I ran across an outstanding post today by John Battelle reviewing Where Good Ideas Come From: The Natural History of Innovation.by Steven Johnson.

It’s one of my favourite books from the last couple of years, and Battelle does a great job of highlighting the key points in it. He also reminded me of a table that Johnson put in towards the end of the book. It looks at the genesis of what he thought were the most significant ideas of the 19th and 20th centuries. He then assessed whether they were developed in commercial firms or non-commercial organisations, and whether they were generated by individuals or by networks of people.

Here’s the table:

This illustrates several important points:

• It’s never either/or, it’s both/and. Are individuals or networks more innovative? Networks – there’s plenty of research to back this idea up. Nevertheless, individuals still generate plenty of big ideas. It’s the same with market vs. non-market – lots of great ideas come from both. More come from non-commercial environments.

  It’s really easy to argue black and white statements (“Only small firms innovate!” “No – only big ones do!”). But they’re never true. In order to support innovation, we need to look at these dichotomies and figure out which circumstances favour one approach over the other. And then we need to support both. This is true for market vs. non-market, for individuals vs. networks, for big firms vs. small firms.

  Black and white thinking is dangerous.

• Networks are a critically important source of great ideas. The lone inventor idea is still with us. Here is what Johnson says about networks:
  

  Ideas rise in crowds, as Poincaré said. They rise in liquid networks where connection is valued more than protection. So if we want to build environments that generate good ideas—whether those environments are in schools or corporations or governments or our own personal lives—we need to keep that history in mind, and not fall back on the easy assumptions that competitive markets are the only reliable source of good ideas. Yes, the market has been a great engine of innovation. But so has the reef.

  The second part of that quote leads to the next point:

• Non-market organisations are critical components of the innovation ecosystem. Many of the ideas that led to you being able to read this blog post came from non-market networks – the computer and the internet being chief among them. But just to illustrate the first point, smart phones, which aren’t in the table, came from a market network. Nevertheless, it’s important to understand how crucial non-market organisations are to generating big ideas.
• Most big ideas get turned into innovations by the market. Here is what Battelle says:
  

  This doesn’t mean those ideas don’t become the basis for commerce – quite the opposite in fact. But this is a book about how good ideas are created, not how they might be exploited. And we’d be well advised to pay attention to that as we consider how we organize our corporations, our governments, and ourselves – we have some stubborn problems to solve, and we’ll need a lot of good ideas if we’re going to solve them.

  Effectively connecting non-market organisations with market-based firms is one of the most important roles of government. In regions that innovate well, these two sectors interact more effectively than in less innovative regions.

Invention and innovation are two different things. However, we still need to start with a great idea to innovate well. Understanding how good ideas originate is an important part of doing this.