Taginnovation

Innovation Rankings

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This article is part of 20in20, a series of 20 blog posts in 20 days to kick off the blogging year 2020. This is 20in20:10.

So Germany was just ranked the world’s most innovative country as per Bloomberg’s Innovation Index. So, all good then, eh?

Somehow this doesn’t sit right with me. It just doesn’t quite seem to… capture what’s going on?

Sure thing, there’s a lot of innovation going on here. The manufacturing sector, the SME’s — Germany’s world-famour Mittelstand— has a lot going on in that sense. The Mittelstand companies in particular with all their so-called hidden champions are often really up to speed, working closely with their clients to deliver best-in-class, high-value products or components. This is great — but I’d file it under lowercase innovation.

Research spending in universities and the big R&D institutes (the Fraunhofer Institutes and their peers) is huge, and they do a lot more basic and applied research, or what seems more worthy of the uppercase Innovation.

So why does it feel a little off? Let’s first take this section in the Bloomberg article (the same as linked at the top of this post):

In the Bloomberg Index, Germany scored three top-five rankings in value-added manufacturing, high-tech density, and patent activity. South Korea lost its crown in part due to a relative slump in productivity, falling to No. 29 from last year’s No. 18 ranking in that category.
“The manufacturing sector is still highly competitive and a source for innovation,” Carsten Brzeski, chief economist at ING Germany, said in an email. “Germany’s performance in such indicators is still strong and much better than the recent economic weakness would suggest.”
Still, Brzeski cited several reasons why Germany shouldn’t be complacent about its innovation standing. Its services innovation is much less impressive, and about a third of research and development spending is in the auto industry, meaning “disruption and longer weakness of this sector could weigh on Germany’s innovative strength,” he said.

This really gets to the core of it. Sure, research spending and patents score high in this ranking — but that tells us about value capture and extracting more than it does about innovation.

The major role that the automobile sector plays here is worrisome because it might pretty much crumble. Germany’s flavor of automobile innovation is innovative within an old-school mindset of one car per person, which I don’t see persist. (I might be wrong, but I don’t think so.) Germany’s car makers had hit the breaks when it came to electric for ages, and still are only learning what to do with data & services. It’s like there’s a ton of brain power sitting there that has to be dragged screaming into the 21st century. I don’t see it leading in anything but efficiency and safety, if that. Not nothing, but not “most innovative country” level innovation.

The education weakness mentioned in the article is extremely worrying, as is Germany’s overall weirdly weak approach to immigration: There’s neither a master plan nor, societally, an agreed end point to when an immigrant has arrived, so to speak: When does an immigrant turn to an accepted citizen? Undefined! So it can’t happen. Yet, without immigration, many societal issues can’t ever be solved; and even if it immigration wasn’t about solving societal issues, it’d still need to happen, and with an approach that had a clear and desirable end point for any immigrating individual as well as society at large. But I digress.

To circle back to the more concrete: Our digital government services — usually a good indicator for innovation, I’d say — lag 10 years behind the state of the art as we see it in the UK or Estonia.

Add to that that patents are a standard but — I’d argue, flawed— indicator of real innovation, and we might just see a lagging indicator of innovation here. Because looking at where I see innovation happening in my professional peer group and looking at cutting edge stuff — literally innovation around the edges — that stuff happens rarely in Germany but also wouldn’t (yet) be measurable by those metrics because it’s too far ahead, too far yet from productization and hence measurable so-called productivity.

So overall, to me this seems like Germany might be leading in the “2 minutes into the future” category of innovation, especially where manufacturing plays a role. But certainly not in the “10+ years into the future” type, which to me is the one that matters.

We might need leading indicators rather than lagging once, to be able to determine who’s on a path to prosperity 10-20 years down the road rather than the next 1-5 years. Only then can we capture the type of innovation that really matters: The one that combines sustainability with productivity, and serves societal interests. The one that creates — positive-sum! — value rather than extracts it. The one that’s expansive in its returns.

App In, Driver Out: Why Digital Concierge Services aren’t Quite the Future

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This article is part of 20in20, a series of 20 blog posts in 20 days to kick off the blogging year 2020. This is 20in20:07.

Two things, side by side, in friction:

(1) App In, Driver Out

One of the most dominant business models of the last 5-10 years has been what I think of as app in, driver out: All kinds of services re-packaged to accept orders via an app, and deliver the service through a driver.

Uber may be the most prominent but certainly isn’t alone. We’ve seen the same for food delivery, for laundry pick-up and delivery, for really all kinds of things.

It’s essentially a concierge service, and hence a pure luxury offering. Offered, in this context, with a digital component and offered extremely cheaply.

(2) Innovation trickle-down from elites

The Varian Rule (2011) states that “A simple way to forecast the future is to look at what rich people have today; middle-income people will have something equivalent in 10 years, and poor people will have it in an additional decade.” Which is, by the way, just a way to rephrase William Gibson’s famous line “The future is already here — it’s just unevenly distributed”, in which he’s been exploring the ways that elites have access to innovation before the mainstream does. (Since William Gibson has been quoted saying this since the early 1990s and I like him better than Varian, I’ll stay loyal to his version.)

