Adopting Diverse Perspectives in the Fostering of Innovation Activities
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1 Adopting Diverse Perspectives in the Fostering of Innovation Activities Totti Könnölä, Ahti Salo & Ville Brummer Systems Analysis Laboratory Helsinki University of Technology P.O.Box 1100, FIN TKK, Finland Although foresight has often supported shared vision-building and generic priority-setting, it can also foster diversity in perspectives, collaborative relations and ideas on innovations. While such diversity can be supported by soliciting weak signals from different stakeholders, the mere mapping of weak signals may result in an extensive set of fragmental issues that are difficult to compare and interpret in terms of suggested actions. In contrast, novel ideas about prospective innovations can be viewed as more focused and action-oriented reflections of weak signals which can be more readily interpreted in the context of innovation processes. In this paper, we describe a novel foresight method for the Internet-based generation and multicriteria evaluation of innovation ideas; we also report experiences from a pilot project where this method was employed in the Finnish Foresight Forum established by the Finnish Ministry of Trade and Industry. Specifically, the method provides a systemic anonymous process which fosters collaborative work among multiple stakeholder groups (eg, researchers, industrialists, administrators, users, students). It consists of (i) the generation of innovation ideas, (ii) mutual commenting and elaboration, (iii) evaluation of ideas with regard to the several criteria (eg novelty, feasibility and societal relevance), and (iv) multi-criteria portfolio analysis towards the identification of most interesting ideas. The encouraging results from the pilot project suggest that this kind of an Internetbased process can foster diversity within innovation activities. 1
2 1 Introduction In the 1980 s, publicly funded foresight activities were largely seen as an instrument for assisting in the development of priorities for S&T resource allocation (Irvine & Martin, 1984). Later on, stakeholder participation and networking have increasingly been regarded as essential dimensions of foresight activities that wire up the innovation system (Martin & Johnston, 1999). Furthermore, experiences from recent participatory foresights have emphasized the importance of common vision-building as a step towards the synchronization of the whole innovation system (Cuhls, 2003). These trends are reflected in the taxonomy of Barré (2002) who distinguishes between the following foresight objectives: (i) setting of S&T priorities, (ii) developing the connectivity and efficiency of innovation system and (iii) creating shared awareness of future technologies. While these objectives remain relevant dimensions of foresight activity, much of the value of foresight derives from its role in enhancing the long-term innovative capabilities of the whole innovation system and its parts (Salo et al., 2004). Because diversity is arguably a key determinant of innovative capabilities, we examine the foresight objectives from the viewpoint of diversity defined as the presence of a wide range of variation in the qualities or attributes (Wikidepia, 2005). Diversity within innovation systems contributes to the ability to anticipate different kinds of futures and assists in responding to them in an adequate manner. Diversity is particularly relevant in view of the path-dependencies that prevail at different levels of the innovation system, including its organizational, sectoral, regional, national and international dimensions. Both evolutionary and institutional economists (e.g. Dosi et al., 1989: North, 1990) have identified dynamic path-dependent processes that are driven by the economies of increasing returns and institutional acculturation. These processes may lead to lock-ins to existing production and social systems (Unruh, 2000; 2002). Often, these processes are characterized by the emergence of standards, dominant designs and practices that reduce uncertainty for action while creating stable expectations of the behavior of others. At the organizational level, such path-dependencies tend to strengthen the surveillance, mental and power filters of information (cf. Ansoff, 1975), which in turn may diminish the organization s ability to identify signals of change. While the dynamics of path-dependence may improve the efficiency of exploiting present resources, it can also lead to a reduction of diversity and thus decrease the adaptive capabilities, flexibility and evolutionary potential of the system. Lack of diversity in technological options and collaborative relations may be particularly noteworthy in times of discontinuous radical changes that replace existing components or entire systems and, at the same time, destroy old competences and create new value networks (Könnölä et al., 2005). From this observation it follows that diversity is pertinent to the management of foresight activities, as suggested by the following remarks on the three general foresight objectives, ie, priority-setting, networking and common vision building: Priority setting supports the identification of common future actions and the efficient resource allocation (Irvine & Martin, 1984). Excessive prioritizing, however, decreases the diversity of options that could challenge conventional approaches and dominant designs. This, in turn, may strengthen inertia within existing techno-institutional systems which become dependent on their historical paths in the absence of available alternatives. Here, foresight methods can support the creation of new alternatives and the inclusion of diverse perspectives in priority-setting. Networking enhances the connectivity of the innovation system and can thus improve its performance. However, excessive emphases on the strengthening of present networks and optimizing their efficiency may create path-dependences which, at the extreme, lead to techno-institutional conditions that lock-out alternative technological options (Unruh, 2000). 2
