Innovation and Creative Transformation in the Knowledge
Age: Critical Trajectories
Dr. Joseph Bordogna
Chief Operating Officer
NATIONAL SCIENCE FOUNDATION
Portland International Conference on
Management of Engineering and Technology
Portland State University
July 29, 1997
Good morning! We live in an era of breathtaking change
and complexity. Twenty-five years ago, typewriters
were one of the top products; now it's PCs. A few
decades back, I worked my way through college creating
India ink drawings by hand for RCA Corporation. I
made a living by demonstrating expertise with a simple
set of instruments known as French curves. Now mouse-clicking
a sketch on a PC screen not only produces a better
drawing in less time--I also don't get indelible India
ink all over my fingers.
Although we are invigorated by change, many of us have
difficulty grasping the full potential of the advances
at our fingertips. Today we are experiencing great
economic strength while many people feel insecure
about their jobs. Indeed, there are no more "safe"
careers. We are witnessing the era of "commodity"
workers - whose contemporary skills are ubiquitous
and thus easily garnered at minimum cost in a global
market. This is no way to make a living: rewarding
careers should be rewarded. I was paid well for those
India ink drawings.
While inexorable technological change challenges our
current ethical, social, and economic systems, we
are also presented with opportunities to improve our
lot. Let's consider, for a moment, the wealth creation
process, which enables our welfare, quality of life,
and even our quest for knowledge.
II. The Innovation/ Wealth Creation Process
A number of reliable studies indicate that, during
the past fifty years, industrial innovation has been
responsible for about 40% of the productivity gain
in the United States. However, the old model of innovation
as a linear path process, with new scientific knowledge
created at the front of the path and new products,
services, and markets garnered at the path's "end,"
is increasingly challenged. Recent economic history
has made it all too clear that research leadership
does not translate automatically into economic success:
physical capital (including information and data bases),
enriched human capital, and technological capital
are needed as well. To better illustrate this, let's
for a moment examine the key elements of the innovation
Figure 2: Innovation-Concurrent Integration
(See the slides that accompany
these remarks. You need a Power Point compatible graphic
program to read the .PPT formated files. You may need
to configure your browser to recognize .ppt files
as Power Point.)
As portrayed here on the screen, Innovation is a concurrent,
interactive, and nonlinear activity. It includes not
only science, engineering and technology, but social,
political and economic interactions as well ... and
the public policy that either enables or mutes the
whole wealth creation process.
A critical element in the innovation process is scientific
inquiry, an analytic, reductionist process which involves
delving into the secrets of the universe to discover
new knowledge. Those who excel at this paradigm sustain
and nurture the world's rich intellectual infrastructure.
The essence of engineering, on the other hand, is the
process of integrating all knowledge to some purpose.
In a poetic sense, paraphrasing the words of Italo
Calvino, the engineer must be adept at "correlating
exactitude with chaos to bring visions into focus."
The "stuff" of technology underpins enablement but
the whole process is muted if the public policy and
economic context are awry.
III. Three Critical Trajectories Impacting the Innovation
Figure 3: Three Critical
With these thoughts in mind, I would like to examine
three critical trajectories that are strategically
impacting the innovation process. These evolve from
trends that are inventing, and being invented by,
each other. I use the word "trajectory" here because
it conveys a useful idea- something moving along a
path with some "oomph" behind it.
(1) Border Crossings (National and Sectorial)
The first trajectory comes under the heading of "border
crossings." It refers to the growth in both scale
and importance of cooperative approaches to scientific
and technological research.
Figure 4: International Co-authorship
As this figure shows, we have seen a marked increase
in recent years in research collaborations that span
international boundaries. The number of internationally
co-authored articles increased by 150 percent from
1981 to 1993. The share of all published articles
with co-authors from two or more different nations
has more than doubled over the past decade.
The uninhibited flow of fundamental knowledge in science
and engineering through publication and peer review
remains a defining characteristic of our global enterprise.
These data make clear that this tradition remains
indispensable to the progress of research in all scientific
and technological fields.
Another type of border crossing has only recently begun
to occur with regularity. Cooperative activities that
cross sectorial boundaries - notably industry-university
partnerships - are a relatively new addition to the
strategic intent of research investment in contemporary
universities, but they too show signs of proceeding
at an accelerating pace.
Figure 5: Co-authorship Across
In the U.S., this trend is most pronounced when examined
from the perspective of the industrial researcher,
as is shown on this figure. Cross-sectorial co-authorship
has grown steadily in the U.S. since the early 1980s.
