Innovation in today’s increasingly competitive economic environment is considered by many to be the engine of economic growth. However, the innovation landscape has altered dramatically in the past decade and if business schools are to better perform their role as a catalyst for innovation then they too need to change.
Innovation is increasingly globally distributed: it is not merely the case that large companies have internationalised their R&D, participants from developing economies are also emerging to be significant players in innovation. The costs of search and the time for lab-to-market activities in the commercialisation and diffusion of innovations have declined, allowing for the possibility of rapid payback of risky investments. Open innovation engaging a broader group of stakeholders is more common and new players have arrived on the scene, for example, non-profits like the Gates Foundation. Finally, the spaces for innovation have enlarged: consider micro-financing and crowdfunding, prediction markets, use of auctions for R&D, the list goes on.
These contextual changes are occurring in parallel with rapid technological change. Think of the changes on the horizon around robotics, neuroscience and nanotechnology.
We also need innovative solutions to some of the global challenges of our world, such as climate adaptation, energy and water scarcities, alleviation of global poverty and the eradication of infectious diseases that have the potential to create pandemics.
All of these changes require new modes of thinking; new behavioural skill sets such as simultaneous collaboration and competition, cross-cultural and locational sensitivity and newer forms of financing.
To assist in propelling innovation, business schools too need to innovate, but before they can do so they need to navigate certain barriers.
● Institutions of higher learning are built on the notion of specialisation of knowledge, but the future innovation landscape requires a combination of deep expertise with equally deep forms of integration.
● The shelf-life of contextual knowledge is increasingly short, and as a result the need for extensive, but persistent research and the movement of research to classrooms is upending our traditional models of instruction where the ‘sage on the stage,’ and ‘guide on the side,’ are no longer adequate.
● Businesses and non-profits are significant crucibles for innovation that has economic consequence, and the education of innovation requires integrating them more closely into the learning process.
● Students are an untapped resource, but they can benefit businesses offering critical consumer insights and problem-solving talents.
● Educational institutions are historically geographically bound, but in the global world of innovation, finding economic ways of delivering a global education is necessary.
Business schools are experimenting with approaches and models to address some, if not all, of these challenges. These include project-based education; internships; student consulting projects; greater teaching faculty engagement with business; and the appointment of practice professors – all arrows in the business schools’ quiver to address the issue of relevance – which will, and need, to continue.
But further strategies are needed. Interdisciplinary units should be created within business schools, drawing on the broader expertise of the institutions to couple deep specialisation with equally deep integration.
Workshops formed in partnership with industry, professional associations and differing educational institutions should be established. These could result in the formation of global networks of innovation for research and scholarship, creating a dialogue among global partners to keep the ‘contextual knowledge,’ current.
Finally innovation labs within business schools should be established. These could be a working space where industry, academics and students can develop and test new ideas and where researchers are trained in creative skills and linked with start-ups.
Innovation is critical to growth but more importantly to finding solutions to key global challenges. To fulfil their role as a catalyst business schools have to innovate and change along the lines suggested. We believe they are well placed to fulfil this role and capable of making the necessary change.
Abby Ghobadian is professor of management and head of the School of Leadership, Organisation and Behaviour, Henley Business School, UK.
VK Narayanan is professor of strategy & entrepreneurship and associate dean for research, LeBow College of Business, Drexel University, US.