3 Thus, apart from strengthening existing networks, foresight activities should also contribute to the creative restructuring or even destruction of possible lock-in conditions by engaging different stakeholders in the proactive generation of rivaling visions on the future (Könnölä et al., 2005). Foresight activities can also foster the emergence of competing coalitions based on different value networks and encourage the envisioning of different architectures, configurations, features and standards (Tushman & O Reilly, 1997). Building a consensual vision of the future and its technologies reduces uncertainties and helps synchronize the strategies of different stakeholders towards common action. Yet, the excessive search for consensus on the most probable future and its technologies may lead to conservative and abstract results (Luoma, 2001), which further strengthens existing pathdependencies. General abstractions are not readily actionable, especially if the responsibilities are not clearly identified (Salmenkaita and Salo, 2004). Thus, the search for a consensual vision of the future should be complemented with or even be replaced by the exploration of alternative futures and respective technological arrangements. In foresight exercises, diverse viewpoint from different participants are often brought up to bear on the general foresight objectives. For example, the Delphi-method (e.g. Helmer, 1983) explicitly starts from the diverse viewpoints and converges towards consensus statements; also networking objectives are implemented by encouraging diverse interactions across disciplines and sectors (Martin & Johnston, 1999). Yet, we posit that emphases in priority-setting, strengthening of existing networks and common vision-building may have spurred methodological choices that contribute more to convergence rather than enhanced diversity. As a result, it may be beneficial to develop foresight methods that recognize diversity considerations as relevant part of the attainment of the general foresight objectives. In this paper, we describe the foresight method that contributes to the inclusion of diversity considerations especially into priority-setting through (i) the engagement of the variety of participants, (ii) the generation of novel ideas on prospective innovations and (iii) the explicit recognition of multiple perspectives in the analysis of the ideas. While the method contributes partly to the inclusion of diversity considerations also in networking and vision-building, these highly relevant dimensions are not in the locus of this method. Experiences from the use of the developed method are described in connection with the Finnish Foresight Forum established by the Ministry of Trade and Industry in mid Based on this method, parallel processes were carried out to support three expert groups on nutrigenomics, health care and social services and personal experience services. Parallel processes were also conducted with the MSc. students in the decision-making course at Helsinki University of Technology. 2 Innovation Ideas as Weak Signals The attempt to accommodate diverse perspectives on the future is a focal feature in the methods developed for the scanning of weak signals, (Kuusi, 1999; Harris and Zeisler, 2002; Mendoça et al 2004). Ansoff (1975) defined weak signals as imprecise early indications about impending significant events. This definition has been elaborated later on to include additional characteristics, such as new, surprising, uncertain, irrational, not credible, difficult to track down, related to a substantial lag time before maturing and becoming mainstream (Coffman, 1997; Harris and Zeisler, 2002; Mendoça et al, 2004). Typically, methods for scanning weak signals result in an extensive and elusive set of fragmental issues that may not be amenable to systematic analyses, given that it be difficult to interpret how the signals relate to one another and, more fundamentally, what they signify for decision-making. Fur- 3
4 ther to this realization, we are here interested in weak signals that contribute to the enhancement of innovation activities as a fundamental foresight objective (Salo et al., 2004). From this viewpoint, novel ideas on prospective innovations can be regarded as focused and action-oriented reflections of weak signals that can be interpreted in their respective innovation processes. Indeed, in the scanning of weak signals, Ansoff discussed the generation of short descriptions of new issues about the opportunities and threats for an organization. Such issues match up with the use of mini-scenarios or nodes of discussion that briefly describe alternative future paths (Kuusi & Meyer, 2002). Encouraged by such perspectives, our method is thus based on the solicitation of ideas on prospective innovations which, in turn, mirror the future impacts of weak signals in a broader sense. Innovation ideas may serve as rivaling mini-scenarios on alternative futures, which in turn enhance the diversity of viewpoints that inform decision-making. The focus on innovations brings in two relevant dimensions, the systemic and action-oriented nature of innovations. Specifically, the systemic nature of innovations