The World Economic Forum launched the Technology Pioneers pro­gramme in 2000 with the aim of identifying 30 to 50 companies with outstanding and innovative technolo­gies every year. Thirty-six companies were selected as Technology Pioneers this year. This report was prepared by Apax Partners with the help of the Economist Intelligence Unit. All the companies mentioned in this report are winners of this year’s awards.

FROM THE ECONOMIST INTELLIGENCE UNIT

Innovation, for all the attempts to explain and understand it, remains as much an art as a sci­ence. Like any creative process, there is no right way to do it. Just as there can be many routes to the summit of a mountain, there are also many differ­ent, but equally valid, pathways to successful innova­tion. And just as the many routes up a mountain can be charted on a map, so too can the various kinds of innovation.

Perhaps the most common form of innovation involves the gradual improvement of existing tech­nologies. Consider microchips, for example. It is only because of many separate, incremental improve­ments to design and manufacturing processes that chips have continued to improve in performance and fall in price over the past few decades. Most people have never heard of these individual innovations (such as silicon-on-insulator, or copper interconnect), but collectively they have made computing power cheap and small enough to incorporate into all kinds of devices. Such “incremental” innovation may be regarded as less exciting than other kinds, but it is just as important.

Another form of innovation involves finding a new way to solve an existing problem. The recent develop­ment of high-brightness light-emitting diodes (LEDs), for example, has made possible low-power illumina­tion. The new technology meets an existing need, but in a new and more efficient way. Domestic lighting based on white LEDs is ideal for use in parts of the developing world where no mains power is available. The low power consumption of LEDs means they can be powered at night by a battery pack that is recharged by solar power during the day. Using solar energy to power conventional high-power, high-voltage light bulbs, in contrast, would be impractical. This approach, in which a new technology replaces a previous, inferior way of meeting an existing need or market, can be termed “modular” innovation, since the new technology simply slots in, replacing an older one.

Yet another style of innovation involves the use of an existing discovery or technology to do something new. Hard disks were invented in the 1950s, and their stor­age capacity has improved steadily ever since, through a series of incremental improvements. As a result, it has recently become possible to use this familiar tech­nology to do entirely new things: the hard disk built into a TiVo personal video-recorder, for example, is what makes it possible to pause and rewind live televi­sion. And music players based on hard disks enable people to carry their entire music collections with them wherever they go. In such “architectural” innovations, the underlying technology is an existing one, but the uses to which it is put are new.

Then there are the most daring innovations of all, in which new technologies are used to solve problems and do things that are fundamentally different to the capabilities of previous technologies: using stem cells, a promising new therapeutic approach, to treat previ­ously incurable diseases, for example. Radical innova­tions often have a whiff of science-fiction about them, since they postulate not just a new technology, but entirely new markets or applications for it. Using sponges made of carbon nanotubes to build stronger, lighter tennis rackets, a modular innovation, is easy enough to imagine; using carbon nanotubes to build a “space elevator” capable of lifting things into orbit, in contrast, is rather more difficult to envisage, since nei­ther the technology nor the application is familiar. Such innovations can be termed “radical” innovations.

The boundaries between these four categories can be blurry but all innovations can be placed in one of them. To determine which category a particular inno­vation belongs in, ask yourself the following: does the innovation depend on an existing or a new technol­ogy? And is that technology being applied in an exist­ing or a new market or application? The four possible answers to these two questions determine which of the four categories the innovation falls into. They can be represented as a two-by-two grid. And as this year’s selection of Technology Pioneers demonstrates, innovations in each of the four cate­gories have the potential to change the world.

Building a better mousetrap

Build a better mousetrap, goes the old saying, and the world will beat a path to your door. Why? Because people already know what a mousetrap is, and why they need one; so the appeal of a better one is straightforward. Hence the appeal of incremental inno­vations, which do not do anything new, but involve improvements to existing products or ways of doing things. The notion of continuous improvement is most familiar in the field of information technology, which is driven by Moore’s Law, the self-fulfilling rule of thumb which states that the amount of computing power available at a given price doubles every 18 months or so. Other, similar laws apply to improvements in stor­age density and network capacity. Most people simply take it for granted that computers will continue to become faster, cheaper and more capable. But such progress requires a steady stream of innovations.

Matrix Semiconductor, for example, based in Santa Clara, California, is one of the pioneers of “three-dimensional” computer chips, in which multi­ple layers of components and circuitry are stacked vertically. Just as high-rise buildings can pack more homes or offices into a city lot, this makes possible memory chips that combine high storage density with low cost. Matrix^® 3DM chips are ideal for storing pre-programmed content, such as music, games and video, in small cartridges that can be slotted into portable devices. In October 2005, the company was acquired by SanDisk, the leading supplier of flash-memory products.

