Have you ever noticed how good workmanlike words go bad, usually when they're overused? How easily they become tired clichés that over-promise and under-deliver? Such is the fate of
the word “innovation,” which is used nowadays as if it was some simple formula for solving problems and getting rich.

Innovation is usually meant to apply to some technical breakthrough that is tied up with a bow and sold to a hungry and receptive marketplace. Think “plastic” in  The Graduate. There are several problems with this starry-eyed orientation. One is that innovation is messy. Even experienced innovators must step off the beaten path and tramp down a lot of dead ends, and still there is no guarantee of success.

Most of us like our days to be smooth and filled with manageable, incremental improvements: coffee at 10, lunch at noon, and a nice little nest egg at the end of the day. Innovation isn't like that. It's disruptive and destructive. New products make old ones obsolete, and the same is true for companies. On a personal level, innovators can be hard to live with. As my sister-in-law said when she worked at Nortel, “We have a genius in our department. It's great because that means we can do things we otherwise couldn't do. But I'm sure glad we don't have two geniuses.”

At a recent conference on commercialization in Halifax, ACOA vice-president John Knubley pointed out that most of the research in the region is done in university labs, and that we are better at the R (research) than the D (development of new products). This leads to my main point: the real innovation we need in this region isn't in the lab but in boardrooms and management meetings and at the water cooler. We need new ways of doing business because revolutionary gadgets often require new business models. Henry Ford's big idea was to build a car cheap enough that the masses could afford one, and along the way he figured out that if he paid his workers enough, they could be customers too.

The world will indeed beat a path to your door and buy your new self-activating electroplated mouse-capture device—but only if you can develop, finance, build, market, and sell it before a startup in a medium-sized Chinese city gets there faster and cheaper. My take is that in our region, the scientists and engineers are

doing their part, but the business guys aren't there yet. They have to learn how to spot promising new technical developments and then connect them with a marketplace that may not yet exist.

Waterloo, Boston, and San Jose are experimental cauldrons that blend people, money, and hard assets to create not only new products but also new ways of doing business. The tech geniuses who founded Silicon Valley also invented the modern world of venture capital. We are more a world of silos where everyone knows their place. Realizing this may be half the battle.

David Gulley of the University of Illinois told the commercialization-conference delegates that his university only started a new ventures office when it realized its top young faculty members were heading for the coast, where they could be both entrepreneurs and researchers. That, and the fact that the university missed out on the action created by student Marc Andreessen, the inventor of the Mosaic web browser. Entrepreneur Jim Clark understood its potential and launched Netscape, the first big tech IPO, creating hundreds of millions of dollars of new wealth in the process.

Another problem with both new products and new business models is that they're hard to value. The more they are truly original, the harder they are to price. This is where speaker Patrik Frei comes in. The young Swiss man founded an international firm called Venture Valuation, which specializes in valuing startups and growth-oriented companies. Frei summarizes Warren Buffett: “Value and price are not the same. Value is inherent worth, and price is what the market will pay you for something at any given time.”

Frei's company develops a “value report” based on at least three scenarios of where the company may be headed. This allows fledgling entrepreneurs to hold some solid cards as they seek financing, partnerships, or licensing deals. The hard part, he says, is to evaluate the “soft factors,” such as the skill of managers, the state of the market, and the potential value of the technology itself.

Meanwhile, as Frei told me, Switzerland may be home to leading banks and international corporations, but like Atlantic Canada, it's not terribly good at supporting startups or allocating venture capital. It's a tricky game, but we can learn to play.