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Innovation, Growth and Nation Branding in Iceland

The PCIM or Post-Crisis Innovation Model developed by Patrick Crehan begin_of_the_skype_highlighting end_of_the_skype_highlighting in 2009, applies not only to the problem of developing a national innovation capability in countries such as Iceland, but to the development of innovation capabilities at the level of regions, cities and large multi-unit companies. CKA has therefore provided a paper that introduces the approach, using the case of Iceland as a point of reference.

The approach relies on six fundamental principles for thinking about innovation and what needs to be done to improve it. These principles include the idea that innovation is primarily the responsibility of management, that innovation should be driven by growth strategy, and that the ability to innovate is an organizational capability rather than an individual skill. Implicit in this approach is the idea that a failure to innovate is not a failure of science or engineering, it is ultimately a failure of management to make the right decisions about innovation and to ensure that innovation is supported with the right systems, processes and resources. Improving innovation starts by engaging management, and not by simply throwing extra money at research.

The six principles on which the PCIM is based are explained in more detail in a paper which can be obtained from CKA. They can be summarized as follows:

1. Innovation should be driven by growth strategy. Growth can be both quantitative and qualitative in nature.

2. Innovation requires marketing as well as R&D. This is a reference to the modern concept of marketing, which is about discovering, creating and understanding new markets and new needs, not just advertising and sales.

3. Innovation requires total innovation not just new ideas for products, processes and services.

4. The innovation system is the value chain or value network of the organization.

5. The ability to innovate is an organizational capability.

6. Innovation is primarily the responsibility of management. It is not something they can afford to delegate. The temptation to do so is real and the job is made all the more difficult due to increasingly rapid changes in the overall business environment.

The PCIM focuses squarely on the strategic capabilities of organizations, capabilities which determine not only how well they innovate, but the extent to which they do the right kind of innovation.

Research and technology investments should be directly driven by innovation needs. In turn innovation should be driven by growth strategy. If this chain is broken, the organization will drift and the best engineering or science in the world will not save it from oblivion.

Organizations need to understand the nature of competition and the source of future growth. Competition is pressure to reduce costs, improve quality or provide better services. Growth can be qualitative or quantitative. These concepts apply equally to public and private sector organizations. They need to periodically rethink their business and how they expect to grow in future. They need to understand the role that innovation will play in achieving such growth. They need to ask themselves if they are well organized to make it all happen.

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In 2009, as part of a consortium to help Iceland develop a new approach to innovation and nation branding, CKA developed a Post-Crisis Innovation Model or PCIM. This model is based on 6 main principles and was developed so as to cost no new tax-payers' money, have a direct impact on industry and enhance the image and band of Iceland abroad, as a country worthy of foreign direct investment. It is worth noting that there are serious debates going on rigth now, not only in Norway but in Denmark as well, about the capacity of these nations to innovate and their global ranking among nations. An increasing number of people think that new approaches are needed, and that merely 'doing what they did in the past' will not be enough in the future. Some people are therefore looking to the PCIM as a possible way forward.

Previous models based on the NIS or National Innovation System, tend to focus on the role of public institutions and the provision of public money for research programmes. This all but ignores the role of industry and has become too costly in the aftermath of the global financial crisis. The PCIM is a highly complementary approach, addressing issues that have been neglected in the past, which can be implemented in parallel with what governments already do.

On 23 August 2010, Mandag Morgen the leading business newspaper for the Nordic Countries featured an article about the work of CKA work in Iceland entitled "Icelandic cure can lift Norwegian Innovation". It consists of an opinion piece based on interviews with Patrick Crehan begin_of_the_skype_highlighting end_of_the_skype_highlighting and Jorn Bang Andersen to discuss what lessons lie in this for Norway. The same day another article apeared in Aftenposten, the leading Norwegian newspaper.

Download the Original version, the English version and Both versions in one document

Mandag Morgen is the leading business newspaper for the Nordic Countries. On 17 May 2010 it featured an article about the work of CKA work in Iceland entitled 'A lesson from Iceland".

Download the Original version, the English version and Both versions in one document

A team of international experts is currently working with Rannis the Icelandic Centre for Research, and its partner organisations such as the Icelandic Innovation Centre, the Trade Council of Iceland, Invest in Iceland and The Icelandic Tourist Board. Occasional reports and relevant links will be provided as the work evolves.

The team consists of:
• Patrick Crehan of CKA
• Jorn Bang Andersen from Denmark
• Rob C. Walcott, Mohan Sawhney and Phil Kotler of the Kellog School of Management in Chicago
• Jill Helmann Chief Innovator at the Cornell University, School of Hotel Management
• Simon Jones of Inconet-GCC in the UK

Rob Wolcott of Kellogg School of Management at Northwestern University writes an occasional blog for Fast Company magazine. On 8 January 29010 fast Comoany published his article "Iceland, back from the brink"




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