Theory of Innovation — Geography matters !

“There are so many deep-tech innovations in Silicon Valley. Why haven’t we seen such innovations yet from China, India and other countries?”

This is a common question among many members of startup community worldwide. I propose my “Layers of Innovation” theory to answer this.

When you look at the innovation coming out of startups (especially internet startups), you can see innovation happening in 3 layers:

• Platform innovation
• Infrastructure innovation
• Deep Tech Innovation

Successful platforms emerge mainly out of business model innovation while deep tech advancements are examples of technological innovation. The innovation in infrastructure layer (bridge) is a result of the combination of business model and technological innovation.

Intuition

The ‘Three Layer Innovation’ model can be better understood with the example of Amazon.

• When Amazon started in 1994 as an online bookstore, and then moved onto a marketplace for selling and buying goods. This is the platform or aggregator layer of innovation.