But there’s definitively something there, to a degree. Elites — financial or technological — have early access to things that aren’t yet available or affordable to the mainstream but might be soon. In fact, not just elites. As Alipasha rightfully points out, it’s not just elites where innovation manifests, but the edges of society more generally: subcultures, special needs, street fashion, you name it.

What shape that mainstreaming might take, if it’s the real thing or some watered-down version, is always hard to predict. Commercial air travel was certainly only affordable to elites first, then later to everybody — in this case, the essential product was the same even though the experience differed along a spectrum of convenience. Personal assistants are available to elites, yet their mainstream versions — digital assistants — are nowhere near the real deal: They’re totally different in nature and deliver a completely different value, if any.

What type of future do we want?

So where does that leave us? Turns out that this type of trickle down only works if there are products that can get cheaper because of production, or through automation. This is, surprisingly, exactly what you’d think intuitively. There’s no surprise here at all! So that’s great.

Unless those services are fully digitized or automated through things like autonomous delivery vehicles, these on-demand services simply cannot reproduce this level of concierge service.

We can digitally model the input side: app-based input can be made convenient and powerful enough. But we can’t lower the costs on the output side enough, without massively externalizing costs to the environment: Automating delivery through, say, drones, might theoretically work but at scale would unleash its own special kind of hell into the urban landscape. And unless we want to go the route of exploitation, humans need to get paid a living wage, so there are no savings to be had there, either.

Extra services cost extra money, which is why these app in, driver out services crumble all over.

So if personalized, cheap laundry delivery might sound too good to be true, that might be because it is. While I’d enjoy the service, I don’t think I’m willing to pay these externalized costs. This wouldn’t be a future I want.

Urban innovation and research labs & programs

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[Work in progress!] Starting a list of urban innovation labs & programs, research programs in that field and the like.

What will be included in this list? At the outset the programs, initiatives and labs that support smart city development and urban innovation but are not pilot smart city projects with their own infrastructure; that support and enable the development and/or provide guidance/policy, but don’t run the technical platforms. One-time events aren’t currently included, but rather ongoing hubs/labs/programs.

Pointers welcome!

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Questioning the Euro tech narratives

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There’s a been a lot (a lot!) of talk about Europe’s, and particularly Germany’s, take on digitization and tech innovation. Sometimes using the Industry 4.0 terminology (connected factories and the like), sometimes framed using European vs US startup success stories (“Where’s a German Google?”).

While a debate about tech innovation, adaption rates and access to the benefits of new technology is necessary – especially when it comes to providing a supporting political framework – I can’t help but notice a few narratives floating around that are quite wide-spread and seem to be dubious at best.

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Berlin Night @ Tokyo (slides)

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As part of a Berlin delegation of technologists, startups and connectors, Bistream kindly invited me to Tokyo to speak at a number of events and meet the local tech, startup, hardware, IoT and innovation scene.

Part of this was a presentation at Samurai Startup Island (event link, Japanese), one of Japan’s top startup incubators. I spoke about hardware startups and the Internet of Things, commonalities and potential of an exchange of ideas/skills/talent between Tokyo and Berlin, and about ThingsCon.

 

Slides below. Enjoy!

 

A visit to KOIL

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After catching up on some work and admin, I was invited to join a meeting over at KOIL, the Kashiwa no ha Open Innovation Lab. It’s part venture arm, part coworking space, part office rental, and it’s been operational just since April 2014. As we went on a tour, it quickly became apparent that it’s all a very high-end, professional affair that incorporates the flexibility as well as the look & feel of grass roots spaces like Berlin’s Betahaus, but supported by a serious budget. The pretty well-equipped in-house workshop space is a good indication.

But of course, as much as I like to visit office spaces, the most important thing was to meet the KOIL team, including a few very high-ranking members of the management, who took the time to chat, give feedback to one of our tour member’s hardware prototype, and to discuss potential further collaborations.

Since the conversation took us well into the evening, a few of us just wrapped up the Friday night with a short trip to Akihabara, aka gadget & game central of Tokyo, where we had ramen followed by a few rounds of games at one of the larger arcades as well as photo booths. When we came back out into the street, I could hardly believe just how quiet the city seemed in comparison to the deafening soundscape inside the arcade.

The year of the connected device, but consumer IoT startups face big challenges

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Over on the BoschSI Internet of Things blog, I contributed a short piece on the challenges that startups in the consumer IoT space are facing.

There is hardly any doubt that 2014 is the year when connected devices – particularly wearables – will go mainstream. Technology tradeshows and media alike are practically bursting at the seams with new products, concepts, and announcements for connected devices.

It’s worth noting that this is quite a special slice of the Internet of Things: this isn’t about the industrial internet, it’s about bringing the IoT to consumers. This is a very different story altogether, a segment with its own opportunities, challenges, and dynamics, one that exists at the intersection of various verticals – think home automation, wearables, connected mobility, personal analytics, health tech. It’s a space where the lines aren’t yet fully drawn, the terminology not yet fully evolved – which is usually a sign of a field that’s moving quickly and innovating. In other words, this is where some truly innovative and interesting stuff is happening.

Read the full text here.