The Ecosystem of Creativity, Innovation and

Change
Some countries like Switzerland and Sweden are
at the top of the Global Innovation Index), Other
countries are at the bottom, although big countries.
The question is why?.
As of 2019 rankings of the GII index, we find
Switzerland at the top of the World’s Most Innovative
Countries with 67.24%; then Sweden with 63.65%;
United States with 61.73%; Netherlands with
61.44%; UK with 61.30%; Finland with 59.83%;
Denmark with 58.44%;Singapore with 58.37%;
Germany with 58.19%; Israel with 57.43%; South
Korea with 56.55%; and Ireland with 56.10%.
Scores determined through various factors such
as business sophistication, level of human and
capital research and creative outputs.
 Factors / Drivers of Innovation

The procedures and structures of an organization

as well as the norms, values and collective beliefs of
employees (whether within middle-level
management or among senior executives), all serve
to shape and influence processes of creativity,
innovation and change.

The driving forces of innovation include internal

and external drivers/factors.
 Definition of an Ecosystem
An ecosystem is a community of living organisms
in conjunction with the nonliving components of their
environment, interacting as a system.

The Innovation Ecosystem:

The innovation ecosystem consists of business

participants, start-ups, academia, technical and
support services, and the individuals that drive
results.

An Ecosystemic approach to innovation is a

structured approach to analyzing the innovation
system.
 Why Ecosystems Approach

Due to the complexity of creativity and innovation,

it is cautioned not to make any overstatement of the
influence of any single attribute on creativity and
innovation.

To better understand creativity and innovation, we

should take a systems approach, which includes
multiple factors from different perspectives and
across levels, to analyze the interaction of the
multiple factors and their influence on personal
creativity and organizational innovation.
 Implications of the Ecosystems
Approach to Innovation
Adopting an ecosystems approach to innovation
recognizes that:

An innovation ecosystem is made up of different

actors, relationships and resources who all play a role.

The effectiveness of each part within the innovation

ecosystem is moderated by other parts of the system
(e.g. entrepreneurs depend on being able to access
financing).

A change to one part of the innovation ecosystem

leads to changes in other parts of the innovation
ecosystem (e.g. an increase in internet connectivity will
accelerate the design and testing of new technologies).
 The innovation Ecosystem
The innovation ecosystem consists of the
following:

1- Media.
2- Economy.
3- Business infrastructure.
4- Demand.
5- Ideas.
6- Talent.
7- Capital.
8- Culture best practices.
9- Service providers and consulting.
10-Government.
11- Laws.
 The innovation Ecosystem
12- Regulations.
13- Science and research.
14- Entrepreneurs.
15- Access to global value chains.
16- Taxes and incentives.
17- Corporations.
18- Education.
19- Industry.
 Why Studying the Innovation Ecosystem
It is important in order to:

1. Explain the difference between countries.

2. Measure the inputs of innovation and creativity.

3. Manage the whole process of innovation by

manipulating and acting on these factors.

So we can have different ecosystems.

Some innovation ecosystems are already well-

functioning and will require little support.
 Why Studying the Innovation Ecosystem
Others are problematic due to fragility, inequity,
conflict, corruption, weak institutions or political
stagnation. Because ecosystems are dynamic,
traditionally strong ecosystems can also decline in
response to external factors.

So, at which level do ecosystems operate?.

Innovation ecosystems can operate at multiple

levels. The definition of the innovation ecosystem
depends on the given level.

Here, we will focus on the main drivers/factors at

the national level.
External Factors/Drivers of Creativity, Innovation
and Change
Political drivers:

Major political and social events.

Lobbying.
Government.
Political system.

These factors have an impact on other factors that

in turn affect innovation.
External Factors/Drivers of Creativity, Innovation
and Change
Economic triggers:

Monetary policy, Exchange rates, Interest, taxes,

and fund availability.
Competitive pressures (fair and active
competition).
Income levels, and purchasing power.
Globalization of markets and the
internationalization of business.
Mergers and acquisitions.
Privatization.
Fluctuations in business cycles.
External Factors/Drivers of Creativity, Innovation
and Change
Sociocultural factors:

Culture and Societal values.

Expectations.
Societal expectations for businesses to operate
ethically and responsibly.
Demographic changes and shifts in customer
requirements.

Technology:

Advances in technology.
 IT developments and Internet.
External Factors/Drivers of Creativity, Innovation
and Change
Availability of spare parts and specific
components.
R&D.

Legal requirements and regulations:

Government laws and regulations (for example,

legislation on pollution).
Property rights.

Environmental factors:

Environmental factors ( e.g., pollution, ethical

Internal Factors/Drivers of Creativity, Innovation
and Change
The generation of new ideas and their translation
into new products, services or ways of doing
business depends on this environment.

Many factors can affect this environment:

1- Technology.

2- Core or main business.

3- People.

4- Administrative structures.

 Culture and Innovation

It is true that we don't need to innovate; all what

we need is to create a culture of innovation.

Innovations needs a culture (company or country)

that encourages innovative behaviors, e.g.:
questioning, observing, challenging.

 Learned behavior in any organizational grouping

or community is an outcome of the values, ideas,
techniques, habits, routines which are passed on by
one generation to another.
 What is Culture

Culture is the values, traditions, customs, ways of

doing things shared by a particular group of people
(nation, country, organization, society).

Culture acts like a “Collective Mental

Programming”.

It impacts the way people make decisions

(behaviors).
 Innovation and Cultural Factors

1-Challenge and involvement: Are employees

involved in, motivated by, and committed to the long
goals and success of the organization.

2- Freedom: Can employees independently define

their work, and take initiative in their day to day
activities.

3- Trust and openness: Are employees

supportive and respectful to each other.

4- Idea time: Do individuals have time to

elaborate on new ideas before taking.
 Innovation and Cultural Factors

5- Playfulness/humor: Is the workplace

spontaneous and fun.

6- Conflict resolution: Do individuals make

decisions and resolve issues based on the good of
organization versus personal interest.

7- Risk- taking: Do managers tolerate uncertainty

and ambiguity and are employees rewarded for
taking risks.

8- Debates: Are employees allowed to express

opinions and put forth ideas for consideration and
review.
 Innovation Ecosystem Factors as Inputs

It is important to understand, and try to control

these factors because they can be the inputs for the
innovation process.

If we take LEGO as an example we can find out

that despite its world domination, LEGO’s sales
started from year 2003 to decline sharply, dropping
35 percent in the US and 29 percent worldwide,
culminating in year 2004 in the biggest loss in the
toymaker’s history: £217 million.

With debts almost equivalent to its annual sales,

LEGO seemed destined for acquisition or worse.
 Innovation Ecosystem Factors as Inputs
 However, in the last ten years, LEGO has grown
from the very brink of bankruptcy into the “Apple of
toys:” an innovative, design-driven and highly
profitable toy brand that produces a staggering 22
billion plastic bricks a year; and it surged ahead of
main rival Mattel in 2014 to become the biggest toy
manufacturer in the world.
Against all odds, LEGO achieved one of the
biggest turnarounds in history.

So, how did LEGO do it?.

Is it that it set a new direction; and let innovation at
the core, or it developed a range of low-risk, low-
cost innovation practices to test ideas and cultivate
expertise?.
 What Can we Learn from the Ups and
Downs of Innovation at LEGO
Innovation without direction is risky.

To experiment and test ideas in a safe way,

without damaging your brand reputation; start with
small projects and small budgets, then test, learn
and prove.

Foster open innovation and listen to the wisdom of

your customers.

Build an innovation culture that gives people

freedom to be creative, as well as the direction and
focus needed to deliver profitable innovation.