Innovate or be Irrelevant


Tim J. Smith, PhD
Founder and CEO, Wiglaf Pricing

Published April 15, 2015

I had the pleasure of attending The Economist Innovation Forum 2015 in Chicago.  When it comes to innovation, the speakers and hosts were highly entertaining and informative.  Yet, the outstanding questions kept multiplying.


Starting with Jim Shultz, Director of Illinois Department of Commerce and Economic Opportunity with the “Opening government keynote”, I wondered what he in particular would have to say.  Jim came from industry and is now in government.  While he spoke, my mind wondered widely:  What is the role of government in innovation?  Should government pick winners and losers when it comes to tax breaks and incentives?  Or should government just offer a level playing field so all innovators can play as equals, entrepreneurs and large corporations alike?

What if these innovations change the role of government, like Twitterized food trucks versus restaurants, or Uber and Zipcar versus taxis and rental cars.  Or even simpler: when will I be able to legally buy tamales made in someone’s home and sold out of an ice chest at my nearby corner like I can in most of the rest of the world?  Are we willing to give up regulations passed in the name of “protecting the public” and maintained in the interest of incumbent firms to allow innovation to flourish?  As an entrepreneur, I thought that Jim would want to reduce the regulatory barriers to entry, but now that he is in government will he prop them up in favor of large corporations to the demise of would-be entrepreneurs?

Continuing with Jordan Brandt, Caralynn Nowinski, Marcus Weldon, and Robert Wolcott in a discussion on “The outlook for disruption,”  I love the idea proclaimed that disruption is an assumption but that leads to more questions.  Does society really like disruptions or will they limit them in the name of maintaining social order?  Just look at the protests in France over Uber and you have to wonder.  If we accept disruption as an assumption, are we also ready to trust that dominant firms will be disrupted when they no longer are able to give us what we want?  Nokia, Kmart, and Kodak all stand as poster children for dominant corporations which became irrelevant in a matter of months.  Are we cool with that?  Should we be?  Do we trust that creative destruction process when it comes to Apple, Google, Facebook, and Microsoft?

And on the issue of “Can dinosaurs dance?” with Scott Painter, Richard Sandor, Vivienne Goldstein, and Sonny Garg, I wondered: is it important?  If they don’t “dance” in innovation, isn’t it sufficient that they buy innovative companies and accelerate their dissemination?  Corporate success with innovation is patchy at best and many financial analysts have conducted the regressions and concluded that most research and development budgets have a negative return on investment. Sure, some come out beautifully, but most fail.  And failure is not evenly spread either.  Agreed.  Some industries seem to require large corporations to innovate as they bring multiple disciplines to bear on a single technological challenge.  But not all.  Where is that line of demarcation?

And when Monsanto’s Michael Stern hit the stage on “Planting the seeds of disruption,” I wanted to know:  what can Monsanto teach the rest of us about launching useful but sensitive innovation without an ensuing public protests?  I got to ask him afterwards.  He said:  two lessons.  One, DON’T BE ARROGANT.  His second lesson was more specific to his industry in indicating that Monsanto should be aware that their customer isn’t just a farmer, that they are infiltrating people’s food supply.  Wow!  Such honesty.  Clearly Zuckerberg and Kalanick should wake up to these simple claims before they suffer from foot-in-mouth disease.

For Pin Ni, Mehmood Khan, Warren Harris, and Shane Wall on “Global innovation in local markets,” will multinationals win the local ground wars?  Context is key to meeting customer needs.  How will large corporations improve the contextualization to enable them to compete with locals?  Many entrepreneurs, even local entrepreneurs, do very well by adapting first world products to developing world context, but can the same be said of multinationals?  Is there a process for multinationals to localize or is it still in the exploratory stage?  And, if it is in the exploratory stage, should they build or buy?

Natasha Loder, Vijay Vaitheeswaran, and Matthew Bishop did a wonderful job orchestrating the conversation.  They pulled so much out of the speakers and The Economist had a great line up.  Yet there is far more to be explored on the subject of innovation, especially in a liberal context.  A lifetime ago, Joseph Schumpeter noted the value of creative destruction in improving the human condition.  Today, we are still unsure of how it works and whether we want it to.

Innovation is driven by questions.  Our questions abound. To quote Einsturzende Naubauten:  Was ist ist, Was nicht ist ist moglich.  (English:  What is, is. What is not, is possible.)

About The Author

Tim J. Smith, PhD, is the founder and CEO of Wiglaf Pricing, an Adjunct Professor of Marketing and Economics at DePaul University, and the author of Pricing Done Right (Wiley 2016) and Pricing Strategy (Cengage 2012). At Wiglaf Pricing, Tim leads client engagements. Smith’s popular business book, Pricing Done Right: The Pricing Framework Proven Successful by the World’s Most Profitable Companies, was noted by Dennis Stone, CEO of Overhead Door Corp, as "Essential reading… While many books cover the concepts of pricing, Pricing Done Right goes the additional step of applying the concepts in the real world." Tim’s textbook, Pricing Strategy: Setting Price Levels, Managing Price Discounts, & Establishing Price Structures, has been described by independent reviewers as “the most comprehensive pricing strategy book” on the market. As well as serving as the Academic Advisor to the Professional Pricing Society’s Certified Pricing Professional program, Tim is a member of the American Marketing Association and American Physical Society. He holds a BS in Physics and Chemistry from Southern Methodist University, a BA in Mathematics from Southern Methodist University, a PhD in Physical Chemistry from the University of Chicago, and an MBA with high honors in Strategy and Marketing from the University of Chicago GSB.