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Tracking down innovation

Innovation is crucial for economic success. But where do the ideas for products and applications come from? And is it the end for established technology when new technology emerges?

by Matthias Münch

Germans cherish their cars, and the automotive industry is one of the most important in the country. Approximately two million people are employed in the Mercedes-Benz, Volkswagen or BMW factories, at suppliers, in car dealerships and garages. For more than a century, German car manufacturers were seen as a driving force behind technical innovation – they were the first to develop the combustion engine, the first anti-lock brakes, the first airbag. When it comes to new driving and mobility concepts, however, the situation has changed. Nowadays, for example, innovative electromobility concepts come predominantly from Japan and the USA.

Consumers tend not to base their choices on technology

Why do certain sectors of industry find it so hard to explore new avenues? ‘A certain inertia common to large organisations is certainly a contributory factor,’ says Kai-Ingo Voigt. ‘German car manufacturers have invested many billions of euros in conventional technology. For a long time, they were successful, but now they risk falling behind.’ Voigt is professor of business administration and industrial management at FAU. He researches how inventions lead to technological advances, which then lead to competitive products which force older products off the market, before these products are in turn replaced by the latest innovations. Voigt cautions that a fundamental difference should be made between technology and applications. ‘The music industry provides a good example. Gramophone, record player, cassette recorder, CD and MP3 player or today’s streaming are a catalogue of the technological advances made over one century. At the end of the day, however, consumers are not particularly attached to any one device, they just want to listen to music.

Focussing on just one area of technology can lead to ruin. The American concern Kodak is a case in point. The inventor of photographic film clung onto its faith in analogue photography for too long and was eventually steamrollered by digitalisation. 130 years after the company was established, Kodak had to file for insolvency in 2012. This is just one case which has made companies sit up and address technology management. Anyone who hopes to market products successfully has to be able to access innovation. ‘Whilst in-house R&D departments can make a valuable contribution, innovative ideas are actually often born outside companies,’ says Kai-Ingo Voigt. He encourages companies to participate in innovation funds, business incubators or start-ups. The ZOLLHOF in Nuremberg is a good example. Here, companies such as adidas, Schaeffler or Siemens meet entrepreneurs from within the university who are setting out into business. Voigt: ‘The potential of an idea is not always immediately obvious. But companies must be willing to try new things and provide venture capital, even if this makes them question themselves and their products.’

Consumers are important innovators

As companies are keen to keep their position on the market and safeguard their economic success, they are an important factor in driving innovation. However, a number of items we take for granted today were not originally invented and developed by companies at all. Tins with ring pulls are one, as are bubble gum and snowboards. Even cars were not originally invented with the aim of founding a gigantic industry. ‘People have always taken matters into their own hands and invented certain goods or services which they were not able to find on the market,’ says Kathrin M. Möslein, professor of information systems, innovation and value creation at FAU. ‘User-generated inventions such as these are an extremely important aspect of innovation, which has been neglected for a long time.’

The reasons motivating people to devise and develop new things are many and varied. Often ideas stem from curiosity, sometimes boredom and sometimes necessity: people suffering from rare diseases, for example, only have a limited number of specialists they can consult, and research into diseases such as these is not an attractive commercial option for companies. Patients take this as an incentive to develop solutions themselves. Tal Golesworthy is one example: the 57 year old Briton suffers from Marfan syndrome, an incurable disorder which affects the body’s connective tissue, and can over time destroy the aorta. As no doctors were able to help, the engineer developed a plastic implant and had it inserted – it has been in place now for fifteen years, helping him live a comparatively normal life. Not only that, his invention has saved many other patients from an early death.

Interestingly, however, a new product which is invented and developed without the involvement of companies is not classed as an innovation under OECD standards. ‘When we read current national statistics on innovation, they refer to new goods or services which have been developed in research laboratories and companies, usually patented and then launched onto the commercial market,’ says Kathrin Möslein. ‘The overriding opinion is that anything invented by users or the general public, independent inventors or developers is not classed as innovation by definition.’ But change is in sight. This year, the OECD is to extend its definition of innovation to refer to manufacturer-generated innovation, household-generated innovation and innovation generated by public authorities. For innovators, innovation research and innovation practice this is nothing less than a revolution. Möslein: ‘This shift in definition means that commercialisation is no longer the central criterion for innovation, a sensible move when you consider that a large part of economic output generated today is based on innovations originating from households or public authorities, and has been for a long time.’

MP3 – is the success story coming to an end?

Scientists at the Fraunhofer Institute for Integrated Circuits (IIS) cannot complain of a lack of visibility for their inventions, or at least not for the MP3 format, the institute’s greatest innovation. However, MP3 is also a prominent example of the fact that groundbreaking innovations also depend on favourable circumstances: when work began within the framework of the EU EUREKA project at the Fraunhofer IIS and FAU in 1987, the focus was on developing technology for coding audio data for digital radio. From an early stage, however, the developers were aware that MP3 was also well suited for selling music on the internet. ‘Technically, MP3 was the best solution for reducing music data, but that alone was not enough for the breakthrough,’ explains Jürgen Herre, professor for audio coding at FAU, who made a major contribution to MP3 being developed at IIS. ‘At the end of the day, MP3 only began to enjoy widespread success after computers became more powerful and began to interact more and more with the Internet, which was just starting to be developed.’

MP3 was just the beginning: new audio coding formats are used, for example, for 3D sound in streaming. (image: Fraunhofer IIS/Kurt Fuchs)

MP3 is more than just technology, it is a cultural phenomenon. Thanks to MP3, music moved away from physical data carriers such as cassettes or CD’s, inspiring the concept of personal music. ‘Thanks to downloads and streaming, music could suddenly be sent to anywhere from anywhere in the world,’ says Herre. ‘We take this for granted nowadays, but at the time it was a groundbreaking idea.’ Encouraged by the major success of MP3, researchers at IIS were quick to develop autocoding technology even further. Five years after the MP3 format became standard, it was followed by Advanced Audio Coding, known as AAC for short, which allowed a better sound quality using a lower volume of data. The third generation, the HE-AAC format, revolutionised the live streaming of music with even lower bit rates. The global success of MP3 was repeated with the following two generations, which are now used in virtually all consumer electronics devices, in computers and mobile phones. And work at developing new formats is still ongoing. Today, scientists from Erlangen are investigating the quality of mobile telephony, transferring 3D sound by streaming or individually controlling background noises.

However, even if work is being done on the fourth generation of audiocoding, this does not by any means signal the end of the MP3 format: ‘We estimate that there are approximately ten billion devices worldwide which process either MP3 or AAC. In addition, several billion MP3 bitstreams exist. That is an enormous volume of digital music which users are not just going to throw away,’ says Jürgen Herre. ‘MP3 is therefore set to remain the common language of consumer electronics for a long time to come.’ The question remains as to whether the advance of broadband internet could make the compressing of audio files redundant in the foreseeable future. Herre thinks not: ‘In reality, exactly the opposite is happening: the more broadband is available, the more services and programmes are offered over these networks. Audio and video coding is still needed, just as before.’

friedrich – FAU´s research magazine

friedrich 2018 Titelbild

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This article was originally published in our research magazine friedrich. The current issue deals with all aspects of the topic of ‘End’: which of them are unavoidable?  How do people deal with this? What does it mean for individuals? Is what people define as the end really the end? Sometimes things just change or develop and something new is created. Occasionally, the end is not an issue at all, with the human race striving for eternity. Is it possible for us to understand this term at all? Is innovation infinite? And do we live forever – on the Internet?

Download friedrich 118 (in German language)

More articles from the magazine can be found under the keyword ‘friedrich’.

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