American companies fear that innovation is the secret of success-and that they cannot innovate

In the small Umagic office in midtown Manhattan, a team of 30 computer programmers are working on setting up websites that will allow subscribers to feed in details about themselves and their problems and to receive advice from ‘virtual’ versions of personalities regarded as experts in their fields: for example, a well-known dietician, a celebrity fitness trainer, a psychologist well known in the media for here work on parent-child relationships . Umagic Systems is a young firm and it’s hard to predict how far they’ll go .hl ten years’ time, consulting a computer about your diet problems might seem natural or it might seem absurd. But the company and others like it are beginning to seriously worry large American firms, who see such half-crazy new and innovative ideas as a threat to their own future success.

Innovation has become a major concern of American management. Firms have found that it is increasingly difficult to redesign existing products or to produce them more economically. The stars of American business tend today to be innovators such as Amazon (the internet bookstore) and Wal-Mart (the supermarket chain) which have produced completely new ideas or products that have changed their industries.

Over the past 15 years, the firms which have achieved the greatest profits have been the ones which have had the most innovations. But such profits aren’t easy to come by .One of the reasons for the increasing number of mergers between companies is a desperate search for new ideas. And a fortune is spent nowadays on identifying and protecting intellectual property: other people’s ideas.

According to the Pasadena-based Patent & License Exchange in the United States , trading in intangible assets such as intellectual property rose from$15 billion in 1990 to $ 100 billion in 1998,with an increasing proportion of the rewards going to small firms and individuals.

And therein lies the terror for big companies : that innovation seems to work best outside them. Many of the large established companies have been struggling to come up with new products recently.' In the management of creativity ,size is your enemy,’ argues Peter Chemin ,who runs Fox TV and film empire for News Corporation. "One person managing 20 movies is never going to be as involved as one doing five movies .'He has thus tried to break down the studio into smaller units ,even at the risk of incurring higher costs.

It is easier for ideas to develop outside big firms these days. In the past, if a clever scientist had an idea he wanted to commercialise ,he would take it first to a big company. Now, with the banks encouraging individuals to set up new businesses through offering special loans, innovators are more likely to set up on their own. Umagic has already raised $5 million and is about to raise $25 million more. Even in capital-intensive businesses such as pharmaceuticals, entrepreneurs can conduct profitable, early- stage research,selling out to the big firms when they reach expensive,risky clinical trials.

Some giants, including General Electric and Cisco, have been remarkably successful at buying up and integrating scores of small companies. But many others worry about the prices they have to pay and the difficulty in keeping hold of the people who dreamt up the ideas . Everybody would like to develop more ideas in-house. Procter & Gamble is now changing the entire direction of its business from global expansion to product development; one of its new aims is to get innovations accepted across the company .Elsewhere ,the search for innovation had led to a craze for ' intrapreneurship ’ -giving more power to individuals in the company and setting up internal ideas -factories so that talents staff will not leave.

And yet innovation does not happen just because the chief executive wills it. Indeed ,it is extremely difficult to come up with new ideas year in, year out, especially brilliant ones. Underneath all experts' diagrams , lists and charts ,most of the available answers seem to focus on two strengths that are difficult to impose: a culture that looks for new ideas, and leaders who know which ones to back. Companies have to discredit the widespread view that jobs working on new products are for ‘those who can't cope in the real business'. They have to change the culture by introducing hard incentives, such as giving more generous bonuses to those who come up with successful new ideas and, particularly ,not punishing those whose experiments fail.

Will all this reorganization and culture tweaking make big firms more creative? David Post, the founder of Umagic, isn't so sure:’ He also recalls with glee the looks of total incomprehension when he tried to sell his 'virtual experts ' idea three years ago to firms such IBM , though ,as he cheerfully adds,’ of course, they could have been right'. Apparently, innovation -unlike diet,fitness and parenting -is one area where a computer cannot tell you what to do.

Gerry Marten and Dona Glee Williams report on reliance on the Indian village of Punukula, so nearly destroyed by reliance on pesticides.

