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Responsibility and innovation: a business perspective

by Redazione FGB [1], 20 April 2011

an interview with prof. Andrew McMeekin.

Prof Andrew McMeekin [2] works at the Manchester School of Innovation and is involved in the Sustainable Consumption Institute [3] based at the same university. In March 2011 he was kind enough to participate in a conversation with Jonathan Hankins in which he discussed (amongst other things) innovation, responsibility, sustainability and governance. The following is a transcription of the  conversation. Some very interesting point were raised that really open up the argument of responsibility and innovation within and from a business or economic perspective.

Index of questions:
1. >> Can you just tell me what you do here at the University of Manchester please?
2. >> In your PHd you wrote about the effect of economic demand upon sustainability within innovation, could you outline your ideas please?
3. >> Here you are speaking about sustainability, but how can we really measure sustainability?
4. >> How would you define innovation?
5. >> Foundation President Piero Bassetti says 'our perspective on innovation is not economic but political, and therefore we have abandoned schumpeters line', could you comment this point of view?
6. >> On the Manchester University website one of your interests is described as 'the sociological study of innovation processes', very interesting, what does it mean?
7. >> We are also interested in promoting public participation in scientific debate, do you teach anything about the wish to make society more scientifically literate.
8. >> The foundations perspective might be that innovators themselves are the people that should be worrying about this and not sociologists, what do you think?
9. >> Without risk there is no progress?
10. >> One of the great debates within the foundation is about responsibility and the idea of trying to instill some form of responsibility within those who innovate, which presents a series of problems. Who are those that innovate? If we are talking about a large conglomerate where is the figure that actually has to take responsibility? In your creative commons article you talk about  the dispersion of innovation and the innovation process. Can you explain?
11. >> Do you think that some form of external governance could work?
12. >> And do you think that there could be some kind of promotion as something that we could define as best practices, or does this go too far, or is it too generic?


Responsibility and innovation: a business perspective
an interview with Andrew McMeekin by Jonathan Hankins.

Jonathan Hankins. Can you just tell me what you do here at the University of Manchester please?

Andrew McMeekin. I have several affiliations, I am employed by the manchester business school, that is my school home. We are now in the Manchester school of innovation and innovation is a long standing interest of mine, and I am also heavily involved in the university's new sustainable consumption institute which was set up with an initial grant from TESCO supermarket chain, where I am trying to develop the sustainability in innovation agenda. I am also the deputy director of a large ESRC grant called 'the state of the practice research group' which is a consortium of 7 or 8 UK universities looking at consumption behaviour and how it could change to become less environmentally damaging. I also teach on a masters course called 'Innovation and the Knowledge Economy'. (up)

JH. In your PHd you wrote about the effect of economic demand upon sustainability within innovation, could you outline your ideas please?

AM. The PHd was looking at the innovation sustainability relationship and trying to understand how sustainability concerns become part of the demand signal that stimulates what the market might or might not do. This is something that I am still working on in a new project,  my focus has changed quite a lot since the PHd but my focus is upon the fact that there needs to be some sort of economic demand for whatever type of innovation might occur in relation to environmental  sustainability challenges. We might think that innovation responds to a burgeoning demand for environmental concerns and that is one type of trigger, there is already an existing demand that sends a signal to entrepreneurs to innovate. In many cases however (as we know from innovation studies) entrepreneurs do things and are creative before economic demand is created within the economy, so it is not in this case that economic demand is not important, but that it then has to be created as part of the innovation process. Either way innovation as I understand it is about the co construction of new knowledge both in terms of innovation and in terms of market demand. Not all innovation occurs within the market sphere of course, but that is a starting point anyway. The reason I make that last point is that it is equally interesting (and we are doing this as part of our current work) to look at how public demand, ie demand via the public purse, can be used to stimulate  innovation. We have got some work on public procurement for sustainable innovation and this is a slightly different channel from the market innovation system. The PHd looked at some of the actual mechanisms by which firms go about trying to understand what demand is actually out there. This is actually an under-researched aspect of innovation studies in general let alone in the sustainability area. It is well recognized that innovations do well if user needs are attended to, and this is one of the stylized factors of innovation, and well recognized theoretically that this feeds back into the market to create further innovation. What is less clear is what that mechanism actually is, how do firms learn about what consumers and customers want, and how do they interpret that information if they can go out and collect it for future innovation?  I looked at the strategies that firms actually use to gather information about customer needs in relation to sustainability

Another aspect was to look at how demand is socially constructed by various actors,  so I looked in detail at one of the environmental controversies of the time around chlorine and PVC. I tried to follow the process by which the issues surrounding chlorine were negotiated by various actors to try to define what the problem was and in the case on the NGO's to mobilize various social sectors either against certain actors such as the PVC industries or mobilize innovation or entrepreneurial actors that were trying to do things differently. In this case it was refrigeration technologies, so NGO's were constructing demand and constructing innovation in response to environmental issues that were always subject to massive amounts of uncertainties, because the science was not clear. So  it was a political process and I guess you see that all around us now, bio-fuels would be an example, for some activists it has the chance to solve some of the problems of diminishing oil stocks and climate change while for others it is worse that oil itself. You see the construction process in demand the whole time. (up)

JH. Here you are speaking about sustainability, but how can we really measure sustainability?

