With the economy reeling, firms are wondering….how can we sustain our breakthrough innovation efforts? Indeed, the Front End of Innovation is conducting a poll to see how many are pulling back on their innovation investments .

But now is not the time. I saw this local story in the paper this week. An ingenious, entrepreneurial assistant professor found a way to make thin film photo masks used to develop tiny biomedical lab devices: lab-on-a- chip sorts of things…..and to make them for less than 1% of the cost of the current technology ($15 rather than $2000). How???? He’s found a technology that a local printing company uses, and simply asked them to apply the technique to thin film. It works! Voila! Now mind you, some alterations in the process were necessary, but not many. The printing shop owner had never ever considered this opportunity space, so it’s a sure boon to his business.

But the real lesson here is that breakthroughs can happen in tough times too. Applying a known technology to a different problem can result in game changing, radical, disruptive innovation…and when the game it changes is cost structure, the poor state of the economy is no longer a barrier to successful commercialization. In fact, it helps.

Today Obama will sign his economic stimulus package, the American Recovery & Reinvestment Act of 2009. That is great news.. our economy does really need help now! From the looks of the details at American Recovery & Reinvestment Act of 2009 it seems that US scientific, engineering and technical R&D communities fared well. Agencies such as NSF, NIH, NASA as well as energy research will be beneficiaries. K through-12 and higher education are also well supported.

All of this is extremely important for seeding innovation and therefore revitalization and transformation of the American Economy. Nevertheless the full benefit of this investment will not come about unless companies and government become more adept at breakthrough innovation which, as we have said often, requires much more than just investment in R&D.

In this regard one disappointing development is that no stimulus funding was approved for the Technology Innovation Program or the Manufacturing Extension Partnership Program at the National Institute of Standards & Technology (NIST). These are two programs that were invaluable to radical innovation projects described in our first book Radical Innovation: How mature companies can outsmart upstarts. Such programs help bridge the chasm between technology discovery and building technology related products and businesses. We need to work hard at getting these and other sorts of innovation-enabling programs funded in the future. Which reminds me that instead of a Chief Technology Officer which is a late twentieth century idea, what Obama really needs to help him achieve the goal of economic rejuvenation is a Chief Innovation Officer.

I am feeling really, really guilty. I just bought a new truck. And it is not a small one – it is a Ford 150. There are bigger ones… the 250 or the 350. Without a running board I have to have someone push me up into the seat. I fell in love with this truck when we had to rent one in December as our other care was in the shop for repairs.

Right now I am rationalizing this purchase along four lines of reasoning:
1) It has four wheel drive and there is a lot of snow outside.
2) I have a lot of animals and a very big garden so I need a truck to carry all my stuff… that is not a great sign either…
3) I am extremely affected by the glare of car headlights and I have to teach at night. Sitting high up in a truck helps – that’s really why I started to love the truck we rented in December.
4) Our other car is extremely environmentally friendly, so net net, perhaps we’re not a major cost to our surroundings.

You ask… ‘What does all this have to do with innovation?’ Well it started me thinking about what was wrong with my decision and us in general with regards to transportation innovation. I was reminded of a case I taught on the hydrogen economy in our class on Business Implications of Emerging Technologies. I chided the students for only thinking about it in terms of automobiles. I challenged them to totally rethink the way we transport ourselves around on a daily basis. Then I started to think about the auto industry bailout and wonder if that might provide a stimulus for rethinking the design of farm vehicles, trucks and the lot, or how we go about solving the problems that such vehicles now solve. There is a lot of talk about electric cars and hybrid vehicles and that is good…they are much more fuel efficient and friendly toward the environment – but they are not really radical in terms of how we transport ourselves on a daily basis. Then I thought of the stimulus package the The American Recovery and Reinvestment Act of 2009and its support for highways and parking garages – once again supporting our entrenched ways of transportation.

So why can’t we embark on a more radical approach? One thought is we don’t have the innovation capacity to do so given our sunk costs in highways, gas stations, car dealerships and culture around the importance of large homes on large pieces of property.This suggests we have to reshape our innovation capacity – change some of the linkages and types of institutions that are key players in the energy and transportation sector. We have to refocus our priorities and values and how we think about transporting ourselves. All of this is an arduous, political and very futuristic, long time endeavor. But it does strike me that if some of the stimulus money was spent on novel types of infrastructure we might begin the process of exploring new ways of thinking about transportation. Yes, the administration wants shovel ready projects, but couldn’t there be a requirement that a certain percentage of these would have to identify how innovation was being taken into account and paving the way to potential new futures? This gets me to my fifth rationalization point. In order deal with the realities of globalization and the rise of China and India and the environmental impact they are and will continue to have, we have to begin to think systemically about innovation. We not only need to lead the way with new technology but also with new ways of deploying it.