The second is the automation of the innovation process. Boeing designed its 777 entirely by computer, using a new electronic toolkit. This toolkit is very important in the design of large, complex systems, such as aircraft, utilities and communications systems, where it is not usually feasible to test full-scale prototypes. But its use is far more widespread, including drugs and cars. Just as automation revolutionised mass production in factories, the automation of innovation has the potential to revolutionise knowledge production.
Innovation is costly, risky, unpredictable and complex.
There is plenty of research showing the importance of innovation for business success, job creation and higher standards of living. For us to understand why this is so, we have to understand the nature of leading-edge industry and services. These are features of what has been called the knowledge economy . It is innovation that transforms these intangible skills into economically valuable activity. As knowledge becomes the basis for economic competition, innovation becomes important for all firms, large and small.