The General Theory of Innovation (GTI): The Foundation

From the start, three crucial choices were made:

1. The process of creating GTI was based on the historical analysis of evolutionary processes of real-world systems: products, processes, services, companies, markets.

2. The systems were deliberately chosen of different natures, technology-based and not technology-based.

3. The investigation focused on both the systems themselves and (mostly) on the relationships the systems had with their respective environments.

The investigation wanted to uncover the driving forces behind the process of evolution, including identifying those factors that cause the need for innovations/solutions as well as those conditions that caused emergence of the problems and determined subsequent success or failure of the proposed solutions. The following are a few examples of the investigated systems:

§ Sound storage has evolved from Thomas Edison’s phonograph to wax cylinders, to discs with lateral grooves, to double-sided discs, to reel-to-reel magnetic tapes, to 4- and 8-track tape cartridges, to compact cassettes, to CDs, to DVDs, to MP3s.

§ The use of currency evolved from the barter of goods (cattle, grain, etc.) to silver ingots guaranteed by Cappadocian rulers (2200 B.C.), to the first crude coins made from a naturally occurring amalgam of gold and silver (640 B.C.), to Chinese paper money (800 A.D.), to bank-backed notes (1633-1660 A.D.), to the first credit card (1950s), to electronic money.

§ Message delivery evolved from sending a messenger on foot, to a messenger on horseback, to the creation of regular mail service, to mail service supported by cars, trains and planes, to faxes, to next day delivery, to email.

Despite being very different, all three examples have a number of things in common:

§ Any product or service (process) is a system. Each and every product or service represents the union of parts or procedures connected to each other in order to deliver value to customers. No individual element of a system can deliver the same value on its own.

§ Systems (products, services, industries) evolve. Systems evolve over time to adapt to changes in customers’ needs and desires.

§ Systems evolve in the predominant direction. The course of a system’s evolution coincides with the delivery of ever-increasing performance while requiring fewer resources for providing that performance.

The predominant direction of evolution can be expressed as the ratio of the sum of the functions delivered by a system (an embodiment of performance) to the sum of connections the system needs to establish for obtaining the required resources for achieving the functionality.

While “functioning” (consider the term “functions”) is easily understood, the term “connections” requires greater explanation. We may perceive connections as the totality of expenditures (sacrifices) required from the system’s environment that assure delivery of a service provided by the system. The first major group of connections to be considered is the “customers expenditures” list (for example, effort needed for use a solution, time involvement, overall cost of ownership, space for storage, the need to learn something new, consequences of use, etc.), followed by the second group of connections (production expenditures) such as required materials, energy, number of manufacturing processes and suppliers, production time, space required for production as well as sub-categories and consequences such as scrap, wastes, pollution, etc. Through the relationship between function and connection, this ratio, the coefficient of freedom (any function empowers a system and makes it freer while any connection increases its dependency and decrease freedom), embodies the business world concept of value. The greater the coefficient, the greater the value delivered by a product or a service.

C_Freedom = S Functions/S Connections

Historical analyses of the evolutionary process for various systems (those above as well as bicycles, glass making, baking equipment, welding, shopping, banking, cars, etc.) show the validity of the coefficient of freedom. It is universal, applied to products, processes, services or various entities such as organizations (both for profit and not-for-profit), industries, markets, regions, etc.

Moreover, these analyses lead firmly to the conclusion that systems do not evolve randomly; the evolutionary cycle of all systems, regardless of their specific nature, is governed by the same set of natural laws that are completely independent of human will and desire, which is the major postulate of GTI, first defined in 1988. The natural law governing the process of evolution (growth, expansion) of various systems states that a system’s evolutionary direction matches an ever-increasing degrees of freedom of the system’s environment and is thus entitled the law of an increasing degree of freedom.

Date: 2016-04-22; view: 796