Conquering Innovation Fatigue: Helping Inventors, Entrepreneurs and Leaders Find Innovation Success

The Tragedy of Chopsticks: Getting Things Straight in China

Jeff Lindsay — Wed, 18 Apr 2012 02:25:57 +0000

As we’ve discussed previously on this blog, the West often gets things completely backwards when it comes to China, and the misunderstandings can be serious barriers to Asian innovators seeking global markets. The “Tragedy of Chopsticks” helps illustrate this.

A few years ago while in the US, I became concerned about chopsticks in China. The anti-chopstick publicity from Greenpeace and other groups was pretty convincing. What a shame to read about the vast tracts of precious forest land in China that were being mowed down to fuel China’s reckless, wasteful use of disposable chopsticks. What an environmental disaster! The New York Time‘s famous Green Blog recently reminded us all that “Disposable Chopsticks Strip Asian Forests.”

The article begins with a photo of a Greenpeace demonstration in Beijing where activists are building trees made from chopsticks to highlight how chopsticks wipe out trees. The coverage of China’s deforestation from its horrific chopstick use made me worry about the nation, for I had long known that China hardly had any forests left. Thirty or so years ago, the amount of forested land in China was around 9%. Some say it might have been a little higher, perhaps 10 or 11%, but it wasn’t much. As a young professor at the Institute of Paper Chemistry early in my career, I learned that China had to import most of its wood since there was so little forest land. But since that time, the paper industry and the chopsticks industry in China has boomed. So if we had 9% forest 30 or so years ago, how much, if any, do you think is left today? After all those people using disposable chopsticks for all these years, is there anything left of China’s forests?

That was a question in my mind before coming over here, where one of my first agenda items was to better understand some of the environmental allegations made against China and against the forest products industry here. What I found really shocked me. Take forest, for example. What’s left of China’s forest? What percent of China’s land is covered with forests? The World Bank and other credible sources now put the estimate around 21% – roughly double what China had a few decades ago. In fact, China is on course to achieve it’s goal of 27% forest land, and has what appears to be the world’s highest rate of afforestation, the opposite of deforestation. To provide the raw materials needed for forest products such as paper and, yes, chopsticks, China is ADDING forests, not mowing them down, creating sustainable high-yield plantations that can be planted and harvested repeatedly just like farmers plant and harvest their farmland, while carefully protecting virgin forests. Yes, plantations aren’t the same as wild virgin forests in terms of species diversity and beauty, but they are forests, and it is a good solution to the challenges of development. Yes, there was tragic forest lost in the past and irresponsible actions, but now China has strict policies and enforces strict regulations. Plantations must be approved before they can be created, and further official approvals are needed before trees can be harvested and then before they can be transported. As for chopsticks themselves, most of these come from bamboo, which grows rapidly and is easily planted, just like a food crop. In fact, bamboo is a food crop, with bamboo shoots being one of the most important components of Chinese cuisine. Will Western NGOs next tell us that we have to stop eating bamboo shoots? And then will we need to stop eating rice to save the rice fields?

So while the West is bemoaning the stripping of Asian forests from Chinese chopsticks and paper, the real story in China is a doubling of China’s forest with the help of the forest products industries and aggressive State policies. Why is this story so completely untold in the West? Why is it not part of the debate when Congress is deciding they need to punish the Chinese paper industry with punitive tariffs, when actually, the Chinese paper industry (at least based on my knowledge of APP) has environmental standards and achievements that are typically better than those that are standard for Europe and North America. But recognizing the remarkable environmental achievements of that industry, including its contribution to rapid afforestation through sustainable plantations, does not fit the agenda of some the West.

China has had its environmental problems and still has a lot of progress to make in terms of pollution, but it’s an issue that is taken seriously and remarkable progress is being made. In the forest products industry, the worse polluters are being shut down, hundreds of inefficient, highly pollution paper mills every year are being shut down as standards are progressively tightened. Come see for yourself and visit some of the beautiful, clean paper mills I’ve seen here in China. And before you try telling the people of China how or what to eat because of your enlightened knowledge of all things environmental (if, perhaps, you are as wrong as I was about the realities of China before coming here), you might want to get your chopstick facts straight. Chopsticks and forests are one of many issues where the West grossly misunderstands China.

