I just finished reading Matt Ridley’s book on innovation. An excellent summary of the issue. How innovation occurs and, importantly, how it is continually opposed and stifled.
I’ve spent many decades as a business consultant for a large number of businesses, mostly small. I have lived in the innovation capital of the world, the San Francisco Bay Area.
I‘ve personally been an innovator in a dozen realms. Best known as the father of MasterCard, the source of the first international money.
There is very little to add to Ridley’s work. But I do have several things to add.
Let’s begin with reality. Some things are physical impossibilities where popular misconceptions intrude on invention.
The airplane was modeled on the flight of birds, which is the dominant metaphor of flight. But butterflies also fly and can fly many miles just by riding on the small wind shear and turbulence near the surface in the lower atmosphere. That turbulence is why personal flying devices don’t work, even though they were forecast every year of my life. The turbulence in the atmosphere near the surface keeps turning the man with a jetpack on his back upside down.
Ridley doesn’t see that diversity is an important ingredient in innovation. I don’t mean the stupid diversity of melanin, the real diversity of insight and experience which is what urban areas genuinely contribute to and what is found in abundance in immigrant societies like America and Israel.
My best example of diversity of experience is Mr. Yuzawa, a middle-aged man who worked as a perfume salesman in Tokyo. He came to me with an observation; one particular scent was not in the Japanese perfume repertoire but was common in American perfumes. Mr. Yuzawa had lived overseas for many years. He personally liked the scent and wanted to know ‘Would the Japanese buy it?’
I had him concoct and bottle it and try it out in a high-end Shinjuku department store with a wide selection of perfumes and known for its diverse clientele. He did and it quickly became a major selling scent copied by all the big Japanese perfume brands.
Three lessons here.
- The man knew his domestic products and he knew the international market too. Diversity of experience.
- The new product was introduced at a high-end store. Many products start among high income customers and work their way down the social gradient.
- Openness to novelty is more likely in a diverse product array than in a brand or chain store model.
In a similar vein; three 1970s San Francisco women opened a shop to market their own distinct body products with their own hippy designs. Along came a British woman who stole the whole kit-and-kaboodle, names, products and designs, turning it into a successful international network of stores: the Body Shop. She later bought the rights from the three women.
Ridley does see freedom as an innovation element. But it isn’t freedom, it is the absence of social oppression. San Francisco and the Bay Area have generated hundreds of major global businesses, not just in the digital world, because San Francisco, in particular, has a very weak government and the social hierarchy has always been feeble, compared to Boston and the East Coast.
Ridley sees openness and cross fertilization as a source of innovation. I found it to be much more: cooperation is the transcendent value involved.
When the open, ideologically ‘loving’ hippies came to me for business advice I helped them form a network of similar open businesses, the Briarpatch Network. Ordinary start-ups have a 20% survival rate over three years. The Briarpatch Network of cooperating, open businesses had an 80% survival rate over five years. Virtually all the early Briarpatch businesses were innovations. Some became national and global models, most remained local and their innovations didn’t propagate. That is the nature of innovation.
The most important ingredient in innovation that Ridley senses but doesn’t discuss is the absence of an hereditary elite class. America always had a much weaker class structure than anything in Europe and greatly benefited from the vast opening of the West. An hereditary elite has maintained the status quote as a survival necessity. Europe from the 1600s in Holland to the 1800s in England had a colonial empire where the Dutch and English (and French) innovators could escape to for experimentation and where innovation could thrive.
My own views on the nature of commerce which emphasizes openness, diversity and cooperation is in a book I dramatically called The Most Important Book in Human History. I called it this because I see the real elements of innovation and successful commerce in serious jeopardy in the current American political and cultural milieu.