The Rise of STEMIE Investigating the Role of Invention and Entrepreneurship In Light Of STEM Sunday, July 31, 2016 1 P a g e
The Rise of STEMIE: Investigating the Role of Invention and Entrepreneurship In Light Of STEM By Danny Briere This positioning paper postulates that there are four independent processes that constitute the overall innovation process. These processes may be independent or inter-related, depending on the starting point and desired endpoint. These processes are: - The Scientific Process - The Engineering Design Process - The Invention Process - The Entrepreneurship Process Underlying each of these processes are roles, including: - Scientist - Engineer - Inventor - Entrepreneur To date, there has been no research designed to assimilate these four pillars of innovation into one framework. This paper attempts to do so. Typically, and at a very high level, these processes can be sequential in nature. A scientist might start by researching a cure for a disease, and finding an effective solution that he/she wishes to take to market. He/she might need new equipment to create the cure in volume. If that equipment largely exists on the market, but just needs to be designed into a production process, then an engineer can be helpful in solving that problem. If that equipment does not exist and needs to be designed and created from scratch, then an inventor (who might also be an engineer) can help create that. An entrepreneur would build a company from scratch to take the produced solution to market. Said another way, science helps establish the baseline of knowledge that an engineer or inventor can apply to solve problems and an entrepreneur can create a company to take these solutions to market. Engineers typically differ from inventors in a straight forward and legal way: engineers are typically given problems to which they need to craft solutions, where inventors search the world for problems to solve and create new, novel approaches from scratch which then should be protected by the intellectual property process. A civil engineer being asked to create a new bridge across a river is not necessarily inventing anything new, even though the design of the bridge itself will be new and unique to the application. If a person invented a new construction technology wherein new graphene nano particles were used to formulate a new type of beam for the bridge, then that would be an invention that could be used by an engineer in creating the new bridge. Historically, some of these terms have been used interchangeably. Engineers and inventors are often confused, and with the advent of fields like biomedical or chemical engineering, the lines between 2 P a g e
fundamental research and applied engineering have blurred. However, this paper puts forth that there are clear differences and interconnectivities among these processes and roles that are worth defining, particularly in light of increasing public and private programs focused on encouraging greater development of STEM (Science, Technology, Engineering and Math) resources in the U.S. Indeed, we believe that where STEM creates a baseline in knowledge and problem solving, the process of Invention uses that baseline to create unique and novel solutions to problems, and entrepreneurship takes those novel solutions to market. This yields a framework that puts Invention and Entrepreneurship as processes that complement and extend the efforts in STEM specifically, in an overall framework known as STEMIE. 1 STEMIE represents the true economic impact of our investment in these underlying core STEM skillsets. It represents the creation of novel patented solutions and of businesses that create jobs and income to the U.S. By extending the model of STEM, we are indeed completing the cycle of taking advantage of all of our investment in building up STEM skillsets, since research has shown that most new jobs and GNP growth comes from the creation of new small businesses that grow around new technologies and other solutions, and not from the annual replacement cycle of new workers into large commercial and academic research entities. STEMIE represents American growth and a fulfillment of our ambitions for STEM. The Scientific Method The Scientific Method has been exhaustively defined over the ages. The Scientific Method is a means of asking questions about science topics, and deriving an answer through experimentation and observation. The generally accepted steps to the Scientific Method are (see Figure 1): 1. Ask a question 2. Do preliminary research around the question topic 3. Formulate a hypothesis 4. Test the hypothesis by designing and executing an experiment 5. Analyze the results of the experiment against that hypothesis and draw a conclusion 6. Release the results The Scientific Method can be iterated to change variables and determine new conclusions. The Scientific Method is most often used to advance core fundamental research where the facts of science are pursued. Scientists study the basic foundational constructs of the universe, of human and animal physiologies, and of all sorts of other environments on and outside of Earth. 1 While the underlying STEM knowledgebase might grow to include Arts (STEAM) or Reading (STREAM), the ability for Invention and Entrepreneurship to build on these resources and programs would be represented by STEAMIE or STREAMIE. 3 P a g e