Eaten Alive By Regulation: Innovation Fatigue and Fish Therapy

Jeff Lindsay — Sun, 04 Mar 2012 00:30:13 +0000

“This is something that is dangerous and clearly unsanitary,” warned New York senator Jeffrey Klein in October 2009. “Once we shed light on this dirty little process, more people will avoid it and we can ban it.” The terrifying menace that so worried the good state senator and led him to introduce legislation to ban it is a natural therapy that has been used successfully for 400 years to treat the skin of feet. 400 years of successful, healthy treatments in the form of fish pedicures. In the US, though, the process is very foreign and has a certain squirm factor to it. Small fish that nibble at dead skin are a relatively common treatment offered in several parts of Asia, but in the West, worried officials have been applying or creating various regulations to fight against the invasion of new options for beauty care, one of many highly regulated business areas where innovation fatigue often comes from the burdensome and sometimes unpredictable applications of regulation.

In the US, approximately 15 states have banned fish pedicures. Some regulators say that they require tools used for pedicures to be completely sterilized after each treatment, which would mean, of course, frying the little critters after they’ve nibbled on your feet. An expensive proposition for business owners. Several people wishing to bring this new service to their community invested heavily in the systems needed for safe, clean tanks and fish, only to have new regulations added that would single out their business and ban it.

Can’t people make their own decisions about where they stick their feet, or how they deal with their bunions? If someone wants to use a natural method that has 400 years of successful history, do we really have to tell them that they aren’t allowed to for their own good? Sure, there are risks, perhaps similar to the risk of putting one’s feet into the water at a beach or swimming pool. But regulators protecting the public from themselves with unnecessary layers of regulation and bureaucracy represent one of the most difficult and painful forms of innovation fatigue. Someday we need to allow business and innovation to flourish and just get out of the way.

Yes, I recently tried fish therapy and found it to be remarkably refreshing and effective. The fish–I think these were Chinese chin chin fish, though Middle Eastern doctor fish are most commonly used–just nibble at dead skin and leave the healthy live skin alone, so they don’t cause bleeding or irritation. It’s hard to see how this could be any more dangerous or terrifying that placing one’s foot in a lake, a stream, or swimming pool, with the exception that there are 100% organic fish like to tickle your feet. I hope to try this again.

Patents: Sucking the Lifeblood from the Economy??

Jeff Lindsay — Thu, 23 Feb 2012 01:35:18 +0000

There’s an anti-patent sentiment in some parts of the public that argues that they are destroying the economy rather than helping. There is particular resentment against non-practicing entities (NPEs), often called trolls, for owning (and typically acquiring large numbers of) patents for products and processes that they don’t actually use themselves. That sentiment, naturally, is most likely to be held by large companies who want to make a lot of money by making and selling whatever they want without some little guy’s patent getting in the way. Trolls with their patents are, we are told, sucking the lifeblood out of the economy. They are especially deadly in the areas of greatest innovation such as software. The related field of business methods is one where the whole concept of patenting is viewed by some as especially dangerous and destructive.

A healthy perspective is now offered by Jeff Wild in his post for IAM Magazine’s blog, “If trolls are destroying US jobs, why is the apps sector booming?” Here is an excerpt:

Last week a shocking report was produced by an organisation called TechNet. Based in the US, it describes itself as “the preeminent bipartisan political network of CEOs and senior executives that promotes the growth of technology-led innovation”. Where the Jobs Are: The App Economy claims that more than 450,000 app-related jobs have been created in the US during the last five years and that the app economy could now be generating annual revenues of up to $20 billion. What’s more, there seems to be no sign of a let-up in the good news. “In the year ending December 2011, the average number of tech want ads containing the word ‘app’ was still 45% higher than the previous year. That’s rapid expansion by anyone’s standards,” the report states.

