I think there are different factors/constraints that have a negative impact on education, healthcare, and politics innovations. The three more important factors/constraints would be: a) Individual Constraints / Lack of incentives b) Industry Constraints / Regulation c) Organizational Constraints / Bureaucracy.
To Sergi’s point there are SO many constraints within these different fields. In large part I believe due to societal, individual, and organizational constraints we see less innovation in these areas. As a society I think we have come to expect these fields to exist in a certain way in our head. For some, there is an equation for each of these fields. Perhaps education = poor, uninvolved teachers. Depending on your use of the healthcare system and your need for care, maybe Healthcare = overpriced or Healthcare = where does the money go that I never use? For politics, I think many people (myself included) feel overwhelmed with following/understanding politics and therefore there is a great misunderstanding and lack of knowledge about politics, as a result politics = whatever the news tells me. These ideas within our heads can be constraining and perhaps incredibly inaccurate. In part, I think individuals within these specific fields may feel that whatever solution they come up with to solve problems will not be received well or that the system is so big, it will take years to create change. From an organizational constraint perspective some of the individuals perspectives about the sheer size, cost, and time involved is probably warranted after all there is a lot of bureaucracy within education, healthcare, and politics. When decisions are tied to votes, money, power, prestige, and time it is often a difficult decision to make a change and little incentives are tied to creating any sort of dramatic innovation that would drive positive change.
I think the political field is constrained too much by politicians trying to please every single person in the world, instead of trying to take care of the general masses.
Healthcare is constrained by many (not all) physicians believing they know the best way to do something, without needing guidance from business administrators. Legal policies also heavily constrain the healthcare industry.
I believe that it has to do with the regulation which creates high barriers to entry in these industries. These type of constraints force competition to be lower than it would be in an unregulated environment.
In general, in these industries, I think we see lots of innovation. It just takes longer to become mainstream. Additionally, these aren't industries that can handle much risk. It's important that any implemented changes are successful. As a result, people become stagnant and worried about making big changes. However, there are some really cool things happening in these spaces that most people don't see. For example, in healthcare, many pharma companies are partnering with cell phone app developers to create programs to help increase patient compliance. I'm sure there are similar examples in politics and education. I don't necessarily think innovative has to equal radical.
I agree with Angela. I think all three appear to lack innovation because they try to be everything to everybody and as a result deliver a canned product that can be palatable to the largest number.
I think education's greatest constraint is how we learn. Show me a person who is a better mathematician because of an innovative course of study rather than working a hell of a lot of problems.
I think one of the biggest constraints in health care, at least where new technology is concerned, is that product performance directly impacts safety and survival. As such, the risks are much higher, and the approval process (FDA, etc.) to get a product to market is very expensive. If you introduce a new cell phone gadget that doesn't work well, it's not great for your brand, but it's not even close to the impact of making, say, a pacemaker/defibrilator/diagnostic test that turns out to have some defects down the road. Other potentially life-saving devices, like airbags, seatbelts, and life vests haven't changed that dramatically - since creating new versions of those products also carries a significant risk. Companies need to feel absolutely sure that the new product is (at the very least) as good as the previous version, to be sure they're not increasing the level of risk people take on by using the new product.
I think the common constraint or root cause of why there is not innovation in neither of these three industries is because of the government. Once this major organization enter into a particular industry as a large stakeholder, innovation is killed.
These industries can be considered as very traditional, complex and sensitive. Changes in any of them could significantly change outcomes in a positive or negative way. The issue here is that we are not talking about a new innovative product launched in a niche market, or a new strategy applied in a risky environment, or perhaps creating a prototype product just to see what happen and who wants it. A bad outcome in healthcare for example due to a change in process could involve the welfare of a patient, or the future opportunities for a political role, or the future performance of people due to the educational process, etc. Although it sounds a little exaggerate, the truth is, in my opinion, that in some industries, been conservative and perform activities with minimal risk taken is sometimes the best option to communities. However, without changing processes, and without taking any risks, improvements in any system become a very hard thing to accomplish.
Echoing what Christine said, the company I used to work for was an OEM for medical device manufacturers. The approval process for devices was so stringent that medical device companies were hesitant to make any changes to their devices. Specifically one of our customers was one of the largest endoscope manufacturer's. My company designed the video processing card for the device. When a newer better technology came out that would greatly increase the quality of the video output, our customer said simply that the device they had just got certified and they would not be going through the process again for a couple of years.
