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Dr. Bordogna's Remarks


Innovation and Creative Transformation in the Knowledge Age: Critical Trajectories

Dr. Joseph Bordogna
Acting-Deputy Director
Chief Operating Officer
Plenary Session
Portland International Conference on
Management of Engineering and Technology
Portland State University
Portland, Oregon

July 29, 1997

I. Introduction

Good morning! We live in an era of breathtaking change and complexity. Twenty-five years ago, typewriters were one of the top products; now it's PCs. A few decades back, I worked my way through college creating India ink drawings by hand for RCA Corporation. I made a living by demonstrating expertise with a simple set of instruments known as French curves. Now mouse-clicking a sketch on a PC screen not only produces a better drawing in less time--I also don't get indelible India ink all over my fingers.

Although we are invigorated by change, many of us have difficulty grasping the full potential of the advances at our fingertips. Today we are experiencing great economic strength while many people feel insecure about their jobs. Indeed, there are no more "safe" careers. We are witnessing the era of "commodity" workers - whose contemporary skills are ubiquitous and thus easily garnered at minimum cost in a global market. This is no way to make a living: rewarding careers should be rewarded. I was paid well for those India ink drawings.

While inexorable technological change challenges our current ethical, social, and economic systems, we are also presented with opportunities to improve our lot. Let's consider, for a moment, the wealth creation process, which enables our welfare, quality of life, and even our quest for knowledge.

II. The Innovation/ Wealth Creation Process

A number of reliable studies indicate that, during the past fifty years, industrial innovation has been responsible for about 40% of the productivity gain in the United States. However, the old model of innovation as a linear path process, with new scientific knowledge created at the front of the path and new products, services, and markets garnered at the path's "end," is increasingly challenged. Recent economic history has made it all too clear that research leadership does not translate automatically into economic success: physical capital (including information and data bases), enriched human capital, and technological capital are needed as well. To better illustrate this, let's for a moment examine the key elements of the innovation process:

Figure 2: Innovation-Concurrent Integration
(See the slides that accompany these remarks. You need a Power Point compatible graphic program to read the .PPT formated files. You may need to configure your browser to recognize .ppt files as Power Point.)

As portrayed here on the screen, Innovation is a concurrent, interactive, and nonlinear activity. It includes not only science, engineering and technology, but social, political and economic interactions as well ... and the public policy that either enables or mutes the whole wealth creation process.

A critical element in the innovation process is scientific inquiry, an analytic, reductionist process which involves delving into the secrets of the universe to discover new knowledge. Those who excel at this paradigm sustain and nurture the world's rich intellectual infrastructure.

The essence of engineering, on the other hand, is the process of integrating all knowledge to some purpose. In a poetic sense, paraphrasing the words of Italo Calvino, the engineer must be adept at "correlating exactitude with chaos to bring visions into focus."

The "stuff" of technology underpins enablement but the whole process is muted if the public policy and economic context are awry.

III. Three Critical Trajectories Impacting the Innovation Process

Figure 3: Three Critical Trajectories

With these thoughts in mind, I would like to examine three critical trajectories that are strategically impacting the innovation process. These evolve from trends that are inventing, and being invented by, each other. I use the word "trajectory" here because it conveys a useful idea- something moving along a path with some "oomph" behind it.

(1) Border Crossings (National and Sectorial)

The first trajectory comes under the heading of "border crossings." It refers to the growth in both scale and importance of cooperative approaches to scientific and technological research.

Figure 4: International Co-authorship

As this figure shows, we have seen a marked increase in recent years in research collaborations that span international boundaries. The number of internationally co-authored articles increased by 150 percent from 1981 to 1993. The share of all published articles with co-authors from two or more different nations has more than doubled over the past decade.

The uninhibited flow of fundamental knowledge in science and engineering through publication and peer review remains a defining characteristic of our global enterprise. These data make clear that this tradition remains indispensable to the progress of research in all scientific and technological fields.

Another type of border crossing has only recently begun to occur with regularity. Cooperative activities that cross sectorial boundaries - notably industry-university partnerships - are a relatively new addition to the strategic intent of research investment in contemporary universities, but they too show signs of proceeding at an accelerating pace.

Figure 5: Co-authorship Across Sectors

In the U.S., this trend is most pronounced when examined from the perspective of the industrial researcher, as is shown on this figure. Cross-sectorial co-authorship has grown steadily in the U.S. since the early 1980s. A large share, nearly 40 percent, of journal articles published by researchers based in private industry now include a co-author from a university or government laboratory. In 1981, this share was hovering at just over 20 percent, so we have seen it roughly double over the past dozen years or so.

