Innovation Doesn't Rust

"Everything that can be invented has been invented." This is the often-published quote attributed to Charles H. Duell, U.S. Commissioner of Patents in 1899, suggesting that the patent office be permanently closed,

since there was nothing left to invent. This statement, it turns out, was somewhat premature and overly simplistic.

Similarly, there has been a lot of discussion recently about the predicted end of innovation coming out of IT and of IT as we know it. The most recent and most discussed predictions come from Nicholas G. Carr in his book Does IT Matter? (Harvard Business School Press, 2004). Carr sees historical parallels in the introduction, spread and eventual commoditization of all innovative technology, IT included.

He argues that an emerging technology can provide competitive advantage in the beginning, but that advantage quickly fades and innovation dries up as the technology becomes mature and ubiquitous. At that point, Carr says, we should stop assuming that it will provide future competitive advantage and treat it as a utility, where innovation is limited to controlling costs and managing service risk .

Some agree that the days of IT-enabled innovation are over. Everyone has computers, everyone has networks, and everyone buys packaged software from the same suppliers. IT innovation is dead, so it's best to hunker down and accept IT as a utility.

But are these observers looking at the right IT? If you consider IT to be hardware, cables and silicon, then Carr and the others are probably correct. The advances attributed to IT can't be maintained if everyone has what everyone else has. We saw this in the erosion of the advantages early computer adopters experienced decades ago.

The physical properties of the silicon and copper of computer hardware limit what we can do with them. Even Martha Stewart doesn't have an infinite number of uses for pine cones and tofu. At some point, innovation simply becomes exhausted.

But there's another IT, an IT of ideas that doesn't grow old or become marginalized. It's this IT that created the innovative services that changed how we bank, build cars and communicate with the kids at summer camp. And if Carr is wrong, this may be the IT that cures disease, supports human colonies on Mars and maybe even makes sense of our taxes.

This is the IT of software -- an IT quite different from the one of silicon and copper, because software, next to poetry, is perhaps the most conceptual of human creations. Software is an extension of human thought, and it will never be built out. Good innovators will always be able to stay ahead of their imitators.

Innovative companies have known about the two ITs for years. For example, more than a decade ago, companies in the securities industry were competing to build the automated systems that gave us the hedging and arbitrage program trading of the late 1980s and early 1990s.

If you had visited the groups that developed these tools, you would have seen that they weren't doing the data processing that produces your paycheck. This IT was a separate unit, often at a separate location, staffed by people who might never have been in the main data center. This IT was funded to create the systems they hoped would provide competitive advantage.

These companies knew that the differentiator between a utility and an innovative development organization wasn't the CPU, the disk drives or the networks; it was the minds of the individuals who created the software. Competitors, all using the same silicon and copper, produced results that couldn't have been more different. And what was the cause of that difference? Pure thought!

Carr is partially right: Companies should rein in the costs of the commodity IT that thrives on hardware and fiber. But IT for competitive advantage demands a separate and totally different treatment. It's not in danger of coming to an end or running out of innovation. This technology will continue to provide competitive advantage for as long as there are creative thoughts and a willingness to document them in programs.

Oh, and about Patent Commissioner Duell's comment that everything that can be invented has been invented: He never said it. Though often quoted and referenced, it simply isn't true. Commissioner Duell had more sense than that. George Tillmann spent his first 17 years at McLean, Va.-based Booz Allen Hamilton Inc. as a management consultant in its IT practice and the past five as its CIO. You can contact him at

Copyright © 2005 IDG Communications, Inc.

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