…as a metaphor for an innovation ecosystem.
I can always tell when I should write about a book because I find myself telling people about it before it has even gone cold on my bookshelf. This is one of those books. “If you are interested in innovation, you need to read the Rainforest”, said Philip, and he was right.
And the metaphor is rich. Think of a desert, where nothing grows and a plantation where growth is managed and weeds are carefully pulled out for incremental improvement. A rainforest, by contrast is an unwieldy, lush ecosystem where everything grows and the weeds are an essential part of its unpredictable nature.
The book describes the foundations of economic theory as exchange and specialisation. And uses the ancient silk road as its example. Innovation, they argue, is also based on exchange – the exchange of ideas and skills. And the invisible currency of innovation is trust. Trust is a great theme and it weaves itself consistently throughout the book.
Hwang and Horowitz argue that there are good reasons Silicon Valley emerged out of the wild west frontier culture of California and they tell a lovely story about the characteristics needed for innovation and the match with those needed for survival on the frontier. But their theory is that you can build these cultural characteristics anywhere and even create virtual innovation ecosystems that span the globe.
I’ve thought a bit about where that places South Australia. Our history and culture is decidedly different. Richard Blandy recently described our culture as Marxist as opposed to the American individualistic culture framed by the Enlightenment. We lay claim to a number of neat inventions – pioneers, making do with scant resources perhaps? We have a history of groundbreaking social changes and we like to remind people that we’re not like the rest of Australia because our first white settlers weren’t convicts. I wondered though, how many migrants – from the eastern European wave, the Italian and Greek wave, and the Vietnamese and even more recent waves – how many of these South Australians feel the culture we describe when we talk about our pioneering past? If you are interested, I’m still trying to get people to tell me what they think and give us an updated snapshot of Adelaide’s strengths. In any case we probably need to understand the stories that resonate with people – a form of appreciative inquiry – in order to understand the type of innovation ecosystem that we can hope to inspire here.
Here are the foundations that Hwang and Horowitz think we need.
Firstly the cultural rules that support innovation:
- permission to break the rules and to dream. This will be a challenge for us South Aussies – we do suffer from a tall poppy syndrome and my personal experience is that we mostly embrace authority and follow the rules. It’s the first rule of the rainforest though and we probably need to tap into some more recent cultural roots to find acceptance of an unapologetic ambitious and challenging approach.
- a natural tendency to open doors and listen
- a willingness to trust and be trusted
- experimenting and iterating together
- a preference for seeking fairness, not advantage
- forgiveness and encouragement when we make mistakes, fail and persist
- paying it forward (to use the american term for giving without expecting to receive because in other circumstances you will be or have been the recipient)
And then the tools for building innovation ecosystems anywhere:
- Learn by doing
- enhance diversity
- celebrate role models and peer interaction
- build tribes of trust
- create social feedback loops
- make social contracts explicit.
I was also fascinated by the description of key players in the rainforest. The keystone species are essential entities that support the biodiversity of the entire system. In the book these are described as the connectors, the people and institutions that help link everybody together, that bring diversity into the mix and that willingly (often without any direct financial incentive) make introductions and play host to new conversations.
The discovery of key connectors is also a theme in Jean-Alain Heraud’s work on knowledge angels which is a much more down to earth evidence base of small business, cities and emerging markets. By contrast the Silicon Valley ecosystem of entrepreneurs and venture capitalists sounds much more high-powered. The business consultants that are most frequently connecting businesses in Heraud’s work are nowhere to be seen. (Further exploration of the upper, middle and underground that Heraud cites can be found here.)
Nevertheless, The Rainforest is an entertaining read and its axioms provide plenty of food for thought:
- While plants are harvested more efficently on farms, weeds sprout best in Rainforests
- Rainforests are built from the bottom up where irrational economic behaviour reigns
- What we typically think of as free markets are actually not that free
- Social barriers – caused by geography, networks, culture, language, and distrust – create transaction costs that stifle valuable relationships before they can be born
- The vibrancy of a rainforest correlates to the number of people in a network and their ability to connect with one another
- High social barriers outside of close circles of family and friends are the norm in the world
- Rainforests depend on people who actively bridge social distances and connect disparate parties
- People in rainforests are motivated for reasons that defy traditional economic notions of ‘rational’ behaviour
- Innovation and human emotion are intertwined
- The greater the diversity in human specialisation, the greater the potential value of exchanges in a system
- The instincts that once helped our ancestors survive are hurting our ability to maximise innovation today
- Rainforests have replaced tribalism with a culture of informal rules that allow strangers to work together efficiently on temporary projects
- The informal rules that govern rainforests cause people to restrain their short term self-interest for long-term mutual gain
- Rainforests function when the combined value of social norms and extra-rational motivations outweigh the human instincts to fear
If you want a good book to provoke your thinking about our capacity to innovate and stimulate change, pick up a copy of The Rainforest.