Thanks Nate – breaking it down into the three separate criteria makes a lot of sense and I agree that the business model is where it doesn’t fit the definition as well. It creates more supply of employees but doesn’t necessary cover the market side.
Revisiting the set of criteria also makes me wonder whether MCIs always start as MCIs or whether they must first be successful performance-improving or efficiency ideas so that they empower customers to create something of their own. For example, Corning’s Optical Fiber started as performance improving before it became market creating.
I wonder if some NGOs fall within the scope of market creating innovations.
For example, the Akshaya Patra foundation is an NGO that created and operates massive production operations for hot foods to serve at schools and convince children to go to school in India.
First, the organization creates jobs by investing in large-scale manufacturing equipment and operations (see here for some of their production innovation https://www.foodforeducation.org/innovative-technology), and hires a whole staff associated with engineering, running, and supporting this fresh food manufacturing. Simultaneously, my sense is that in its locations, the following chain of events starts to happen:
Nutritious food produced much more efficiently –> Meals available to children that would not ordinarily be able to get them –> Children that couldn’t go to school before start going –> Children get education and gain skills to get jobs –> They are trained to fill jobs.
This would be longer lasting job growth.
If this foundation were to measure job creation in the same way some of the large tech companies do, with the jobs it creates directly + jobs it creates indirectly + the job economy it creates, my guess is the numbers would be huge. Thoughts?
It seems like in some companies, revenue growth loosely trends with workforce growth. When a new opportunity deserves investment, the company invests in factories, etc. Is this true? If a company is focused on growing its revenue, will it automatically be ready to invest in more innovations and, with a delay, ultimately create jobs?
Good point! I wonder if there is a difference in outcome between automating technical/skilled labor jobs versus more service oriented jobs.
In the case of the ATM, I would guess that service jobs (tellers) were the first to go, but tech and maintenance jobs were the first to be created. If cars were to go driverless, the service jobs (drivers) again would go first, but would technical jobs get created? Similar to the Prius/Camry example, the actual cars would be performance improving so it could net out.
In the case of manufacturing, technical jobs would go first, but what gets created?
Playing the devil’s advocate for a moment, if I am a current factory employee and we end up net-net with automation and jobs lost/created, was there really any value in the automation? Sure, it does increase volume (Amazon, Google, etc) and efficiency, but there is the counterbalance of all the investment that went into educating technicians or engineers or managers to manage and troubleshoot automated processes, versus the less classroom educational and more skills based training for past manufacturing jobs.
A part of me does wonder if when the economy adjusts, a college education will also become ‘commoditized,’ making the only way to succeed in the future to be with advanced degree(s). In this case, multiple degrees and hundreds of thousands of dollars later for the entry level employee, do we just delay job growth by 5-7 years as compared to skilled labor training?
A possible perspective to consider: https://techcrunch.com/2017/03/26/technology-is-killing-jobs-and-only-technology-can-save-them/
I wonder whether companies are truly able to identify whether their projects are performance improving, efficiency, or market creating innovations without the benefit of hindsight. Do companies know they are creating an MCI before it becomes an MCI?
Right now, it seems difficult to tell whether jobs and/or sustainable economic growth were the intent or purely the outcome of successful MCIs.
In an ideal scenario for this dilemma, we have loyal shareholders with a long time horizon investing in risky potential MCIs that could lead to growth. However, would the large companies know what to do with additional capital if it was available, less timid, and less migratory? Is there enough R&D in the pipeline with these companies to trigger growth?
If companies were to double down on their R&D investment, and even categorize their projects by innovation types in order to allocate the right resources at the right times, it could still take 10+ years for the innovations to form, fail, reform, succeed, and lead to growth. Patience cannot be the only factor to consider – what are the others and could any of them accelerate progress?
It seems like many of the companies succeeding with MCIs are also the companies who have launched several unsuccessful products. I think of Google (Glass and Buzz), Amazon (Fire Phone), Corning (Several products and processes that were developed, shelved, and reselected for new applications), and Apple (launched the Newton tablet in 1993, 17 years before the iPad took off).
Perhaps the volume of product launches as important as investment time horizon and patience. Larger public companies have the resources to compete on volume, but a newly formed small or medium sized startup would struggle with this if the first launch goes poorly. What should a startup company do to recover from a failed MCI and re-invest in a successful MCI?