[su_pullquote align=”right”]By Victor DOS SANTOS PAULINO and Najoua TAHRI[/su_pullquote]
Innovation as the key driver of economic growth is nothing new. However, France, with the rest of Europe, continues to face significant challenges in stimulating innovation in its economy and maintaining its competitive edge.
In a study investigating what discourages French firms from innovating, we find that the biggest barriers to innovation are financial or market-related, and not technological. Financial constraints, lack of competent personnel and a perceived pointlessness of innovating are some of the main culprits behind this lag in innovation. Surprisingly, very few firms cited technological barriers, and similar results have been observed in other parts of the world.
The right skill-mix
Taking a closer look, we observe that many of the obstacles can be traced back to a shortage of managers with the relevant skill set. Various innovation studies point out that innovation success requires the effective combination of different expertise, both technical and commercial. However, managers with both attributes are rare, especially in France. And the absence of versatile managers can result in conflicting viewpoints between technical managers who tend to be preoccupied with technological performances and commercial managers who tend to be focused on market concerns. This in turn can lead to a communication breakdown and cooperation failure, impeding the innovation process.
Add to this, the prevalent culture of “technology push” innovation in France, where by innovation processes are spearheaded by R&D in new technologies but are plagued by a poor understanding of the market. This not only reinforces market barriers to innovation but also leads to financial constraints. Substantial resources end up being pumped into and prolonging the R&D phase, blurring the distinction between inventing something, innovation and achieving innovation success. The development of the Concorde is a good illustration of this. To date there are ongoing debates on whether the supersonic airliner was an innovation success or not. For some, the technological breakthroughs overshadow the fact that only 14 units were sold to two clients. In short, firms are discouraged from innovating because innovation, from their perspective, necessitates considerable resources to cover the excessive costs of invention.
Impact of government support
In Europe and notably in France, public authorities are wrapped up with technological progress leaving little room for commercial expertise in the innovation process. Inventions and discontinuous technologies are favored, often out of sync with market dynamics, and very costly. Too often public funding programs, for instance in the aerospace sector, push firms to undertake projects that are not always economically viable. Thus, firms tend to orientate their strategies on technological advances, to the detriment of market objectives, essential for anticipating returns on investment.
Breaking down the obstacles by industry, the aerospace industry faces the highest obstacles, followed by the manufacturing and service industries. This is expected as aerospace companies are more likely to be innovative, face high productions costs and heavily rely on public investment. In contrast, firms in the service industry experience the fewest obstacles. The development of new-to-world products is rare in the service industry, where the intangibility of products allows for easy imitation by rival firms and thus raises a serious problem in convincing investors to fund new ventures. Service orientated firms therefore tend to adopt a market pull strategy with focus on continuous innovations, marginally enhancing or upgrading the service offering, and at a much lower cost. It is therefore not surprising that firms in this sector face the lowest financial barriers to innovation.
Overcoming barriers to innovation
As a starting point, firms should accommodate market research in their innovation processes. This is easier said than done as technical managers sometimes first need to move away from the idea that if you don’t know how to make a product, you won’t know how to sell it. Technical managers need to recognize the importance of bringing in the market perspective on board the innovation process. To combat the shortage of managers with both technical and business skills, firms could offer on-the-job training to develop deficient competencies (e.g. granting MBA opportunities to technical managers). Moreover, to tackle the root of the problem, higher learning institutions offering scientific degrees should integrate a strong element of social sciences in their programs. This would not only ensure a commercial dimension in the innovation process but may also go a long way to solving communication issues between technical and commercial teams, and add legitimacy to marketing insights.
However, this is not a substitute for involving commercial managers directly in the innovation process. Ideally, firms should go a step further and create a business intelligence unit to provide information on the market, to work side by side and complement the work of the technological team. The weight accorded to commercial competencies in the innovation process will vary according to the characteristics of the activity sector.
A fundamental change will also have to come from the public authorities who need to redirect their funding to support successful innovations rather than novel technologies, and allow firms to focus on continuous innovation – the natural course for most. By prioritizing downstream innovation processes, such as innovation commercialization, firms will face lower market barriers and innovation costs. To this end, public authorities need to make more room for firms in defining the strategic orientation of public support policies.
Innovation is a powerful means by which to ensure long-term survival. Without innovation, it is extremely difficult to adapt to a changing environment. Although new product failure is high, innovation without any failure is impossible. In a nutshell, successful innovation requires not only a change in the mindset and innovation culture of firms but also shifts in the public institutional framework to be more in favor of continuous innovation. Firms, government agencies, higher education institutions all have a role to play in overcoming barriers to innovation and creating an enabling environment for innovation.
This article is based on the study entitled, “Les obstacles à l’innovation en France : analyse et recommandations ”, co-authored by Victor Dos Santos Paulino and Najoua Tahri, published in Management & Avenir, 2014/3, no. 69, p. 70 – 88, available here
[su_spoiler title=”Méthodologie”]The study, conducted in 2014, is based on the results from the 4th Community Innovation Survey (CIS 4) carried out in France between 2002 and 2004 and published by Eurostat. 175,533 firms in France participated in the survey, indicating if they have experienced any of 11 obstacles to innovation. For the purposes of our study, we then divided the obstacles into four categories: knowledge, market, financial and external obstacles, and analyzed the obstacles by nature of the firm and by sector (manufacturing, services and aerospace, the latter being a key industry in France). [/su_spoiler]
[su_pullquote align=”right”]By Kévin Carillo[/su_pullquote]
The rapid development of collaborative communication technology as an alternative to e-mails provides companies with a possibility of fundamental transformation but will require supporting measures to usher in a genuine culture of knowledge sharing.
