Everyone talks about Innovation, but we want to talk about IMPACT
From Innovation to Impact: The Translation Challenge.
Over the last twenty years, politicians, academics and business leaders have all enthusiastically embraced and promoted innovation as the key to economic success. This belief has been reflected in many policies, publications, and programmes extolling the importance of innovation, research, and entrepreneurship as the keys to enabling growth at national, regional and global levels.
Curiously there has been little practical or theoretical insight resulting from all this spent energy. Until the emergence of The Triple Chasm Model, there has been a gap in describing the processes by which innovations can be harnessed to deliver commercial impact. Instead, most interventions have relied on a binary approach:
increasing investment in publicly funded research + encouraging commercial take-up by the private sector = success (fingers crossed!)
This binary view means that the process of diffusion-driven growth(1) is not well-understood and results in a poor understanding of risks, timescales and resources required. As a result, most innovation interventions, largely funded by the public sector, have tended to focus on the early stages of the translation journey – the start-up phase. Even a cursory review of published papers and books focused on entrepreneurship & venture creation reveals a limited understanding of how innovation can create and deliver impact at the scale-up phase.
All the available data points to a poor conversion rate for turning innovations into impact. Instead of trying to understand the reasons for this, the problem is usually explained away by simplistic metaphors such as the ‘valley of death’, or ‘the funding gap’, explanations reminiscent of the ‘invisible hand’ theory of macro-economics(2) from the 18th century.
Schumpeter(3) pointed out the importance of understanding the meso-economic drivers (which operate in the layer between the macro and micro economic layers), over 70 years ago, when trying to understand how value is created and translated into commercial, social and environmental impact (now simplified as the 3P’s of Profits, People and Planet).
This serious gap in our understanding has not gone un-noticed: Jacobs and Mazzucato highlight this challenge in their introduction to a series of essays published in 2016 as ‘Re-thinking Capitalism’ (4) which is worth repeating here (with our emphasis in bold)
‘Three key insights underpin a rethinking of capitalism…First, we need a richer characterisation of markets and the businesses within them…The second key insight is that investments in technological and organisational innovation … are the driving force behind economic growth and development… but this requires a much more dynamic and accurate understanding of how innovation occurs than is provided by orthodox economic theories of imperfect competition…Recognition of the role of the public sector in the innovation process informs the third key insight…. the creation of economic value is a collective process’
Closing this fundamental gap in our collective understanding of impact and exploring the possibility of creating new frameworks and tooling that could dramatically increase the chance of success was the inspiration behind the creation of The Triple Chasm Model.
Over the last decade we have been trying to address this challenge based on a global data-driven approach to understanding the translation process, based on our work with more than 3,000 global scale-ups. Our research and analysis have resulted in the creation of the Triple Chasm Model which consists of three key building blocks(5)
We define the maturity of any proposition along the translation process explicitly, relative to the three Chasms and modified Technology Readiness Levels
We define the impact of the 12 meso-economic vectors or drivers which shape progress along the translation process.
We map the maturity vs the meso-economic vectors to create a commercialisation journey map which can be used to assess the progress of any innovation towards impact.
This approach enables us to explore potential commercial strategies in a way not possible using other approaches, but a lot more remains to be done - join the debate in The Commercialisation Community.
Everett Rogers was the first person to explain how growth depends on the diffusion of innovation in the 1960’s; his work also underpins the ‘S’ curve, popular in entrepreneurship courses
Adam Smith talked about ‘the invisible hand of market forces’ in 1779, a concept that still appears to shape the thinking of some economists!
Schumpeter, J.A. (1947, reprinted in 2008), Capitalism, Socialism and Democracy.
Jacobs, M. & Mazzucato, M. (Eds), (2016), Rethinking Capitalism, Wiley-Blackwell, UK.
Phadke, U.P & Vyakarnam, S. (2017), Camels, Tigers & Unicorns, WSP, UK.