Innovation – Closer-to-Market or Closer-to-Science? 160.0

Close-to-market innovations work best for the Philippines
Reading yesterday’s issue (January 19, 2010) of the proceedings of the National Academy of Sciences (PNAS) of the United States of America affirms the correctness of my proposal for innovations in an emerging market like the Philippines to be in applications closer to the market than to science.

Truthfully, I only subscribe to the Table of Contents of the PNAS which is free on the Internet. Still, for this short blog, reading the Table of Contents – please wipe that smile of your face – is enough to define the challenges if we focus our scarce S&T resources to basic research. Note: Some content are free with open access.

Update on March 23, 2010: You may click on emerging markets innovationat the navigation line above for a summary of my views.

Basic Research. New knowledge from basic research is built up block by patient block. A sample list of the research categories and research cases shows we do not have the foundations to even start the research much more apply them:

Chemistry: Cooperative nanomaterial system to sensitize, target, and treat tumors. In application, this is possibly a step towards replacement of radiation chemotherapy that has bad side effects on surrounding tissues to one of ingested nanomaterials as delivery systems that will act only on the diseased tissues.

Engineering: Protection mechanisms of the iron-plated armor of a deep-sea hydrothermal vent gastropod. In later iterations, this research will probably lead to the design of protective gear for humans and machines that will allow mining in high heat areas like near an undersea volcano at the tectonic plate boundaries like the Philippine deep.

Applied Physical Sciences and Biophysics and Computational Biology: Swimming bacteria power microscopic gears. This research could lead into in-situ repair of damaged machines or micro-manufacturing in hard-to-access areas. Fuel for the working bacteria will be the right food and water made available on site.

Please click the link at the bottom if you wish to know more of these projects at PNAS. Where does these leave an emerging market like the Philippines?

Schumpeter’s Innovation and Entrepreneurship. Innovation starts with invention into diffusion and commercialization. The whole process, if we use Joseph Schumpeter’s model, is managed by entrepreneurs whose motivation is to move resources from areas of under-utilization to one of more productivity if only for them or their communities to benefit from the activity.

Schumpeter did not specify that inventions must come from basic research. In fact, he use the phrase ‘new combinations.’

Innovation in the Philippines. My view is that, for emerging markets like the Philippines, it will come from mash-ups that are closer to the market at the diffusion end of technology than basic research in science that must be the strategy.

Paradoxically, we may have some advantage over those scientists and innovators from the developed world as long as we focus and accept the realities of our own markets.

For the Philippines:

• We are the 12th most populous country in the world.
• We do have a lot of the poor with low purchasing power at the bottom of the pyramid of consumers.
• We do have a high level of trust until the trust is proven unjustified (see next post on Denmark and Israel regarding trust and innovation systems).
• We are able to work very well in small groups and in fluid coalitions.

I am sure that a deeper observation and analysis of our unique market can synthesize better observations.

The idea, I guess, is that we ought to develop our own models learning from our own history and from the mistake of others (i.e. by intensive learning including from reading books and recorded experiments.)

Quick and Dirty Process. The next step is prototyping and learning-by-doing by using the new designs and innnovations and by interacting with customers, suppliers and other stakeholders as in the Bengt Ake Lundvall national innovation system (NIS) elsewhere explained.

Interestingly, because the methodology of Lundvall’s research is the case method and inductive he had to consequently maintain that the final NIS design depends on the specific case of each country.

The success stories in the Phiippines for innovative entrepreneurship that I have told like mobile phone banking for micro-finance and geothermal energy show the importance of formulating the right questions relevant to our markets to get the best answer.

Because of limited resources for innovation, we may end up selecting winners from those which provide the highest level of learning from interactions like networks and even informal institutions like micro-credit.

The final innovations may not be technological in Brian Arthur’s scheme as they do not comply with the third part of the definition that they involve manipulating natural phenomena. Still, innovations in his ‘purposed systems’ involving mashups with technology enablers (I have created a category of disruptive innovations in this area at the Sidebar) may well provide the biggest bang for the buck to propel the economy beyond the mystical number US$5,000 GDP per capita.

Maybe, then we can start moving back up the innovation change closer to science and basic research.

Note: Please click this link to reach the proceedings of the National Academy of Sciences of the United States of America.