means that innovation ideas can reflect future combinations of (weak) signals, whereby they also make these signals more perceptible. The action oriented nature of innovation, in turn, makes it possible to question how these innovation ideas could be best promoted and in what settings, which in turn may suggest yet other signals. Moreover, the focus on innovations makes the ideas more or less commensurate (or at least comparable), which in turn is important when they are evaluated and analyzed with regard to several criteria. The notion of systemic innovation derives from the recognition that innovations emerge in the wider context of techno-institutional co-evolution of the innovation system (Smith, 2000). Thus, their success is defined within the complex interplay among S&T supply, societal demand and professional and industry sectors. Furthermore, action-oriented innovation ideas may provide important seeds for a systemic change among fragmental decision-making entities. 3 Generation and Evaluation of Innovation Ideas Further to the above challenges, we have developed a method which is essentially based on the collaborative generation of innovation ideas and their evaluation and analysis with multiple perspectives. This method was developed in a pilot project connection with the Finnish Foresight Forum (later typified as the Forum) established by the Ministry of Trade and Industry in mid-2004, where it was employed to implement a process based on Internet-based generation, commenting, evaluation and analysis of innovation ideas. This process was designed and facilitated by the authors in close collaboration with the Forum coordinator, with the aim of supporting the work of expert groups on three theme areas: (i) nutrigenomics, (ii) health care and social services, and (iii) personal experience services. Parallel processes on these same theme areas were conducted with the MSc. students in a course on decision analysis at the Helsinki University of Technology. At the outset, the initial objectives of the pilot project were to engage a larger number of participants in the work of the theme areas; to develop a systematic process with consecutive phases for the scanning, evaluation and analysis of weak signals with multiple perspectives; to examine the results in the expert panels of the Foresight Forum; to publish the results for the wider audience. After the early stages of the pilot project, we realized that the objectives could be adjusted following the premises of responsiveness in the management of foresight activities (Salo et al, 2004). The main departure was that instead of scanning across a wide spectrum of weak signals it would be pertinent to focus on innovation ideas which would thus be regarded as conceptually more comprehensible indications of weak signals. Towards this end, we also provided the following definition for innovation ideas: Concrete and context related new ideas for innovations that (i) are related to 4
5 the chosen issue area (e.g. nutrigenomics), (ii) are new for the participant or received insufficient attention, (iii) may be related to technological discontinuities, (iv) are interesting in light of present observations (v) may provide change to develop an innovation (applicable new technology, concept, method or practice) within years and (vi) may require collaboration among different actors. We employed Internet-based decision support tools in the generation and evaluation of innovation ideas. This decision was largely driven by the realization that, in the management of foresight activities, the quest for diversity of ideas in face-to-face meetings can be difficult and time-consuming (and hence expensive) for organizers (Salo et al., 2004) and participants alike (Salo, 2001). In contrast, Internet-based distributed work enables efficient and systematic stakeholder participation with features such as anonymity as well as flexibility in terms of time and place (Salo & Gustafsson, 2004). Yet, bearing in mind the limitations of Internet as a forum of social interaction, the Internetbased process was run in connection with the panel work of expert groups. 3.1 Phases of the Project For each theme areas, the Internet-based process engaged diverse participants, including developers, researchers, users and students, among others. Towards this end, the project website was set up with the help of the Opinions-Online decision support tool, which allowed the participants to generate, comment and evaluate new ideas. The results of this participatory process were analyzed and synthesized with a multi-criteria approach called Robust Portfolio Modeling (Liesiö et al., 2004). Overall, the pilot project lasted six months, organized into the following four phases: (i) Generation of innovation ideas The Forum coordinator sent an to about 50 selected participants requesting them to read instructions on the project website and to generate 1-7 innovation ideas. It was estimated that writing the innovation ideas (max. 250 words) would take appr minutes. This questionnaire was open two weeks and participants were able to add new ideas repeatedly. (ii) Commenting and elaboration In the second phase, the participants were invited to respond to two websites. Of these, the first was for commenting others ideas and for improving one s own ideas, while the second website was for reading other respondents comments. The questionnaire was open two weeks and participants could freely visit the sites as often as they wanted to, practically at least twice; first time for commenting others ideas and second time for improving their own ideas based on other participants comments. (iii) Evaluation with the multiple criteria In the third phase, the participants were invited to evaluate the ideas with regard to the following three criteria using the Likert scale 1-7: Novelty How new is the idea? Feasibility How feasible is the idea? Societal relevance How extensive and consequential impacts the innovation could lead to? The participants were free to choose which ideas they evaluated. They were also encouraged to produce written comments on the ideas and, in particular, to provide suggestions for actions through which they could be fostered. (iv) Multi-criteria portfolio analysis After the internet-based participatory phases, the results were analyzed with Robust Portfolio Modeling (Liesiö et al., 2005) which made it possible to identify those collections (portfolios) of ideas 5
