John H Howard, 3 December 2024
Why do some regions emerge as global leaders in innovation while others struggle to adapt? The answer isn't just about resources or talent. It's about balance: the ability to blend structured approaches with creativity, efficiency with adaptability, and short-term stability with long-term vision.
In today's rapidly evolving world, achieving this balance is the key to building innovation ecosystems that can thrive now and transform for the future.
This Insight explores two complementary approaches to innovation: Strategy, Systems, Structure (SSS) and Purpose, Process, and People (PPP). While SSS provides the structure needed for stability and measurable outcomes, PPP offers the flexibility and inclusivity essential for tackling complex, long-term challenges.
By combining these frameworks, regions can create ecosystems that optimise today's industries and reimagine what's possible for tomorrow.
Why Structure Still Matters in Innovation
Think of SSS as the backbone of innovation. Its foundation lies in three key pillars: strategic clarity, efficient systems, and strong governance. It is the essence of a Horizon 1 focus on optimising current systems.
Strategic clarity ensures that resources and efforts are directed toward areas of proven strength. For example, the European Union's Smart Specialisation Strategies transformed regional economies by targeting high-potential clusters, such as renewable energy or advanced manufacturing. These focused efforts have driven measurable economic growth and strengthened regional competitiveness.
Efficient systems, reflected in well-working institutions and infrastructure, such as research parks and innovation councils, ensure smooth stakeholder collaboration, enabling knowledge-sharing, funding allocation, and coordinated action.
Finally, SSS relies on strong governance and accountability to keep innovation efforts on track. Transparent processes align resources with priorities, monitor outcomes, and ensure projects deliver measurable results. Public-private partnerships often play a pivotal role here, providing the stability and coordination necessary for success.
SSS thrives in environments that demand stability and incremental improvements. It is particularly well-suited for Horizon 1 of the Three Horizon Thinking framework, which focuses on optimising existing systems and maintaining economic stability.
However, the same rigidity that makes SSS effective in this phase can limit its ability to adapt to uncertainty or respond to disruptions, especially when regions face the need for transformational change.
Why Vision and Purpose Build the Future
If SSS is the backbone, PPP is the bridge to the future. This approach prioritises flexibility, inclusivity, and collaboration, making it the ideal framework for tackling complex societal challenges. Its strength lies in its ability to unite stakeholders around a shared purpose.
Unlike traditional economic strategies focusing solely on growth, PPP addresses sustainability, resilience, and equity challenges. For instance, the Transition Town movement has inspired local communities to innovate around sustainable living. This approach fosters grassroots engagement and creates hyper-local solutions that can inspire broader change.
PPP also relies on iterative processes that keep ecosystems dynamic and responsive. Unlike rigid planning, these processes, which include participatory design and scenario planning, embrace experimentation and adapt to changing circumstances. This flexibility is particularly important when challenges and opportunities continually evolve.
At its core, PPP is people-centric. It builds networks of trust and inclusivity, ensuring that innovation reflects stakeholders' diverse perspectives and needs. Informal collaborations, such as those driving Silicon Valley's success, show how strong interpersonal connections can spark transformative ideas and sustain momentum.
While PPP shines in Horizon 3, where creativity and experimentation drive breakthroughs, its lack of structure can sometimes lead to fragmented efforts. Without clear governance or measurable outcomes, it can struggle in contexts that require efficiency and accountability.
Horizon 2: The Crucible of Innovation
The real magic happens in Horizon 2, the transitional phase where the strengths of SSS and PPP converge. This is the space where existing systems are challenged, bold experiments flourish, and new pathways to transformation are forged. To succeed in this space, regions must integrate the stability of SSS with the adaptability of PPP.
It is important that within the ecosystem, participants reflect and recognise when they should clearly think and operate differently when engaging at Horizon 1 and 3 levels using the appropriate mix of SSS and PPP behaviours.
Participants must apply integrative thinking and behaviours in decision-making, priority setting and resource allocation. Policymakers, funders, and rainmakers tend to get stuck in habits and fixed mindsets. They must adopt growth mindsets and address possibilities and potential while connecting seemingly intractable issues and problems.
An example of this balance can be found in Finland's Oulu Innovation Alliance. In the 1990s, Oulu's economy was heavily reliant on telecommunications. When the industry faced collapse, the region's leaders responded with a hybrid strategy. They leveraged SSS principles to consolidate their leadership in ICT, using structured strategies and clear governance to optimise their existing strengths.
The Alliance embraced PPP principles by launching mission-driven initiatives in digital health and sustainable technologies. These efforts encouraged experimentation and long-term vision, enabling the region to rebuild its economy and emerge as a global innovation hub.
The Alliance provided stability and adaptability in managing the reality of unhelpful tensions within the rhetoric of cooperative harmony.
Oulu's story is a compelling reminder that Horizon 2 isn't just a bridge—it's the crucible where resilience and transformation are forged.
Building Resilient Ecosystems
When structure meets creativity, the result is resilience. By combining the clarity of SSS with the flexibility of PPP, regions can build innovation ecosystems capable of addressing today's priorities while preparing for future challenges.
This hybrid approach offers transformative benefits. It enables regions to adapt to disruptions and thrive in uncertain conditions. It fosters inclusivity by ensuring that innovation reflects the needs of diverse stakeholders, from grassroots communities to industry leaders.
It also provides the tools to scale local successes into systemic impacts, creating sustainable and far-reaching ecosystems.
The Path Forward
The future of innovation isn't about choosing between structure and vision; it's about blending the two. SSS provides the backbone for stability and measurable outcomes, while PPP bridges bold, long-term possibilities. Together, they create a roadmap for innovation ecosystems that are dynamic, inclusive, and forward-looking.
Regions that embrace this hybrid approach will address today's challenges and lay the foundation for transformative futures. The question is: are they ready to strike the balance and unlock the full potential of innovation? How can organisations move from Strategic clarity to mission-driven transformation?
Implications for Policy
Policymakers at all levels of Government should integrate the Strategy, Systems, and Structure (SSS) and Purpose, Process, and People (PPP) frameworks to build resilient and dynamic innovation ecosystems. Combining the stability of SSS with the adaptability of PPP ensures regions can address immediate priorities while fostering long-term transformation.
The following approaches are recommended:
Design flexible funding mechanisms and policies that enable experimentation without compromising accountability. Encourage participatory design and scenario planning to respond dynamically to evolving challenges.
Use structured strategies to optimise existing strengths (SSS) while promoting bold experimentation (PPP) to explore transformational opportunities.
Align economic goals with societal missions to enhance stakeholder engagement. This fosters inclusivity, addressing diverse community needs and encouraging grassroots innovation.
Scale local successes by providing robust infrastructure and coordinated networks. Ensure these initiatives inform broader policy strategies.
Build cross-sector partnerships to break silos and encourage knowledge-sharing, ensuring the ecosystem reflects diverse perspectives and expertise.
Integrate SSS and PPP during transitional phases, ensuring stability supports experimentation. This creates pathways for transformation.
By blending structure with flexibility, policymakers can create ecosystems that are both resilient to disruptions and responsive to future opportunities.
An extended version of this insight is available through the following link.
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