Real Innovation Should Become High Tech's Cup of Tea

Last Updated Jul 3, 2008 2:08 PM EDT

Since fast food outlets started printing "Contents Extremely Hot" on drink cups, there haven't been that many opportunities to connect tea and car insurance. But here's an odd pair of stories that have something in common. An employee of a famous chain of more than 200 British tea shops died June 19 at 92, and Progressive Insurance is rolling out, on a national basis, a system that can monitor driving for a pay-as-you-drive billing method.

The thread between the stories is that sometimes non-tech companies can out-innovate their high-tech counterparts. We usually think of technical innovation as being the property of high-tech companies. And yet, often these corporations put the cart before the horse, developing something new and then trying to convince customers that they need or want it.

But real need is a far more powerful, and practical, impetus to invention. It's why section 8 of the U.S. Constitution makes provision for Congress

To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;
There is an economic need for invention to solve real problems.

Tea-shop employee David Caminer helped develop the LEO (for Lyons Electronic Office), the world's first business computer, for food company J. Lyons & Co. It wasn't IBM or Eckert-Mauchly Computer (makers of the UNIVAC) or Nixdorf or Burroughs. Business people, looking for better ways to run their company, saw digital computers that had previously been used in engineering and science and realized that data is data.

Progressive, meanwhile, saw a new business model in tracking the driving habits of consumers, as this Engadget post indicates:

The little blue box plugs into your car's ODB II diagnostic port (all cars made after 1996 have one), and studiously records your driving habits, wirelessly sending the data back to Progressive HQ (it's not clear exactly how). Every six months, Progressive will crunch the numbers and issue a new rate for you based on how you drive -- savings of up to 40 percent are possible.
There are issues that give one a second thought: You're sharing a lot of data with an insurance provider given that you don't know what the discount will be, and it's yet another device that could potentially be hacked, since it's in some sort of wireless communication with the company. And yet, this is using an electronic box to think completely outside an industry mental one.

A company like Sony is considered high tech because it manufactures and buys high tech parts to incorporate into technology products for consumers and business. Google is high tech because it writes code and aggregates content to deliver as a technology service to consumers and business. So how would a Lyons in the past, or a Progressive now, differ? Such companies use high tech parts and services to deliver technology-driven value.

The biggest value technology can offer is not cheaper operations or additional features or a gee-whiz factor, but the opportunity to look at an old problem from a fresh vantage. Here's to the business innovators that can teach "cutting edge" companies a thing or two.

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    Erik Sherman is a widely published writer and editor who also does select ghosting and corporate work. The views expressed in this column belong to Sherman and do not represent the views of CBS Interactive. Follow him on Twitter at @ErikSherman or on Facebook.