BitBand, a company based in Netanya, Israel, has developed technology that improves the smoothness and efficiency of the delivery of video content across Internet protocol (IP) networks. Delivering video across the Internet has been possible for years, but as tele­coms operators around the world start to diversify into television services delivered over broadband internet links, doing so reliably has assumed sudden impor­tance. BitBand’s technology has already been deployed by operators in Italy, Sweden, Ireland and India.

 Constant improvement is also vital in information security, a field in which an arms race is underway between those trying to attack and defend data stored on computer networks. Fortinet, based in Sunnyvale, California, has developed security systems based on hardware, rather than software. Using an appliance built around dedicated chips that scan for viruses, worms and attempted intrusions is far faster than using software. It ensures that legitimate traffic can still flow, and users do not suffer from a loss of net­work performance.

Incremental improvements need not be limited to underlying technology, of course. Telmap, based in Herzliya, Israel, is one of several companies working in the field of mobile mapping and navigation. What sets its technology apart, however, is the sleek design and ease of use of its user interface. For no matter how advanced the underlying technology, a naviga­tion system is no use if users find it complicated or confusing to use.

Nor are incremental improvements limited to the field of information technology. Energy Innovations, based in Pasadena, California, has devised a clever but powerful improvement to the design of solar con­centrators. These are arrays of mirrors that concen­trate sunlight on to a photovoltaic cell in order to generate electricity; rather than boosting output by increasing the number of cells, they boost output by, in effect, increasing the amount of sunlight falling on to a single cell. To do this, however, each of the mir­rors in the array must be moved so that it tracks the sun. Solar concentrators are only economic if the increase in power output more than offsets the increased cost and complexity of the tracking system. Energy Innovations’ Sunflower 250 concentrator uses an array of mirrors that are cleverly interconnected to a single undercarriage so that all of them can be steered using just two motors. This could make solar concentrators far more affordable and attractive.

Build a better mousetrap using an entirely new technology—a laser beam rather than a mechanical spring, perhaps—and you still don’t need to explain its purpose. Instead it is enough to demonstrate that the new technology is superior in some way. This opens the door to modular innovations, in which a new technology substitutes for an old one in an exist­ing market or application. Examples abound in the field of energy, where innovators are searching for new, more compact and less polluting ways to meet existing energy needs. In particular, many firms are pursuing the development of fuel cells, electrochemi­cal devices that combine a fuel (usually hydrogen, methanol or methane) with an oxidant to produce electricity far more efficiently than internal-combustion engines do. Fuel cells could be used in place of existing engines and generators to power cars, houses and factories, while producing far less pollution; they could also replace batteries in portable electronic devices, where they offer the promise of longer running times.

Intelligent Energy, based in London, England, is one of several firms developing fuel cells for a range of commercial applications. But it is best known for the development of the “emissions-neutral vehicle”, or ENV, the first fuel-cell-powered motorcycle. It can run for up to four hours on a full tank of hydrogen and has a top speed of 50mph. Its purpose is to demonstrate that fuel-cell vehicles can be built today, and can be stylish and fun. The ENV was designed from scratch around Intelligent Energy’s fuel-cell design, known as Core; it is not simply an existing motorcycle into which a fuel-cell has been retrofitted. It is a reminder to existing vehicle manufacturers that if they do not embrace fuel-cell technology, they could be chal­lenged by upstarts that do.

CMR Fuel Cells of Cambridge, England, takes its name from its new “compact mixed reactant” design for fuel cells. It simplifies the design of the fuel cell to eliminate flow-field plates, which are normally used to guide the flow of fuel and oxidant to the appropri­ate parts of the fuel cell. In CMR’s design, the fuel and oxidant are simply mixed together and passed through the cell, which is porous. This could reduce the cost of a stack of fuel cells by 80% and its size by 90%, according to the company, so leaving more room for fuel and increasing the running time avail­able from a power pack of a given size. Accordingly, CMR plans to focus on making fuel cells to power portable electronic devices.

While fuel cells provide a new way to generate electricity, InnovaLight, based in Santa Clara, Califor­nia, is working on a more efficient way to turn elec­tricity into light, using silicon nanocrystals or “quantum dots”. When connected to an electrical supply, these tiny structures emit light, the colour of which depends on their size and structure. Compared with conventional lightbulbs, and even with light-emitting diodes, they are far more energy efficient, and can be easily “tuned” to produce light of a partic­ular colour without requiring changes to the manufac­turing process. (Different coloured LEDs, in contrast, must be made from different materials.) Proponents of quantum dots believe that they will eventually replace today’s light bulbs, as well as making possible entirely new forms of illumination, such as light-emitting wallpaper.

Innovations in biotechnology can also be modular in nature, as new, high-tech approaches are used to meet existing needs in novel ways. Amyris Biotech­nologies, for example, based in Emeryville, California, is applying new techniques from the field of synthetic biology to address an age-old problem that persists across the developing world: malaria. One of the most effective treatments for malaria, long used in Chinese medicine, is a herb called Artemisia, the active ingre­dient of which is an isoprenoid compound called artemisinin. But the herb is in short supply and the price has recently soared. Amyris’ approach is to take plant genes and insert them into E. coli, thus convert­ing the bacterium into a factory that can produce any given isoprenoid in large quantities. While its initial focus is on anti-malarials, the company plans to move on to other isoprenoids which are effective treatments for cancer and viral infections, but must currently be laboriously extracted from natural sources.