The upsurge in businesses of collaborative communication technology from web 2.0 has been both rapid and widespread. Internal social networks, video-conferences, blogs, micro-blogs, wikis, document sharing—the number of those adopting these linked tools never ceases to increase, in the hope of improving productivity and performance; tools that open up vistas of profound change within their companies and in the working habits of their staff. Little by little the traditional ‘silo’ model whereby the various departments, roles and hierarchies are compartmentalized in a kind of internal competition, is being replaced by the new and more open Enterprise 2.0 model based on increased staff collaboration that breaks down this rigid structure and on sharing information through a kind of forum which itself creates knowledge.
Alongside this organizational revolution, collaborative tools may also be an efficient solution to the increasing problem of e-mail proliferation. E-mails were revolutionary when they first appeared and were unanimously adopted in the workplace but they are now a victim of their own success to the point where their overuse becomes a serious obstacle to productivity: staff members get scores of emails each day, spend hours reading them, don’t open all of them, lose them and their in-boxes get filled up. Finally, communication is hindered and collaboration handicapped. Certain types of interaction currently done by e-mail would be much more efficient with collaborative communication techniques and this is certainly the case, for example, for conversations, sharing of expertise or brainstorming within a group or community.
This said, cooperation and knowledge sharing cannot simply be imposed by decree. Although it is extremely important to give staff access to alternative tools and systems, it is equally important to ensure they adopt them in a productive way. More so in that they are disruptive technologies that radically modify work habits and ways of relating.
The essential role of habit
Our research has focussed precisely on determining just how far the habitual use of collaborative tools—their day-to-day and automatic, routine use—influences the inclination of staff to share their knowledge when they no longer have access to e-mail. The theoretical model we developed identified three perceived advantages to using collaborative communication systems: the relative advantage they offer (it’s useful for my job), compatibility (it corresponds to my needs, the tasks I have to accomplish at work and to the nature of my job) and ease of use. We hypothesize that these advantages have a direct effect on user habits and on knowledge sharing. We also postulate that user habit has a catalyzing effect on each of the perceived advantages in relation to knowledge sharing.
To measure the validity of these hypotheses, we undertook a field study in an information technology (IT) services and consulting firm and obtained the following results: if users see an advantage in using collaborative tools they are more likely to make a habit of it and to share knowledge; likewise user friendliness also leads to habit-forming. On the other hand, we were unable to establish a direct link between user friendliness and knowledge sharing. Nor was the study able to establish the immediate effect of compatibility on knowledge-sharing habits. Concerning the central focus of the study, the part played by habit, the results show that it is extremely important in that it strengthens the impact of the relative advantage and of compatibility on skill sharing.
Technological evolution and the human factor
The study confirms that access to these technologies, no matter how efficient they are, is not enough to change behavior. Their use must become a habit. The more at ease staff are with collaborative tools, the more naturally they will share knowledge and the more easily they will adopt the codes and methods of Enterprise 2.0.
Consequently, what management has to do is to encourage these habits, and the study shows that there are two important arguments that can help bring this about: lead staff to understand that using a collaborative system is not only extremely useful but also easy. This implies introducing a number of measures, some of which are very simple: communication, incentives, games and competitions, sharing the experiences of advanced users, targeted pedagogical programs, and so on.
At the end of the day, this study underlines the classic problem when studying information systems: the importance of the human factor. Simply deploying a collaborative system is not suficient for an enterprise to become 2.0. A collaborative culture must created before the tools are implemented.
[su_note note_color=”#f8f8f8″]Kévin Carillo and the article “Email-free collaboration: An exploratory study on the formation of new work habits among knowledge workers”, Jean-Charles Pillet et Kévin Carillo, International Journal of Information Management, Novembre 2015.[/su_note]
[su_spoiler title=”Methodology”]In their research, Jean-Charles Pillet and Kévin Carillo carried out a quantitative case study. Starting with a review of the research literature at the time they constructed a theoretical model based on the idea that ingrained habits diminish the relationship between the perceived advantage of using a collaborative system and the ability of staff to share knowledge. To measure the validity of the 9 hypotheses they drew up a questionnaire with 21 items, each one having a 5-point response scale from “totally disagree” to “fully agree”. The study was carried out in August 2014 in an IT services and consulting firm with a workforce of more than 80,000 people spread over forty-odd countries. Several years beforehand, its executives had launched a global policy of dropping e-mails in favor of a collaborative system comprising three main tools: videoconferencing, an internal social network and a system for document sharing. The study focused on a single particular department in the company, the one responsible for handling the suspension of client IT services as soon as possible. Sixty-six valid responses (55%) were collected from 120 people divided into 5 teams in France and in Poland and an analysis of these confirmed some of the hypotheses made.[/su_spoiler]