23 March 2012

Author Simon Poulter

In acknowledging that artistic outcomes are not necessarily commercial in terms of innovation, we can also observe that outputs from digital experimentation may tend towards pure research. There are, however, surprising links between business innovation and creative endeavour - more to the point this has become a central understanding of our knowledge economy; that aberrant or disruptive thinking is desirable in both creative production and technological advance. In The Innovator's DNA (Harvard Business Review Press, 2011) Dyer, Gregersen and Christensen identify five common traits in innovation leadership - associating, questioning, observing, networking and experimenting. Although reductive, the language could equally apply to artists as it does to those engaged in business.

Artists working with technology tend not to work in isolation and we see the steady rise of the 'lab' as a way of optimising innovation in artistic practice. We define the artistic laboratory as a temporary or ongoing space where the associating, questioning, observing, networking and experimenting in terms of practice can take place. In form, artistic development is placed in a dynamic, social and interactive space - pushing practice and leading to unexpected outcomes.

Perhaps where the artistic and commercial links break down is in terms of revenue or capitalisation of outcome, products or artworks. Business innovation hubs create a driving force of interaction and wealth creation, along with a churn of products and ideas - or so the propaganda goes. However, empirical evidence shows that aggregation of talent, ideas and outcomes is not a simple cut and paste regenerative or venture capital based enterprise. The US and UK economies are interesting comparators - for example, in Silicon Valley it has not been uncommon for young (and usually male) entrepreneurs to try out several 'start -ups', learning through failure (and iteration) and then eventually putting together a viable business. In the UK, where more distinctive governments schemes such as the Technology Strategy Board (TSB) have been evoked, there are structured capacity building exercises such as the 'Catapults' defined as centres to accelerate innovation (for example there will be a Connected Digital Economy Catapult aimed at knowledge transfer). Other organisations such as Arts Council England have forged strategic schemes focussing on digital distribution and innovation.

At the same time as there has been a wide adoption of the language of innovation across the arts and business in the UK, there has been scant attention to definition of terms or evaluation of outcomes from investments. In Culture of Innovation (NESTA, 2010), Hasan Bakhshi and David Throsby assert that, "There is little clarity about what innovation means in an arts and cultural context". However they offer some useful pointers and potential metrics - value creation, art-form development, audience reach and business models.

Henry Chesbrough and Richard S. Rosenbloom in their paper The Role of the Business Model in Capturing Value from Innovation: Evidence from Xerox Corporation's Technology Spinoff Companies refer to an 'architecture of revenues' as a distinction from the technology, invention or thing itself. In effect, the level of innovation required in terms of thinking about revenue generation is no less than that of the technological innovation to bring about the thing itself (the product). The most well known example of this would be the 'graphical user interface' created at XEROX and subsequently used by Jobs and Wozniak to great effect in the Apple range of computers. 

Steve Jobs was as an innovator - but of the 'architecture of revenues', not of the products themselves. Successful innovation, as Job's biographer Walter Isaacson observed, arose from standing at the intersection of the humanities and technological advances. Jobs, we could argue, foresaw the importance of disruptive business models allied to disruptive technologies. In The Innovator's Solution, Clayton Christensen modified his terminology to term this as disruptive innovation, an example being Jobs' insistence that the 'customer' does not know what they want (counter-logic to common corporate-speak or ideas of proximity to the consumer).

Furthering the idea that business and artistic innovation are founded on the same processes, we can see that both tend towards an heuristic mode. Materials, code, colours, references and connections are played with, reshaped and subjected to trial and error. Thus, the results or outcomes may often be unintended or indeed wilfully indeterminate. In the artistic hub or tech space this process is augmented by competitive instincts, social interactions and shared knowledge.

Of course there are base levels at which these heuristic experiments take place - i.e. within a coding language or form of software, an established technical platform (ie laser cutter), an aesthetic language or artistic movement. In this case, a mode or technical layer establishes focus for play.

Christensen's observations around disruptive technologies are well documented in corporate developments in technological marketplaces. More recently we can see how the music industry has been relatively easily taken down by shifts in acquisition and distribution.

The argument, in terms of corporate force, is to maintain the core revenue streams and investment, while keeping an eye on emerging breakthroughs, if necessary speculating or 'buying out' those that challenge or limit the above. This is often cynical in form, holding back advances to the marketplace. But, as we have seen in the case of XEROX, eventually those technologies do breakthrough (for example Adobe and PostScript along with the graphical user interface).

Naturally, of course the transitions that digital beings or entrepreneurs make when successful are toward the preservation of revenues; for example digital rights management or social walled gardens (Facebook etc). Also, in a digital economy fuelled by venture capital, the business model might taken on an heuristic form. It might not be clear where the revenues come from without trying things out. The start-up must however scale up and then seek control of a market.

More broadly, it is interesting to compare non-corporate or arts related modes of innovation and knowledge acquisition. In doing so, we begin to create a hybrid discourse on innovation and, on the one hand, a vapid 'catch all' way of describing things and, on the other, a strong sense that describing something as 'art' or 'software' may increasingly be a redundant form of categorisation. 

The business model of a corporation or arts organisation will vary from that of a university and in turn all of these will vary from that of a technological 'start up'. However, in the firm tide of the knowledge economy there are countless examples of this activity. The corporate research lab will naturally tend towards the creation of knowledge and technological developments and observations that inform the over-riding business model (ie selling printers, developing an operating system or constructing a social media enterprise). Traditionally, an arts organisation's business model would be to author or curate a programme engaging the public or a constituent user base. A university research lab will incline towards peer reviewed knowledge and outputs. This is all changing, as digital culture and processes evolve.

Applying disruptive innovation to all of these established models may well be the answer and we note that in Europe and the USA there are an expanding set of collaborations around applied and creative technology, perhaps with the pre-eminence of the Massachusetts Institute of Technology (MIT). In the UK, there is increased focus on clusters and hubs, notably Tech City in East London. Drilling down into the arts, there are emerging examples of 'digital leads' but as yet not the higher definition required to incentivise regional development.

In terms of digital innovation, Hasan Bakhshi and David Throsby conclude that further experimentation is needed by cultural and arts institutions. But of course there needs to be more strategic consideration of the increasing conflict in terms and outcomes that arise when we use the word innovation. Looking at the triangle formed by entrepreneurship, academia and creative technology, issues arise around governance (legal models), lighter frameworks facilitating human interaction and stronger evidence of outcome from investment.

It's quite clear though, that encouraging artists and makers to contend all of the above is the future and that we need to encourage more enlightened debates across government and the arts and technology sectors. But we conclude that the objectives of business and artist disruptive innovation are the same.