Innovation secures the future in a world of change

By Rosabeth Moss Kanter, Ernest L. Arbuckle Professor of Business Administration, Harvard Business School 

Sometimes the best way to save a job is to change it.

New ideas that open business opportunities have always been the foundation of American resilience and strength in global competition – the smartest, not the lowest-cost producer. That’s why innovation is currently top of mind for business strategy, government policy, and even pop culture (the wild ideas on “American Inventor”).

Innovation secures the future in a world of change. Wherever brainpower is nurtured through investments in education and scientific research, new industries arrive as old ones disappear. In the higher-education-intensive Northeast, textile and shoe manufacturing were replaced by computer manufacturing, then software replaced hardware, and today life sciences herald a new innovation wave. The central driver of the U.S. economy has already shifted from blue collar (manufacturing) to white collar (services), and now it is moving from white collar to “white coat,” based on discovery and invention in health and information technology. More than ever, we depend on brainpower to create well-paid jobs of the future.

Innovation thrives on traditional American values of openness and learning. Corporate leaders demonstrate commitment to innovation by encouraging creativity, listening to employee ideas, and creating safe spaces to try something new – such as the new ventures group within Chicago’s USG, which is developing new materials and new customer partnerships. Not every idea has to be a blockbuster or focused on products. Companies can innovate in marketing, production, finance or distribution. Affinity credit cards allowing donations to charity were pioneered in Chicago.
Open minds produce innovations. Sometimes a new business opportunity is right there, but people fail to see it. A decade ago, Gillette had a toothbrush unit (Oral B), an appliance unit (Braun), and a battery unit (Duracell), but lagged in introducing a battery-powered toothbrush. Success required a new CEO who encouraged conversation and collaboration across divisions.

Conversations outside the company are equally important. Giants such as IBM and Procter & Gamble now rely on business partners as a critical source of innovation; they talk openly about their business needs and emerging technologies. Joining business networks focused on innovation can help companies join forces.

The best thing a region can do to create jobs is to invest in fertile environments in which ideas can grow and people can gain the skills to imagine and develop them, with access to capital and affordable space. Colleges and universities can spawn advanced ideas and help businesses commercialize them, while K-12 schools should teach the rigor of math and science while nurturing imagination in young people. Unexpected wins can result when everyone rallies behind innovation. A group of public high school chemistry students in New Hampshire are developing a solar-powered biodiesel processor to produce clean-burning biodiesel fuel from discarded vegetable oil from local restaurants. That’s good for the environment, good for a high-tech future, and even good for restaurants.

Rosabeth Moss Kanter, a Harvard Business School professor, is the author of America the Principled: 6 Opportunities for Becoming a Can-Do Nation Once Again, published by Crown, and Confidence: How Winning Streaks & Losing Streaks Begin & End.