A Brief History of Innovation

(as described by Harward Business Review in its Article “The New Corporate Garage”)

The first era : The lone inventor

The first era of innovation—that of the lone inventor—encompassed much of human history. Innovators occasionally formed or latched on to companies to exploit the full potential of their ideas, but most seminal innovations developed before about 1915 are closely associated with the individuals behind them: Gutenberg’s press. Whitney’s cotton gin. Edison’s lightbulb. The Wright brothers’ plane. Ford’s assembly line (actually as much a business model as a technology).

The second era : the big labs

With the perfection of the assembly line, a century ago, the increasing complexity and cost of innovation pushed it out of individuals’ reach, driving more company-led efforts. A combination of longer-term perspectives and less stifling corporate bureaucracies meant that many organizations would happily tolerate experimental efforts. Thus the heroes of this second era worked in corporate labs, and corporations evolved from innovation exploiters into innovation creators. Many of the notable commercial inventions of the next 60 years came from these labs (such as the Bell Labs ones)

The third era : the startup

The seeds of the third era were planted in the late 1950s and the 1960s, as companies started to become too big and bureaucratic to handle at-the-fringes exploration. The restless individualism of baby boomers clashed with increasingly hierarchical organizations. Innovators began to leave companies, band with like-minded “rebels,” and form new companies. Given the scale required to innovate, however, these rebels needed new forms of funding. Hence the emergence of the VC-backed start-up. These and similar institutions helped to support the formation of Apple, Microsoft, Cisco Systems, Amazon, Facebook, and Google. Life became even harder for innovators in big companies as the capital markets’ expectations for short-term performance grew.

The fourth era : The corporate garage

Today it’s easier than ever to innovate, which may suggest that it’s an ideal time to start a business. After all, a wealth of low- or no-cost online tools, coupled with hyperconnected markets, put innovation capabilities into the hands of the masses and allow ideas to rapidly spread. The fourth era encompasses the agility of a startup and a corporate catalyst to scale it up.