In order to innovate, change must occur. However, the barriers to change are extremely high in the fields of education, healthcare and politics. Without enticing incentives and a compelling "what's in it for me," individuals will not change their behaviors - and, without individual change, organizational change cannot occur. Consequently, I think that in order to get these enormous industries to innovate, it must start at the individual level.
Echoing all previous sentiments: low tolerance of risk. At least in healthcare and education, because the consequences are potentially so severe. Regarding politics, nobody wants the blame for causing such bad consequences. Reform can only happen when politicians--or whoever has the power to effect change in these areas--don't fear negative personal outcomes, e.g. losing a chance for re-election, drop in salary, loss of power.
We're seeing more and more innovation in these areas, with great help from high-techs. I think the difficulties of innovation are mainly from two reasons. First, information asymmetry. Physicians know much more than patients; Politicians are good at obscuring facts from public. People get confused with all the chaos. Second, long time period. Regulations, treatment, knowledge transfer, all of them need very long time to prove whether they are effective or not. The lead time is much longer than other industries. Fortunately, with development of internet and social media, these obstacles could be overcome step by step.
Innovation is lacking in these areas specifically because they are viewed as 'exceptional' to the human condition (though I would argue that they actually aren't). We often break out of our generally accepted (and effective) capitalistic model in these areas because we struggle to assign value to life (or education - which is closely related). As a result we are far less willing to take risks, have difficulty debating openly, and find it surprisingly difficult to compromise.
You'll note there is a 4th category which demonstrates similar difficulties in innovation... religion.
Some constrains that these industries may have to innovate are: Economical constrains... innovate or change any process may involve high capital investment Technical constrains… the knowledge and the capabilities to perform an activity in a different way when has been done in the same way for years, makes it hard to achieve a positive outcome. Social constrains… organizations and individuals think that there is no need for change, that things are working fine enough as they are right now. Organizational… these industries do not want to take the risk of changing a process and risk underperforming outcomes
What I see that is similar in these situations is the perception of a greater downside than upside when proposing change. If the change works, which is hard to quantify in these areas, there will still be battles ahead to convince enough people to accept the innovation and really move forward. However, if the change fails, there will be no end to the people exclaiming, “I told you so…” and dismiss the whole excise as a waste of resources and prevent more people from following their ideas. While this could be true for any innovative idea, the scale of education, healthcare and politics is immense simply because every single person has experience with these areas. Everyone has gone to some school, been to a doctor and probably has an opinion on how the government should spend money. The same can not be said for most other industries. As much as innovation is heralded in technology, especially consumer electronics, there is a large portion of the population that really doesn’t care about the latest gadget, doesn’t need to be convinced of its utility, but also won’t stand in the way of innovation.
I think these areas have limited innovations because of the internal constrains. People inside these fields are in a comfort zone and they don't want anyone driving changes. Politicians built a career and they are doing fine with how things are, the health care industry is also doing fine and a doctor that studied for 20 years doesn't want any change that can Jeopardize his income, in education unions prevail and they don't want change neither. In all these fields there is a powerful party that like things the way they are.
I agree with Carlos, internal constraints are abound. Especially politicians, they have worked to get where they are, and now they have reached that goal they don't want to change the process. Whether accepting bribes or donations from companies, making legal inside trades, or increasing their own pay - they have no incentive to change the way washington functions.
Sure there are constraints in these industries but there have been many innovations, especially in education and healthcare. We have to look outside the US to see some of the innovations.
also, I agree with carlos. The monetary incentives to do a good job are not there. There was an article by CNN editor Fareed Zakaria on why the quality of education has fallen in the US. He argued that teacher workforce has to improve in order to improve the quality of education. But increasing the monetary incentives wont do the trick. You have to recruit based on proven skills and apply the same recruiting philosophy in other schools.
I think the lack of innovation in these areas is driven primarily by the development of entrenched interests. In healthcare, the current fee for service system rewards quantity over quality; beneficiaries of this system do not want to see changes. The teachers unions, as an example, want job security even at the expense of innovation and bringing in the best people. In politics, multiple interests do not want change because they directly benefit from the system as it is currently constituted; this stifles any possibility for innovation.
In the instances of both health care and education, the people in those systems that innovation would most benefit have virtually no say in the matter outside their personal contacts. Their budgets, curriculum, payment system etc are all controlled by politicians who have a thousands different reasons for not getting anything done. Im not so cynical as to think that no politician truly cares about either of those things - it just takestoo much to get anything truly groundbreaking through the bureaucratic process.