Around 20 years ago, a handful of families migrated from the Guntur district of Andhra Pradesh, south-east India, into Punukula, a community of around 900 people farming plots of between two and ten acres. The outsiders from Guntur brought cotton culture with them, and this attracted resident farmers by promising to bring in more hard cash than the mixed crops they were already growing to eat and sell, such as millet, mung beans, chilli and rice. But growing cotton meant using pesticides and fertilisers - until then a mystery to the mostly illiterate farmers of the community.

Local agro-chemical dealers obligingly filled the need for information and supplies. These'middlemen' sold commercial seeds, fertilisers and insecticides on credit, and guaranteed purchase of the crop. They offered technical advice provided by the companies that supplied their products. The farmers depend on the dealers. If they wanted to grow cotton - and they did - it seemed they had no choice.

A quick ‘high’ of booming yields and incomes hooked growers during the early years of cotton in the region. Outlay on insecticides was fairly low because cotton pests hadn't moved in yet. Many farmers were so impressed with the chemicals that they started using them on their other crops as well. The immediate payoffs from chemically-dependent cotton agriculture both ensured and obscured the fact that the black dirt fields had gone into a freefall of environmental degradation, dragged down by a chain of cause and effect.

Soon cotton-eaters, such as bollworms and aphids, plagued the fields. Repeated spraying killed off the most susceptible pests and left the strongest to reproduce and pass on their resistance to generations of ever-hardier offspring. As the bugs grew tougher and more abundant, farmers applied a greater variety and quantity of poisons, something mixing 'cocktails' of as many as ten insecticides. At the same time, cotton was gobbling up the nutrients in the soil, leaving the growers no option but to invest in chemical fertilisers.

By the time some farmers tried to break free of their chemical dependence, insecticides had already decimated the birds, wasps, beetles, and other predators that had once provided natural control of crop pests. Without their balancing presence, pests ran riot if insecticide was cut back. As outlays for fertilisers and insecticides escalated, the cost of producing cotton mounted. Eventually the expense of chemical inputs outgrew the cash value of the crop, and farmers fell further and further into debt and poverty.

Their vicious cycle was only broken by the willingness of a prominent village elder to experiment with something different. He had been among the first villagers to grow cotton, and he would be the first to try it without chemicals, as set out by a programme in Non-Pesticide Management (NPM). This had been devised for Punukala with the help of a Non-Government Organisation called SECURE that had become aware of the hardships caused by the pesticide trap.

It involved turning to neem, a fast-growing, broad-leaved evergreen tree related to mahogany. Neem protects itself against insects by producing a multitude of natural pesticides that have evolved specifically to defeat plant-eating insects. Thus they are generally harmless to human and other animals, including birds and insects that eat pests.

The plant is native to India and Burma, where it has been used for centuries to control pests and to promote health. To protect cotton, neem seeds are simply ground into a powder, soaked overnight in water, and sprayed onto the crop at least every 10 days. Neem cake applied to the soil kills insect pests and doubles as an organic fertiliser high in nitrogen. As neem grows locally and is easy to process, it is much less expensive than the chemical insecticides sold for profit by the dealers and their corporate suppliers.

Quick, short-term gains had once pushed Punukula into chemical-dependent agriculture. Now they found that similar immediate rewards were helping to speed change in the other direction: the harvest of the next 20 NPM farmers was as good as the harvest of farmers using insecticides, and they came out ahead because they weren't buying insecticides, instead of investing cash (in short supply) in chemicals, they invested time and labour in NPM practices.

By the end of 2000, all the farmers in Punukula village were using NPM rather than chemicals for cotton, and they began to use it on other crops as well. The was using it. The status and economic opportunities of women improved - neem change gathered momentum as NPM became even more effective once everyone became a source of income for some of them, as they gathered seeds from the surrounding area to sell for NPM in other villages. The improve situation meant that families could afford to put more land under cultivation.

In 2004, the panchayat (village government) formally declared Punukula to be a pesticide-free village. And they have big plans for the future, such as water purification. The village now serves as a model for disseminating NPM to other communities, with around 2000 farmers visiting each year.

