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The model of integrated thinking that combines three frameworks – Integrated Reporting, Sustainability, and Intangible Capital is excellent, but the framework for innovation is missing. In the framework for innovation there is a debate over a traditional vs. a new framework. In the traditional framework, investment in R&D is considered the primary driver of value creation. But the debate is also about process. In the traditional framework, the process is linear with stage gates in a “waterfall” that begins with R&D. In the new framework, it’s nonlinear and iterative that simultaneously discovers needs and solutions that include patents, inventions and technologies created in R&D that spans companies, universities and governments. Steve Blank popularized the Lean Startup Movement (LSM) by showing how an iterative process is more effective for startups than the linear process. Blank is now analyzing R&D which is thinks is not effectively creating value. Here are references.

My thinking on a framework for innovation is that LSM is a subset of a larger framework described as the fourth generation (4G) of innovation management (and R&D) to emerge since 1900. 4G has twelve principles and practices. One is a new framework for capital accounting that combines tangible and intangible capital based on capabilities - people with knowledge, tools, technologies and process - and the structure of those capabilities governed by architectural rules.  The 4G model in this principle is similar to Integrated Reporting with multiple capitals including intangible capital and a process of value creation.  4G recognizes that radical innovation is necessary to create new value based on dominant designs to transform capabilities, business models and industry structures to change societies to achieve goals such as sustainability. Capabilities are the building blocks of value in organizations, markets, industries and societies. They can be measured, developed and shared in value chains and networks. Capabilities are similar to atoms in chemistry and physics. 

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