Also, with education, theres a risk aversion to innovation - a policy screw up affects children and that isnt something anyone takes lightly.
I think healthcare is one of the least innovative industry, but it happens to be one of the most profitable industry. In my opinion, the reason why it is not innovative is because any innovation will have huge impact on the entity that used to have lots of profits. None of the entity wanna give up the realized profit sharing, so they try to discourage innovation, or block innovation. For example, right now there is a movement regarding e-record. It is a very mature technology, where financial institutions are using it for transactions worthy billions of $. However, I could not think of any technical reason why it could not be done in health care. The only "real" possibility is that implementing it will hurt the jobs. So the e-record needs to fight through lots of resistance to make it happen.
I think the problem in these industries is that there are too many stakeholders and decision-makers. In health care you have the patient, family, the doctor, insurance, hospital administrators, government, etc. who all have a say in the care the patient receives. In education, you have the parents, the administrators, the school board, the state, unions, etc. who all have a voice in what can be taught in schools. In politics, you have local, state, and federal government agencies, elected and unelected officials all who have overlapping powers. When you have this many voices, there is no possible way to please everyone. So at some point in the process things become deadlocked and it is just easier to maintain the status quo than continue trying to innovate.
The lack of innovation in health care is due to several factors. First, focusing mostly on the biotechnology/pharmaceutical sector, there is significant risk tied to the huge amounts of capital and time needed to develop a drug. Investors want to see a return as soon as possible but an innovation in the biopharma world may not see a return (if any) for several to multiple years. Second, the regulatory process has become stricter and made it very difficult to have a company receive approval. Companies do not want to risk creating something innovative if there is a huge chance it will never make it to the market. Finally, there are so many moving parts, such as patients, providers, pharma, biotech, device companies, etc., in the health care system. Health care reform brings much uncertainty and this causes individuals in the health care industry to wait and see what happens versus jumping in and trying to bring something new to the table.
Healthcare: I would argue that healthcare is very innovative. Those companies that are not innovative will fall behind their competition. The only reason why they might not be as innovative is for fear of malpractice charges.
Govt: As I noted on an earlier blog post, they look to the past to solve future problems. Also, pretty much everything that govt does is public knowledge so if they make a mistake they could receive widespread ridicule. You cannot force society to 'welcome a brainstorming session'
Education: I think you have too many people to please in the education system to ever some to a consensus on anything. I think Charter Schools are among the few that have taken great strides in improving education. Michelle Rhee is an example of someone who attempted to improve education in DC but was forced out because she was not liked by the majority of the people she was fighting to help. http://blogs.babble.com/strollerderby/2010/10/13/rhee-resigns-as-head-of-dc-schools/
I completely agree with Ravi. The environment needs to be conducive for innovation to occur in each of these fields. Since politics, education and healthcare affects the life of each and every citizen, any new concept will need to be ratified by the elected body of representatives, who have their own vested interests to stay in power. In a country like India, the size and population make it difficult most of the time to provide resources to those who need them (the bottom of the pyramid). So, coming up with innovative solutions is the need of the hour. However, more often than not, the bureaucrats find reasons to push back on reforms that would create an environment that might encourage newer ideas in those fields, even if that would help the masses in the long term. Doing so would require a temperament of taking risks, which goes against traditional vote bank politics. Also, there is no incentive for driven individuals or firms to find solutions to these problems if they know that they would have to go through the red tape to get anything done on the ground.
I believe there are plenty of individuals within these organization that are personally innovative and want to implement innovative ideas that will enhance their work place, but within each of these organizations bureaucratic policies prevent or at least slow any innovation from actually taking shape. Within each of these organizations, their has been a culture instilled that discourages anyone from going against the norm. And the people who do try to go out and make change are continually rejected and eventually lose any motivation to continue pursuing what they believe should be changed. People that try to make a difference are quickly silenced and beaten down by those that have already been forced to accept their cultural behavior.
Since each of these three things are (in large part) publicly funded, innovation is stifled by the inability of Americans to agree on, well...anything. We design laws and new programs in an effort to persuade or force people into agreeing on a common plan, but inevitably there are plenty of dissenters. The politicians making the rules are the ones that need public support, so taking any innovative or radical approaches to education, healthcare, or politics will undoubtedly threaten their chance to get reelected.
