Just read this great interview by Deloitte Review with US CTO Aneesh Chopra. Awesome insights into the importance of innovation! Below are a few of the key points from the interview. I hope you enjoy and learn as much as I did.
Ecosystems for Innovation: An interview with U.S. CTO Aneesh Chopra
Historically, larger companies, universities or government agencies with deep pockets have often brought forth the ideas that shape business and society. More recently, though, the advent of new digital infrastructures such as cloud computing, mobile and online social networks is enabling small groups of individuals with small investments to create big impact.
The economic importance of innovation has emerged as a central theme among governments, especially with many parts of the world economy still on a shaky footing. New ideas spawn new industries and can enhance a country’s economic position. One of the better investments a government can make, some argue, is in building blocks that enable and encourage short-turnaround, fast-paced innovation.
Among the prominent figures in the innovation space is Aneesh Chopra, the United States chief technology officer. In this role Chopra serves as an assistant to the president and associate director for technology within the Office of Science & Technology Policy. He works to advance the president’s technology agenda by fostering new ideas and encouraging governmentwide coordination to help the country meet its goals, from job creation to reducing health care costs to protecting the homeland.
Vikram Mahidhar: What trends do you see impacting innovation, and how?
Aneesh Chopra: Three trends are significantly lowering the cost and accelerating the speed of innovation.
The first trend, the digital infrastructure, is now demonstrating benefits to the entrepreneurial ecosystem in ways that might have happened in the past but at a much faster rate with much broader impact. The advent of broadband networks has really democratized access to computing power and as a result has made the business case around cloud computing more realistic. It is not just broadband, but combinations of infrastructure enhancements – including processing speed and computing power. We now have a truly agile infrastructure that offers a greater degree of personalization.
The second trend is mobility. The U.S. president has made wireless a major part of our infrastructure story for the 21st century. We are describing it as the third wave of economic growth in the Internet, the first being dial-up, then broadband, now mobile broadband.
The third trend that is emerging is open innovation, broadly speaking. The greater reliance on interoperability standards now offers a wide variety of choices across a spectrum of price points to perform the same task. Similarly, for businesses to be successful there isn’t a need to offer a complete portfolio of applications as used to be the case.
So as a result the net bottom line is that the cost to innovate, at least in the IT domain, has been dramatically lowered. It’s not exactly the same story in pharmaceuticals, nor is it the same story in clean energy – those remain capital-intensive segments of our innovation infrastructure. But on the IT component these are the trends that we’re finding.
VM: What is your favorite example of a new innovation model driven by the digital infrastructure in industries other than IT?
AC: My favorite by far is in health care. A year ago, our health and human services department awarded a research and development grant to a team at Harvard University led by professors Zak Kohane and Ken Mandl to develop an app store for health care.
Within a year they developed an open-source architecture called “Substitutable Medical Applications, reusable technologies,” or SMArt. This architecture provides a set of core services to facilitate substitutable health care applications, or plug-ins, similar to the App Store found in the iPad, iTouch or Droid.
Today it is hard to find a provider that has digitized its health information. We have not seen the kind of competitive marketplace where new startups or small firms could come in and build valuable applications on top of the health care infrastructure. It is too expensive to do that because most health care providers use their own proprietary standards and applications.
This Harvard team was tasked to liberate health data in a standardized way such that the vendors can have common standards to build third-party applications capable of running on multiple platforms at low to no marginal cost.
Within a year this team published its first application programming interface, and it has initiated a $5000 prize for the most innovative app developer who can build value off of those data to improve quality and lower costs in health care. It’s the first organized third-party application ecosystem on top of our traditional IT architecture in hospitals and doctors’ offices. This is an example of a tangible good that has come out of this new innovation model, and I believe that we’ll be impressed with the kind of breakthroughs that will
come out of this movement. You can learn more about this at smartplatforms.org.
VM: How do you see new models of innovation working together with traditional innovation models?
AC: They all have to be part of the portfolio. We spend $147 billion a year in research and development in the federal government. My presumption is the overwhelming share of that money is in the traditional approach, which goes in fundamental research at the university level or at federal labs, resulting in ideas demonstrating an opportunity for commercialization. The private sector taps into these labs to commercialize such ideas, and the value is created. For example, the battery in the Chevy Volt includes intellectual property derived from research at one of our federal labs, Argon National Laboratory, from over 10 years ago. So the traditional model of planting your seed corn and looking out 10 years does in fact deliver results for the American people. It did so in DARPA’s investments on the Internet. Even the work at Google got a boost from an early grant on libraries. So I think the traditional model has been the bread and butter for our R& D pipeline.
But as we look from our basic innovation ecosystem investments, through the National Science Foundation and the like, to some of the new applied R&D initiatives that are aligned to mission objectives, the new innovation model mostly is how we can achieve breakthroughs in the mission priorities through applied R&D.
VM: How do you see government itself adopting the new models to improve its internal practices?
