How Companies Innovate through Progressive Failure

When Watson defeated two all-time champions on the beloved American quiz show Jeopardy, it was a triumph not only for the robot but also for the IBM scientists who developed the machine. Watson took 25 researchers four years to develop, with no promise of payoff. And there are plenty of failed unnamed robots where Watson came from -- failures, perhaps, from the market's perspective. 

But that's the nature of R&D, said IBM Chairman Samuel Palmisano, during his keynote at today's Innovation Summit.  As Palmisano explained, it's worth it.

Investing in R&D constitutes one of the key principles that Palmisano laid out for competing in what he called a "new world." It's probably worth taking his advice --after all, IBM, according to the playful lead a recent New York Times piece "has become so successful ... [it's] almost boring." 

But IBM has never drawn yawns. 

The computing giant consistently innovates, embodying another of Palmisano's four principles for competititveness: Delivering unique value. 

"You have to be better at something," he said. He used not his company but rather his country as the example of this mantra. Palmisano explained that the US is a hub of innovation because of the "value proposition" of fair capital markets, great universities, and political stability.

Countries have everything to do with business's success in Palmisano's "new world" -- not only because of business's demand for infrastructure, security, education, and research -- but also because of policy's direct impact on business. Innovation doesn't just happen: it's nurtured. In Palmisano's equation, government's role is crucial, which means funneling talent to government is crucial. 

Though the political discussion about government is dominated by the question "bigger or smaller," Palmisano thinks that debate is off-point."It's about becoming smarter." 

Steve Clemons, the Washington Editor-at-Large for The Atlantic, who stepped in to interview Palmisano after his 30 minutes speech, agreed. 

"America is the GM of countries," he joked, describing the country as a behemoth that looks good from the outside, but that is perhaps soon to be overshadowed by the future's looming superpowers. Needless to say, China came up.   

 But the picture Palmisano painted was hardly grim, and the promise of his recipe for competitiveness is, not unexpectedly, hugely ambitious: Widely shared economic growth and gobal citizenship.

Laura Zax - A love of all things innovation is what first drew Laura to Ashoka, where she works to identify and connect leading social entrepreneurs--innovators applying new solutions to some of the oldest and most entrenched societal problems. She also serves as managing editor of Ashoka's StartEmpathy, the forthcoming online home of a movement focusing on educational innovation. Before coming to Ashoka, Laura worked as Communications Director of a mobile health technology start up building products to bring primary care into the 21^st century.