Only very recently have we begun to see concrete evidence that highlights the importance of university-based research in determining a nation's capacity to innovate and compete economically. A just-completed study of citations from U.S. patents to the scientific literature has documented the linkage between university research and industrial innovation. This study - developed by Dr. Francis Narin and several colleagues has already been featured prominently in a number of major news outlets, including the New York Times.

Figure 6: Patent Cites to "public" science

The Times article ran under the headline, "Study Finds Public Science is a Pillar of Industry." The study found that 73 percent of recent patents awarded in the U.S. cite research from public and non-profit organizations. The academic sector was found to be the principal source of key findings, as it proved to be the source of just over half of the articles cited.

These findings, coupled with today's constrained U.S. Federal budget environment makes this an especially crucial period for industry-university linkages. Over the last two decades, we have seen partnerships between academe and industry grow into a bountiful landscape of innovative endeavors.

(2) Emergence of Complex Technologies

This brings me to the second trajectory --the changing nature of the products and processes demanded by today's global marketplace.

Figure 7: Added Value: 30 Most Valuable Exports

In a study presented this February at the annual meeting of the American Association for the Advancement of Science, Donald Kash and Robert Rycroft, found that the most successful commercial technologies have changed in one basic way over the past quarter century: they have become more complex.

Kash and Rycroft analyzed the 30 most valuable exports in the global market in the years 1970 and 1994. They divided them into the categories shown on this table. The boxes on the matrix are determined by whether the products themselves can be considered simple or complex, and whether they require simple or complex manufacturing processes.

Kash and Rycroft's key finding is quite striking. In 1970, a quarter century ago, nearly 60 percent of the world's top exports were essentially simple products that could be manufactured through simple processes (upper left box). Today, that same percentage-60 percent-of the world's top exports are complex products that require complex manufacturing processes (lower right box).

Figure 8: Innovating Complex Technologies

Kash and Rycroft write that "economic well-being in the future will likely go to those who are successful in innovating complex technologies." Put simply, the future belongs to those who can make sense of the complex, to those who can integrate diverse knowledge located in many different organizations to produce previously non-existent capabilities.

Diversity is a must--diversity in views, in approaches, and in backgrounds. Without it, we will never see beyond the limits of our individual perspectives and achieve the breakthroughs that occur only through the synthesis of widely different skills and perspectives.

(3) Age of Knowledge and Distributed Intelligence (KDI)

The third trajectory I'll examine today is the impact of advanced information technologies on society - what my colleagues and I at NSF describe as Knowledge and Distributed Intelligence or simply "KDI".

When recently asked about the future of the Internet, Bob Lucky, vice president at Bellcore, said: "There are two things I know about the future. First, after the turn of the century there will be one billion people using the Internet. The second thing I know is that I haven't the foggiest idea of what they are going to be using it for.

The INTERNET is indeed a tremendous breakthrough in that it cobbles together millions of computers, servers, all kinds of software and databases, and documents, - - and makes huge amounts of "stuff" available to millions of people. The next revolution, however, will be making the internet "intelligent" - a "place" where people and machines collaborate.

What we are seeing today is only the beginning for forging connections to learning and creativity. We are moving from the Internet Decade to the Information Everywhere Decade. Will we develop new ways to express and unleash our creative talents - talents that are now limited by our ability to interface via a keyboard and mouse? What tools will enable us to control and master this ultra-rapid flow of information? Will having the proverbial Library of Congress in your pocket be a blessing or a burden?

The answers to these questions are being pursued on many different fronts from many different directions . Our efforts and our leadership can transform this immense, unprecedented, and somewhat intimidating potential into true progress, economic opportunity, social gain, and rising living standards for human civilization.

Figure 9: Knowledge and Distributed Intelligence

As I mentioned, we are pursuing a theme that we refer to as Knowledge and Distributed Intelligence (or simply "KDI"). KDI is perhaps the most encompassing venture NSF has ever pursued. It cuts across all fields of research and touches education at all levels. And, it is inseparable from the trends and technologies that are driving growth and opportunity in our economy and society - from networks to sensors to virtual reality systems.

In the next few years, KDI research will help us take the next quantum leap forward in terms of both technological progress and societal benefit. It is impossible to predict the next level of tools and capabilities. But, we can be confident they will be spectacular!