AC: That was my first homework assignment as I took this job. President Obama, on his first full day in office, issued a Presidential Memorandum on Open Government that directed the then unnamed Chief Technology Officer to provide advice on how to make government more open. And the president specifically spoke of harnessing the power of transparency, participation and collaboration as guiding principles for how we would like to run the government.
We focused a great deal of our time and attention early in the administration articulating that vision and challenging our federal agencies to personalize that mission and vision through their domains. Every federal agency today has articulated that vision by preparing its open government strategy. For example, you can read the open government strategy for Health and Human Services at hhs.gov/open. Every cabinet-level agency fulfilled that objective, all within the first year or so following my arrival.
As the culture starts to incorporate these changes, the value now is to take advantage of the open government approaches, combined with three policy levers—the role of R&D collaboration, the role of open data, and the role of voluntary industry consensus standards activities—along with the new models for public engagement to deliver breakthroughs.
That’s the formula we’ve adopted in the administration, and we’re hopeful [it] will be a lasting legacy for the public sector regardless of party or who holds the executive office.
VM: How do you measure success? Are the goals and criteria similar to more traditional approaches?
AC: The interesting thing about the metrics is that they are first principles that we had almost forgotten about. For instance, if you were to ask someone, “What does HHS do?” most people would say it provides health insurance to the elderly and the poor and the disabled, because everyone mostly knows of HHS in the context of its role as Medicare or Medicaid provider. But what they don’t remember is that the actual mission statement of HHS is to improve the health performance of the country, community by community.
Similarly if you go back to the first principles and ask what can we do to harness the power of technology, data and innovation to achieve the fundamental mission objective, that hasn’t changed, but it is allowing us a new look because of these advances in IT.
The new model is to unleash data and empower people to take control over their own community’s destiny through delivery on four key attributes – inspire, cajole, nudge and convene. These attributes achieve the base mission objective even if they’re not aligned to a specific funding appropriation or a given program that’s been authorized in the budget. These are things that were always available for folks to do but had not been the priority that we’re making it.
VM: What challenges do you see around Open Innovation?
AC: The biggest challenge is whether or not the ecosystem will embrace this approach. For instance, in the case of the health information exchange example, our desire to bring the health care stakeholders together to help design the standards that opened up safe, secure email happened to fit almost like a glove with where the industry intended to go anyway. It just didn’t have the convening and the nudging to get it done. So the timing worked very well. Will the same opportunities present themselves in energy, in education, and even in other domains of health care where we need to see breakthroughs?
Second is how the policy objectives and the ecosystem as currently organized might allow collaboration. In open innovation you’re reliant on partners that aren’t required by law to do anything, but you’re hopeful there is a coalition to be formed in the organizing. So the science around organizing and celebrating and nurturing the ecosystem is not something traditionally known in public service, and it keeps me up at night.
Third is our ability to communicate the value – that is, to demonstrate meaningful and tangible results to the American people. I am accountable to my president; we are accountable through Congress and to the American people. We need to demonstrate that these ideas are delivering value for the American people relative to the investment that we’re making as a society in these issues. And I must constantly assess the degree to which these initiatives will deliver results or not. I need to make sure I’m advising the president with the best information that we have on which of these initiatives to move forward on and how and in what manner. I’ve got to make sure the right cost-benefit equation is understood when moving forward.
VM: What can the private sector learn from how you are approaching innovation in government?
AC: For the private sector to adopt this “ecosystem” innovation model there are clearly issues in pre-competitive collaborative space that I believe have room for further evaluation and consideration.
Back in the days of Bell Labs, there was a forcing function, a natural magnet that convened the ecosystem. Professors, small businesses, supply chain vendors, etc. came together around common challenges. It offered an opportunity for everyone to collaborate and win together. In the absence of some of those traditional corporate labs we’ve lost some of that convening power.
I think one of the opportunities for industry is to start thinking anew about how might we come together and collaborate more without violating concerns of antitrust or other regulatory barriers. I believe there’s a chance to see more of this collaboration and in fact could be encouraged by this notion of government as convener. I think the message to the private sector is to start thinking about how we might, together in a pre-competitive context, think anew about research and development needs. Think anew about data that’s held by government that if released could help inform new products and services. To think anew about industry-driven consensus standards activities that would open up and unlock opportunities that today are much more difficult. I think the private sector would be in a very strong position to engage Washington, to think of those opportunities, and we’re ready and waiting to do it.
Vikram Mahidhar is deputy leader of Innovation, Deloitte Services LP.
Deloitte’s Global Public Sector plays an important role in Deloitte by providing a full range of services including audit and enterprise risk, consulting, tax, and financial advisory, to bring an informed, 360-degree perspective to each public sector project it undertakes. It’s mission is to help governments serve the 21st century citizen by applying best practices in strategy, scenario planning, operations improvement, technology integration, and human capital. Deloitte is a proud supporter of GovLoop. Check out Deloitte on Twitter and Facebook.