AM. Well, it is in some ways a buzz word. One of the problems is that it has come to mean a lot of different things to different people, you have the Bruntland definition, widely used as securing the future for future generations, but this is a sort of mission statement without defined concrete principals. economics has developed a series of concrete principals such as maintaining stocks of certain types of capital, natural, physical etc, and that seems like a reasonable starting point, but this becomes a bit woolly again when we say it is about mutually enforcing economic or social development, so I suppose it is about maintaining stocks of social and economic capital. In terms strictly of environmental sustainability it is about humanity and society reproducing itself within the limits of the earths capacity, something we are not doing now and our trajectories are taking us well beyond that point. (up)

JH. How would you define innovation?

AM. I follow the old fashioned broader view of innovation, new products, new organization forms, new market forms, not just technology or hardware but also service innovation and innovation of entire markets, new business models, so quite a broad approach. (up)

JH. Foundation President Piero Bassetti says 'our perspective on innovation is not economic but political, and therefore we have abandoned schumpeters line', could you comment this point of view?

AM. Well I don't know what is meant by political in this statement, but there is a very strong part to Schumpeters theory that is left out from most analyses. Most focus on the economic part of the innovation story and the view of combinations changing economic borders, and that was principal in scumpeter. The missing part is at the very core of his analysis, the issue of resistance and the notion that entrepreneurs have to posses the drive to overcome resistance in the incumbent system. This isn't just economic resistance, it is also cultural and social Resistance to new ideas, and I think that that is very much as important a part of his theory of entrepreneurship is the classic economic understanding. I would take some of that overcoming of resistance to be what you might call the politics of it, it is about mobilizing political allies in order to overcome some of the institutional block issues that might otherwise stand in the way of a good idea.
The other insight on power relations is the difference between innovation that comes from very powerful players in the system versus the more creative construction side. This is about people from outside the current regime invading and perhaps even overthrowing it, something that must be difficult. On the one hand large firms have access to very large economic forces but also political resources in terms of the links that have that can be mobilized around their innovation activities. When we are talking about a new start up in the garage they are parting from a different basis, they don't have access to similar resources either economically or politically, although they do seem to always be next to big universities so there is some sort of connection to more enduring institutional arrangements I think, so I am not sure that there is a conflict between a view of being political and a Schumpaterian view. (up)

JH. On the Manchester University website one of your interests is described as 'the sociological study of innovation processes', very interesting, what does it mean?

AM. I think that my reading of progress in understanding science technology and innovation over the last 30 or 40 years is that there has been a break between the sociologists, whose focus has been principally round science and technology so what I would call science and technology studies on the one hand, and on the other the economics of innovation that has focused on the economic institutions of capitalism and how they provide incentives and opportunities and the institutional basis for the innovation process. It seems to me that this divide has been a little bit unfortunate as it has meant that the sociological approach has tended not to look at the economic institutions within which science, tech and innovation occur. That is a broad statement because there are exceptions, but when I talk about the sociological analysis of innovation it is to say that this is innovation in an economic sense, but it is about creating demand, it is about markets and how they are formed and that itself should be much more open to sociological inquiry. In other words it shouldn't just be left to the economists that don't have a particularly detailed view of how markets are created or change over time, and this seems to me to be an opportunity to send STS and innovation studies in a new direction.

I suppose that it comes from my reading of economic sociology as either a new field or the consolidation of a long thread of the last 100 years that uses sociological approaches to look at economic institutions and how they work. It is really a programmatic statement about interests, also I think that a lot of the stuff on innovation systems in the best analysis under that heading would draw on both sociological end economic insight. So it is about re-combining ideas from different disciplines with a focus on the creation and development of markets for innovation or as part of the innovation process itself. (up)

JH. We are also interested in promoting public participation in scientific debate, do you teach anything about the wish to make society more scientifically literate.

AM. I don't actually. There is as we know a vast literature on the public understanding of science and participation and I was up to speed with the debates about a decade ago,  but Intuitively I think it is really important, I don't have much expertise on this though. (up)

JH. The foundations perspective might be that innovators themselves are the people that should be worrying about this and not sociologists, what do you think?

