Prof. Knott explains how innovation really works

Professor Anne Marie Knott’s book based on her research into the connection between R&D investment and growth isn’t available until the middle of March, but it’s already attracting media buzz. How Innovation Really Works is featured in a column by Lee Schafer  in the Minneapolis Star Tribune:

In a book coming out next month called “How Innovation Really Works,” Knott lumps R & D tax credits in with a long list of other misconceptions, questioning the conventional wisdom of strategies like only chasing radical ideas or looking outside a company for new ideas, known as “open innovation.”

Yet she’s also hopeful. The conventional approach of having your own team of engineers and marketers solve problems still works. What has stalled innovation is mostly having executives routinely misunderstand the value of what they are getting from R & D spending. In other words, the innovation problem seems fixable.

Knott, who teaches strategy at Washington University in St. Louis, knows she’s a rare optimist. It’s now common to hear how we have run out of big ideas, as the Wall Street Journal recently reported. “My answer that is no, there is plenty of opportunity,” she said. “Firms have just gotten worse at the R & D they do.”

Armed with insights from her experience as an R&D project manager, 20 years of academic research, and two National Science Foundation grants, Knott devised RQ (Research Quotient), a revolutionary new tool that measures a company’s R&D capability―its ability to convert investment in R&D into products and services people want to buy or to reduce the cost of producing these.

RQ not only tells companies how “smart” they are, it provides a guide for how much they should invest in R&D to ensure that investment will increase revenues, profits, and market value.

Knott’s RQ research was the recipient of the Olin Award in 2015.