Connecting the Edges

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The 2012 Roundtable on Institutional Innovation convened leaders to explore how organizations can stay atop todays constant technological advancement. In the current economic environment, growth and underemployment are two outstanding national, indeed international, problems. While technological advances and globalization are often cited as instigators of the current plight, they are also beacons of hope for the future. Connecting the Edges concludes that by integrating the core of an organization with the edge, where innovation is more likely to happen, we can create dynamic, learning networks.

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<ul><li>1.By Richard AdlerA REPORT ON THE 2012 ASPEN INSTITUTE ROUNDTABLEON INSTITUTIONAL INNOVATIONThe Aspen Institute Communications and Society Program</li></ul><p>2. Connecting the EdgesA Report of the 2012 Aspen InstituteRoundtable on Institutional InnovationBy Richard AdlerCommunications and Society ProgramCharles M. FirestoneExecutive DirectorWashington, D.C.2013 3. To purchase additional copies of this report, please contact:The Aspen InstitutePublications OfficeP.O. Box 222109 Houghton Lab LaneQueenstown, Maryland 21658Phone: (410) 820-5326Fax: (410) 827-9174E-mail: publications@aspeninstitute.orgFor all other inquiries, please contact:The Aspen InstituteCommunications and Society ProgramOne Dupont Circle, NWSuite 700Washington, DC 20036Phone: (202) 736-5818Fax: (202) 467-0790Copyright 2013 by The Aspen InstituteThis work is licensed under the Creative Commons Attribution-Noncommercial 3.0 United States License. To view a copy of thislicense, visit http://creativecommons.org/licenses/by-nc/3.0/us/or send a letter to Creative Commons, 171 Second Street,Suite 300, San Francisco, California, 94105, USA.The Aspen InstituteOne Dupont Circle, NWSuite 700Washington, DC 20036Published in the United States of America in 2013by The Aspen InstituteAll rights reservedPrinted in the United States of AmericaISBN: 0-89843-589-713/015Charles M. FirestoneExecutive DirectorPatricia K. KellyAssistant Director 4. ContentsForeword, Charles M. Firestone................................................................vExecutive Summary, Richard Adler........................................................viiConnecting the Edges, Richard AdlerThe Economic Imperative........................................................................... 1Schumpeters Gale........................................................................................ 2Core vs. Edge: Where does Innovation Happen?....................................... 4The Role of Education................................................................................. 5New Realities for Business: From Transactions to Relationships ................ 7The Facebook Effect................................................................................... 8Building Trust.......................................................................................... 11Can Governments Really Change? ......................................................... 12Cities as Vital Edges................................................................................. 15Developing Human Capability.................................................................. 17New Ways to Work................................................................................... 19New Ways to Learn.................................................................................. 20Learning on the Job?................................................................................ 24Connecting the Edges................................................................................ 26Finding the Right Edge, Using the Right Tools........................................ 28Reinventing Higher Education at ASU................................................... 30Staying on the Edge ................................................................................... 32Endnotes .................................................................................................... 33 5. AppendixRoundtable Participants............................................................................. 39About the Author....................................................................................... 41The Aspen Institute Communications and Society Program.................. 43Previous Publications from the Aspen InstituteRoundtable on Institutional Innovation................................................ 