As I say, it’s shocking stuff. For those of us who remember the multiple news stories and blog pieces during 2011 that focused on NPEs such as Lodsys taking action against app developers in the US, the idea that the sector is actually booming and creating jobs at breakneck speed is hard to comprehend. Weren’t the “trolls” supposed to be destroying a nascent industry and driving jobs and dollars away from the US? How can it possibly be that the reverse seems to be happening? Indeed, how can a serious report on the American app sector not mention NPEs or trolls at all?

Surely, it must be an amazing oversight. Or perhaps not. Maybe all the outrage and doom-mongering last year was overhyped hysteria. Maybe the reality is that NPEs, or “trolls”, or whatever you want to call them, are really not a decisive issue in the app economy at all. And maybe that applies to NPEs and trolls generally: in the great scheme of things, they are not a big deal.

In a piece published by Forbes last week, Ken Lustig, head of strategic acquisitions at Intellectual Ventures, points out that the number of patent suits initiated in the US has remained relatively flat for the last 10 years and that only around 100 actually go to trial. What’s more, there is much less patent litigation now than there was in the 19th century, supposedly a golden age of American innovation. Indeed, says Lustig, revered names such as Thomas Edison used the NPE model to diffuse their inventions and grow rich. What is being reported today in such dramatic and negative terms is what has always happened in the US when new technologies appear:

Every major technological and industrial breakthrough in U.S. history—from the Industrial Revolution to the birth of the automobile and aircraft industries and on up to today’s Internet and mobile communications revolutions—has been accompanied by exactly the same surge in patenting, patent trading, and patent litigation that we see today in the smartphone business. This is how the rights to new breakthrough technologies have always been distributed to those best positioned to commercialize them—to the benefit of the whole nation in terms of new jobs, new medical advances, and new products and services.

He also summarizes the important research compiled by Michael Risch of the Villanova University School of Law. The bottom line is that both sides in the debate about NPEs have made mountains of molehills, though the defenders of NPEs do have a valid point in one particular area: “the evidence does support one defense of NPEs: they provide a better way for individual inventors to enforce their patents than bringing lawsuits themselves.”

NPEs don’t just include patent aggregators like Intellectual Ventures or Acacia. Universities and numerous lone inventors are often not (yet) in the business of producing and marketing goods but have significant inventions to market. Based on the research about the impact of NPEs and their patents, there is no need for alarm and no need to revise patent laws to stamp them out. Doing so could stamp out the fires of innovation that have brought us out of the stone age into the booming knowledge economy. IP needs to be protected and nurtured, not vilified and weakened. And certainly not discouraged with much higher fees at the USPTO, which the current Administration is proposing. Taxing innovation and other steps that discourage inventors by making it harder to protect their inventions are far more likely to suck the lifeblood from the economy than the existence of NPEs. More innovation fatigue is not what this economy needs.

The Quest for Profit: The Mother of Invention, or Its Kidnapper?

Jeff Lindsay — Mon, 06 Feb 2012 23:11:27 +0000

As we discuss in Conquering Innovation Fatigue, the profit motive can be important for inventors but is often not the real incentive behind the quest to invent. Steps that eliminate the opportunity to profit from invention, though, can be serious barriers to a nation’s innovation potential. The profit motive can be important for prospective innovators. However, a focus on profits can be utterly destructive to innovation within a corporation, where the incentives to those who lead other would-be innovators can create new barriers that kill the innovation future of the company. Ironically, what can be a helpful incentive for innovation to an individual can easily become a disincentive once distorted by the internal workings of a corporation. This is illustrated in recent analysis from Clayton Christensen. See an overview in the article “Clayton Christensen: How Pursuit of Profits Kills Innovation and the U.S. Economy” at Forbes.com. Christensen argues that ratio-based metrics for profitability distort corporate thinking and reward behavior that ultimately destroys the future of the corporation by creating short-term benefits in apparent profitability. We illustrate a related problem in the book with the Apple Tree Analogy, in which metrics for short-term profitability for an apple harvester get a dramatic boost when the apple trees are toppled, making it much faster to harvest the fruit. The future, though, becomes barren.

