BUSINESS

“Innovate or Die”

According to their owners, an increasing number of businesses focus on innovation. Pavel Csank,

of the MSIC, believes that the word “innovation” is massively overused. It often refers to

a  growing range of phenomena related to enterprise and is gradually losing meaning. People

sometimes wonder what it means even though innovation has a  serious impact on the lives

of each of us. We asked Mr Csank what motivates companies to innovate, what are some typical mistakes,

and what is the prospect of innovation in the Moravian-Silesian Region in the decades to come.

Innovation is an indivisible part of

development. What do you think of

companies reluctant to innovate?

For over a century, companies who do not

innovate have been considered doomed.

There is a popular and frequently quoted

saying, “innovate or die.” Numerous

analyses of many companies support that.

Some businesses can be successful and

are interested in innovation but very often,

once they have grown to a particular size

or stage of development, they struggle to

continue innovating. It is connected to the

general discomfort most people feel when

experiencing changes.

About a third of businesses operating at

the NY Stock Exchange come in with an

innovation of a new, very particular kind. The

word innovation is perceived as a foreign

expression, not associated with real content

because the innovation per se comes in

various forms. It may represent a change in

the colour or shape of a chair or it might refer

to a newly developed medical treatment.

Even though the word’s connotation is not

quite clear, it consists of exactly the issues

transforming the world around us.

What is the current greatest driving force

in innovation?

I believe that the obligation to minimize

carbon emissions is the principal drive of

innovations. The first Industrial Revolution,

which began in the 18th century, started

up the carbon economy. If we analyse its

chemical and material composition, it was

based on fossil fuels. Without energies, there

is no industry, and industry has brought

a great surge in productivity and allowed for

all the current material wealth. We obviously

cannot operate without a significant change

if we want the planet to remain habitable.

Data show that the scale of high-risk

investments in environmental technologies

is growing rapidly. New companies offering

technologies with a proven positive impact

on the environment report a dramatic

increase of yields and growth. They often

rely on public investment. All modern

technologies somehow connect to public

investments, which is not a generally known

fact: the internet or smartphones would

have never existed if it had not been for

public investment in their research and

development.

What mistakes do businesses typically

make once they decide to innovate?

They will not delegate responsibilities and

decision-making--that is the greatest and

most frequent mistake in small businesses.

Their owners often focus on too short-term

planning. They have low ambitions in growth

and innovation. There is a tension between

the financial and process propropsects

on one side and the creative humans on

the other in every enterprise, especially

if the company is at the stock exchange.

Then there is an immense pressure on

the short-term financial result. And when

you focus on the short-term financial

result, you start missing on the means to

support significant elements of the internal

innovation environment which affects the

company culture and how the company

allows experiments and implementation of

novelties. Much innovation is the side effect

of something completely different.

What seems to be a good innovation at first

sight turn out to be a failure?

It certainly can. Firstly, a great majority of

good ideas have already been invented,

discovered, and tried out. Secondly,

numerous innovation projects do not meet

expectations. Financial managers and other

people responsible for finance then become

very suspicious about innovation.

Nowadays, the problem is that too much

emphasis is on technology. Innovation

is a phenomenon a bit different from

invention. Many people connect innovation

with technology, which may be important,

but if it is not used properly, it has no added

value for the customer. Therefore, they will

never bring the desired effect and profit.

How much of its capital, time, and attention

should a company spend on innovation?

There is not a single correct answer to this.

There are countless ways to understand

innovation. It basically depends on what the

change is based on. It can be the search for

a new product; the company may struggle

for higher productivity and to be more useful;

the innovation may be in the relationships

between the company and customers. If

I were to respond in one sentence, I would

say it depends on what the company wants

to achieve.

There are many kinds of company owners:

the level of their ambition reflects the

operation of their enterprise. How it works,

if it is or is not successful, greatly depends

on how much the owners invest, how they

manage company finances, and where they

spend it. That is connected to the company

culture and employees, too.

Do you have a vision where innovation will

go in the Moravian-Silesian Region in the

decades to come?

A regional economy is like a living organism

going through evolution. I believe that the

hot topics will be new energies, production

methods, and energy management. There

will be an increasing number of companies

focused on the development and assembly

of components and units for power

production, distribution, and management.

The carbon economy is at its end; it will

not exist in some fifty years. Looking ten

to twenty years ahead, changes will come.

More and more companies wonder about

hydrogen as the energy resource for the

future. Hydrogen is believed to be the right

direction, and we all understand that the sun

and wind is not enough. The whole of the

energy system needs to store energy, as it

becomes basically useless once it cannot be

stored. The current competition, therefore, is

in who develops the most efficient energystoring technology.

Automotive industries are going through

significant changes. Thirty years ago, the

greatest export of the Moravian-Silesian

Region was steel; now it is the automotive

industry which keeps growing. The best

examples are the transformation of new

fuels and autonomous control of vehicles.

Our great advantage is that we stand close

to where the trends are born; we can watch

them happening, and make use of the

business opportunities they bring.

Thank you for the interview.

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