I think return on investment relatively takes a long time compared with other industry. For example, to see the results of innovational implement in educational sector, we should wait many years in order to get reliable data. Therefore, having appropriate incentive system also would be difficult.
I have to agre with Colin (again) on this one. Trying to get millions of people to agree on anything is next to impossible, especially when no one wants to be accountable for failures.
I agree with Hannah that there actually is a lot of innovation in these industries, but as others mentioned, the governmental constraints play the biggest role in preventing quick adoption than would be the case in other non-public industries.
As far as education goes, I would have thought that more would be done here, but a classroom a hundred years ago looks a lot like one now. I think that environments that push so much freedom of thought like education sometimes lack the ability to converge on something long enough to be able to implement it.
Finally, with healthcare I think that innovation is somewhat stifled because we're dealing with people's lives. Granted a lot has been done, but when you can only risk so much, the level of innovation will match that level of risk taking.
The two main reasons is government involvement and money. The status quo in all three of these areas is great for those in power and money. The incentive to take on risky innovation is minimal for those making the decisions.
As many others have said, the problem facing these industries is not necessarily one of limited innovation, but rather one of bureaucracy and red tape. This is particularly true of healthcare and education, as the leadership in these areas has to answer to a vide variety of stakeholders. Further, the fact that children and people's health are in question causes for conservative behaviors surrounding change. The political system shares some similarities here. Because the power balance can shift so quickly in politics, the risks associated with attempted innovation are outweigh the potential benefits in the eyes of those with a lot to lose.
I think in these industries it is mainly a market constraint. Specifically, these industries are not subjected to typical market dynamics. This lack of market pressure shelters companies in these industries from having to innovate to survive. In healthcare, consumers do not pay for what they consume, and as such there is no price transparency. In education, the government basically has a monopoly in primary education. In higher education, the government's willingness to give loans with no collateral - frequently to people without the means to pay them back. This allows institutions to charge prices much higher than what an unregulated market would bear.
Interesting question for Mexico. I think there is a lot of conflict of interest between politic parties. We have an old social constraint in which politicians are always fighting to be seen as good and make the others seen as bad. So for those that propose innovation and improvements, almost never have support, then healthcare and education (among other public issues) cannot be changed as easy as apparently it would be.
As once displayed in a video in Managerial Econ, as society we are generally dissatisfied with industries controlled by the government and most pleased with the private sector. The DMV versus Fed Ex. Due to all the bureaucracy that influences education, health care, and politics very rarely is real innovation able to occur. These groups epitomize the idea that creative people must be stopped and are notorious for housing innovation killers.
These sectors have existed since centuries. This might drive people to think: Well, it has worked for so many years like this, why would we want to change? The structures and systems are pre-defined, and many people's personal interests and everyday practices are linked with them, which makes it difficult to incentivise change. Also, individual motives might interfere with innovativeness. For instance - as already mentioned by many of you - people in politics might fear that doing things differently could undercut their possibilities to maintain power and influence.
However, I do believe that there are great differences between these different industries that were mentioned. For instance healthcare seems to me much more innovative than politics. This might be due to the fact that so many people are doing research in healthcare. Also, (at least in Germany, but I guess in the US as well) there are thousands of consultants working for the healthcare industry, driving poeple to innovate and to break their usual patterns of behaviour to the better.
Another point might be the group size. Whole countries are to some extent involved in these sectors. Every time someone wants to drive innovation in the educational system in Germany there is a huge public outcry and various, long and ongoing discussions emerge. Of course one could say that politicians have the power to push certain things through if they believe them to be beneficial for the educational system. Still, everyone knows that they will again be led by the motive to be re-elected. Hence, innovativeness in these sectors is oftentimes cutt-off due to the existence of such vicious circles.
I think there are different factors/constraints that have a negative impact on education, healthcare, and politics innovations. The three more important factors/constraints would be:
ReplyDeletea) Individual Constraints / Lack of incentives
b) Industry Constraints / Regulation
c) Organizational Constraints / Bureaucracy.
I just want to clarify that when I say the three more important factors/constraints, I don't mean this is a general truth. It is only my opinion.
