Globalization and Democratization of Innovation
My last article explored the use of Artificial Intelligence (AI) in healthcare. AI is the toolset most likely to create the life sciences solutions needed to confront the Covid-19 pandemic and produce treatments that may cure many of the diseases that cause so much suffering and pain in our world. I pointed out the difficulty in connecting investors and other stakeholders with innovators who need financing to bring their products to market. I pick up this topic today.
For fifty years, the global heart of technological innovation has been Silicon Valley, where entrepreneurs congregated from around the world to drive cycle after cycle of rapid advances in computing and life sciences technologies. Silicon Valley will remain a primary source of the sophisticated technology (deep tech) needed to save the world. However, Silicon Valley by itself cannot produce all the exponential solutions needed — solutions that can create immediate, substantial improvements in life on earth. Also, the large demand and tight local supply means that Silicon Valley solutions could be overpriced, as they are across the board today.
Silicon Valley, however, is no longer a region. It is a platform, a state of mind, a set of capabilities. Life sciences innovation hubs have sprung up in Boston, Cambridge, and many other sites around the world. My company’s life sciences R&D team is located in Aix-in-Provence, France, a charming small town best known for arts and culture. We will shortly open a major R&D lab near Marrakesh in Morocco where the pool of highly educated data science talent is boundless.
These new hubs combine the same key features as the original: great universities, talent, enthusiasm, infrastructure, state and local government support, and private capital. Startups have become the engine of innovation. The globalization of R&D and innovation has devolved power away from large organizations and closed systems, including Silicon Valley itself, moving it to highly agile startups in technology hubs around the world.
For the emerging generations, the startup is now the social ideal; the tech entrepreneur is the culture hero. Inspired by Silicon Valley’s iconic leaders, these generational cohorts are setting out to prove that they can innovate as aggressively and create as ingeniously as their Silicon Valley contemporaries.
Having watched Boomers fritter away the opportunity for purpose-driven and more meaningful lives, young people are taking lifestyle and social changes firmly in hand. A variety of studies show that at least three-fourths of all young people are making career changes related to lifestyle, and nearly ninety percent of young people believe that they can make a difference in the world.
Many of the startups are being geared toward impact. Willing to take risks to find a way to make a living that inspires them, these new entrepreneurs have knocked down the divide between corporate and activist values (my company ALPHA10X counts itself as part of this group).
This new model of innovation uniformly contains a mix of economic, physical, digital, and personal networking assets to support an innovation-rich environment. All assets, both physical and virtual (the latter especially important during the pandemic), are organized to stimulate new and higher levels of connectivity, collaboration, and innovation.
Today’s startup workers crave proximity so that ideas and knowledge can be transferred more quickly and seamlessly. Personal relationships between players — between individuals, firms, and institutions — sharpen and accelerate the advancement of ideas. The result is the rapidly emerging application of “open innovation,” where companies work with other firms, inventors, and researchers to generate new ideas and bring them to market.
Corporations are also turning to startups. Large organizations excel at scale and efficiency, but they struggle with the pace of needed innovation. More and more, they include startup investment and acquisition as fundamental to their innovation strategy.
How to Discover the Next Big Thing
Because we failed to adequately prepare for or preempt the pandemic, our future must now be determined by the power of exponential technology, specifically AI. The pandemic was the start of a series of events that will radically change the world. This time of peril is also a time of opportunity. If history is any indication, rebounding from a major economic disruption requires an equally large spike in demand and production. Outside of war, a global pandemic is the only issue large enough to provide such a spike. And all vaccines and related solutions are based on exponential technologies.
We can build the exponential technologies needed to save the world. The genius and creativity and passion are there. As is the capital, in abundance. Technology is democratizing finance and investment too, moving control of the finance industry away from large institutions and distributing it more broadly. Capital services that were previously offered only to large institutional investors is now available to a wave of small funds and to high-net-worth investors and the funds and advisors that serve them. New public and private financing platforms are disintermediating established, linear business models, bringing fresh infusions of capital that will enable exponential growth.
That is where we find ourselves today: at a point of bifurcation. Which, as well as being a time of peril, can also be a time of great innovation. Every consecutive innovation wave creates greater opportunity and therefore greater value. The impact wave is a tsunami — connecting the entire world, trillions of devices, and yottabytes of data. And as each wave gets bigger, the value potential soars. Innovation is “everywhere.” Exponential solutions will be developed by highly motivated newcomers: It’s their world that is imperiled. The difficulty is to discover the innovation-gold in different regions without taking on unnecessary risk.
Collectively, we must use the huge infusion of capital wisely. We can’t throw money at the many possibilities and hope one will stick. Too often, this has been the nature of innovation investments, whether for the first railroads or for the first of any digital solutions. At the same time, exponential solutions do imply a higher level of risk than government entities (and perhaps some corporations) are used to consider.
Corporate and political leaders must be as innovative in discovering world-changing solutions as the new solutions are themselves in addressing major issues. Just as AI will be the fundamental driver for creating the exponential solutions, AI will also need to be the main driver for identifying them along with potential investors. Only AI will provide the capacity to delve through the billions of technical and market data and the millions of companies and individuals involved to identify intersections most likely to produce the most effective life sciences innovations.
Policymakers, investors, and corporate innovators must engage in two critical shifts in thinking. They must invest in exponential rather than incremental technologies, and they must range far more broadly than Silicon Valley to find solutions. Corporate and government leaders must apply their best minds and leadership to the effort. They must use every available tool, including AI itself, to identify and analyze necessary exponential solutions. Crisis-led reactivity is not enough. Speed is of the essence. Tomorrow will be too late. We need to use every tool we have to rapidly discover and deploy enough life sciences solutions to save the world.