The first thing that Charlie Brown learnt when someone set up a rival lemonade-stand is that once he lost his monopoly-status and this simple ‘thirst-quencher’ became a commodity, creativity and innovation were now critical to his business’s future survival. From this week’s readings it’s clear that what’s being experienced within the Scandinavian design industry or any similar business clusters – whether it’s ski equipment manufacturers in the Italian Alps, PC components designers in California’s Silicon Valley or aeroplane parts manufacturers around the giant Airbus plant in Toulouse France – is the ultimate evolution of the lemonade-stand principle. (Power, D. 2009)
The idea behind clusters is basically beneficial. For example, the hundreds of firms started by ex-Microsoft employees in Redmond, Seattle all helped to cross-pollen each other with new ideas. (Hinkel, M. May 7th 2008) In other words, having like firms operating within close proximity to create concentration density can provide important critical mass when it comes to buying power, knowledge transfer or access to an all-important skill-base. (Power, D. 2009) However, results from the study of Stockholm design services referred to in Dominic Power’s presentation: Creativity and innovation in the Scandinavian Design Industry suggests that when it comes to creativity and innovation, competition is much more critical than collaboration. (Power, D. 2009) Even though these firms did work together, the study revealed little to no interest in formal collaboration or formally sharing much of the work they did together. There was however, considerable evidence to suggest that the drive to be creative and innovative was underpinned by the competitive dynamics of a rapidly changing and growing industry.
I think the message from this study is clear. While agglomeration can help an industry-base develop, but expecting companies to share their IP in the process of bringing new products to the market is delusional at best. In other words, no company is going to compromise the elements of its business that make up its competitive advantage. But that said, the know-how within individual firms does get spread throughout an industry simply by hiring and firing – people going to work for their competitors. (Power, D. 2009) And given that this happens in every industry sector, it’s hardly surprising that Power indentifies networks of friends and contacts as the most important form of interaction within any cluster. I think the warning for any company within today’s knowledge industry is simply: Overlook the power of social or business networks like Facebook or MySpace at your peril. For the companies operating within a cluster, social networks represent both threat and opportunity. On the one hand, they can tributary to career development of staff, but at another level they could help that talent-pool plot their next career move. Considering the speed at which an idea or concept can be ripped off today and electronically communicated around the world in nanoseconds, I think one of the key challenges confronting today’s businesses is staff retention. So maybe they need to spend more time creatively and innovatively preventing the source of their competitive edge – namely their key talent – from walking out the door.
This is an example of creative thinking within business. Creative thinking with Edward De Bono, the founder of the six thinking hat system.
- Power, D. (2009) Creativity and innovation in the Scandinavian design industry. Designed in Stockholm. Creativity, Innovation and the cultural economy (pp. 200-216). (Eds. Andy C. Pratt Paul Jeffcut). Hoboken: Taylor and Francis
- Hinkel, M. (May 7th 2008) Microsoft Ex-Pats Developing Open Source Software Outside of Redmond. Retrieved from: http://socializedsoftware.com/2008/05/07/microsoft-ex-pats-developing-open-source-software-outside-of-redmond/