the geography of innovation

Where you are is still important. Location has a huge impact on the resources available to you, the education of the people that you work with, the money available to try out radical ideas, and the cultural attitudes towards new things. Check out this from a Time Magazine article on California:

Ignore the California whinery. It’s still a dream state. In fact, the pioneering megastate that gave us microchips, freeways, blue jeans, tax revolts, extreme sports, energy efficiency, health clubs, Google searches, Craigslist, iPhones and the Hollywood vision of success is still the cutting edge of the American future — economically, environmentally, demographically, culturally and maybe politically. It’s the greenest and most diverse state, the most globalized in general and most Asia-oriented in particular at a time when the world is heading in all those directions. It’s also an unparalleled engine of innovation, the mecca of high tech, biotech and now clean tech. In 2008, California’s wipeout economy attracted more venture capital than the rest of the nation combined. Somehow its supposedly hostile business climate has nurtured Google, Apple, Hewlett-Packard, Facebook, Twitter, Disney, Cisco, Intel, eBay, YouTube, MySpace, the Gap and countless other companies that drive the way we live.

And here’s another interesting bit:

California scores poorly in most “business friendly” ratings, which tend to focus on tax rates and wage levels rather than on, say, worker productivity or creativity.

A lot of the measures of ‘business friendliness’ have absolutely nothing to do with the factors that support innovation. In fact, it is a robust research finding that things like increased regulation actually spur innovation and related economic growth. Why are the leading clean-tech energy innovations coming from California and Germany? In large part because of long-standing legislative requirements.

And then there’s this from Guido Jouret of Cisco:

California has a very welcoming attitude, but it’s a Darwinian society. Companies come and grow and die, and no one sheds a tear. And there’s a real sense that it isn’t worth doing if it won’t change the world.

When we talk about creative destruction we often focus more on the ‘creative’ part than the ‘destruction’ – but both are needed for innovation to occur. The big question is what resources are available for those that are negatively affected by change.

I keep hearing about the death of distance, but where you are still matters – especially if you’re trying to innovate. This doesn’t mean that people and firms can’t be innovative in environments that are less supportive of innovation – they can. It simply means that you need to consider the resources and constraints provided by your location when you develop a strategy for innovation.

(hat tip to Tom Peters – who highlighted the first quote too)

(the picture is from flickr/Port of San Diego under a creative commons licence)

Student and teacher of innovation - University of Queensland Business School - links to academic papers, twitter, and so on can be found here.