What the story of the ATM teaches us about innovation
45 years ago this week, an innovation which brought the British banking industry into the modern age was installed in Enfield, north London – the cash machine. Truly innovative for its time, the ATM was the brainchild of one man, John Shepherd-Barron, after a brainwave when noticing how technology behind vending machines could be applied to banking.
Despite emerging decades ago, it’s a powerful illustration of the way we should be innovating in the 21st century. We work now in an environment where consumers and users can help – and increasingly expect – to identify and exploit the most exciting technological developments of our age. This is vital, especially at a time when we urgently need new research, technology and products to restore growth, create jobs and power us back to prosperity.
Yet too often universities, corporations and governments innovate in isolation, or in bilateral collaborations. But Shepherd-Barron’s story tell reminds us of the critical role of individuals in innovation – it often takes a fresh approach to realize the potential of one technology for an often quite radically different purpose.
There is increasing recognition of the opportunities offered by open innovation and much broader collaboration between large organisations. There’s a lot of talk, too, about different finding new ways of innovating, and the importance of interaction between those in industry, academia and government – so-called ‘triple helix’ innovation.
This is important, of course, but we must not forget the central role of entrepreneurs in innovation – and even more importantly the customers who will buy our products. Innovation is only successful if entrepreneurs think they can develop, market and sell a product that customers want to buy.
Yet the role of individual entrepreneurs, most often the visionaries in our workplaces, is frequently overlooked. Encouraging an entrepreneurial approach in big organisations is often frowned upon – even in those that were started by an entrepreneur. Too often, individuals who have the potential to become truly innovative are discouraged because they challenge the status quo.
The challenge, then, is to build a dynamic culture in which entrepreneurs, academics, researchers, key players in large corporations and consumers can innovate and co-develop new ideas and market test them immediately. We need to facilitate interaction between groups of academic specialists, large corporations from different sectors, small businesses and specialised charities, to exploit new research in radical and potentially unpredictable ways. Bringing in consumers – in other words, the market – must be at the heart of the process.
Such an approach is already the norm in some markets – most obviously in the development of apps. The internet means that innovations in digital technology, apps and software can often be developed and refined and simultaneously market tested, with minimal cost. Yet there are several barriers to replicating this approach for many high cost products with long development times.
First, we need to tackle the tendency of people to become siloed in one type of institution, and enable people to move much more freely between universities, corporations and small businesses than they can now. One way to help promote this idea might be to start with provision of many more work placements for students and graduates than we see now. There is the potential for a structured scheme which would see high-fliers rotate around a selection of small business, larger companies and university research departments to help them gain experience of all these different areas.
Secondly we need to establish some form of innovation hothouse. These could be virtual, but in many cases they will need to be physical centres for innovation, where entrepreneurial individuals from different organisations could work with consumers and other users to innovate together. Cutting red tape around VAT, which currently hinders setting up such institutions, would be vital.
The story of the cash machine is one which demonstrates that it is extraordinary people who have vision, married with exceptional business acumen, who pioneer innovation. It is these extraordinary, entrepreneurial individuals that we must encourage if we’re to pull ourselves out of the current economic mire and provide a secure base for future prosperity. Only by recognising that we must work across sectors, public and private, large and small, and in partnership with consumers, will innovation prosper in decades to come.
Professor Stephen Caddick is the VP for Enterprise at UCL, with a special interest in innovation and university and business collaboration.Tagged in: Apps, atm, cash machine, Innovation, invention, science, small businesses, techology, VAT, work placements
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