Corporations need to carefully consider the metrics they use for profitability, as Christensen teaches, and unlearn some of the sacred concepts they were given in business schools. They should also go one step further an consider the impact of their metrics on not just the long-term growth of the company as a whole, but also the individual innovator and the innovation culture within the company. Listening to the voice of the innovator inside the corporation should be an important exercise for its top leaders.

Innovation Through Crowdsourcing: Congratulations to “All Your Shreds Are Belong to U.S.”

Jeff Lindsay — Thu, 19 Jan 2012 01:37:59 +0000

Contests can be one of the most interesting innovation tools. With the right challenge and incentives, creative groups from across the world can help invent and innovate rapidly. The creativity of crowds fueled by a content was just demonstrated in the Shredder Challenge contest that was launched October 2011 by the U.S. government’s DARPA (the Defense Advanced Research Projects Agency). DARPA wanted to know what could be achieved with computer tools in reassembling shredded documents to recover the originals. Since many different approaches were possible, this was an excellent candidate for crowdsourcing. Rather than hire a huge team for a short while to pursue many different paths, or use a small team pursuing many paths over a long period of time, just throw this one out to the crowds for healthy competition. The objective in this competition was to create a system for reconstructing shredded documents. The system would have to demonstrate success by reassembling the shreds from five documents whose shredded remains were posted on a website. As reported at Gizmag, the “All Your Shreds Are Belong to U.S.” team won the $50,000 prize for this contest by assembling all five documents two days before the Dec. 4 deadline. Given the hours that the winning team put into this competition, $50,000 was a very good deal for DARPA (and the American taxpayers) and not such a good deal for the winning team. If you consider all the thousands of additional hours put in by many other teams working on the competition, DARPA got quite a lot for a small investment.

Companies can and do this kind of thing as well, with varying degrees of success. Capturing the imagination of people with the skills needed for the problem is the key. Prizes help, along with fame and bragging rights. Intellectual property issues can get in the way for some companies. I’ll point to Local Motors as one of the leading examples of for-profit crowdsourcing. Their business model is sophisticated and highly refined, something I’ve written about here previously.

As for the hilarious title of the winning group, you might enjoy reviewing the history of the classic phrase, “All your base are belong to us.”

Chinese Auto Innovation Rolling Westward

Jeff Lindsay — Mon, 16 Jan 2012 04:14:46 +0000

The impact of innovation in China is often not obvious to the West, even when many gadgets like the iPhone draw upon innovations from China and Taiwan that make many Western products possible. Not many Chinese brands have spread outside the borders of China, leading some observers to question the significance of Chinese innovation in full-fledged products and not just components or manufacturing methods. China is just beginning to learn how to develop brands that will succeed in the West. The apparent dearth of brand-based innovation from China should change in the coming decade. Some of the front-runners might be found in the automotive industry.

The Chinese automobile brand, Chery, is already rolling westward. A friend of mine spotted it on-sale in Kiev, Russia, and sent me these photos (photos courtesy of Martin Daffner). Chery, now one of China’s leading exporters, began exports in 2001 to Syria and now sells its cars in the European nations of Russia, Ukraine, Belarus, Serbia, Macedonia, Turkey and Italy (per Wikipedia) and as of 2012 will be marketing also in Australia, Singapore, and South Africa. Chery’s strategy is to expand in developing countries first and then enter more developed countries.

As Chinese brands move to the West, we will increasingly see Chinese companies getting their IP stolen unless they take proactive steps early to protect it. It’s already happening in the realm of trademarks, as Li Yongbo reports in the China Daily article, “More Chinese brands victims of IPR violations.”

First, Align All the Lawyers

Jeff Lindsay — Wed, 04 Jan 2012 01:41:22 +0000

Many companies seeking innovation overlook their own internal barriers to innovation success. One of the biggest barriers can be their own attorneys. Lawyers are needed for many aspects of innovation, such as drafting the agreements with partners in open innovation and protecting IP with patents, trademarks, and other intellectual assets. The skill of a good lawyer who understands the business and its needs will often make the difference between success and disaster. But frequently non-lawyers fail to recognize how broad the spectrum of lawyer quality is and how non-standardized and diverse the practice of law can be. People with a technical or financial background, who are used to seeking and finding “correct answers” in problems of math, engineering, and accounting, might not recognize how subjective and variable in style and outcome the work of lawyers can be. More specifically, they might not recognize how ridiculous and counterproductive the work of their attorneys is.

