The role of power laws to build the future of innovation

We don’t see the future, but we seek patterns. When patterns don’t appear naturally, we invent them so that reality could fit our narrative about innovation.

Such narrative will work for a few years; even decades sometimes. But it doesn’t change the underlying complexity of the market. The narrative is not wrong per se, it’s a useful bias to explain a chaotic reality. These last decades, the most well-known narratives about innovation were based on the speed at which technology was changing the market. Interestingly enough, connecting technology and market change is also a narrative.

It is about the self-fulfilling prophecy that when technology changes fast enough, it will spark market changes based on break-through performances. And if there are enough correlations, there is no real causation in the end. As such it is always important to remember that the number of patents (or R&D spending) is not a fair or even adequate metrics of innovation.

Industries dont see the future they build narratives - innovation copilots

But nonetheless, this narrative implying that invention (creating new technologies) is innovation (changing the market) being so well spread, we have specific variations of it. Moore’s law helped frame the computing market for decades, pushing Intel and Microsoft to rely on each other to develop always more powerful computers that in the end were still running spreadsheets and word processors. When computing power really seemed to matter, we had to translate it for the biotech market with Flatley’s law. Then reality kicked back in, and we realized that developing new drugs ended up costing more and more (despite ever-growing computing power), or that the market just wanted mobile devices that would keep on working for a full day.

And so, industries had to escape their own narratives, adjust to current reality, and rebuild narratives. Except that you cannot adjust overnight. Intel already invested billions of dollars in new factories when they realized that they were pushing for the wrong specifications. More importantly, your culture won’t adjust overnight. How many years before car manufacturers can let go of their strategic know-hows and engineering skills on thermic engines?

Industries find comfort and project their vision through these narratives on technology. But they also trap themselves in them, while startups can adjust faster, and –most of the time– are already pursuing another narrative.

This is key if you want to understand how startups can contribute to corporate innovation: startups can unmask new technology laws to sustain your future business. And while they do that, they also help the industrial culture to adjust faster to the new paradigm.

So the next time you want to predict where the future of innovation is built, search for the next Moore’s law. 

Author: Philippe

After obtaining a PhD in biotechnologies, and working in a medical diagnostic startup, Philippe Méda has managed teams and companies in the medical and pharmaceutical industries for over fifteen years. Following an MBA in 2007 Philippe founded Merkapt, a consulting agency in charge of co-piloting innovation for startups and large multinationals, in Europe, and Asia. Since then he has been training 200 to 300 startups a year, consulted for dozens of multinationals on rupture innovation or corporate incubation, and was directly involved in more than 150 startups building their market fit and scaling up their business. Philippe also teaches innovation and business model design in key MBA programs in Paris and Shanghai and is now living in Amsterdam.

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