A large share, nearly 40 percent, of journal articles
published by researchers based in private industry
now include a co-author from a university or government
laboratory. In 1981, this share was hovering at just
over 20 percent, so we have seen it roughly double
over the past dozen years or so.
Only very recently have we begun to see concrete evidence
that highlights the importance of university-based
research in determining a nation's capacity to innovate
and compete economically. A just-completed study of
citations from U.S. patents to the scientific literature
has documented the linkage between university research
and industrial innovation. This study - developed
by Dr. Francis Narin and several colleagues has already
been featured prominently in a number of major news
outlets, including the New York Times.
Figure 6: Patent Cites to
The Times article ran under the headline, "Study
Finds Public Science is a Pillar of Industry." The
study found that 73 percent of recent patents awarded
in the U.S. cite research from public and non-profit
organizations. The academic sector was found to be
the principal source of key findings, as it proved
to be the source of just over half of the articles
These findings, coupled with today's constrained U.S.
Federal budget environment makes this an especially
crucial period for industry-university linkages. Over
the last two decades, we have seen partnerships between
academe and industry grow into a bountiful landscape
of innovative endeavors.
(2) Emergence of Complex Technologies
This brings me to the second trajectory --the changing
nature of the products and processes demanded by today's
Figure 7: Added Value: 30
Most Valuable Exports
In a study presented this February at the annual meeting
of the American Association for the Advancement of
Science, Donald Kash and Robert Rycroft, found that
the most successful commercial technologies have changed
in one basic way over the past quarter century: they
have become more complex.
Kash and Rycroft analyzed the 30 most valuable exports
in the global market in the years 1970 and 1994. They
divided them into the categories shown on this table.
The boxes on the matrix are determined by whether
the products themselves can be considered simple or
complex, and whether they require simple or complex
Kash and Rycroft's key finding is quite striking. In
1970, a quarter century ago, nearly 60 percent of
the world's top exports were essentially simple products
that could be manufactured through simple processes
(upper left box). Today, that same percentage-60 percent-of
the world's top exports are complex products that
require complex manufacturing processes (lower right
Figure 8: Innovating Complex
Kash and Rycroft write that "economic well-being in
the future will likely go to those who are successful
in innovating complex technologies." Put simply, the
future belongs to those who can make sense of the
complex, to those who can integrate diverse knowledge
located in many different organizations to produce
previously non-existent capabilities.
Diversity is a must--diversity in views, in approaches,
and in backgrounds. Without it, we will never see
beyond the limits of our individual perspectives and
achieve the breakthroughs that occur only through
the synthesis of widely different skills and perspectives.
(3) Age of Knowledge and Distributed Intelligence
The third trajectory I'll examine today is the impact
of advanced information technologies on society -
what my colleagues and I at NSF describe as Knowledge
and Distributed Intelligence or simply "KDI".
When recently asked about the future of the Internet,
Bob Lucky, vice president at Bellcore, said: "There
are two things I know about the future. First, after
the turn of the century there will be one billion
people using the Internet. The second thing I know
is that I haven't the foggiest idea of what they are
going to be using it for.
The INTERNET is indeed a tremendous breakthrough in
that it cobbles together millions of computers, servers,
all kinds of software and databases, and documents,
- - and makes huge amounts of "stuff" available to
millions of people. The next revolution, however,
will be making the internet "intelligent" - a "place"
where people and machines collaborate.
What we are seeing today is only the beginning for
forging connections to learning and creativity. We
are moving from the Internet Decade to the Information
Everywhere Decade. Will we develop new ways to express
and unleash our creative talents - talents that are
now limited by our ability to interface via a keyboard
and mouse? What tools will enable us to control and
master this ultra-rapid flow of information? Will
having the proverbial Library of Congress in your
pocket be a blessing or a burden?
The answers to these questions are being pursued on
many different fronts from many different directions
. Our efforts and our leadership can transform this
immense, unprecedented, and somewhat intimidating
potential into true progress, economic opportunity,
social gain, and rising living standards for human
Figure 9: Knowledge and Distributed
As I mentioned, we are pursuing a theme that we refer
to as Knowledge and Distributed Intelligence (or simply
"KDI"). KDI is perhaps the most encompassing venture
NSF has ever pursued. It cuts across all fields of
research and touches education at all levels. And,
it is inseparable from the trends and technologies
that are driving growth and opportunity in our economy
and society - from networks to sensors to virtual
In the next few years, KDI research will help us take
the next quantum leap forward in terms of both technological
progress and societal benefit. It is impossible to
predict the next level of tools and capabilities.