The Scientific Method is most often compared against the Engineering Design Process, discussed next. Figure 1: Scientific Method Flow Chart (Source: Adapted from ScienceBuddies.org) 4 P a g e
The Engineering Design Process The Engineering Design Process is a means of coming up with a solution to a stated problem. It is an iterative process like the Scientific Method that yield an optimal solution through the process of experimentation. The steps in the Engineering Design Process are (see Figure 2): 1. Receive the problem and define its boundaries 2. Do preliminary research around the problem topic 3. Specify requirements 4. Perform Scientific Process, if needed 5. Create alternative solutions, choose the best one, and develop it 6. Build a prototype 7. Test, and redesign as necessary 8. Release the results The Scientific Process might be needed as part of the Engineering Design Process because the specified requirements might call for greater knowledge about elements or materials that might be used in a solution. It is important to recognize the first step here specifically. Engineers typically are given problems to solve by someone else. If they go looking for problems to solve, (or if they approach a problem given to them by a reframing of the problem leading them to a unique or different solution) then they more classically fall into the Inventor category. 5 P a g e
Figure 2: Engineering Method Flow Chart (Source: Adapted from ScienceBuddies.org) 6 P a g e
The Invention Process The Invention Process is one that has elements of both the Scientific Process and the Engineering Design Process embedded in its steps. Inventors differ from both of these processes largely in a) how they get started on the problem they are solving, and b) what they do once it is solved. Inventors, by definition, create novel and non-obvious solutions enough so to be eligible for patents with the USPTO if they choose to go that route. Inventions, however, might not be for economic motive -- they might not be commercialized at all by the inventor, even. 2 And inventions do not have to be patented to be inventions, they just need to be novel and non-obvious to meet the definition of an invention. Inventors can be, and actually often are, engineers or scientists; how they apply their skills and to what end is what differentiates the Invention Process from the Scientific Process and the Engineering Design Process. The open ended problem discovery at the beginning is what clearly differentiates an inventor from an engineer, though. Inventors see the world as problems waiting for solutions, and pick a problem that they are compelled to pursue towards a solution. While both the Invention Process and the Engineering Design process will do the same background research and iterative development, the focus on later stage intellectual property protection and an end-game which puts them in a position to either license or produce their product is typically different from the normal engineering process that seeks to solve a problem using known elements. Here are the steps to the Invention Process: 1. Find a problem 2. Do background research 3. Formulate a proposed solution 4. Perform Engineering Design Process a. Specify requirements b. Perform Scientific Process if needed c. Create alternative solutions, choose the best one and develop it d. Build a prototype e. Test and redesign as necessary 5. Protect the intellectual property, if desired 6. License or Produce, if desired If they elect to start a company and produce the solution, then they become an entrepreneur. Many inventors license their solutions to others to pursue company building, however, and move on to their next invention. 2 A good case in point is the fact that Tesla patented its battery technologies and then offered them for free to the market to build more momentum and efficiency around new battery development. http://www.usatoday.com/story/money/cars/2014/10/14/tesla-musk-patents/17247723/ 7 P a g e
Figure 3: Invention Process Flow Chart (includes elements of Engineering and Scientific Inquiry) 8 P a g e
The Entrepreneurship Process The definition of an entrepreneur is often misunderstood. Noted startup guru Brad Feld pointed out this dilemma in his column, Do We Need A New Word for Entrepreneur 3 As he notes, Wikipedia s definition 4 clearly says that an entrepreneur is the one who takes the risk to start a business: Entrepreneurship is the process of starting a business, a startup company or other organization. The entrepreneur develops a business plan, acquires the human and other required resources, and is fully responsible for its success or failure. As Feld points out, people associated with entrepreneurs will often call themselves entrepreneurs as well, even though they did not start a company I was employee number 12 at Startup XYZ! That does not qualify the person as an entrepreneur, however. The entrepreneur takes the risk by starting the venture. There are multiple ways to organize the effort of planning, launching and building a venture. But there are a set of fundamentals that must be covered in any approach. Duke University s Fuqua School of Business breaks the entrepreneurial process into five phases: Idea Generation, Opportunity Evaluation, Planning, Company Formation/Launch and Growth. 