45 6. ForewordThe Aspen Institute Communications and Society Program con-venes a number of different roundtables to address issues involving theimpact of the digital revolution at the cutting edges of societal, demo-cratic and business institutions and values. One of the newest in theseseries looks at institutional innovationhow institutions need to adaptto meet the changing needs of their organizations, their constituentparts and the ecologies they live in.As much of the world has faced problems recently in their econo-miesleading in some cases to societal unrestmany point to theneed for economic growth as the way out, and to innovation as a meansto that growth. In the United States, for example, the business enginefor growth has slowed over the past decade at least, leading to concernsabout the future of jobs, both in numbers and quality. Forward think-ers call for greater innovation in both the business and public sectors tojumpstart growth and progress.This Roundtable series is premised heavily on the work of John Hageland John Seely Brown, leaders of the aptly named Deloitte Center forthe Edge. Their research, and the Aspen Roundtable itself, focuses onways to encourage creativity and innovation though collaboration,social networking and interactions of all kinds, particularly at the edgeof organizations, where, as our rapporteur says, The weight of inertiais less inhibiting and where disruptive initiatives are more likely to betolerated.Digital network technologies are disrupting the cores of many orga-nizationsfrom the entertainment and information businesses to per-haps the last bastion of resistance, our educational institutions. At theedges of these organizations, we find the greatest (some say only) inno-vative measuresthat is, invention turned into action. This conferencelooked not only at that phenomenon but also how these edge networksconnect both to each other and to the cores of their organizations.AcknowledgmentsI would like to thank the Deloitte Center for the Edge for being oursenior sponsor for the Roundtable and in particular, John Hagel andv 7. vi Connecting the EdgesJohn Seely Brown for their leadership, suggestions and assistance. Inaddition, we thank EMC Greenplum for their sponsoring contributionsto the Communications and Society Program, and Richard Adler forweaving the Roundtables dialogue, background readings and his ownindependent research into a concise and coherent report.Finally, I thank Kiahna Williams, Senior Project Manager, who man-aged the Roundtable throughout, and Tricia Kelly, Assistant Directorof the Communications and Society Program, for her review and helpin producing this report.Charles M. FirestoneExecutive DirectorCommunications and Society ProgramThe Aspen InstituteWashington, D.C.April 2013 8. viiExecutive SummaryAmericas democratic, capitalist system has produced an unprec-edented level of prosperity for this country. But the engine of growthresponsible for this prosperity, which has been based on incessant inno-vation and continuous renewal, has slowed in recent years. The resulthas been a growing economic disparity that is leaving a substantialportion of the population behind. What is needed now is a new waveof innovation that embraces the public as well as the private sector thatgenerates enough good jobs to allow all workers to do well.Innovation is rarely a solo activity. It most often takes place withinnetworks that bring people together in ways that encourage creativityand allow good ideas to be turned into action. The place where innova-tion is most likely to flourish is not at the core of organizations but atthe edge where the weight of inertia is less inhibiting and where disrup-tive initiatives are more likely to be tolerated.Digital network technologies are creating new possibilities for col-laboration outside the confines of traditional institutions. These newcapabilities not only threaten to disrupt many existing business enter-prises but also educational institutions that find themselves challengedby the rise of Massively Open Online Courses and other non-conven-tional forms of learning. In each case, it is at the edge of organizationswhere the most exciting developments are taking place, where newideas, new technologies and new ways of working are being combinedin promising ways. If we are going to re-start vigorous, inclusive eco-nomic development, and ultimately realize the full potential of newways of doing things, we need to learn how to foster edge institutionsthat will accelerate innovation and find more effective mechanisms forlinking the edge to the core. 9. This report is written from the perspective of an informed observer at theAspen Institute Roundtable on Institutional Innovation.Unless attributed to a particular person, none of the comments or ideas containedin this report should be taken as embodying the views or carrying the endorsementof any specific participant at the event. 10. Connecting the EdgesRichard Adler 11. Connecting the EdgesA Report of the 2012 Aspen InstituteRoundtable on Institutional InnovationBy Richard AdlerThe Economic ImperativeForthepastfiveyears,theAspenInstituteRoundtableonInstitutionalInnovation has been exploring the challenge of ensuring that organiza-tions remain healthy and competitive in the 21st century. Previousreports from the Roundtable describe the far-reaching changes in theenvironments in which commercial and non-profit enterprises oper-ate and the ways that those enterprises might usefully respond to thesechanges.As documented in Deloittes Shift Index, there has been a steady,long-term decline in the overall economic performance of businessenterprises as a result of their failure to adapt to operating in a hyper-connected, rapidly changing world.1Through their work at the Deloitte Center for the Edge, John Hageland John Seely Brown have argued that to survive in this new environ-ment, organizations need to move from a 20th century push model inwhich success is based on achieving economies of scalea model thatwas appropriate to a world in which markets were relatively stable andpredictableto a 21st century pull model based on scaling continu-ous learning to keep pace with a constantly evolving marketplace. Keyto achieving this transformation is empowering all employeesnot justthe top leadership, but everyone in an organizationto take on chal-lenges and solve problems that will allow them and their organizationto keep learning and growing. Engaging workers passions throughsuch challenges is key to sustaining the kind of extreme performancethat has become a necessity for institutional survival.1 12. 