ReplyDeleteTo Sergi’s point there are SO many constraints within these different fields. In large part I believe due to societal, individual, and organizational constraints we see less innovation in these areas. As a society I think we have come to expect these fields to exist in a certain way in our head. For some, there is an equation for each of these fields. Perhaps education = poor, uninvolved teachers. Depending on your use of the healthcare system and your need for care, maybe Healthcare = overpriced or Healthcare = where does the money go that I never use? For politics, I think many people (myself included) feel overwhelmed with following/understanding politics and therefore there is a great misunderstanding and lack of knowledge about politics, as a result politics = whatever the news tells me. These ideas within our heads can be constraining and perhaps incredibly inaccurate. In part, I think individuals within these specific fields may feel that whatever solution they come up with to solve problems will not be received well or that the system is so big, it will take years to create change. From an organizational constraint perspective some of the individuals perspectives about the sheer size, cost, and time involved is probably warranted after all there is a lot of bureaucracy within education, healthcare, and politics. When decisions are tied to votes, money, power, prestige, and time it is often a difficult decision to make a change and little incentives are tied to creating any sort of dramatic innovation that would drive positive change.
ReplyDeleteI think the political field is constrained too much by politicians trying to please every single person in the world, instead of trying to take care of the general masses.
ReplyDeleteHealthcare is constrained by many (not all) physicians believing they know the best way to do something, without needing guidance from business administrators. Legal policies also heavily constrain the healthcare industry.
ReplyDeleteI believe education's biggest constraint is a lack of funding, which relates directly to a lack of quality employees in the system.
ReplyDeleteI believe that it has to do with the regulation which creates high barriers to entry in these industries. These type of constraints force competition to be lower than it would be in an unregulated environment.
ReplyDeleteIn general, in these industries, I think we see lots of innovation. It just takes longer to become mainstream. Additionally, these aren't industries that can handle much risk. It's important that any implemented changes are successful. As a result, people become stagnant and worried about making big changes. However, there are some really cool things happening in these spaces that most people don't see. For example, in healthcare, many pharma companies are partnering with cell phone app developers to create programs to help increase patient compliance. I'm sure there are similar examples in politics and education. I don't necessarily think innovative has to equal radical.
ReplyDeleteI agree with Angela. I think all three appear to lack innovation because they try to be everything to everybody and as a result deliver a canned product that can be palatable to the largest number.
ReplyDeleteI think education's greatest constraint is how we learn. Show me a person who is a better mathematician because of an innovative course of study rather than working a hell of a lot of problems.
I think one of the biggest constraints in health care, at least where new technology is concerned, is that product performance directly impacts safety and survival. As such, the risks are much higher, and the approval process (FDA, etc.) to get a product to market is very expensive.
ReplyDeleteIf you introduce a new cell phone gadget that doesn't work well, it's not great for your brand, but it's not even close to the impact of making, say, a pacemaker/defibrilator/diagnostic test that turns out to have some defects down the road.
Other potentially life-saving devices, like airbags, seatbelts, and life vests haven't changed that dramatically - since creating new versions of those products also carries a significant risk. Companies need to feel absolutely sure that the new product is (at the very least) as good as the previous version, to be sure they're not increasing the level of risk people take on by using the new product.
I think the common constraint or root cause of why there is not innovation in neither of these three industries is because of the government. Once this major organization enter into a particular industry as a large stakeholder, innovation is killed.
ReplyDeleteThese industries can be considered as very traditional, complex and sensitive. Changes in any of them could significantly change outcomes in a positive or negative way. The issue here is that we are not talking about a new innovative product launched in a niche market, or a new strategy applied in a risky environment, or perhaps creating a prototype product just to see what happen and who wants it. A bad outcome in healthcare for example due to a change in process could involve the welfare of a patient, or the future opportunities for a political role, or the future performance of people due to the educational process, etc. Although it sounds a little exaggerate, the truth is, in my opinion, that in some industries, been conservative and perform activities with minimal risk taken is sometimes the best option to communities. However, without changing processes, and without taking any risks, improvements in any system become a very hard thing to accomplish.
ReplyDeleteEchoing what Christine said, the company I used to work for was an OEM for medical device manufacturers. The approval process for devices was so stringent that medical device companies were hesitant to make any changes to their devices. Specifically one of our customers was one of the largest endoscope manufacturer's. My company designed the video processing card for the device. When a newer better technology came out that would greatly increase the quality of the video output, our customer said simply that the device they had just got certified and they would not be going through the process again for a couple of years.
