are created with the best interest of users at heart.

Once a society agrees upon a set of standards concerning how technologies and products ought to work together, inventors can be unleashed to do what they do best.

Collaboration

Collaboration among parties not used to working together was one of the most serious challenges to societal progress cited by GIO participants. In health care, for example, doctors, hospitals, and research institutions generally maintain strict control over what many view as proprietary information. Yet that barrier needs to fall before the world’s health care systems will be able to deliver care targeted specifically for each patient. Similarly, closer government collaboration with industry could help governments keep abreast of fast-paced changes in technology and process innovation and to accelerate the pace of innovation for both government and industry.

Nanotechnology research that is currently being conducted in New York State is a prime example of how collaboration between academia, governments, and the private sector can work. IBM’s research and development scientists have joined with the University of Albany and the state government of New York to create Albany NanoTech, the world’s most advanced university-based research facility.

Two key enablers of collaboration are culture and intellectual property practices. Bridging the differences arising from various cultural expectations and norms and making the transition from exclusionary intellectual property models to ones that enable both sharing and protection of ideas will be necessary in order to extract the economic benefits of innovation.

The individual

Where much innovation in the last century grew out of the adoption of mass production, innovation in the 21st century will primarily be built on the “infrastructure of the individual.” In the medical arena, for instance, the potential for targeted medicine hinges on diagnoses and treatments that are better tailored to the individual. Many of today’s products and services are now customized according to unique preferences and are made available on demand, as opposed to through delivery models where choice is confined to a company’s definition of a demographic. And many governments already offer services that allow citizens to interact with agencies at the individual’s convenience, rather than forcing them to be bound by office hours or locations.

But this new focus on the individual is about more than just mass customization; individuals can now drive innovation with a level of force that previously required people acting en masse. For example, the individual contributions of members of the open-source community have brought radical change to the IT industry. Major repositories of valuable information are being built online by self-organizing groups whose members act alone to contribute, edit, and police the contributions, changing the way encyclopedias and other reference works are conceived.

Moving toward the future

The importance of the dynamics discussed above would have been hard to imagine during Strabo’s era, when fixed and parochial pockets of industry predominated. The world seemed much bigger and was more disconnected and less complex at that time. Today, in a philosophical sense, the earth is smaller than ever, even as we think on grander scales. Those nations that think big and understand the value of deep collaboration with customers, partners, governments, academics, and competitors are the ones that will enjoy the economic fruits of innovation.

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