Denmark: Falling behind the top-5 innovation leaders
The most recent European Innovation Scoreboard (EIS, 2009), ranks Denmark among the top-five innovation leaders, an impressive number that hides a rather grim reality. Denmark and two other of the countries in the top-five, Sweden and the United Kingdom, have not experienced annual growth in innovation performance and thus are the slow growers among the innovation leaders. In Denmark’s case, one of the reasons for this is that Danish companies are not entering into external collaborations, according to Jeffrey Saunders, Futurist at the Copenhagen Institute for Future Studies, in a presentation to the Danes Abroad Business Group Online forum. The EIS shows an 8% decline over the last five years in the collaboration among innovative SMEs in Denmark.
This is the ninth edition of the European Innovation Scoreboard (EIS), which provides a comparative assessment of the innovation performance of EU27 Member States, under the EU Lisbon Strategy.
External collaboration triples success
8% decline in the collaboration among Danish innovative SMEs
Addressing all the facets and dimensions of external collaboration is beyond the scope of this article, which aims mainly to highlight the role of external consultants in innovation projects and to propose practical ways to bring experts on board without resorting to the use of consultants.
Research by the Danish Agency for Science, Technology and Innovation (www.fist.dk) reveals the important fact that when companies collaborate, the likelihood of successful innovation doubles compared to projects conducted without collaboration. When several parties are involved in the collaboration, e.g. customers, suppliers, consultants, the likelihood of success triples. So, why do only 20% of the 9,518 companies studied by Monday Morning attribute value to the role of external consultants as the source of ideas for innovation? These numbers stand in contrast to management consultancies’ self-perceptions of their mastery of innovation.
Bringing order to complexity
Only 20% of Danish companies attribute value to external consultants as source of ideas and innovation
If, in spite of these findings, consultants are not perceived as contributing value to companies’ innovation processes, then perhaps their role should be clarified or even redefined. If Danish innovative SMEs are not among the top-performers in Europe in terms of external collaboration, then would a redefined role for external consultants help to overcome this problem: should their role be to bring external experts and explicit expertise to the company rather than introducing companies to potential collaborators and theorem?
Thomas Friedman in his seminal book The World is Flat, changed the way that many executives and the media spoke about doing business in a globalized world, how the ability to bring order to the global complexity is essential for business success and global competitiveness. Pankaj Ghemawat later rebutted Friedman’s views in his Redefining Global Strategy, but the complexity still remains.
”Dealing with complexity is an inefficient and unnecessary waste of time, attention and mental energy. There is never any justification for things being complex when they could be simple”, Edward de Bono
External consultants should have the ability to see, understand, and communicate complexity in simple terms, an attribute that is immensely valuable for the innovation management process, e.g. at the outset to set the innovation horizon. An example of a company with this ability is Firstmove, which was featured in a previous article on InnovationManagement. This company excels at identifying and interpreting firstmovers’ latent behaviours, and communicating these as future trends and market needs.
Tailoring global talents to the local
Outside consultants are not on their own the key to tripling project success. Collaboration must be diversified and must transcend the stakeholders involved, i.e. customers, suppliers, experts, etc.. Expert advice often comes with a hefty price tag and the amount and composition may need to be tailored, especially if concentrated in one or few persons. Throughout the innovation management process, questions arise and problems require resolution, and often are multidimensional, not necessarily adhering to the formal boundaries defined by professions.
The platform MillionBrains (www.millionbrains.com) is a new breed of social media platforms, aimed at solving business related problems. It is based on a hybrid theory of ‘swarming’ intelligence (Gloor, 2006) and open innovation (Chesbrough, 2006). MillionBrains brings together experts from many fields, who have registered voluntarily to provide expertise and expert comment on problems loaded onto the platform by companies, in the spirit of open innovation. 20% of the current group of experts is from China, the rest being split across the rest of the world. These volunteer experts are motivated primarily by fame and exposure to peers since the monetary rewards are modest. For companies, the rewards from opening up are access to a pool of global talent, speedier innovation and monetary benefit since they pay only for the ‘right’ idea.
MillionBrains is not the only platform offering this type of service (e.g. InnoCentive), and as more companies recognize its value and begin to incorporate these ‘talent pools’ into their innovation management processes, it is hoped that the slow growers among the innovation leaders will increase their performance. This potentially could reverse the downward slope of Denmark’s innovation performance growth.
What is your opinion? If business is global but e.g. taxation is local, does it make sense to measure and compare countries on the basis of the innovation taking place within the country’s borders?
By Frode Lundsten, MBA, Editor for Denmark
References
- European Commission Enterprise and Industry 2010, Pro Inno Europe Paper 15 “European Innovation Scoreboard (EIS) 2009”, European Commission, Brussels
- Friedman, T.L. 2007, The World is Flat: The Globalized World in the Twenty-first Century, 2rev edition, Penguin, New York
- Ghemawat, P. 2007, Redefining Global Strategy: Crossing Borders in a World Where Difference Still Matter, Harvard Business School Publishing Corporation, Boston
- Gloor, P.A. 2006, Swarm Creativity: Competitive Advantage through Collaborative Innovation Networks, Oxford University Press, New York
- Chesbrough, H. 2006, Open Business Models: How to Strive in the New Innovation Landscape, Harvard Business School Publishing Corporation, Boston
About Frode LundstenFrode has more than 20 years of experience in helping companies to sustain or revitalize their growth. He has worked both in national and international contexts of business development and change management, where strategy implementation and applied innovation management has been the focus. Frode also has experience from publishing and media industry, both as a publisher and a columnist. Frode holds a MBA degree from Henley Management College, UK, where his dissertation focused on the adoption of open innovation in Danish companies. Frode is also founder and partner of Strategy2Tactics.dk.
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