Similarly, NitroMed, based in Lexington, Massa­chusetts, has added a novel twist to the treatment of cardiovascular disease. It has devised a way to attach nitric-oxide molecules to existing drugs, so that they are released when the drug is metabolised. Nitric oxide is known to play a role in many cellular func­tions, and has an anti-inflammatory effect, among other things. But in some circumstances it can also be toxic. By piggybacking on other drugs, it can be precisely targeted at a particular site of action. BiDil, a treatment for heart disease developed by NitroMed, has proved to be particularly effective among African-American men, and made medical history in June 2005 when it became the first drug to be approved by America’s Food and Drug Administration for a spe­cific racial group. It is a step towards a future in which medical treatments will be precisely matched to particular patients, overturning today’s “one size fits all” approach.

Teaching an old dog new tricks

Where modular innovations meet old needs in new ways, architectural innovations do the opposite: they repackage existing technologies to meet new needs or address new markets. This means that, unlike incre­mental and modular innovations, they may address needs that people do not yet realise they have, and must often convince a sceptical marketplace that they are worthwhile. A good example is the TiVo personal video-recorder, which records television on to a hard disk. This enables the pausing and rewinding of live TV, but even more importantly, makes it possible to record dozens of favourite programs and call them up when needed. At first, the technology was a hard sell, since its benefits are not obvious and are difficult to explain without a demonstration. But once the TiVo began to change the way people watch television—it abolishes schedules, in effect—the benefits of the device began to spread by word of mouth, and it went on to become an iconic, category-defining and industry-changing product. To be successful, archi­tectural innovations must demonstrate that they are more than just a gratuitous recombination of existing ideas, but are instead applying familiar technologies in new and useful ways.

An inspiring example comes from Ossur, a firm based in Reykjavik, Iceland. It has combined com­puter technology with materials from the aerospace industry and smart-fluid technology from the car industry to produce a range of advanced prosthetics. These “bionic” systems can adapt themselves both to the user’s gait and the circumstances, from walking on flat terrain to navigating stairs and ramps or cross­ing uneven ground. Sensors inside the prosthetic Rheo Knee^TM, for example, detect the knee position and applied load, and a small computer then varies the stiffness of the knee joint when needed by apply­ing a magnetic field to a magnetorheologic fluid, which increases the fluid’s viscosity. The Power Knee^TM goes further: rather than merely assuring that the prosthetic lower leg is in the correct position and providing an appropriate degree of resistance, it can also do the work of missing knee muscles, to assist the user in walking up stairs, for example.

Another novel combination of existing technologies comes from MBA Polymers of Richmond, California. It has devised an elaborate system for reclaiming plastic and other materials from electronic devices, computers, appliances and even cars. The raw mate­rial is first ground and shredded, and various devices (such as spectrometers, densometers, magneto­meters) and techniques are used to sort the resulting fragments by colour, type of plastic or metal, and so forth. The sorted material can then be recycled and reused. Just as minimills revolutionised the steel industry by enabling scrap metal to be easily recy­cled, this technique could do the same for the plas­tics business. MBA Polymers has already set up a plant in China, now the electronic-waste dump of the world. The potential to turn mountains of waste material from a liability to an asset is particularly attractive given the introduction of new rules around the world that make manufacturers responsible for disposal of their products.

Architectural innovation can also involve taking technology from one field and applying it in another, apparently unrelated one. Ahura, based in Wilming­ton, Massachusetts, is doing just that. The company originally intended to apply its expertise in minia­turised laser technology in the telecommunications market, but had to think again when the telecoms bubble burst in 2001. Instead, the same technology can now be found inside a range of portable devices that shine laser light at a substance and determine its composition based on the reflected light, using a technique called Raman spectroscopy. The ability to determine the chemical composition of an unknown sample using a handheld device has obvious applica­tions in homeland security, but can also be applied in medicine, for tumour analysis and drug discovery.

Another firm deploying an existing technology in a new way is AgION Technologies of Wakefield, Massa­chusetts. The effectiveness of silver as an antimicro­bial has been known since antiquity; it was used by the Greeks and Romans to disinfect contaminated water, for example. More recently, silver has been incorporated into medical devices and dressings to reduce the risk of infection. AgION has gone a step further: it has developed a way to bond silver ions to an inert ceramic so that the rate of release of silver ions increases with the humidity (and hence with the likelihood of bacterial activity). The resulting material enables antimicrobial silver to be incorporated into all kinds of new devices, including pens, household fridges and even mobile phones. The idea is centuries old, but the method of application is entirely new.