Meet the Solvers

Authored By 
Matthew Regele
Blog contributor 
Policy Fellow
March 5, 2015

Everyone knows that innovation is central to economic growth. But, what we typically fail to recognize is that such growth often depends in part on “solvers.” Solvers are individuals and organizations that use deep expertise to troubleshoot design challenges and help inventors turn their creative ideas into actual products sold on the market. My research on the invention-to-commercialization process in the New England aerospace & defense and medical device industries highlights the importance of this role. It also demonstrates how our myopia in this area has caused us to underestimate small businesses’ contributions to innovation ecosystems, the collection of actors and resources that combine and interact to generate sustained, innovation-driven economic growth.

Most discussions of innovation remain firmly focused on invention – the emergence of creative new ideas. In the academic sphere, this concentration reflects data availability. Patent data is accessible, reliable, and complete, allowing us to (relatively) easily measure the output of inventive activity. In contrast, accurate statistics on product introductions are much harder to come by. Thus, measuring commercialization remains difficult. The upshot of this is that we have a developed a solid understanding of the individuals and organizations that are likely to generate new ideas. We know that small, old businesses contribute little in this regard. Their smallness means they lack the resources necessary to compete with larger players in developing incremental product improvements. Their old age makes them less likely to diverge from the status quo and pursue disruptive new ideas. And the fact that they often say they are not particularly interested in pursuing dramatic growth, but are instead more focused on lifestyle concerns like independence and autonomy, suggests they are unlikely to pursue such opportunities in the first place.

Such insights about invention are valuable, but tell us little about what happens once an idea has emerged. My recent work on the New England aerospace & defense and medical device industries suggests that the relative importance of the different players shifts substantially once we move beyond the initial invention stage.

Specifically, I have found that when it comes to translating inventors’ designs into physical products that can be made and sold at scale, smaller, older businesses often make critical – if nuanced - contributions. Such organizations often fill what I call the “solver” role. Solvers help product designers address specific, well-bounded – but thorny – design challenges, as well as developing the processes that will enable these designs to be produced economically and at scale.

“Solving” has become critical in aerospace due to the large original equipment manufacturers’ (OEMs) increased outsourcing of production. With this outsourcing has gone the intuitive, tacit knowledge about how various aerospace alloys will react to being bent, welded, and riveted together. Such knowledge is critical because the manufacturing process can alter the underlying properties of materials – and the safety and reliability of the resulting parts. The knowledge gap is often even wider in medical devices, where invention more often takes place in startups. This increases the likelihood that the designer will have little prior experience with the manufacturing processes that will be needed to produce their devices.

In both of these industries, small manufacturers have stepped in to fill the void. These organizations are full of highly experienced experts that understand the intricacies of the materials they work with. As a result, they can very quickly and accurately provide feedback on whether a particular design is cost-effective, or whether it is even possible to make with existing technology. They are also adept at outlining the steps that will produce the desired results. Further, unlike larger competitors, these organizations are small and flexible enough that they can work through such challenges with their customers.

Paradoxically, small businesses’ prioritization of quality-of-life issues over growth opportunities can actually enhance their effectiveness in the solver role. Such priorities mean that they are willing to make their contributions out of the limelight, and to allow most of the economic benefits of their work accrue to their growth-oriented customers. Customers thus grow while they remain small, setting them up to flexibly partner on the next solving challenge. Without such firms’ continued willingness to take on such challenges, innovative output might be dramatically slowed, if not ground to a halt.

I expect we would observe similar patterns across many sectors. This certainly includes other settings where innovation is complex. Complex products contain multiple interacting parts, are subject to long, often multi-year development efforts, and require large upfront investments before success can be ensured. Such complexities increase the likelihood that an inventor – whether an individual or an organization – will not possess the full knowledge necessary to traverse the invention-to-commercialization gap.  Interestingly, such industries also seem to be some of those with the biggest potential for growth – for example, think of alternative energy, self-driving and electric vehicles, and pharmaceuticals.

In short, if we truly want the economic benefits of innovation, then it is time we extend our focus beyond entrepreneurial inventors and incorporate the risk averse problem-solvers that often help turn their ideas into reality. We may find that such individuals and organizations are as common – and crucial – to successful innovation ecosystems as the customers they support.

Matthew Regele is an ISPS Graduate Fellow and a PhD student in Organizations & Management at the Yale School of Management.