What began as a few farmers desperate to find a way to farm without poisons has become a movement with the potential to pull an entire region back from ecological disaster.

A. An ingenious invention is set to bring clean water to the third world, and while the science may be cutting edge, the materials are extremely down to earth. A handful of clay yesterday’s coffee grounds and some cow manure are the ingredients that could bring clean, safe drinking water to much of the third world.

B. The simple new technology, developed by ANU materials scientist Mr. Tony Flynn, allows water filters to be made from commonly available materials and fired on the ground using cow manure as the source of heat, without the need for a kiln. The filters have been tested and shown to remove common pathogens (disease-producing organisms) including E-coli. Unlike other water filtering devices, the filters are simple and inexpensive to make. “They are very simple to explain and demonstrate and can be made by anyone, anywhere,” says Mr. Flynn. “They don’t require any western technology. All you need is terracotta clay, a compliant cow and a match.”

C. The production of the filters is extremely simple. Take a handful of dry, crushed clay, mix it with a handful of organic material, such as used tea leaves, coffee grounds or rice hulls, add enough water to make a stiff biscuit-like mixture and form a cylindrical pot that has one end closed, then dry it in the sun. According to Mr. Flynn, used coffee grounds have given the best results to date. Next, surround the pots with straw; put them in a mound of cow manure, light the straw and then top up the burning manure as required. In less than 60 minutes the filters are finished. The walls of the finished pot should be about as thick as an adult’s index. The properties of cow manure are vital as the fuel can reach a temperature of 700 degrees in half an hour and will be up to 950 degrees after another 20 to 30 minutes. The manure makes a good fuel because it is very high in organic material that bums readily and quickly; the manure has to be dry and is best used exactly as found in the field, there is no need to break it up or process it any further.

D. “A potter’s din is an expensive item and can could take up to four or five hours to get upto 800 degrees. It needs expensive or scarce fuel, such as gas or wood to heat it and experience to run it. With no technology, no insulation and nothing other than a pile of cow manure and a match, none of these restrictions apply,” Mr. Flynn says.

E. It is also helpful that, like terracotta clay and organic material, cow dung is freely available across the developing world. “A cow is a natural fuel factory. My understanding is that cow dung as a fuel would be pretty much the same wherever you would find it.” Just as using manure as a fuel for domestic uses is not a new idea, the porosity of clay is something that potters have known about for years, and something that as a former ceramics lecturer in the ANU School of Art, Mr. Flynn is well aware of. The difference is that rather than viewing the porous nature of the material as a problem — after all not many people want a pot that won’t hold water — his filters capitalize on this property.

F. Other commercial ceramic filters do exist, but, even if available, with prices starting at US$5 each, they are often outside the budgets of most people in the developing world. The filtration process is simple, but effective. The basic principle is that there are passages through the filter that are wide enough for water droplets to pass through, but too narrow for pathogens. Tests with the deadly E-coli bacterium have seen the filters remove 96.4 to 99.8 per cent of the pathogen — well within safe levels. Using only one filter it takes two hours to filter a litre of water. The use of organic material, which burns away after firing, helps produce the structure in which pathogens will become trapped. It overcomes the potential problems of finer clays that may not let water through and also means that cracks are soon halted. And like clay and cow dung, it is universally available.

G. The invention was born out of a World Vision project involving the Manatuto community in East Timor The charity wanted to help set up a small industry manufacturing water filters, but initial research found the local clay to be too fine — a problem solved by the addition of organic material. While the AF problems of producing a working ceramic filter in East Timor were overcome, the solution was kiln-based and particular to that community’s materials and couldn’t be applied elsewhere. Manure firing, with no requirement for a kiln, has made this zero technology approach available anywhere it is needed. With all the components being widely available, Mr. Flynn says there is no reason the technology couldn’t be applied throughout the developing world, and with no plans to patent his idea, there will be no legal obstacles to it being adopted in any community that needs it. “Everyone has a right to clean water, these filters have the potential to enable anyone in the world to drink water safely,” says Mr. Flynn.