In working with various companies seeking to promote innovation, I’ve sometimes watched in horror as a single misguided attorney not only impedes deals but even destroys relationships as he or she seeks short-term gains that destroy the long-term potential in a relationship. The tone of an attorney’s work can exude distrust and harshness at a time when trust and friendship needs to be built. Opportunities can be destroyed by an attorney urging the client to twist the screws to extort unreasonable gains from a potential partner, by pushing for extreme terms, by treating every encounter with the outside world or with inside employees as an adversarial relationship to be won at all costs. I’ve seen good innovators walk away from partnerships or even from their own companies through the antics of poor lawyers.

When it comes to innovation and partnerships, managers must not assume that their legal team know what they are doing (in spite of genuine excellence in the letter of the law), and instead must take steps to educate the attorneys about the relationships they wish to build, the tone they wish to convey, and the long-term goals they seek. Innovation success may require aligning your legal team with the not only the business goals but the principles to be pursued, the relationships to be strengthened and the spirit and character they wish to show.

Don’t take Shakespearean extremes. Rather, first simply align all you lawyers. Then you’ll be a little more likely to overcome innovation fatigue.

Another Invisible Chinese Company: Lenovo

Jeff Lindsay — Thu, 08 Dec 2011 07:47:25 +0000

Following up on the mind-numbing failure of Thompson-Reuters to include ANY Chinese or Taiwanese company on their list of the 100 Top Global Innovators, let me mention one more that should be there: Lenovo. This Chinese multinational company had 402 US patents granted from 2005 to 2010, well above the numbers obtained by some other companies on the TR list supposedly based on patent activity. They have international scope and are now the world’s 2nd largest maker of personal computers. Annual sales are over $20 billion. This puts them above many of the less-known companies on the TR list. OK, Lenovo inventors listed on patents are more likely to be from the US or Japan than from China, so Lenovo’s IP situation arguably doesn’t speak to innovation in China per se, but based on the stated criteria of TR, one would think that this Chinese company should still merit attention as a global innovator, regardless of which part of the globe their R&D centers are located.

It’s Worse Than I Thought: Update on Invisible Innovation in China and Taiwan

Jeff Lindsay — Thu, 24 Nov 2011 04:24:02 +0000

In my recent post, “Invisible Innovation: The Blindness of the West to China’s Innovation Story,” I lamented the failure of the Thompson Reuters list of 100 top global innovators to include anything from China (and Taiwan). In that post, I erred in stating that Foxconn’s 700+ US patents in the 2005-2010 time period for the TR study was greater than some of the companies that made the list. The error is that I should also have added Foxconn’s patent company to the search. By searching for “Hon Hai Precision” or Foxconn, I now see that we’re dealing with a company has over 5800 patents, more than three times as many as Apple in the same time period. What this means is that I was wrong in saying that Foxconn has more patents than SOME of the companies in the list–they actually have more than MOST of the companies on the list. The invisibility problem I discussed is even worse than I thought when such a mammoth patent estate escapes notice.

So how was Hon Hai/Foxconn overlooked, when they have more international IP activity than Apple and most of the companies listed? How is that possible, when their innovations are a major part of the Apple success story, and when they are the world’s largest maker of electronics? An electronic cloak of invisibility seems to have covered Foxconn and other Chinese or Taiwanese companies, making Chinese innovation largely invisible to the West. It’s time to take the cloak off.

