Innovation... not always a pleasant novelty

Let’s start with a definition.

Francesco Daveri

Innovation is the result of specific activities carried out within an organization with the scope of establishing and developing new products or services or new production and technological processes that increase efficiency in using the resources within the organization itself.

An initial semantic distinction is that innovation and novelty are two different things. In its Oslo manual, the OCSE (Organization of Economic Cooperation and Development) – the inter-governmental agency that has, among other tasks, that of encouraging member Countries to adopt mutually consistent definitions when measuring economic phenomena – defines innovative activities “all the scientific, organizational, financial and commercial steps that lead to putting the innovation into practice”. From this, we can deduce that some innovative activities (that is, those introduced for the purpose of innovating) are themselves innovative from the point of view of the processes required to put them into practice or of their impact on the surrounding social ambiance. But other innovative activities do not appear to be (and hence certainly are not) new for the users.


JUST THINK OF THE COMPUTER. Its contribution (certainly innovative!) to improving the possibility of making calculations has been known to humanity since 1939. But until the seventies, calculators were “brain machines” closed in large rooms inside a company, that communicated with the outside world only through perforated sheets compiled by a caste of laboratory technicians. Automation (in data collection, storing, elaboration and management) of accounting services in a company was an activity confined to its back office, having no impact on the way the company’s employees and its clients worked. But then automation came into the factories and computers on everyone’s desk. CIM (Computer Integrated Manufacturing) has radically modified companies’ activities, allowing an enormous increase in the possibilities to change the quality of the products and adjust them to the client’s requirements (“customization”) and requesting continuously new and added services from suppliers. Thanks to distributed IT (connected to the Internet), buyers achieved the possibility of elaborating texts and making calculations, but also of buying books, shopping at the supermarket and even designing their own personal computer featuring the desired characteristics, directly from the office or from home.


AT THE ROOT OF THE FIRST AND ALSO SECOND PHASE OF THE ICT TECHNOLOGICAL REVOLUTION, THERE IS MOORE’S LAW, that is the phenomenon of increasing miniaturization that has led to the enormous multiplication of the number of transistors in each semiconductor and to the drastic cost reduction of producing “derivatives” of semiconductors, such as the computer itself. As Gordon Moore, founder of Intel, effectively stated: “If the automobile industry advanced as rapidly as the semiconductor industry, a Rolls-Royce would get over 200 thousand kilometers to the liter, and it would be cheaper to throw it away than to park it”. But it is worthwhile remembering that it is only in the second phase of the ICT revolution – the automation and distributed IT phase – that we have begun to speak about Information Society.


THERE IS ANOTHER ASPECT OF INNOVATION THAT IS FREQUENTLY OBSCURED FROM THE RHETORIC OF INFORMATION SOCIETY. Innovation is not always manna from heaven – quite the opposite. Frequently, the introduction of innovations entails costs for one and benefits for another. An innovation such as the use of Windows as the operating system fills a need that was previously satisfied in a different way (making access to a PC easier even for those who are not familiar with the commands of the Ms-Dos operating system), but does so by making the competences requested in a not-too-distant past, obsolete (the ability to program in Dos).

In general, an innovation usually displaces competitors of the innovative manufacturer and they, in turn, will oppose its introduction, if they can. If they cannot, they will try and limit the innovator in order to reduce his/her profits and competitive advantage.

Understanding that an innovation is not always a novelty and that, if it is, its consequences are not always appreciated by everyone, is of crucial importance in understanding how the innovation process takes place and for what reason in many countries, despite its proven social usefulness, the adoption process of the innovation often takes place very, very slowly. •


Francesco Daveri, professor of Economics at the University of Parma and also lecturer in the MBA program of the Business School of Bocconi University (Milan), is an expert in the growth dynamics of European countries. In his research, he has analyzed – through a comparative approach – the implications of the technological revolution induced by the ICT - Information and Communication Technology for the growth of productivity in the EU and in the United States. On these same topics, he has also published articles on countries’ case histories that are paradigmatic for their success (Finland) and for their failure (Italy). His articles have been published mostly on international magazines and journals specialized in the world of economics. He has also published two books in Italian and occasionally drawn up or helped to draw up Policy Reports on behalf of various Italian and foreign companies and public institutions such as the European Commission, the World Bank and Italy’s Ministry of the Economy.

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