Innovation is not guaranteed to work, if it were then it would not be novel enough to be termed “innovation”. So there is a risk involved. However, presumably, we would like our innovative efforts to work (that is, to pay out) some of the time, otherwise they would not be worth the price.
During a flow of Twitter messages about an event today (2012.01.24) at the Centre for Creative Collaboration in London, there was an exchange of messages in which Benjamin Ellis (@BenjaminEllis) suggested that paying the price of innovation is the opposite of paying an insurance premium. The message is here. Benjamin called it an innovation premium.
It is a gamble
Well, the opposite of an insurance premium is a bet. The model is the same: you pay a small price, in the expectation of getting a bigger payout if an event occurs. The difference is that: in the case of an insurance premium, you (probably) hope that the event does not happen; whereas, in the case of a bet, you hope that it does.
So it seems that innovation is equivalent to gambling. Of course, one can consider and analyse the various risks involved, and can work to minimise the downside. But in the end, in innovation, as in gambling:
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