Indicators of Innovation: Leadership in Diversity
Directly following on from the previous blog discussing the problems of measuring the impact of innovation ecosystems, we are now diving a little deeper into each of the five key areas outlined in the paper published by the MIT and Skoltech Initiative, Creating university-based entrepreneurial ecosystems: evidence from emerging world leaders. We will cover in turn: leadership, learning and careers, university entrepreneurial and innovation (E&I) activity, grassroots E&I activity, and regional/national connectivity. To some extent the purpose of this series of blogs is to work towards defining a broader set of metrics that might be applicable to ecosystems beyond those tied to the university infrastructure. At the risk of repetition, although our work is more focused towards this other, more entrepreneurial- or private corporation-led area, it remains clear that ties to universities are important for innovation programmes. We might suppose that some connections with universities are necessary, without being in themselves sufficient for innovation. Here then, we will use these five key areas as a framework to explore different aspects of the ecosystem activity, and to track down some metrics.
The first of these areas is that of leadership and institutional governance, which the report breaks down into these more specific elements:
- Clear and well-articulated E&I strategy with senior-level endorsement.
- Clear performance metrics for E&I that include culture, connectivity, commercialisation and industry-funded outputs.
- A responsive approach to internal and external E&I opportunities.
- Provision of flexible, responsive and on-going funding streams to support E&I activities.
The leadership of such institutions is fundamental to the development and success of an innovation ecosystem. According to the report, such leadership often works in one of two ways: either it fosters grass-roots, community-led, innovation behaviour: a so-called bottom-up approach. Alternatively, the university leads the efforts in engagement with corporate partners towards commercialising university-owned innovation: a top-down method.
In some respects both these approaches in developing E&I activity indicate the boundary at which the university-founded ecosystems and the more external, SME ecosystems blend into one another. With the latter approach, the university provides facilities, contacts and, of course, the education and inspiration that leads to innovation. From their position, should the university take the final step and link researchers to industry, and thus commercialisation, this connection then affords the university claim to intellectual property (IP) rights to the innovation and subsequent rewards.
“…an entrepreneurial university is one that supports and integrates both these domains, with the performance of an effective and vibrant ecosystem being greater than the sum of these parts.”
Conversely, with the bottom-up approach the university struggles to capture IP as the final step of development of innovation is taken by those communities of people that have organised themselves. Both types of activity are important in the development of a strong ecosystem – as with all ecosystems diversity of activity is essential as this leads to novel connections. However, as the report makes clear, “… the division between university-owned IP and non-university IP casts a long shadow.” This problem is made worse when one of the key metrics of ecosystem success in this area is the exploitation of university-owned IP.
To some extent none of this helps us in our quest for understanding the metrics behind innovation ecosystems. On the one hand we realise that a key metric might be the level of IP generated, but on the other hand we know this is only part of the story: there are other outputs that are not IP led. Further, when we begin to look at ecosystems such as L39, which does not have an entrenched IP or funding model, tracing any developmental IP to the ecosystem becomes even harder.
We might suppose that leadership activity in a non-university ecosystem could be tracked through the efforts and activities of entrepreneurs – CEOs and ‘Heads of…’ – but developing a well-articulated strategy for E&I in an ecosystem that has been constructed purely for that purpose may seem a little strange. As suggested above, having a broad range of activities that include both bottom-up and top-down methods could be measurable. We might think about an ecosystem that balances activities that encourage both interoperability and community within the ecosystem, with those that bring in large corporate organisations and industry in order to increase commercial ties. The actual measurement of the success of these different activities would require complete acceptance, and understanding, of the strategy from all the people within the system, alongside the use of an app that can trace online interactions, such as WeWork Commons, developed by the co-working company WeWork. However, as one keen listener at the Future Property Tech conference mentioned the other day: ‘How do you trace the offline interactions – where does innovation happen?’
For me, the importance of leadership here is found in both the activity of what the individuals at the top of the ecosystem are doing, but also what these leaders, or authority figures, actively encourage. There should be a focus on diversity of activity, but also diversity of parts within the ecosystem. This second area might need further exploration – diversity of parts does mean variation in skills or expertise (older companies bring experience, whilst younger companies often bring innovation and energy) – but diversity should also include the one thing that University ecosystems have in abundance: students.
Diversity, as a metric of an innovation ecosystem, would require a compound set of indicators, such a set might include size of company, range of innovation, event activity, corporate visitors, and nationalities represented within the company. Most of these indicators could be captured in questionnaires or would already be contained in records held by those who manage the space. Importantly, this diversity should also be measured in the drive towards such diversity – the activity taken by leaders to incorporate different experiences and activities. Do they reach out to local education institutions, do they offer subsidised student places? One such option might be to offer a small space to driven individuals who could benefit greatly from being part of an innovation ecosystem. The organisation somewhereto_matches 16-25 year olds across the UK with underutilised spaces, enabling young people to work on their innovative ideas. Bringing such people into a working environment has as much to offer the wider ecosystem as it does the young people themselves. Another option might be to rent out some space using a third party space finder such as Hubble.
A delicate balance must be struck with such undertakings. Diversity for diversity’s sake can cause problems – you wouldn’t want every desk to be pushing a completely different project because this would reduce the possibilities for individuals to work together. That said, having a random fintech expert in a room full of smart cities energy suppliers or fashion designers, could prove highly fruitful. Alternatively, bringing bright and engaged students into a room of hardened business-focused individuals might be beneficial to everyone. By introducing different groups, levels of expertise and types of people you keep your ecosystem changing and change is key for the life of an ecosystem – it brings diversity and allows it to respond to external pressures. Bearing in mind points 3 and 4 listed earlier, we can see how breaking down the barriers to an ecosystem, and diversification of its parts though constant influx of new people, are all positive indicators.
Initially this blog was intended to cover leadership in innovator ecosystems – but an aspect of that leadership must be about encouraging the parts within such ecosystems. One of the interesting characteristics of ecosystems is that they are not so much ‘led’ but perhaps ‘curated’ by management and, sometimes, charismatic leaders. This comes about as a result of the balance between the parts having differing goals and the element of competition alongside the encouraged collaboration. Leadership, for the developing ecosystem, is about seeing the bigger picture and facilitating the growth and development by encouraging diversity of the parts. An ecosystem may be able to demonstrate diversity, but is that diversity actively encouraged? Is the value of and opportunity for novelty a driving force?
The next feature of effective ecosystems (according to the MIT report) is that of academic cultures and careers – for the ecosystem outside the university, we might see this as activities, events and communication by an ecosystem with its environment. The Insight Team will explore this in the next blog.