ReplyDeleteIn order to innovate, change must occur. However, the barriers to change are extremely high in the fields of education, healthcare and politics. Without enticing incentives and a compelling "what's in it for me," individuals will not change their behaviors - and, without individual change, organizational change cannot occur. Consequently, I think that in order to get these enormous industries to innovate, it must start at the individual level.
ReplyDeleteEchoing all previous sentiments: low tolerance of risk. At least in healthcare and education, because the consequences are potentially so severe. Regarding politics, nobody wants the blame for causing such bad consequences. Reform can only happen when politicians--or whoever has the power to effect change in these areas--don't fear negative personal outcomes, e.g. losing a chance for re-election, drop in salary, loss of power.
ReplyDeletecompletely agree Ravi!
ReplyDeleteWe're seeing more and more innovation in these areas, with great help from high-techs. I think the difficulties of innovation are mainly from two reasons. First, information asymmetry. Physicians know much more than patients; Politicians are good at obscuring facts from public. People get confused with all the chaos. Second, long time period. Regulations, treatment, knowledge transfer, all of them need very long time to prove whether they are effective or not. The lead time is much longer than other industries. Fortunately, with development of internet and social media, these obstacles could be overcome step by step.
ReplyDeleteInnovation is lacking in these areas specifically because they are viewed as 'exceptional' to the human condition (though I would argue that they actually aren't). We often break out of our generally accepted (and effective) capitalistic model in these areas because we struggle to assign value to life (or education - which is closely related). As a result we are far less willing to take risks, have difficulty debating openly, and find it surprisingly difficult to compromise.
ReplyDeleteYou'll note there is a 4th category which demonstrates similar difficulties in innovation... religion.
Some constrains that these industries may have to innovate are:
ReplyDeleteEconomical constrains... innovate or change any process may involve high capital investment
Technical constrains… the knowledge and the capabilities to perform an activity in a different way when has been done in the same way for years, makes it hard to achieve a positive outcome.
Social constrains… organizations and individuals think that there is no need for change, that things are working fine enough as they are right now.
Organizational… these industries do not want to take the risk of changing a process and risk underperforming outcomes
What I see that is similar in these situations is the perception of a greater downside than upside when proposing change. If the change works, which is hard to quantify in these areas, there will still be battles ahead to convince enough people to accept the innovation and really move forward. However, if the change fails, there will be no end to the people exclaiming, “I told you so…” and dismiss the whole excise as a waste of resources and prevent more people from following their ideas. While this could be true for any innovative idea, the scale of education, healthcare and politics is immense simply because every single person has experience with these areas. Everyone has gone to some school, been to a doctor and probably has an opinion on how the government should spend money. The same can not be said for most other industries. As much as innovation is heralded in technology, especially consumer electronics, there is a large portion of the population that really doesn’t care about the latest gadget, doesn’t need to be convinced of its utility, but also won’t stand in the way of innovation.
ReplyDeleteI think these areas have limited innovations because of the internal constrains. People inside these fields are in a comfort zone and they don't want anyone driving changes. Politicians built a career and they are doing fine with how things are, the health care industry is also doing fine and a doctor that studied for 20 years doesn't want any change that can Jeopardize his income, in education unions prevail and they don't want change neither. In all these fields there is a powerful party that like things the way they are.
ReplyDeleteI agree with Carlos, internal constraints are abound. Especially politicians, they have worked to get where they are, and now they have reached that goal they don't want to change the process. Whether accepting bribes or donations from companies, making legal inside trades, or increasing their own pay - they have no incentive to change the way washington functions.
ReplyDeleteSure there are constraints in these industries but there have been many innovations, especially in education and healthcare. We have to look outside the US to see some of the innovations.
ReplyDeletealso, I agree with carlos. The monetary incentives to do a good job are not there. There was an article by CNN editor Fareed Zakaria on why the quality of education has fallen in the US. He argued that teacher workforce has to improve in order to improve the quality of education. But increasing the monetary incentives wont do the trick. You have to recruit based on proven skills and apply the same recruiting philosophy in other schools.
I think the lack of innovation in these areas is driven primarily by the development of entrenched interests. In healthcare, the current fee for service system rewards quantity over quality; beneficiaries of this system do not want to see changes. The teachers unions, as an example, want job security even at the expense of innovation and bringing in the best people. In politics, multiple interests do not want change because they directly benefit from the system as it is currently constituted; this stifles any possibility for innovation.