For FY 1998, NSF's KDI investment falls into three basic categories:

  1. Knowledge Networking focuses on the integration of knowledge from different sources and domains across space and time.
  2. Learning and Intelligent Systems seeks to unify experimentally and theoretically derived concepts relating to how humans learn and create, in collaboration with machines.
  3. New Challenges in Computation focuses on research and tools needed to model, simulate, analyze, display and understand complicated phenomena, to control resources and deal with massive volumes of data in real time, and to predict the behavior of complex systems.

Cutting across these three activities is the Next Generation Internet. NSF's role in this multi-agency effort is intended to keep academic science and engineering at the cutting edge of computing and networking technologies.

IV. Creative Transformations

Figure 10: Creative Transformations (Schumpeter)

Joseph Schumpeter introduced the concepts of creative destruction and creative transformations over half a century ago. He admonishes that unless an entity continually transforms itself, it will ultimately be destroyed by market competition.

As you are well aware, Corporate America has been going through a period of restructuring. The three integrated trajectories that I described have driven the shift in corporate focus away from the individual and toward the group. Indeed, products and processes have become so complex that no one individual can bring all the needed skills to the table.

Today, a new model for the successful corporation has emerged. It's epitomized by high-tech firms like Sun Microsystems and Netscape. Robert Keidel dubbed this "the cooperation-driven" corporation--and it is different in a number of ways from what we've been used to in the past. Its overarching purpose is to enhance group performance, celebrate teamwork and flexibility, and create a tempo that is electric. Cooperation is now a key to continually recreating a corporate entity and remaining competitive in the global economy. Not only is this true for corporations, it is true for universities and other institutions as well.

Consider that over 2,000 years ago a well to-do citizen of ancient Greece offered some of his real estate, a grove, to a thoughtful fellow citizen - to be used as a place where fellow thinkers could gather for hearty discussions on matters of common and uncommon interest. The grove became Plato's Academy, and the generous benefactor's name was Academus - the name from which our higher education enterprise derives its own name.

In those days, a physical place was needed in order to build connections to learning and creativity. Today, knowledge is becoming available to anyone, anywhere, anytime, and power, information, and responsibility are moving away from centralized control to the individual. At many universities and elsewhere, books are already being published and courses taught on the World Wide Web.

The noted guru of artificial intelligence, Edward Feigenbaum states: "The library of the future will be a network of knowledge systems in which people and machines collaborate." We can only speculate on the enormous impact this will have on what we now call a "university."

Figure 11: Study of Creative Transformations

The dynamics that underlie the process of creative transformation are poorly understood. At NSF, we have begun to address the principles underlying creative transformations by bringing together research in two areas - the Management of Technological Innovation (MOTI) and research on Transformations to Quality Organizations (TQO). Currently, the first program is administered by our Engineering Directorate, while the TQO program resides in our Directorate for Social, Behavioral, and Economic Sciences. [My colleague, Joe Hennessey, will describe these programs in greater detail in a session tomorrow.]

These organizational details are important, because we have learned that we must draw upon work in both engineering and the social and behavioral sciences to address the fundamental questions that hold the key to progress, such as:

  • How do organizations come to understand the need for innovation and change?
  • How does technological change affect organizational change?
  • How do transformations affect performance?
  • How can organizations effectively create, develop, and implement new technologies, processes, and structures to meet customer needs?

It is clear that these questions and many others like them cannot be addressed by relying exclusively on either the so-called "hard" or "soft" sciences. Addressing them requires that we develop new approaches to research that are highly integrative across all fields of science and engineering.

V. Conclusion

In closing, I should like to speculate about what the three trajectories I have highlighted hold for the future:

  • International and inter-sectorial cooperation is likely to continue growing at an accelerating pace - to the benefit of all of us.
  • The emergence of complex technologies and their impact on wealth creation will increase the need for integration across all fields and sectors.
  • The arrival of the era of knowledge and distributed intelligence will enable us to pursue previously unimaginable avenues of technology, and it also will restore and reinvigorate the natural linkages between research and learning.

Let me add that these trajectories are much more likely to change us than we are to change them. That may cause some discomfort in our ranks, but we should keep in mind something Douglas MacArthur once said, "There is no security in life, only opportunity."

In the final analysis , I believe these trends bode very well for economic and social progress, and our ability to innovate. Thank you for your attention and I'd be happy to answer any questions you may have now (as time permits) or in the following plenary workshop.



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