6 that were better than others, in view of the average ratings with regard to the above criteria. The results of this analysis were finally discussed in the expert group workshops. 3.2 Analysis with Diverse Perspectives As noted in Section 2, innovation ideas can mirror possible weak signals. In line with the Ansoff s idea of weak signals, an innovation idea must be supported at least by some respondents in order to be treated as a possible reflection of weak signals; but if the idea receives consistent and extensive support, it is more probably a trend than a weak signal. Conversely, if the idea receives no support at all, it can be regarded as noise and can thus be deemed irrelevant for further analysis (see Figure 1 for three types of signals). Evaluation Participant Trend Weak signal Noise Figure 1 Three types of signals In general, it is possible to distinguish suggestive archetypal categories based on the means and variances of criteria-specific scores. This means that when the idea receives high mean and low variance it may reflect a possible trend; and in contrast, when the idea receives low mean, it may be considered as noise. Furthermore, when the idea has a fairly high mean and high variance it may reflect a weak signal, as it is strongly supported by some and opposed by others. These suggestive notions are illustrated in Figure 2 where the vertical axis describes the mean and the horizontal axis the variance. Thus, the trends with high mean and low variance are positioned in the upper left quartile, while the weak signals with a mean beyond the threshold level and rather high variance are in the upper right quartile. Consequently, the noise signals with low mean are positioned in the lower quartiles. Average Trend Weak signal Noise Noise Variance Figure 2 Signals with regard to means and variances 6
7 However, while the above remarks parallel much of the earlier literature, our case was different in that the innovation ideas were evaluated not only with one but three criteria (novelty, feasibility and societal relevance), which in turn resulted in six criteria-specific measures for each idea (three means and three variances). Thus, the consideration of multiple criteria helped bring in additional perspectives into the analysis, while at the same time it raised questions concerning the weighting of the criteria: for example, an innovation idea that is not considered socially relevant may still be novel and hence interesting. This suggests that it is impossible to assign any true weights to the criteria, and the collections of most interesting ideas for later analyses should be derived with methods based on the use of incomplete information. Robust Portfolio Modeling (RPM, Liesiö et. al., 2005) is a recently developed methodology for multi-criteria project portfolio selection problems in presence of incomplete information about the relative importance of criteria and projects, too. In RPM, the total value of each project is expressed as a weighted average of its criterion-specific scores, while the overall value of a portfolio is expressed as the sum of these total values across its constituent projects. An essential feature of RPM is that all the non-dominated portfolios can be explicitly computed in order to examine the attractiveness of individual projects as well as project portfolios based on analyses that are carried out at the portfolio level. In our case, innovation ideas were regarded as projects, which made it possible to model most interesting collections of innovation ideas based on two complementary approaches. In the first, consensus-oriented approach, only the score-specific means were adopted, in order to identify the ideas that performed relatively well on the three criteria (novelty, feasibility, societal relevance) in view of the incomplete information about the criteria weights. In the dissensus-oriented approach, variance measures were added to these three criteria, with the aim of identifying ideas about which the participants had expressed rather disparate views. 3.3 Results of the process The Internet-based process supported the objective to engage stakeholders into the work of the expert groups. About 50 participants per theme were invited resulting in the following dispersion of participants among different stakeholder groups: industry ~ 10 %, government ~ 40 %, research ~ 30 %, commerce and NGOs ~ 10 %, and technology entrepreneurs and investors ~ 10 %. Despite the fact that the Personal experience services theme suffered from the lack of participation (mainly because of the busy holiday season for tourism related entrepreneurs), the participation in other themes was vivid all through the process. Also the collected feedback from the participants was positive about the user interface and the process at large. The project produced in total 166 ideas on prospective innovation ideas, of which many were considered interesting for further elaboration. For example, the ideas were adopted into the Delphi-process of a regional foresight project. Furthermore, the ideas have been distributed to the enterprises, universities, research centers, ministries and local development centers through websites, workshops and seminars. Table 1 summarizes the participant contributions in the different phases of the internet-based consultation process. 7