AM. I think that is right because of some of the mistakes that large and small innovation societies have made over the last years. Thinking maybe about genetic modification or even bio-fuels again where  not being sensitive to the cultural and social dynamics that might exist in relation to an emerging area causes hold ups and fouls, so there might be strong business reasons to ensure that there is a more thorough communication process between those bringing new ideas to society and those whose lives might change as a result or might be affected. On the one hand there is a rather hard nosed business aspect to needing to be involved in a kind of dialogue, but ethically I think it is more profound that that, there is a responsibility upon innovators to communicate the perceived effects and risks of anything that they want to introduce. But of course again a whole innovation process is ridden with uncertainty and it always will be, it is the nature of the innovation process, and somehow that needs to be communicated, alongside the fact that risk means that not all of the arguments can be heard, not all of the risks or benefits are known. I believe that innovation is a progressive force for society and so you can't just stop it. The hard line views of the cautionary principal which is that we only pursue something if we are absolutely certain that the risks are absolutely minimal frustrate me. The problem with this is that you would really cut progress dramatically because risk simply cannot be known. (up)

JH. Without risk there is no progress?

AM. Yes that is right, but along with progress unfortunately there is very often pain. The unintended consequences of innovation are just that, and there will always be unintended consequences of any form of action. The worst thing one can do is to have no action in my view, but clearly what is needed are systems to be but into place that at least try to minimize the potential risks and I think that there are ways to do that even in the context of massive uncertainties. A willingness to respond very quickly when signals emerge that something might not be quite right for example, and I don't know exactly what the right institution is for that. I think that some particular innovation processes do gain some momentum to use Thomas Hughes's language and it can be very hard to stop. So you can see that somehow retaining diversity, not getting locked into single paths in innovation terms would seem to me to be for the common good of society, quite a good way to operate, retaining diversity as a buffer against future risks. (up)

JH. One of the great debates within the foundation is about responsibility and the idea of trying to instill some form of responsibility within those who innovate, which presents a series of problems. Who are those that innovate? If we are talking about a large conglomerate where is the figure that actually has to take responsibility? In your creative commons article you talk about  the dispersion of innovation and the innovation process. Can you explain?

AM. Yes innovation is now organized beyond the boundaries of a single firm, in almost all areas, and that means (that to use your language) responsibility for those innovations is somehow distributed as well. In governance terms that is quite a problem, so we have some new departures in governance and responsibility, we have the establishment of corporate social responsibility groups within firms. You might ask if they are the right people, in their position do they exert the right type of control and governance over the innovation process, and I would question that. I think that a lot of the work of corporate social responsibility is disconnected from the innovation process in firms. So then the question arises of what governs the innovation process within firms, or even individual entrepreneurs who have a new idea. (up)

JH. Do you think that some form of external governance could work?

AM. A well there is external governance, there is government regulation which does play a role. The state plays a major role here, but if anything the trend is going in the other direction now, it is to roll back the influence of the state over business. From the point of environmental issues in UK for example the interest is much more in voluntary agreements where government sits round the table with businesses and says that we need to meet these challenges in this sector, but we are not going to legislate, we are not going to regulate, we would like you to find the solutions yourselves. I think it is too early to say if this is going to deliver the magnitude of response that is required for some of the big issues and I think that there are a lot of businesses that are recognizing that they need to do something in relation to sustainability issues for their reputation. In the longer term it is possible that whole areas of business will be jeopardized by some kind of environmental catastrophe, so in a way it is about long term business survival for these firms, but I am concerned about whether they can meet the scale of the challenges right now and understand it. These are firms that operate in particular institutional contexts and so very often this is about short term financial reporting to shareholders. Sometimes I ask myself as well as other people, what do we expect firms to do according to the context within which they operate. Recently I have spent a lot of time speaking to TESCO about this, there is an internal commitment and I don't doubt the personal commitment of those involved in those parts of the business to try to make profound changes, but on the other hand it is a business with a particular business model and approach to business and to change that radically very quickly would expose them to risks in relation to their shareholders, so in some ways some third party involvement might be very important and perhaps required. I personally think that governments need to show very strong leadership in that respect. (up)

JH. And do you think that there could be some kind of promotion as something that we could define as best practices, or does this go too far, or is it too generic?

AM. One of the problems with best practice is that it implies that there is a single correct trajectory, but if we were to go out today and look at a bunch of firms in the food sector we might identify which one we think is behaving in the most environmentally sustainable way at the moment. Following the best practice logic you would then say, well lets look at what they do, their strategies and their systems and processes and suggest that other businesses or organizations try to copy them, but that process is very difficult because there is embedded culture in organizations and simply trying to transpose another organizations processes and systems upon your own is not a trivial matter. As I said before one of the ways that progress occurs is through variation rather that convergence so I think that convergence to a single best practice might be stifle an idea that is better than the existing best practice but that just hasn't developed enough yet, so I am not sure. On the other hand I think that the exchange of good practice and learning about good practices is probably a good thing, not as an idea that this should become a target to imitate, but to provide learning across different contexts. Different contexts probably mean that the same practice won't be appropriate everywhere, so there is a strong basis for wanting to make good practices more visible but not that there is an attempt to immitate them. It is time to show the various possibilities that are out there in order to stimulate further experimentation to create divergence rather than convergence to a particular best practice.
(up)

Read the second part > [4]

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