How do I define innovation capital?
Innovation capital is the sum of all that promotes the development and changes required for achieving innovation outcomes, within one organisation or its broader networked environment, for marketplace advantage. These are made up of the resources, processes, knowledge and capabilities, that are constantly evolving and highly dynamic, to build greater innovating capacity.
The hard part is valuing innovation capital, as these are constantly being renewed and evolving.
Innovation capital is a set of renewal capabilities and understanding what these are is critical but today is not well understood. We find it extremely difficult to report clearly on the makeup of our innovation capital, and where we should focus in their development.
Being able to articulate the value within these capitals would be truly valuable and would help us differentiate between those that are static or simply repeating, and those that are dynamic, ever-evolving, and searching for new knowledge.
Building stock, generating flows
It is the generating of ‘new stock’ that builds the values of our future capital. It is these unique bundles of an organisations resources and assets that give us our new innovation value, through the process and flow of new knowledge and its value creation, that lead to commercialization. We need to constantly create fresh innovation capital.
It is the dynamic interactions between the different innovation capital assets that produces successful activity and outcomes. This is where absorptive capacity plays its vital part in structuring this process.
How can we capture and articulate the innovation capital?
The key to identifying innovation capital lies in its stocks and knowledge building assets and their uniqueness in the resources that make this up, in constantly evolving and learning, these are the real strategic asset to nurture and build. Leveraging and continually building the ‘stock’ of our innovation capital can render different productive value outcomes.
It is our ability to ‘mix and combine’ the innovation activity that it consists of, in all the decisions and activities that occur, from the recognition of a need or a problem, the decisions, and the activities that build through developing concepts. This leads to the eventual release into commercialisation into successful market outcomes that feeds and builds the combined innovation capital.
Knowing this make-up of our innovation capital provides us with the potential for driving our future growth. Identifying the real capital that will drive and sustain the real advantage, providing the future potential for new wealth should be the essential way we measure organisations performance, not on past financial performance or personal perception, built on limited understanding.
Holding the future back if we lack a deep understanding of our innovation capital
If we had a better understanding of the make up the innovation capital, and what makes up its critical enablers, then we are better positioned to qualify and even quantify a more confident future, based on the capital that ‘feeds’ the future potential.
We need to understand the strategic importance and take the time to explore where our innovation capital lies to understand all the value-building points. Most corporate boards lack any clear line of sight into this, which significantly holds innovation back, constrains growth, and makes us all far more cautious of the future.
I think it is the time we did clarify our innovation capital in far better ways. Need any help?