Photovoltaic panels on the roof of BP Headquarters in Cape Town, South Africa. Credit Adrian Campbell. Copyright Arup.

+ Successful innovators choose either to allow their technology to leak out or actively share it.

The recent news that Kodak has filed for bankruptcy protection got me thinking: how can once pioneering companies go so wrong?

Let’s look at another example. After 40 years of trying, it seems that BP is leaving the Solar PV market. The reasons for that, principally cheaper manufacturing in China, might seem obvious but there’s an interesting story in BP's failure to innovate.

Researchers at BP developed technology for turning raw silicon into large cubes of crystalline silicon on an industrial scale. The crystalline silicon could be sliced into wafers to make efficient, monocrystalline solar cells at about half the cost of existing technology. BP demonstrated that the process would work commercially but did nothing with it.

There’s a balance to be struck between risk and reward, but ideas and products have a shelf life. Ideas are relatively cheap but will never amount to much if you don’t develop them and turn them into something useful. And long before one idea reaches this ‘something useful’ phase, the next ideas should be forming.

If you followed the link above, the article talks about patents and BP's concern that the technology 'leaked out by diffusion.' I would argue that the most innovative companies choose either to allow their technology to leak out, or actively share it.

Take Patagonia for example. Its success is based on innovation – on being first-to-market and, most importantly, continuing to innovate. Yvon Chouinard, its founder, began by developing simple climbing tools that did the job better than anything else on the market; not as a business proposition but because, as a keen climber, he wanted something better.

Patagonia’s whole business has been built around that approach. The company has gone from manufacturing climbing equipment to producing outdoor clothing by pursuing new ideas to their logical conclusion. Of course there have been failures, but their lessons have been learnt. From the start, Patagonia understood the concept of limited shelf life; it’s OK to allow competitors to copy what you are doing because by the time they get it right you’ll already have moved on. 

Remember Nokia? They’re suffering from what Joseph Schumpeter described as ‘creative destruction’. It seems that they forgot to have the next idea. Either that or they forgot to turn their ideas into something useful.