5 These phases, and the Opportunity Evaluation and Planning steps, are expanded in greater detail by Duke below. 1. Idea Generation: every new venture begins with an idea. In our context, we take an idea to be a description of a need or problem of some constituency coupled with a concept of a possible solution. (A characterization of this phase is still work in process on this site.) 2. Opportunity Evaluation: this is the step where you ask the question of whether there is an opportunity worth investing in. Investment is principally capital, whether from individuals in the company or from outside investors, and the time and energy of a set of people. But you should also consider other assets such as intellectual property, personal relationships, physical property, etc. 3. Planning: Once you have decided that an opportunity, you need a plan for how to capitalize on that opportunity. A plan begins as a fairly simple set of ideas, and then becomes more complex as the business takes shape. In the planning phase you will need to create two things: strategy and operating plan. 4. Company formation/launch: Once there is a sufficiently compelling opportunity and a plan, the entrepreneurial team will go through the process of choosing the right form of corporate entity and actually creating the venture as a legal entity. 5. Growth: After launch, the company works toward creating its product or service, generating revenue and moving toward sustainable performance. The emphasis shifts from planning to execution. At this point, you continue to ask questions but spend more of your time carrying out your plans. As Duke notes: Although it is natural to think of the early steps as occurring sequentially, they are actually proceeding in parallel. Even as you begin your evaluation, you are forming at least a hypothesis 3 http://www.feld.com/archives/2015/07/need-new-word-entrepreneur.html 4 https://en.wikipedia.org/wiki/entrepreneurship 5 http://www.dukeven.com/home/entrepreneurship-overview---a-framework 9 P a g e
of a business strategy. As you test the hypothesis, you are beginning to execute the first steps of your marketing plan (and possibly also your sales plan). We separate these ideas for convenience in description but it is worth keeping in mind that these are ongoing aspects of your management of the business. In the growth phases, you continue to refine you basic idea, re-evaluate the opportunity and revise your plan. Building a business involves managing many things happening at the same time. The process integrates elements of the scientific, engineering, and invention processes, as the company conceptualizes and designs its product. (The full Entrepreneurship Process is detailed in Figure 4.) The input into the Entrepreneurship Process can be the Output of the Scientific, Engineering, and/or Inventing Processes. An inventor, as we said previously, might license his/her invention to an entrepreneur to take to the market. An entrepreneur might read about a new scientific discovery and desire to commercialize it. Entrepreneurs can be inventors, engineers or scientists in their own right as well. Note that a company can be building a service as well, and that might not require any scientific, engineering, or invention processes. Also, an entrepreneurs might realize as the company is developing that he/she needs to license other technologies. The table below shows a focus here is the evaluation and planning phases: Opportunity evaluation (investment prospectus) Need / problem Solution Competitive position Team Risk / reward profile Company's plan Strategy Target customer Business model Position Milestones / company objectives Operating plan Company timeline Staffing plan Budget Financing plan Execution Market research Marketing Business development Forecasting Sales planning R&D management Operations management People management Process and infrastructure Budgeting Financing Table 1: Framework for the evaluation and planning phases of starting a business. (Source: Duke University) 10 P a g e
Figure 4: Entrepreneurship Process Flow Chart (includes elements of Invention, Engineering and Scientific Inquiry) 11 P a g e
The Lean Startup Process It should be noted that the above represents the classic approach to starting a business. Today s startup world favors the Lean Startup approach that focuses on early and frequent interactions with customers to refine a firm s products and pathways to market. It is an illustration of one form of hypothesis testing of a business strategy. Popularized by Eric Reis 6, the lean startup approach focuses on four major stages: 1. Customer Discovery: Customer discovery translates a founder s vision for the company into hypotheses about each element of the business model, and sets out a plan of experiments to test each of these hypotheses. 2. Customer Validation: Customer validation tests the business defined in step one to ensure it has a repeatable, scalable business model that can deliver the volume of customers necessary to build a profitable company. 