But, we can be confident they will be spectacular!
For FY 1998, NSF's KDI investment falls into three
- Knowledge Networking focuses on the integration
of knowledge from different sources and domains
across space and time.
- Learning and Intelligent Systems seeks to unify
experimentally and theoretically derived concepts
relating to how humans learn and create, in collaboration
- New Challenges in Computation focuses on research
and tools needed to model, simulate, analyze,
display and understand complicated phenomena,
to control resources and deal with massive volumes
of data in real time, and to predict the behavior
of complex systems.
Cutting across these three activities is the Next Generation
Internet. NSF's role in this multi-agency effort is
intended to keep academic science and engineering
at the cutting edge of computing and networking technologies.
IV. Creative Transformations
Figure 10: Creative Transformations
Joseph Schumpeter introduced the concepts of creative
destruction and creative transformations over half
a century ago. He admonishes that unless an entity
continually transforms itself, it will ultimately
be destroyed by market competition.
As you are well aware, Corporate America has been going
through a period of restructuring. The three integrated
trajectories that I described have driven the shift
in corporate focus away from the individual and toward
the group. Indeed, products and processes have become
so complex that no one individual can bring all the
needed skills to the table.
Today, a new model for the successful corporation has
emerged. It's epitomized by high-tech firms like Sun
Microsystems and Netscape. Robert Keidel dubbed this
"the cooperation-driven" corporation--and it is different
in a number of ways from what we've been used to in
the past. Its overarching purpose is to enhance group
performance, celebrate teamwork and flexibility, and
create a tempo that is electric. Cooperation is now
a key to continually recreating a corporate entity
and remaining competitive in the global economy. Not
only is this true for corporations, it is true for
universities and other institutions as well.
Consider that over 2,000 years ago a well to-do citizen
of ancient Greece offered some of his real estate,
a grove, to a thoughtful fellow citizen - to be used
as a place where fellow thinkers could gather for
hearty discussions on matters of common and uncommon
interest. The grove became Plato's Academy, and the
generous benefactor's name was Academus - the name
from which our higher education enterprise derives
its own name.
In those days, a physical place was needed in order
to build connections to learning and creativity. Today,
knowledge is becoming available to anyone, anywhere,
anytime, and power, information, and responsibility
are moving away from centralized control to the individual.
At many universities and elsewhere, books are already
being published and courses taught on the World Wide
The noted guru of artificial intelligence, Edward Feigenbaum
states: "The library of the future will be a network
of knowledge systems in which people and machines
collaborate." We can only speculate on the enormous
impact this will have on what we now call a "university."
Figure 11: Study of Creative
The dynamics that underlie the process of creative
transformation are poorly understood. At NSF, we have
begun to address the principles underlying creative
transformations by bringing together research in two
areas - the Management of Technological Innovation
(MOTI) and research on Transformations to Quality
Organizations (TQO). Currently, the first program
is administered by our Engineering Directorate, while
the TQO program resides in our Directorate for Social,
Behavioral, and Economic Sciences. [My colleague,
Joe Hennessey, will describe these programs in greater
detail in a session tomorrow.]
These organizational details are important, because
we have learned that we must draw upon work in both
engineering and the social and behavioral sciences
to address the fundamental questions that hold the
key to progress, such as:
- How do organizations come to understand the need
for innovation and change?
- How does technological change affect organizational
- How do transformations affect performance?
- How can organizations effectively create, develop,
and implement new technologies, processes, and
structures to meet customer needs?
It is clear that these questions and many others like
them cannot be addressed by relying exclusively on
either the so-called "hard" or "soft" sciences. Addressing
them requires that we develop new approaches to research
that are highly integrative across all fields of science
In closing, I should like to speculate about what the
three trajectories I have highlighted hold for the
- International and inter-sectorial cooperation
is likely to continue growing at an accelerating
pace - to the benefit of all of us.
- The emergence of complex technologies and their
impact on wealth creation will increase the need
for integration across all fields and sectors.
- The arrival of the era of knowledge and distributed
intelligence will enable us to pursue previously
unimaginable avenues of technology, and it also
will restore and reinvigorate the natural linkages
between research and learning.
Let me add that these trajectories are much more likely
to change us than we are to change them. That may
cause some discomfort in our ranks, but we should
keep in mind something Douglas MacArthur once said,
"There is no security in life, only opportunity."
In the final analysis , I believe these trends bode
very well for economic and social progress, and our
ability to innovate. Thank you for your attention
and I'd be happy to answer any questions you may have
now (as time permits) or in the following plenary