09 July 2014

From “Waterfall” towards “Complex Innovation”

“Waterfall” Innovation finished about 15 years ago: the model was moving from research activities to standardization, from systems development by Technology Providers to Service Providers deployments up to services provisioning to Consumers.

Today (and tomorrow) Innovation is likely working the other way round: it is starting from the needs of the Digital Society, from the massive Consumers, Users and from the challenging requirements of the new Digital Economy. Today Could Computing and ICT platforms are easily accessible in any part of the world (almost) on an equal basis. This is making a big difference as it this will reduce the thresholds for several new Players to enter the Digital Economy ecosystems and to provide ICT services for the Digital Society.

In fact, at the end of the day, competition is moving from Capex to Opex, and my guess is that the full transition will happen non-linearly, once a critical threshold will be reached. Just like a phase transition. A system/phenomenon is called linear if effects are proportional to their causes, non-linearity mostly happen when effects are becoming (positive and negative) feedbacks to the input. And that’s what’s happening today: technology development and adoption is accelerating through a systemic combination of several variables. The coming Digital Economy – just like a Complex System - cannot be reduced just to the sum of its parts!

What is the meaning of complexity ? We have to resume the Latin root complexus, which means entwined: a complex system is composed by a network of components variously interconnected (e.g., with positive and negative feedback loops). The study of complex (eco)systems investigates how relationships between components give rise to collective, systemic behaviours of the (eco)system and how the it interacts and forms relationships with its environment. “Waterfall” approaches won't work anymore. 

So, my argue is that Innovation should be deeply embedded in the DNA of Digital Society and Economy, looking at massive markets.That’s why I’m calling it Complex Innovation: a way of making Innovation by dealing with the systemic interdependencies of all socio-economic variables of the hyper-connected world we are living in.

Ultra-broadband diffusion, advances in Information Technologies, increasing optical bandwidth availability, tumbling hardware costs are creating this hyper-connected world and the conditions for the change of paradigm, which is about softwarizing the processes of the Society and the Economy.