2 Connecting the EdgesThe starting point for the 2012 Roundtable on InstitutionalInnovation was the difficult realities of the current economic environ-ment and the urgent need to increase the rate of economic growth,not only in the United States but across the globe. What is at stakeis not just the survival of many existing enterprises but the economicwell-being of a substantial portion of the U.S. population. What willallow firms, organizations, networks and the individuals within theseecosystems, to keep growing and developing? Are there new strate-gies for growth that can benefit both individual organizations and theeconomy as a whole? And where are these new strategies most likely tobe developed and implemented?the most conducive environment for innovationis often at the edge of organizations.One place where radical change is not likely to be welcomed is at thecoreof an enterprise or a network or an economybecause of theinertia of legacy systems and the need to meet expectations of produc-ing consistent, predictable results. By contrast, the most conduciveenvironment for innovation is often at the edge of organizations, whereless is at stake and experimentation (and the possibility of failure) ismore likely to be tolerated. But in order to have substantial impact,innovations eventually need to be brought into the core (or to growinto a new core). The purpose of the 2012 Roundtable was to explorethe relationship between core and edge and identify ways in which theycan be more effectively connected in order to accelerate the process ofpositive change and re-ignite vigorous, inclusive economic growth.Schumpeters GaleMichael Crow, President of Arizona State University, began thediscussion by pointing out that the United States is the home of agreat deal of innovation and is itself an institutional innovation ofenormous magnitude. Americas capitalist, democratic system repre-sents a fundamental systems innovation in how a society is organized.Through its belief in progress, its openness to new ideas and change, 13. and its commitment to the ideal of freedom, the U.S. has producedunprecedented economic prosperity for its citizens (and for millions ofnon-citizens as well). The mechanism that has powered this economicsuccess story has been what Crow described as Schumpeters Galethe constant pressure exerted by a free marketplace that brings aboutthe death of enterprises that are unable to compete effectively, clearingthe way for the birth of innovative new enterprises. This process ofcreative destruction (described by economist Joseph Schumpeter),driven by the entrepreneurial spirit, is the force that drives growth.Unfortunately, the gale that has been responsible for our economicprosperity has diminished in recent years. Danger signs are apparentin many places. The countrys persistent high unemployment rate isdirectly related to the failure of the economy to create enough newjobs. And, according to Michael Crow, the economic situation of asubstantial portion of the population is increasingly dire. If you dividethe U.S. population into three roughly equal strata, you will find the top100 million are doing reasonably well (with the top one percent doingconsiderably better than that); the middle 100 million experiencinglittle if any improvement in their economic situation in the past severaldecades and often finding it difficult to hold on to what they have; andthe bottom 100 million in serious trouble, falling further and furtherbehind the rest of the population in terms of income, educationalattainment and health status. In Arizona, the gap between the top andbottom segments of society is growing at the fastest rate in history, atrend that is being replicated in much of the rest of the country. In fact,a significant portion of those at the bottom come from families thathave no income at all.What will it take to revive economic growth enough to bring pros-perity to everyone? Although Schumpeter focused on the role of cre-ative destruction in the private sector, generating sustained inclusivegrowth will require innovation in all sectors. This includes government,which is typically seen by free market advocates as an obstacle whoseinfluence must be diminished to allow growth to happen. (In the mem-orable words of Ronald Reagan, Government is not the solution to ourproblem; government is the problem.) But rather than creating barri-ers to innovation by attempting to control markets through rigid regu-lation, is it possible for govern...</p>