ReplyDeleteIn the instances of both health care and education, the people in those systems that innovation would most benefit have virtually no say in the matter outside their personal contacts. Their budgets, curriculum, payment system etc are all controlled by politicians who have a thousands different reasons for not getting anything done. Im not so cynical as to think that no politician truly cares about either of those things - it just takestoo much to get anything truly groundbreaking through the bureaucratic process.
ReplyDeleteAlso, with education, theres a risk aversion to innovation - a policy screw up affects children and that isnt something anyone takes lightly.
I think healthcare is one of the least innovative industry, but it happens to be one of the most profitable industry. In my opinion, the reason why it is not innovative is because any innovation will have huge impact on the entity that used to have lots of profits. None of the entity wanna give up the realized profit sharing, so they try to discourage innovation, or block innovation.
ReplyDeleteFor example, right now there is a movement regarding e-record. It is a very mature technology, where financial institutions are using it for transactions worthy billions of $. However, I could not think of any technical reason why it could not be done in health care. The only "real" possibility is that implementing it will hurt the jobs. So the e-record needs to fight through lots of resistance to make it happen.
I think the problem in these industries is that there are too many stakeholders and decision-makers. In health care you have the patient, family, the doctor, insurance, hospital administrators, government, etc. who all have a say in the care the patient receives. In education, you have the parents, the administrators, the school board, the state, unions, etc. who all have a voice in what can be taught in schools. In politics, you have local, state, and federal government agencies, elected and unelected officials all who have overlapping powers. When you have this many voices, there is no possible way to please everyone. So at some point in the process things become deadlocked and it is just easier to maintain the status quo than continue trying to innovate.
ReplyDeleteThe lack of innovation in health care is due to several factors. First, focusing mostly on the biotechnology/pharmaceutical sector, there is significant risk tied to the huge amounts of capital and time needed to develop a drug. Investors want to see a return as soon as possible but an innovation in the biopharma world may not see a return (if any) for several to multiple years. Second, the regulatory process has become stricter and made it very difficult to have a company receive approval. Companies do not want to risk creating something innovative if there is a huge chance it will never make it to the market. Finally, there are so many moving parts, such as patients, providers, pharma, biotech, device companies, etc., in the health care system. Health care reform brings much uncertainty and this causes individuals in the health care industry to wait and see what happens versus jumping in and trying to bring something new to the table.
ReplyDeleteHealthcare: I would argue that healthcare is very innovative. Those companies that are not innovative will fall behind their competition. The only reason why they might not be as innovative is for fear of malpractice charges.
ReplyDeleteGovt: As I noted on an earlier blog post, they look to the past to solve future problems. Also, pretty much everything that govt does is public knowledge so if they make a mistake they could receive widespread ridicule. You cannot force society to 'welcome a brainstorming session'
Education: I think you have too many people to please in the education system to ever some to a consensus on anything. I think Charter Schools are among the few that have taken great strides in improving education. Michelle Rhee is an example of someone who attempted to improve education in DC but was forced out because she was not liked by the majority of the people she was fighting to help. http://blogs.babble.com/strollerderby/2010/10/13/rhee-resigns-as-head-of-dc-schools/
I completely agree with Ravi. The environment needs to be conducive for innovation to occur in each of these fields. Since politics, education and healthcare affects the life of each and every citizen, any new concept will need to be ratified by the elected body of representatives, who have their own vested interests to stay in power. In a country like India, the size and population make it difficult most of the time to provide resources to those who need them (the bottom of the pyramid). So, coming up with innovative solutions is the need of the hour. However, more often than not, the bureaucrats find reasons to push back on reforms that would create an environment that might encourage newer ideas in those fields, even if that would help the masses in the long term. Doing so would require a temperament of taking risks, which goes against traditional vote bank politics. Also, there is no incentive for driven individuals or firms to find solutions to these problems if they know that they would have to go through the red tape to get anything done on the ground.
ReplyDeleteI believe there are plenty of individuals within these organization that are personally innovative and want to implement innovative ideas that will enhance their work place, but within each of these organizations bureaucratic policies prevent or at least slow any innovation from actually taking shape. Within each of these organizations, their has been a culture instilled that discourages anyone from going against the norm. And the people who do try to go out and make change are continually rejected and eventually lose any motivation to continue pursuing what they believe should be changed. People that try to make a difference are quickly silenced and beaten down by those that have already been forced to accept their cultural behavior.
