Xavier Ferras from the Esade Bachelor of Business Administration & Bachelor in Artificial Intelligence for Business
Joseph Schumpeter (1883-1950) defined innovation as the introduction of new technologies in the market. Today, we know that innovation is much more than that. Companies can innovate in multiple ways: their products, processes, marketing strategies or business models. However, technological innovation creates stronger entry barriers: When a company has its own technology (defined as “applied knowledge or “knowledge in action”), it benefits from unique and exclusive advantages. Essentially, its competitors don’t know how to do what the company does. A company with proprietary technology operates under monopolistic conditions, especially if it patents that technology. In fact, patents are nothing more than legally-recognized temporary monopolies, rewarding innovations with their exclusive exploitation.
Technology enables creating and protecting enormous blue-ocean markets which were unheard of or often unimaginable before their development. Technological innovation, in fact, facilitates the definition of new strategies and business models and it is the foundation for real economic growth. The appearance of new technologies in markets, in the Schumpeterian sense, has stimulated unprecedented progress and prosperity since the Industrial Revolution. Incremental innovation, that is, ongoing improvement, is also a great source of competitiveness, and technology has provoked quantum leaps forward in terms of wellbeing. However, can anyone actually measure the immense economic growth and contribution to human development brought about by the invention of steam engines, automobiles, microprocessors and internet?
Schumpeter is in fashion again today. After the pandemic, we find ourselves immersed in a hypercompetitive technological scenario. The strategic tension between China and the US is moving us towards a Second Cold War in which the playing field will consist of controlling key technologies. The quickly growing demand for digital systems and the scarcity of semiconductors, among other crucial factors, clearly underscore the critical role technology plays in countries’ economic development. Never before have we seen such huge sums being invested in R&D at both the public and corporate levels. The world will be flooded with knowledge in areas such as Artificial Intelligence, microelectronics, supercomputing, nanotechnology, clean energy and synthetic biology (areas referred to as “deep tech”). We will never have knowledge available like we do today to completely transform society and our economy. Now is the time to capture that knowledge and convert it into a competitive advantage for our businesses. Key to this, on the one hand, is the role business schools play in implementing new educational and training models that respond to the labor market’s demands in contexts that are increasingly dominated by technology. And, on the other, nothing better than the young, daring and fast startups with incredible strategic flexibility to create a new and productive R&D economy and transform the stock of knowledge found in universities and research centers into global prosperity and wellbeing.