Jan 9th 2014, 16:50by M.S.L.J.
CASSANDRA has every reason to fear innovation. A particularly nifty piece of Greek engineering once brought doom to her family in the shape of a horse. By contrast, Henry Chesbrough, faculty director of the Garwood Centre for Corporate Innovation at Berkeley’s Haas School of Business, embraces new ideas.
His three predictions for 2014 concern areas from research and education to venture capital and Asia’s service industry, as seen below.
1. Universities will be increasingly disrupted by both new technologies and society’s demands. The advent of MOOCs (massive open online courses) will continue to challenge the fundamental architecture of the university, which bundles teaching and research into a single organisational entity. Because world class instructors are available to anyone, via the internet, pressure on the teaching portion of the university will not ease in 2014. Meanwhile, the research mission of the university will compete with the work of other providers. For example, the European Union’s Horizon 2020 funds (for research and innovation programmes) will shift from supporting basic scientific inquiry to more applied endeavours. This will seek to make a commercial or industrial impact in society. While it will take years, a major rethink of the role and structure of the university is in order.
2. Corporations will increase their presence in the venture capital world. Traditionally viewed as “dumb money” by seasoned venture capitalists, corporate venture capital (CVC) is making a surprising, sustained comeback. In certain sectors, such as renewable energy or the life sciences, CVC accounts for nearly half of the venture money being invested. This is due in part to CVC’s ability to wait patiently for startup ventures to build their businesses, and also partially because corporations are often the most likely exit for most of these ventures. Even the most skeptical private venture capital firms are seeking to partner with CVCs as a result.
3. Services innovation is coming to Asia. Whether it is Japan, looking to translate its technological prowess into new growth, China, looking to increase domestic consumption, or Korea, looking to escape the commodity trap, many leading Asian companies are starting to invest time and money in enhancing their service offerings. Even traditional manufacturing companies are finding that services provide a welcome nudge to profits, and increase customers’ satisfaction with their products as well. However, the business culture in leading Asian economies is very engineering-focused, and it will be a challenge to promote executives with deep service experience to the top levels of leading firms.