Dehydrating Innovation in Europe: EFSA and Beverage Innovation

Jeff Lindsay — Sun, 20 Nov 2011 11:30:15 +0000

One of the hottest areas for innovation globally is in improved foods and beverages that benefit human health. Unfortunately, bureaucrats are among the biggest barriers that innovators face in this field. In the United States, something as uncontroversial as the well-known relationship between citrus fruit and scurvy (that is, citrus fruit can prevent or help cure scurvy) becomes a dangerous proposition in the hands of a bureaucrat. One VP with a major global food company explained to me that selling an orange with the claim that it “may help prevent scurvy” could get you thrown in jail in the U.S. under the strict rules of the FDA, rules which make it exceedingly difficult to pursue innovation in food, no matter how strong the science is. But the innovation barriers from regulations in the U.S. may be dwarfed by those that are metastasizing in Europe, especially under the heavy hand of the EFSA (European Food Standards Authority). The fantasy land of bureaucrat anti-imagination in Europe is so other-worldly that you can become a criminal for claiming that “water may help prevent dehydration.” Incredible? Impossible? Here’s what Victoria Ward and Nick Collins report in The Telegraph, Nov. 18, 2011 (excerpt):

EU bans claim that water can prevent dehydration
Brussels bureaucrats were ridiculed yesterday after banning drink manufacturers from claiming that water can prevent dehydration.

EU officials concluded that, following a three-year investigation, there was no evidence to prove the previously undisputed fact.

Producers of bottled water are now forbidden by law from making the claim and will face a two-year jail sentence if they defy the edict, which comes into force in the UK next month.

Last night, critics claimed the EU was at odds with both science and common sense. Conservative MEP Roger Helmer said: “This is stupidity writ large.

“The euro is burning, the EU is falling apart and yet here they are: highly-paid, highly-pensioned officials worrying about the obvious qualities of water and trying to deny us the right to say what is patently true.

“If ever there were an episode which demonstrates the folly of the great European project then this is it.”

NHS health guidelines state clearly that drinking water helps avoid dehydration, and that Britons should drink at least 1.2 litres per day….

German professors Dr Andreas Hahn and Dr Moritz Hagenmeyer, who advise food manufacturers on how to advertise their products, asked the European Commission if the claim could be made on labels.

They compiled what they assumed was an uncontroversial statement in order to test new laws which allow products to claim they can reduce the risk of disease, subject to EU approval.

They applied for the right to state that “regular consumption of significant amounts of water can reduce the risk of development of dehydration” as well as preventing a decrease in performance.

However, last February, the European Food Standards Authority (EFSA) refused to approve the statement.

A meeting of 21 scientists in Parma, Italy, concluded that reduced water content in the body was a symptom of dehydration and not something that drinking water could subsequently control.

Now the EFSA verdict has been turned into an EU directive which was issued on Wednesday.

Ukip MEP Paul Nuttall said the ruling made the “bendy banana law” look “positively sane”.

He said: “I had to read this four or five times before I believed it. It is a perfect example of what Brussels does best. Spend three years, with 20 separate pieces of correspondence before summoning 21 professors to Parma where they decide with great solemnity that drinking water cannot be sold as a way to combat dehydration.

“Then they make this judgment law and make it clear that if anybody dares sell water claiming that it is effective against dehydration they could get into serious legal bother.

EU regulations, which aim to uphold food standards across member states, are frequently criticised.

Rules banning bent bananas and curved cucumbers were scrapped in 2008 after causing international ridicule.

The ruling is more than merely laughable. For those on the cutting edge of advanced foods and beverages, it is an ominous sign of the innovation fatigue from government that is increasingly strangling Europe and much of the Western world. The inability to make reasonable, scientifically-supported claims about the benefits of healthy foods and beverages is one that will stifle innovation and entrepreneurship in Europe. I’d rather have to do my own homework to understand the validity of health claims than to have bureaucrats completely stifle innovation in health-promoting goods. Give me the Wild West of unrestrained innovation, with all the risks and bad claims that might follow, rather than a sterile 1984 society in Oceania which hordes of bureaucrats protect me from myself and everything new. But between those two extremes are many healthy, democratic alternatives in which sound legislation reduces the most egregious crimes while allowing innovators for the most part to move forward.

Here in China, where some of the best beverages in the world are to be found, I’m happy to say that soft-drink entrepreneurs appear to still have the freedom to declare that aqueous beverages reduce thirst and help prevent dehydration. Watch for the world’s epicenter of food and beverage innovation to increasingly shift toward China, if it’s not already firmly rooted here.