3. Customer Creation: Customer creation builds on the initial success of sales in step two; the company starts to spend marketing money to create end-user demand and drive the sales funnel. 4. Company Building: Company building refocuses the team s effort from testing and pivoting and into full scale execution along the now-tested and proven business direction. The business model can be documented and revised within the template of a Business Canvas, as developed by Alexander Osterwalder. 7 Figure 5 shows the customer-centric lean startup process and the business canvas. We have not included the Lean process to a great extent here, largely because a lot of invention in science and engineering does not lend itself to Lean methods. For instance, you do not develop new drug candidates, semiconductor chips, etc., through Lean approaches. Also, there is some concern that pushing Lean in K-12 will only encourage students to get excited about the kind of quick and easy products and services that lend themselves to such methods (e.g., development of new apps). Finally, it can also set expectations for fairly immediate feedback, which is often not possible in the market depending on the product idea. One virtue of Lean, however, is the simple point that one should be attentive to opportunities to test ideas sooner rather than later. 6 http://theleanstartup.com/ 7 http://alexosterwalder.com/ 12 P a g e
Figure 5: The Customer Development process by Steve Blank and the Business Model Canvas by Alex Osterwalder (Source: Steve Blank, Alex Osterwalder) 13 P a g e
Discussion It is helpful at this time to compare across the different methodologies and processes. What stands out to the reader will be how the first steps vary across the four processes. Scientific Method: Ask A Question Engineering Design: Receive a Problem Invention Process: Find a Problem Entrepreneurship Process: Find an Opportunity The reader will note the nuance between Engineering Design and Invention. Generally, engineers are given a problem to solve. Build a bridge here. Design a device to do X, Y, and Z. Find a formula that will make Q happen. Problem-solving and creativity are necessary skills to perform Engineering Design. With Invention, there is a stronger front-end problem seeking and problem identification skillset that is required, because the inventor needs to look at the world around themselves and find a problem to solve. Global engineering competitions excel in driving problem-solving and creativity through their challenges FIRST Robotics with its annual Tech Challenge 8, VEX Robotics with a similar competition 9, and others, all present problem sets to the students to solve. This is contrasted with programs like the Connecticut Invention Convention 10 and other similar Invention Convention competitions around the U.S. which challenge students to find a problem in their life they would like to solve, and solve it. The focus is on problem seeking and problem identification skills, which can then lead into engineering and scientific discovery processes too. The Entrepreneurship Process starts even broader than the rest, and not only tells the student to find a problem to solve, but one that can be made into a profitable, investable business. Lots of inventions are interesting, but the step up to making sure it can be brought to market amidst competitive, market, and other forces is a much different skillset. Financial, operational, marketing, sales, and other skillsets are needed to properly position a product or service for market, and programs like Junior Achievement help build those skills in students. What distinguishes the entrepreneurship process even more is its focus on the outcome -- on building that business. The reader will note that, in each of the prior processes discussed, the end goal was not necessarily to do more research, or the build a product, or to market an invention. The process ends with the communications of the results of the process. Scientific research is published, engineering designs are passed on to execution groups, and an inventor can invent, even if the product is never patented or licensed. But with a business, a business without taking a product to market will fail. The goal of bringing a product or service to market is an inherent endpoint of the process. 8 http://www.usfirst.org/roboticsprograms/ftc 9 http://www.vexrobotics.com/competition?ref=hometile 10 http://www.ctinventionconvention.org 14 P a g e
Other Related Topics There are several related topics that merit mentioning, so as to understand how they fit within the framework. Commercialization. Commercialization is a term most often used in a technology transfer situation within University-type environments where there is a desire to make money off of research and inventions of faculty. More generally, we ve seen instances of mention of STEM Commercialization such as in the Believe in Ohio 11 program by the Ohio Academy of Science. In our framework, and in practice, such knowledge becomes commercializable when it is patented or patentable. As such, we believe the Invention Process which can also reference the Scientific Method and the Engineering Design process is in effect a commercialization process. Note that some commercialization