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Alice de Koning is a professor at the Huskane School of Business at the University of Calgary and an RBC Teaching Fellow in Entrepreneurial Thinking.
Are we overinvesting in inventors and inventions? Canada’s government programs and private investors are focusing too much on the next cool thing and not enough on building companies that go into global markets. Are you not?
As a professor, I can’t help but notice the use of the term innovator or entrepreneur in conversations and media articles to explain what an invention is in essence. It may just be interesting storytelling, or the people portrayed may really be innovators and entrepreneurs. But your story can be misleading if you don’t use the right words or tell your story through the lens of innovation and entrepreneurship.
A few simple definitions are sufficient for our purposes. An inventor is someone who creates interesting new things. An inventor could be a university scientist, a skilled tradesman, or a creative neighbor. Inventions can be medical devices, new processing techniques, or new digital concepts.
Innovators create solutions for real customers to solve real problems. Solutions can be new science-based de novo, new applications or a combination of existing services and products. What matters is that innovators create value in the eyes of potential customers by solving important problems.
Entrepreneurs create and build organizations to deliver value to people and ensure that the organization is financially sustainable. They do so by developing a business model that pays the bills and generates funds to invest in future growth.
The words we use and the stories we tell create a culture that inspires inventors, innovators and entrepreneurs. If you focus too much on invention, you can get hung up on exciting new applications, knowledge and skills, but miss the point of value creation. Products and services that create more value may demand higher prices from customers who appreciate them, and higher prices create capital for growth.
I believe these concepts are important to Alberta and Canada. Because promoting invention alone is not enough to build a more diverse and growing economy. A common fallacy is “build it and it will happen”, which expresses the belief that great inventions sell themselves. they don’t.
Even when we look at inventions that have achieved great market success, we find examples of the disconnect between inventors, innovators, and entrepreneurs. The facsimile machine was created by an Australian inventor, but a Japanese company was needed to create a global market.
Philips engineers have created the technology behind CDs, DVDs and many other products that exploit the core functionality of the Dutch multinational’s patents. But it took the human minds of other innovators and companies to develop an amazing range of products before the brand was marketed globally by companies such as Sony.
Nokia Oyj developed touchscreens and many other technologies and provided the company with a major patent portfolio, while Apple Inc. created one of the most successful products of all time: the iPhone. The phone leverages patent portfolios from several companies (including Nokia), but the key difference is Apple’s strong focus on the customer experience.
Canadians must avoid the fate of inventors who do not derive full value from their inventions. We already have engineering and scientific strengths and a successful ecosystem in the energy and resources industry.
But I fear that I haven’t emphasized the value of innovators and entrepreneurs enough. Part of the challenge is that our future economy will require a strong customer focus to understand how we create and grow value for the world.
Resource industries typically sell to the global commodity market. In these markets, companies do not have to create and sell products and services that add much value to their customers beyond the characteristics of the goods each company produces.
But if we don’t build a culture and ecosystem focused on creating value for our customers through innovation and entrepreneurship, we’ll need more jobs, more science, technology, creativity, and more globalization. You cannot start or scale your company with the income you pay to success.
It can take years, even decades, to bring an invention to market. By focusing more on the innovators and entrepreneurs within the stories we celebrate, the cultures we create, and the ecosystems we build together, we can avoid that lengthy process.
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