It must be said: At times, innovating can be quite frustrating. From adjusting prototypes to getting lost in the process and not having enough revenue streams to proceed, somewhere along the way you will likely be forced to face your mistakes and learn from them. You may even be forced to alter your business plan or come up with something entirely new, all the while weathering a bumpy road and trying to leap hurdles like an Olympic runner. So what are these hurdles you might come across on your way? Back in the Netherlands, I participated in a study that narrowed down 6 generic barriers you’re likely to encounter during the innovation processes.
- Risk avoidance (both in culture and procedures)
- Rigid legislation and regulations
- Scattered competences and fragmented project based knowledge
- Short term focus on return on investment/financing schemes
- No pilot location to test
- Lack of Urgency
The study was executed for the Dutch Water and Construction Sector, but it is interesting to see if these barriers apply to Barcelona’s ecosystem as well. Perhaps this post will encourage you to start the discussion of which barriers you might run into yourself, and think how you can overcome them. Please share your thoughts with us; let’s learn together as a community.
One of the factors that determines the success of innovation is the degree to which people and organisations are prepared to take risks. This is because the precise results of innovation are difficult to predict, and people do not want to be held responsible for plans that do not turn out as expected. All in all, innovation means taking risks and being willing to accept those risks, however this willingness is often lacking.
In government, for example, people are frightened of making mistakes that may have political or managerial implications. In the corporate sector, people and organisations avoid risks if they have the idea that investments won’t pay for themselves. Research institutions are reluctant to make inherently uncertain predictions about the impact of innovations. They also tend to keep their knowledge to themselves when there are no guarantees that it will be used in the right way.
In short, all parties can benefit from contracts (possibly of an innovative type) that make it clear how risks are distributed. It is important here to make sure that all the risks are not hived off onto a single party and that the description of the assignment is not set in stone, eliminating any room for changes or improvements based on new insights.
Rigid Legislation and regulations
Legislation is always set for previous problems situations, but new problems usually don’t fit in the 1995 legislation. We can therefore conclude that innovation often conflicts with legislation and regulations, and vice-versa. Laws, rules and procurement procedures are drawn up with particular target situations in mind based on actual practice. But over the course of time, things can change as a result of pressure from social change, new threats or technological advances. The need for innovation can collide with the existing policy framework.
The strict application of laws, regulations and procedures holds parties in an iron grip, frustrating innovators. Special attention should be given to the determination of intellectual property. Fortunately, more flexible ways as Creative Commons are being more and more used.
Scattered competences and fragmented knowledge
Knowledge and competence become more and more fragmented due to project based work. In many cases, the process is delayed through a lack of information/feedback data and inadequate communications between the stakeholders involved. So the difficulty in exploiting knowledge and competences is primarily one of organising the boundary conditions for new solutions, new combinations of knowledge, experience and people. Stakeholders must be able to learn from past experiences so that they can use these lessons on new projects. To cope with this barrier implementation, an integrated approach is important because innovations often emerge where different areas of knowledge meet.
Short term focus on finance schemes
As with all investments, the costs of innovation precede the returns. Costs and returns might be difficult to estimate when dealing with a long term horizon, making it hard to explain to investors what the ROI could be. Another hurdle when dealing with public-private projects: the allocation of costs or returns to the participants aren’t straightforward upfront because they cannot always be stated in financial terms.
The tension between managing transaction and tender costs and the prevention of market concentration (in other words, too many multi-year large contracts with one market party or a limited number of market parties) is an ongoing source of concern for governments and the corporate sector when it comes to the economically sound structuring of innovation. Frequently, the government fails to pay enough attention to the importance of finance schemes in innovation projects. The corporate sector suffers from this because innovation demands much larger investments from business than standard projects, while future market demand (which is also largely determined by government) remains uncertain.
Pilot location to test technology
Pilot location is needed – physical, managerial, procedural and financial – as well as time so that people can experiment with new solutions and applications. To encourage innovation, a sheltered environment is needed. In a pilot location innovations can be carried out without pressure to deliver positive results immediately or without the intended innovations having to support existing, formal strategy targets and management responsibilities. The pilot location establishes an environment where regulations or damage to reputation will not play any role in the case of failure. It opens up opportunities to learn from experiences, to share experience with others and also to make it possible to temper expectations.
Lack of urgency
Innovation must be based on the feeling that something is necessary, in short, there has to be a sense of urgency. To develop a sense of urgency in the sector, there must be a feeling that without your new product/resource/company/etc., something will go wrong. However, the need for innovation to prevent problems in the longer term is often not clear-cut. Although a sense of urgency is lacking, the innovation may well be justified. Urgency can be developed actively by deploying pressure and drivers. Pressure results from the threat of emergencies or calamities. By identifying the implications for society of specific long-term developments, it is possible to create drivers and then transform them into more demanding objectives and standards.