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Source: New Knowledge 119

he thought through his focus. Before he even began the techni-
cal work on the glass envelope, the vacuum, the closure, and
the glowing fiber, he had already decided on a “system”: his
light bulb was designed to fit an electric power company for
which he had lined up the financing, the rights to string wires
to get the power to his light bulb customers, and the distribu-
tion system. Swan, the scientist, invented a product; Edison
produced an industry. So Edison could sell and install electric
power while Swan was still trying to figure out who might be
interested in his technical achievement.
The knowledge-based innovator has to decide on a clear focus.
Each of the three described here is admittedly very risky. But not to
decide on a clear focus, let alone to try to be in between or to attempt
more than one focus, is riskier by far. It is likely to prove fatal.
3. Finally, the knowledge-based innovator—and especially the
one whose innovation is based on scientific or technological knowl-
edge—needs to learn and to practice entrepreneurial management
(see Chapter 15, The New Venture). In fact, entrepreneurial manage-
ment is more crucial to knowledge-based innovation than to any other
kind. Its risks are high, thus putting a much higher premium on fore-
sight, both financial and managerial, and on being market-focused
and market-driven. Yet knowledge-based, and especially high-tech,
innovation tends to have little entrepreneurial management. In large
measure the high casualty rate of knowledge-based industry is the
fault of the knowledge-based, and especially the high-tech, entrepre-
neurs themselves. They tend to be contemptuous of anything that is
not “advanced knowledge,” and particularly of anyone who is not a
specialist in their own area. They tend to be infatuated with their own
technology, often believing that “quality” means what is technically
sophisticated rather than what gives value to the user. In this respect
they are still, by and large, nineteenth-century inventors rather than
twentieth-century entrepreneurs.
In fact, there are enough companies around today to show that the
risk in knowledge-based innovation, including high tech, can be sub-
stantially reduced if entrepreneurial management is conscientiously
applied. Hoffmann-LaRoche, the Swiss pharmaceutical company, is
one example; Hewlett-Packard is another, and so is Intel. Precisely
because the inherent risks of knowledge-based innovation are so
high, entrepreneurial management is both particularly necessary and
particularly effective.