ReplyDeleteSince each of these three things are (in large part) publicly funded, innovation is stifled by the inability of Americans to agree on, well...anything. We design laws and new programs in an effort to persuade or force people into agreeing on a common plan, but inevitably there are plenty of dissenters. The politicians making the rules are the ones that need public support, so taking any innovative or radical approaches to education, healthcare, or politics will undoubtedly threaten their chance to get reelected.
ReplyDeleteI think return on investment relatively takes a long time compared with other industry. For example, to see the results of innovational implement in educational sector, we should wait many years in order to get reliable data. Therefore, having appropriate incentive system also would be difficult.
ReplyDeleteI have to agre with Colin (again) on this one. Trying to get millions of people to agree on anything is next to impossible, especially when no one wants to be accountable for failures.
ReplyDeleteI agree with Hannah that there actually is a lot of innovation in these industries, but as others mentioned, the governmental constraints play the biggest role in preventing quick adoption than would be the case in other non-public industries.
ReplyDeleteI don't think politics has a lot of innovation due to the long history of how things work which has since led to a lot of bureaucracy.
ReplyDeleteAs far as education goes, I would have thought that more would be done here, but a classroom a hundred years ago looks a lot like one now. I think that environments that push so much freedom of thought like education sometimes lack the ability to converge on something long enough to be able to implement it.
ReplyDeleteFinally, with healthcare I think that innovation is somewhat stifled because we're dealing with people's lives. Granted a lot has been done, but when you can only risk so much, the level of innovation will match that level of risk taking.
ReplyDeleteThe two main reasons is government involvement and money. The status quo in all three of these areas is great for those in power and money. The incentive to take on risky innovation is minimal for those making the decisions.
ReplyDeleteAs many others have said, the problem facing these industries is not necessarily one of limited innovation, but rather one of bureaucracy and red tape. This is particularly true of healthcare and education, as the leadership in these areas has to answer to a vide variety of stakeholders. Further, the fact that children and people's health are in question causes for conservative behaviors surrounding change. The political system shares some similarities here. Because the power balance can shift so quickly in politics, the risks associated with attempted innovation are outweigh the potential benefits in the eyes of those with a lot to lose.
ReplyDeleteI think in these industries it is mainly a market constraint. Specifically, these industries are not subjected to typical market dynamics. This lack of market pressure shelters companies in these industries from having to innovate to survive. In healthcare, consumers do not pay for what they consume, and as such there is no price transparency. In education, the government basically has a monopoly in primary education. In higher education, the government's willingness to give loans with no collateral - frequently to people without the means to pay them back. This allows institutions to charge prices much higher than what an unregulated market would bear.
ReplyDeleteInteresting question for Mexico. I think there is a lot of conflict of interest between politic parties. We have an old social constraint in which politicians are always fighting to be seen as good and make the others seen as bad. So for those that propose innovation and improvements, almost never have support, then healthcare and education (among other public issues) cannot be changed as easy as apparently it would be.
ReplyDeleteAs once displayed in a video in Managerial Econ, as society we are generally dissatisfied with industries controlled by the government and most pleased with the private sector. The DMV versus Fed Ex. Due to all the bureaucracy that influences education, health care, and politics very rarely is real innovation able to occur. These groups epitomize the idea that creative people must be stopped and are notorious for housing innovation killers.
ReplyDeleteThese sectors have existed since centuries. This might drive people to think: Well, it has worked for so many years like this, why would we want to change? The structures and systems are pre-defined, and many people's personal interests and everyday practices are linked with them, which makes it difficult to incentivise change. Also, individual motives might interfere with innovativeness. For instance - as already mentioned by many of you - people in politics might fear that doing things differently could undercut their possibilities to maintain power and influence.
ReplyDeleteHowever, I do believe that there are great differences between these different industries that were mentioned. For instance healthcare seems to me much more innovative than politics. This might be due to the fact that so many people are doing research in healthcare. Also, (at least in Germany, but I guess in the US as well) there are thousands of consultants working for the healthcare industry, driving poeple to innovate and to break their usual patterns of behaviour to the better.
Another point might be the group size. Whole countries are to some extent involved in these sectors. Every time someone wants to drive innovation in the educational system in Germany there is a huge public outcry and various, long and ongoing discussions emerge. Of course one could say that politicians have the power to push certain things through if they believe them to be beneficial for the educational system. Still, everyone knows that they will again be led by the motive to be re-elected. Hence, innovativeness in these sectors is oftentimes cutt-off due to the existence of such vicious circles.