Social Media and the Business of Innovation

I wanted to write about social media’s impact on innovation weeks ago, but got sidetracked. Herein we quote the Post: “The real problem [with the Detroit automakers] is failing to stay competitive with global rivals in the realm of advanced principles of design and manufacturing – principles that exploit global, peer-to-peer information platforms to increase the variety of smash hits a firm might produce.”

So wrote Bernard Avishai in the Washington Post on November 23rd, in “Why Detroit Can’t Keep Up”. Avishai was identified in the Post as the former technology editor of the Harvard Business Review and a former international director of intellectual capital at KPMG.

We in new media are not in the automobile industry and don’t particularly care to challenge the innovation supremacy of, say, Volkswagen’s Skoda division in the Czech Republic (which Avishai profiles quite admiringly). But the lessons for social media’s ability – even in a capital intensive manufacturing industry like automobiles – to lower product development costs while greatly EXPANDING the edges of the innovation envelope are eye-popping.

Avishai writes approvingly of the “capacity to experiment” famous at companies like Sony, Samsung, Apple and Honda, a capacity made possible by a culture anathema to the “big idea” homerun-swinging approach of American car companies. Ideas are developed across the company, in product teams within brand units, while data, experiences, specifications, relationship lessons and other learning is shared across internal social networks.

So, for example, Skoda’s local designers are able to actually incorporate VW’s breadth of experience in designs for the local Czech market rather than simply taking a VW Golf and slapping on a Czech body cover – in contrast to GM taking the German Opel and calling it a Saturn.

This is not exactly the same as crowd-sourcing, where Twitter “followers” and other networks are tapped into to better inform an individual community member. Rather, ideas are shared on the peer-to-peer model of academic journals long-ago made the norm in science learning, with the twist of building the “modular” car or other production output.

Technology is but one enabling mechanism of social media’s ability to foster innovation. More broadly, the current spotlight on the automobile industry is intertwined with the debate about the role of government in an economic recovery – or saving – of America’s manufacturing sector. And to that end, the falling down of certain parts of the American economy may have the salutary effect of fostering the kind of innovation impossible in otherwise robust times.

So argued Bret Swanson in Forbes last week, writing “How Techno-Creativity Will Save Us”. While Steve Forbes and his minions have been trumpeting the rally cry of “How Capitalism Will Save Us” and similar blather from the business press, the kernel of realism in their valuable optimism is the historical spurt of innovation out of times of crisis. From the standpoint of new media and, particularly, social media, one very exciting consequence of the success of the Obama campaign may be the obvious political buy-in to the value of social media. One would consequently expect encouragement – through the policy apparatus of tax, trade, treaty, multi-jurisdictional and other government-controlled touch points of the economy – that could spur expansive growth of social media’s application to business.

The opportunity to do so may result from both the fortuitous rise of this particular new administration as well as a political climate receptive to experimentation.

Andrew Mirsky is principal of Mirsky and Company, a new media and technology law firm based in Washington, DC with an office in New York City. Andrew advises media and technology clients on all legal aspects of business operations, including corporate and finance, intellectual property, contracts, and human resources. Andrew is also founder of Media Future Now, a (roughly) monthly gathering of DC professionals, focused on finding ways to keep media-centric businesses agile, innovative and future-focused.