Your book Digital Time Makers is about, among other things, the most exciting topic of our time - how innovations are created. Let's start with the word innovation: What does it mean and what distinguishes it from a technological improvement? When does an innovation become an innovation?
That’s a very good question. You can roughly divide it into two groups. Either you've found a solution to an existing problem, or you have a solution to a problem that doesn't even exist yet. From there it gets a bit more complicated. It can happen that you can't do anything with it at first and the innovation sits on the shelf for ten years until you have a use for it. One notable example of this is the invention of the laser. Researchers discovered energy-rich light in the 1960s and were very excited – but at first, they didn't know what to do with it. It took more than ten years for the CD to become established as a music carrier.
That reminds me of the invention of penicillin. A medical revolution. It wasn’t developed but found by chance. Now, you can't just wait around for inspiration to strike, you must go looking for inspiration first. What's the best way to do that? Spoiler: It tends not to be brainstorming sessions, right?
That's right (laughs)—yet still that concept sticks around. If you go on a daytrip with the team on the weekend, of course an idea has to come out of it, something you can use. There is no template or blueprint for innovation. Another thing people forget is that innovation is often an iterative process. That means it's not just this one brilliant idea, but a steady stream of constant work. It's about creating a framework so that people can collaborate as freely as possible. One great example of this is the Spanish textile company Inditex, which has introduced a corporate innovation hub. There is a specified budget—but beyond that, no guidelines at all. Employees are free to do whatever they want and cooperate with whomever they want. Giving a team such a high degree of freedom is, of course, the best prerequisite for truly groundbreaking innovations, because you are no longer limited by corporate culture.
How important is the team factor? Is it still underestimated?
Very. The more different backgrounds you can bring together, the more innovative a team will be. In general, the team’s makeup is crucial to the success of the company. That's why investors look very closely at it, especially since most start-ups don't have a finished product to begin with, just an idea. That's why the team is the most important factor in the initial phase. What is the composition of the team, and do people have the confidence that they can implement the idea successfully? In some people's minds, there is still a belief that great ideas come from a genius sitting alone in a basement. Of course, there are exceptional talents who would thrive in this situation, but, as a rule, it's a team success and it always takes longer than you might think.
What else do we need to change to improve the road to innovation?
We need more humility. Germany must not rest on its laurels, nor should we work with the tools and methods that worked in the past and try to transfer them to today’s world. Quite a few companies are already in a crisis or soon will be. This can actually be an excellent basis for them to reinvent themselves from, because every crisis is also an innovation accelerator. This pattern is easy to see. In 2008 during the financial crisis, for example, several innovative concepts were born such as Airbnb and Uber. Now, with Corona, we have another such opportunity. And, who knows, maybe something big will come along. What we also urgently need to become more innovative is collaboration. And we need it at all levels. We can already see the first signs of this, for example among car manufacturers. It used to be unthinkable that they would cooperate in certain areas. The fact that Elon Musk was recently a surprise guest at a VW event would have been unimaginable in the past. You can see that a change in thinking is taking place, but there has also been a lot of movement at other levels, between start-ups and corporates. People have understood that accelerators need different conditions and freedom, and that DAX standards are counterproductive.
How do you assess the situation of innovation here in comparison to the international markets? Where does Germany stand?
If you look at how the two biggest global players, China and the USA, are passing us by, you start to feel anxious. We will only have a chance if we join forces on a European level. There are some great start-ups here that are enormously successful and have set precedent: Celonis, NaVis, and Flix Mobility are beacons of hope. The problem—as the founders and investors will confirm—is funding. Adequate funding is severely lacking. Sure, we have a large tech start-up fund, but that only covers the initial investments. After that, it gets difficult. That’s the moment when our brightest stars move abroad.
Let's look at the positive side: Do you see any positive developments? What things inspire you?
Absolutely! There is one development that I find incredibly encouraging: the field of AI in medicine. In radiology, for example, when it comes to detecting tumors at an early stage. AI is much better at this than radiologists, which means you can make more qualified decisions about whether to operate or not. And the tech also beats the human eye in assessing whether it's a tumor at all. So many lives can be saved by early detection!
It’s possible that we could do even more, right? However, this isn’t possible due to data protection requirements in Germany...
We are very unique here in Germany—that’s not to say we’re up the creek. I think we need to reform data protection, but with a sense of proportion, of course. Technically a lot is still possible, for example by using anonymized data.
TLGG CEO Christoph Bornschein once said in an interview: "We'd rather bury the data in the garden than worry about cancer.” That’s very bold, but he's right.
I think so too. Germans have a strange defense reflex when it comes to opening up and finding more creative solutions. That's going to come back and bite us at some point. There is a clear double standard here. When it comes to giving away data on Instagram, they're quick to do it. But when you bring that line up, it doesn't go over so well (laughs). Nobody wants to hear that.