Innovation fatigue, innovation deficits and lack of innovation – these descriptions of the innovation capacity of national economies have been circulating in the media for several years. We live in a world of non-linear change, black swans and perfect storms, and still, it seems that we think in a linear mode. In a globalizing world, contemporary grand societal challenges, such as the UN Sustainable Development Goals, have been observed to be increasingly difficult to address by traditional means.
By Nikos G. Sykas – Strategy, Communication and Innovation Advisor
Post Covid-19 world is a rapidly changing, highly nonlinear ecosystem characterized by fluidity, turmoil, disorder, uncertainty, randomness, variability, complexity, chaos, volatility, interdependencies, hidden asymmetries, catastrophic risks, explosive crises, fierce competition and winner-takes-all effects. We have more nonlinearities –asymmetries, convexities– in today’s world.
The blind spot of innovation cannot perceive that the potential gains that can be brought about by positive asymmetries (convexity bias) are more than the losses that might be incurred. Time, volatility, disorder, randomness and uncertainty increase the gain –than the loss– incurred through the exploitation of positive asymmetries. This fact escapes the linear mode of thinking.
Public sector, local government and business cannot innovate effectively and tackle today’s asymmetric threats and multiple challenges across multiple domains by using the static tools and linear models developed for the pre-Covid era. Linear approaches and the focus on efficiency and incrementalism without taking into account the asymmetric risks and uncertainties, undermine the impacts of European Programs such as Horizon Europe, the European Green Deal and the Recovery and Resilience Facility.
Based on the webinar titled ‘How to prepare a successful proposal for Horizon Europe’ organized by the European Commission Directorate-General for Research and Innovation on 24 March 2021, antifragility is not included in the basic evaluation criteria. Even though the coronavirus crisis has changed everything, the basic evaluation criteria used in the Horizon Europe Program running from 2021–2027 are practically the same as those used in the Horizon 2020 program for the period 2014–2020. Also, antifragility property is entirely missing from the EU Recovery and Resilience Facility that entered into force on 19 February 2021.
A ‘bat flapping its wings’ in China disrupted the global innovation ecosystem, revealing the fragility of communities, business models and risk management plans across 220 nations. A new protocol for innovation resilience is required. We need asymmetric innovation strategies, dynamic tools and a multidimensional, multidisciplinary, multiscale approach to cope with grand challenges and innovate under conditions of extreme uncertainty.
After many years of research, I developed a new dynamic Innovation Model which among other, defines the properties and features that need to be embedded in the innovation process in order to achieve antifragility:
- Expand creativity by combining factors, attributes and distinctive capabilities from the four basic types of innovation: product, process, organizational and communication. This combinatorial strategy: a) Increases the possibility of achieving innovative outcomes and b) discovers and exploits positive asymmetries (convexities) in order to generate transformational, disruptive innovations that produce exponential multiplicative benefits and advantages.
- Use of Conceptual Metaphor as a creative technique for extending the meaning, the reproduction of knowledge and the transfer of innovations in new contexts and different domains. As Mihaly Csikszentmihalyi notes: ‘Some of the most important discoveries emerge when an idea that works well in one domain is transplanted in another domain’.
- An Organization is antifragile when it has the ability to: a) Modify its exposure accordingly in order to exploit positive asymmetries (opportunities) and avoid negative asymmetries (dangers) and b) use uncertainty, chaos, variability, fluidity, entropy, stressors, disorder, randomness and time as raw material for innovation.
- Improve the decision-making process. Human intuition is insufficient in situations characterized by uncertainty. The study of human judgment was transformed in the 1970s, when Kahneman and Tversky introduced their ‘heuristics and biases’ approach and challenged the dominance of strictly rational models. Their work highlighted the reflexive mental operations used to make complex problems manageable, and illuminated how the same processes can lead both to accurate and to dangerously flawed judgments.
- Early detection of dangers. Enhance preparedness by detecting the first signs of the phenomenon and turning a black swan into a grey swan. Technologies such as Augmented Reality, Wireless Communications, Smart Apps and Command Center Infrastructure enriched by IoT (Internet of Things) sensors and full Geographic Information System (GIS) capabilities for Utility Infrastructure and Vital Infrastructure (refineries, airports, military installations, etc.) will revolutionize Emergency Response and relief operations in natural disasters and terrorist attacks.
The new Innovation Paradigm can be used:
- In practically all domains and at all levels, scales and sizes: Public Services, Local Government, Business (startups and large corporations), Banks, Quality Management, Circular Economy, Creative Industries, Social Entrepreneurship, Social Innovation, Education, Research & Innovation Centers, Economic Diplomacy, Nation Branding etc.
- To maximize the scientific, economic and social impact of Horizon Europe, the European Green Deal, the Recovery and Resilience Facility and other EU Funding Programs.
- For accelerating growth and structural transformation.
The new Innovation Model is presented analytically –theory and applications– in a 260-page practical Guide I have prepared which, among other describes more than 70 asymmetric innovation strategies, cross-cutting tools and creativity techniques that can help Organizations: a) Innovate much more effectively and b) achieve antifragility.
The structure of a new innovation should be antifragile-by-design, capable of gaining from volatility, variability, randomness, uncertainty and time by maximizing exposure and benefit from positive (favorable) asymmetries (more upside than downside from volatility and randomness) and minimizing exposure and harm from negative (unfavorable) asymmetries. The first step is the detection and removal of any fragilities (vulnerabilities) and the elimination of the risk of ruin. Positive black swans (opportunities) also have a necessary first step: you need to be exposed to them.
This distinctive capability of harnessing antifragility is missing entirely from European Programs. The linear static structure of European Programs makes them extremely fragile – they are not prepared to combat the asymmetric threats of the post Covid-19 era. On the one hand European Programs are vulnerable to negative black swans (unfavorable asymmetries); on the other hand, they cannot capture positive black swans (favorable asymmetries). The concepts of black swan and antifragility were developed by Nassim Nicholas Taleb.
Resilient and robust systems are those that are able to withstand shocks and bounce back quickly after them. Adaptive systems are those that are able to respond effectively in the wake of shocks. Antifragile systems, however, don’t just bounce back or even bounce back better, they thrive and improve because of, not in spite of, volatility and uncertainty.
According to policy analyst John Kingdon, the implementation of a policy innovation happens once a window of opportunity for policy change becomes available. For a window of opportunity to form, three streams must be present: a problem stream, a policy stream and a politics stream. First, the problem stream refers to the moment when a policy issue requires attention. Second, the policy stream refers to the moment a solution to the problem is available. Third, the politics stream refers to situations when both motivation and resources to solve a problem are available.
A window of opportunity exists for embedding antifragility property in the architectural design of European Programs. The new Innovation Model described very briefly above is the only tool, on a global basis, that introduces this critical factor –the ability to harness antifragility– in the innovation process.
