Change and innovation

". . . Because our leadership elite are addicted to the powers and privileges associated to that past it is perpetuated," writes Mario Antonio G. Lopez, Changes, Business World, 1st Oct 2012. "Many would keep the pie small because they have control of it rather than make it grow and lose their power even when it promises greater personal and national benefits." His bottom line: we are "mired in the past."

And it explains our resistance to change and by extension our inability to innovate. And in one universal measure, i.e., patents, we lag and, unsurprisingly, in competitiveness too. What about our neighbors? Consider the latest rankings from IFI Claims Patents Services: IBM and Microsoft are in the top 10; Asian firms account for 25 of the top 50 U.S. patent-grant recipients for 2011, while US firms captured 17 slots; IBM wins the most patents for the 19th straight year with 6,180 patents. [Network World, 11th Jan 2012.]

There is an argument that patents can impede innovation. And it came up again in the Samsung and Apple patent conflict. Fortunately or unfortunately, for the Philippines, we’re not there yet. We must first walk before we run. We must first develop an innovation bias before we consider that patents impede innovation. And we can’t develop the bias if we are mired in the past – and find solace in the status quo. Our longstanding challenge is underdevelopment which demands change and innovation, unfortunately not second nature to us. And they are not going to come so long as our way of life preserves “the power and the privileges of the leadership elite.”

Change and innovation are inherent in developed economies because they reward progress which in turn spurs competition. It is what an egalitarian society ought to be. In a hierarchical society like ours, dominance by the powerful is what is rewarded. And thus when Eastern Europe broke away from the dominance and power of Soviet rule, the West wanted to rapidly share with them the elements of free market – and how to pursue them. They had to recognize that the free market does not mean gratis. They would have access to what the West had to offer but they also had to build their own economic base. As I write this blog, I am in the heart of Eastern Europe where for the last 10 years I have become part of that effort. While they are creative people, they still had to learn the thought process of creative thinking – and to this day the learning and the relearning continues and is a big part of their planning process.

My Bulgarian friends have no patents to their credit – yet – but that is not the object. They are about developing and sustaining an innovation culture and thus are constantly pursuing innovative product ideas (across four different but related businesses) that they then market in over 20 countries and counting. And not surprisingly, in 2011, the European Business Awards recognized them for being one of the best and fastest growing companies in the EU. [Theoretically big companies can bully smaller ones but the reality is smaller enterprises are faster on their feet. In fairness, IBM shares with clients their patents for the latter to build on and for their own benefit, i.e., patents don’t have to shut out innovation.]

And that innovation culture should win my Bulgarian friends their share of patents in future. They also draw inspiration in the thought that P&G, their model marketer, “currently owns over 35,000 active patents.” [http://us.experiencepg.com/home/phd_first_conference.html] And fairly recently they hired a scientist from a local university to head R&D of their latest business unit. They remember the story I shared with them that it was a small group of scientists from a renowned US university – working with our pharmaceutical subsidiary – that helped develop a breakthrough technology that earned my MNC employer a US patent and contributed to achieving 45% share of the global market for the brand. On the other hand, “Pfizer’s revenues fell 7 per cent from a year ago . . . as sales of Lipitor fell 71 per cent . . . during the quarter; the impact of the end to the Lipitor patent.” [http://www.ft.com/intl/cms/s/0/9820326a-9398-11e1-8ca8-00144feab49a.html#axzz287ixsDfC]

The bottom line: we can’t be mired in the past and the status quo if we are to pursue change and innovation – and thus accelerate economic development and appreciably reduce poverty.