processes require the creation of a business plan either by the knowledge holder or the potential licensee to build the case for commercialization. This is the process of opportunity evaluation in the Entrepreneurship Process, and is likewise covered. So as such, we do not believe there is need for a Commercialization Process outside of what is in this framework. Maker Movement/Spaces. We love the Maker Movement. We would love to see all schools have Maker Spaces! Maker Spaces can teach a great range of core skills that are useful in the core Innovation processes the Engineering Design Process and the Invention Process, in particular but Making is not really a process unto itself, in our framework. When students are using Maker Spaces to solve an engineering design problem, then the making is part of that process; same is true with inventing: Once a problem has been identified, and the inventor is cycling through different solutions, a Maker Space can help with further refining the physical possibilities of the solution how to think about the structural needs of the invention, what materials to use, tools available for prototyping, housing, energy input, etc. Although it is not inconceivable that an idea would actually spring while At a Maker Space, especially if frequented often, once the student is in the mindset of creating an invention, it is the Invention Process that is being followed. Indeed, Making is a step in the invention process where Maker skills are applied to manifesting an idea into a real physical product (unless inventing a piece of software, or a process, etc.) a place to further the design phase of the idea to solution to prototype to product. So Maker Spaces are important and play a role, but when used to achieve a specific endpoint like an engineering design or an invention are a part of those respective processes. As such, schools should be looking to use their Maker Spaces as part of invention and engineering design curricula for maximum effect. Innovation. There is no innovation process here per se. Innovation means many things to many people. Wikipedia defines innovation as: 12 Innovation is a new idea, more effective device or process. Innovation can be viewed as the application of better solutions that meet new requirements, unarticulated needs, or existing market needs. This is accomplished through more effective products, processes, services, technologies, or ideas that are readily available 11 http://www.believeinohio.org/ 12 https://en.wikipedia.org/wiki/innovation 15 P a g e
to markets, governments and society. The term innovation can be defined as something original and more effective and, as a consequence, new, that "breaks into" the market or society. While a novel device is often described as an innovation, in economics, management science, and other fields of practice and analysis, innovation is generally considered to be a process that brings together various novel ideas in a way that they have an impact on society. As such, any output from the Scientific Method, Engineering Design Process, Invention Process, and/or Entrepreneurship Process, could be deemed an innovation. Collectively, these four processes create Innovation in our opinion, and advance the U.S. Innovation Agenda through their use. (See Figure 6) Taken this way, there is no need or means to define a specific Innovation Process it is inherent in the overall framework. Figure 6: Driving the Innovation Agenda Summary In order to completely take advantage of our investments in STEM in America, we need equal attention to Invention and Entrepreneurship -- STEMIE. All four elements science, engineering, invention, and entrepreneurship are equally important in supporting this framework for innovation in the U.S. Each of the four cornerstone processes require creativity, diligence, testing and patience to do well and each of them delivers value to society. Each of these methods in essence move from some question to some 16 P a g e
result. The question a scientist seeks to answer is, in our view, just as important, as the one an entrepreneur might want to answer. While some scientific discoveries are more valuable than others (e.g., transistor) and some businesses are more valuable than others (e.g., Google) market value is not the only relevant metric for how valuable something else is. With STEM, you get the transistor but with Invention you get the microprocessor and the iphone. Then with Entrepreneurship you get Apple. Without the steps of Invention and Entrepreneurship, STEM provides only potential energy. It is through Invention that new vistas are opened up across all this knowledge, and it is through Entrepreneurship that whole new societal and business structures and methods are created. STEM without IE is incomplete. STEMIE is a complete fulfillment of translating Science, Technology, Engineering, and Math skillsets into actionable and tangible products, services, and companies to drive jobs and revenue growth in the U.S. GDP. 13 13 My thanks to Chuck Gritton, CTO and chief inventor of Hillcrest Labs; Wes Cohen, Frederick C. Joerg Professor and Professor of Economics at Duke s Fuqua School of Business; [WHO ELSE?], in helping me refine the concepts within this document. 17 P a g e