8 Participants Generated Themes Phase 1 Phase 2 Phase 3 Innovation ideas Personal experience services Health care and social services Nutrigenomics Personal experience services (Students) Health care and social services (Students) Nutrigenomics (Students) Total Table 1 Participation in the internet-based process and the number of generated ideas. The process served as a pilot project for the development of the new method for the generation, commenting, evaluation and analysis of novel ideas on prospective innovations. The application of the RPM approach in the analysis of innovation ideas also proved successful: the participants in the final workshops considered the analysis with regard to multiple criteria both novel and informative, and some of the identified ideas were not only interesting but even surprising. 4 Discussion While the typical locus of foresight activities on priority-setting, networking and vision-building may have contributed to the improved performance of innovation systems, foresight can also improve the ability to anticipate and proactively prepare for radically different futures. This type of evolutionary flexibility and adaptability of innovation systems can be enhanced with the systematic foresight methods with diversity considerations. Building on the experiences from a pilot project for the Foresight Forum, we consider that general foresight objectives and diversity considerations need not be in conflict but, rather, may jointly contribute to the attainment of the fundamental foresight objective to enhance innovation capabilities of the whole innovation system. While the developed method contributed especially to the inclusion of diversity considerations in priority setting through the generation and identification of new alternatives, it may also have enhanced diversity in networking and vision-building through the learning about each others ideas. The effective fostering of diversity in different value networks with alternative visions on the future may require, however, also foresight methods that, in particular, emphasize proactive formation of rivaling coalitions through the envisioning of supporting architectures, configurations, features and standards and clearly identified responsibilities. Despite the emphases of the paper on innovation ideas, the developed method may also be beneficial in other areas of application. For example, we have already applied the method to assist the bottom-up formation of common S&T research agendas in the connection with European ERA- NET and technology platform activities. Furthermore, because of bounded rationality and imperfect information it may often be difficult to identify in advance what technologies and organisational responses are most desirable for society (Kline, 2001). From this view point, the method could be applied also into risk and environmental management to identify potential risks in advance and to prepare for those difficult to anticipate. 8
9 References Ansoff, I Managing Strategic Surprise by Response to Weak Signals. California Management Review, Vol. XVII, No 2, winter Coffman, B.S Weak signal research, part III: Sampling, uncertainty and phase shifts in weak signal evolution. MG Taylor Corporation. Online source: Dosi, G., Freeman, C., Nelson, R., Silverberg, G. & Soete, L. (eds.) Technical Change and Economic Theory, Pinter, London. Harris, D., S., Zeisler, S. (2002). Weak Signals: Detecting the Next Big Thing, The Futurist, Vol. 36, pp Helmer, O Looking Forward: A Guide to Futures Research. Beverly Hills: Sage. Irvine, J. and Martin, B.R Foresight in Science, Picking the Winners. Dover: London. Kline, D Positive feedback, lock-in, and environmental policy. Policy Sciences, 34: Kuusi O Teknologisen kehityksen heikot signaalit. FUTURA, 2/99, Suomen Tulevaisuudentutkimusseuran jäsenlehti (The Member Journal of the Finnish Society for Future Studies). Kuusi, O. and Meyer, M Technological generalizations and leitbilder the anticipation of technological opportunities. Technological Forecasting & Social Change, 69: Könnölä, T., Unruh, G.C. and Carrillo-Hermosilla, J Prospective Voluntary Agreements for Escaping Techno-Institutional Lock-in. Journal of Ecological Economics. Forthcoming. Liesiö, J., Mild, P. and Salo, A Preference Programming for Robust Portfolio Modeling and Project Selection. Submitted manuscript. Available at: # Publications, visited Luoma, P Swedish technology foresight - a cooperative initiative', in M. Hjelt et al. (Eds.) Experiences with National Technology Foresight Studies. Helsinki: Sitra Report Series 4/2001, July 2001, pp , visited Martin, B.R. and Johnston, R Technology foresight for wiring up the national innovation system. Experiences in Britain, Austria, and New Zealand. In: Technological Forecasting and Social Change, Special Issue on National Foresight Projects 60, Grupp H (ed.). Elsevier Science: New York; Mendoça, S., Pina e Cunha, M., Kaivo-oja, J., Ruff, F Wild Cards, Weak Signals and Organizational Improvisation, Futures, Vol. 36, pp North, D Institutions, institutional change and economic performance. Cambridge, UK: Cambridge Univ. Press. 9
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