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Issue 19

Innovation or how to shape the future

Andrei Kelemen
Executive Director
@IT Cluster
OTHERS

I will start this small text with a quote from a guy that reinvented Nokia. Not nowadays Nokia, but the one from the "80s and which later became the tech giant we all know. This is what J.O. Nieminen, CEO of Nokia Mobira, said in 1984: When an inventor in Silicon Valley opens his garage door to show off his latest idea, he has 50% of the world market in front of him. When an inventor in Finland opens his garage door, he faces three feet of snow. Therefore, innovation had to be at home among the thousands of icy lakes of Finland. This is, in a nutshell, the reason why this Scandinavian country"s economy ranks constantly among the top 5 most competitive in the world.

Meanwhile, Romania ranks as the second least innovative EU member state, just above Bulgaria (as usually) according to the European Innovation Scoreboard 2013. The table below illustrates the gap that our country is facing in comparison with other EU member states. The challenge is indeed formidable.

Source: Innovation Union Scoreboard 2013, European Commission

Why is it though important that a country, in general, organizations and individuals, in particular, are innovative? Is this something that we should really strive to achieve? Let"s quickly look at some figures, using as starting point the ranking above.

The most innovative EU member state is Sweden, while the country"s general competitiveness is ranked 4th in the world out of 144 audited states. Just one other EU member state is "more competitive", the already mentioned Finland. The GDP/capita of Sweden is $56,956, while the average disposable income is $26,242. Around 74% of people aged 15 to 64 in this Scandinavian country have a paid job. Slovenia, ranked just below the EU average in the Innovation Union Scoreboard 2013, is placed on the 56th place in terms of competitiveness, with a GDP/capita of $24,533, the average disposable income is at $19,119 while employment of the working age population is somewhere at 64%. Hungary, our neighboring country, ranked 22nd among the 27 EU member states in the Innovation Union Scoreboard, is the 60th most competitive country in the world, the GDP/capita is at $14,050, the disposable average income is $13,858/year, while employment of the working age is at 56%. I think the pattern becomes obvious: the more innovative the country, the better the lives of individuals in said country. More people have a job and are getting paid better.

Now that we have an answer to our first question (why is innovation important?) let"s see what innovation actually means. A widely accepted theory (I underline the term "theory") is that an innovation system is made of elements such as demand for innovation, framework conditions (regulatory framework or tax system), industrial systems composed of large companies, SMEs and startups, education and research systems, intermediaries (or institutions for collaboration), political systems and infrastructure (including IPR, venture capital and business angels, and standards).

The overall picture looks complex, indeed. However, given the huge impact on everyone"s life, innovation within what we do to make a living cannot be dismissed easily. At Cluj IT we accepted this challenge: the most important objective of the entities in our cluster is to facilitate the transition from outsourcing driven businesses to innovation based business development. We look, from this angle, towards creating the framework where research and innovation capacities are being channeled in the direction of our companies so that this transition becomes not only possible, but also probable. Some may fail trying, bot not trying means certain failure.

At this point the question how we do it is inevitable. Part of the answer is that we definitely do not have to invent the wheel. Others, before us, met the same challenges and paved our way with their success or failure stories. Another part of the answer is to acknowledge that, although the recipe is quite simple, the real problem is to have all the right ingredients aligned and ready. If we look at what an innovative system requires and if we perform a brief analysis we can identify the areas where we, as industry, need to do something. In some cases what we have to do means starting from scratch because there is nothing in place. Cluj IT is gradually building this "system" so that in near future, maybe 5-7 years from now on, innovation within our companies will be common practice. One by one, we try to define, create, improve, link the elements of a functional innovation system with the ultimate goal that our business survive, develop and become competitive globally. We are bringing together people, organizations and industries that were far apart less than a year ago.

I have been looking at a recent report of Ericsson"s Consumerlab on future technological trends predicted for 2014. Without exception they are all based on IT advancements, which is not really the surprise. What is though outstanding is that all these predictions will impact the individual lives of many. Technology becomes more and more integrated in our daily habits, which means there is a great need for innovation, for finding new solutions for improving our lives and our communities. This, at its turn, will yield in that competitive advantage or value proposition that places our business apart. Are we up for the challenge to shape this future?

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