Are companies reluctant to invest in long-term innovations? The Harvard Business Review says they are—and guesses at why—in what its editors say is the journal’s “first formally crowdsourced” article, “The Capitalist’s Dilemma.”
No doubt you’ve heard of one of the two lead authors—Clayton M. Christensen, a professor of business administration at Harvard known for his work on disruptive innovation. His co-author was Derek van Bever, a senior lecturer in entrepreneurial management, but the list of contributors has well over 200 names and includes “community thought leaders” as well as members of a “working team.”
According to a Harvard news release, a total of about 500 Harvard Business School alumni took part in the project, initially helping as Mr. Christensen and Mr. van Bever attempted to define the questions they were asking, and later offering ideas and then reviewing drafts of the article before it was submitted.
The project relied on OpenIDEO, a collaboration platform created by an alumnus of the business school. Colin Maclay, director of the school’s Digital Initiative, said the general approach was to put ideas ”out in the open, so that, one, everyone can see them, and two, people can comment on them, elaborate on them further, and help to develop them, to take what might be a kernel of an idea into something that’s much more powerful.”
“Part of our intention in piloting this was to demonstrate the power of this approach for other faculty at HBS and beyond,” said Mr. van Bever. “And we really believe that, going forward, taking advantage of this capability is not only possible, it’s really revolutionary in terms of the speed with which we’re able to work.
“But also with an alumni base as rich in experience and diversity of perspectives as ours is, you’d be crazy not to tap that if you could,” he added.
The business school’s Digital Initiative is now planning other crowdsourcing projects, including one devoted to challenges in health care.
As for why companies aren’t spending on innovation, here’s the short version:
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The crux of the problem is that investments in different types of innovation affect economies (and companies) in very different ways—but are evaluated using the same (flawed) metrics. Specifically, financial markets—and companies themselves—use assessment metrics that make innovations that eliminate jobs more attractive than those that create jobs. We’ll argue that the reliance on those metrics is based on the outdated assumption that capital is, in George Gilder’s language, a “scarce resource” that should be conserved at all costs. But, as we will explain further, capital is no longer in short supply—witness the $1.6 trillion in cash on corporate balance sheets—and, if companies want to maximize returns on it, they must stop behaving as if it were.