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 THE CYCLIC NATURE OF
INNOVATION: CONNECTING
HARD SCIENCES WITH SOFT
VALUES
ADVANCES IN THE STUDY
OF ENTREPRENEURSHIP,
INNOVATION AND ECONOMIC
GROWTH
Series Editor: Gary D. Libecap
Recent Volumes:
Volume 10: Legal, Regulatory and Policy Changes that
Affect Entrepreneurial Midsize Firms, 1998
Volume 11: The Sources of Entrepreneurial Activity, 1999
Volume 12: Entrepreneurship and Economic Growth in the
American Economy, 2000
Volume 13: Entrepreneurial Inputs and Outcomes: New
Studies of Entrepreneurship in the United
States, 2001
Volume 14: Issues in Entrepreneurship: Contracts,
Corporate Characteristics and Country
Differences, 2002
Volume 15: Intellectual Property and Entrepreneurship,
2004
Volume 16: University Entrepreneurship and Technology
Transfer: Process, Design and Intellectual
Property, 2005
 ADVANCES IN THE STUDY OF ENTREPRENEURSHIP,
INNOVATION AND ECONOMIC GROWTH VOLUME 17

THE CYCLIC NATURE

OF INNOVATION:
CONNECTING HARD
SCIENCES WITH SOFT
VALUES
EDITED BY

GUUS BERKHOUT
PATRICK VAN DER DUIN
DAP HARTMANN
ROLAND ORTT
Faculty of Technology, Policy & Management, Delft University
of Technology, Delft, The Netherlands

Amsterdam – Boston – Heidelberg – London – New York – Oxford

Paris – San Diego – San Francisco – Singapore – Sydney – Tokyo
JAI Press is an imprint of Elsevier
JAI Press is an imprint of Elsevier
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First edition 2007

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No responsibility is assumed by the publisher for any injury and/or damage to persons
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herein. Because of rapid advances in the medical sciences, in particular, independent
verification of diagnoses and drug dosages should be made

British Library Cataloguing in Publication Data

A catalogue record for this book is available from the British Library

ISBN: 978-0-7623-1336-5
ISSN: 1048-4736 (Series)

For information on all JAI Press publications

visit our website at books.elsevier.com

Printed and bound in the United Kingdom

07 08 09 10 11 10 9 8 7 6 5 4 3 2 1
CONTENTS

LIST OF CONTRIBUTORS vii

PROLOGUE ix

INTRODUCTION
Gary D. Libecap 1

PART 1: THEORETICAL FRAMEWORK

CHAPTER 1 INNOVATION IN A HISTORICAL 7

PERSPECTIVE

CHAPTER 2 CONNECTING TECHNICAL 25

CAPABILITIES WITH SOCIETAL NEEDS:
THE POWER OF CYCLIC INTERACTION

CHAPTER 3 FROM PASTEUR’S QUADRANT TO 49

PASTEUR’S CYCLE; LABELING THE FOUR BASIC
CYCLES OF CIM WITH CHAMPIONS

PART II: INTERACTIONS WITH OTHER

SCIENTIFIC AREAS

CHAPTER 4 INNOVATION TAKES TIME: THE ROLE 71

OF FUTURES RESEARCH IN CIM

CHAPTER 5 MARKET ANALYSIS TO ASSESS THE 87

POTENTIAL OF BREAKTHROUGH TECHNOLOGIES

Co-authored by David Langley and Nico Pals

v
vi CONTENTS

CHAPTER 6 THE ROLE OF INTELLECTUAL 105

PROPERTY IN CIM

PART III: NEW BUSINESS APPLICATIONS

CHAPTER 7 CIM APPLIED TO THE MOBILE 125

TELECOM INDUSTRY

CHAPTER 8 CIM AND THIXOMOLDINGs: 139

REGIONAL ASPECTS OF AN INNOVATION
SYSTEM

CHAPTER 9 REVOLUTIONIZING CHEMICAL 153

PRODUCTION PROCESSES USING CIM

EPILOGUE 173

Co-authored by Matthijs Kok

Co-authored by Maaike C. Kroon
LIST OF CONTRIBUTORS

Authors
Guus Berkhout Faculty of Technology, Policy &
Management, Delft University of
Technology, Delft, The Netherlands
Patrick van der Duin Faculty of Technology, Policy &
Management, Delft University of
Technology, Delft, The Netherlands
Dap Hartmann Faculty of Technology, Policy &
Management, Delft University of
Technology, Delft, The Netherlands
Roland Ortt Faculty of Technology, Policy &
Management, Delft University of
Technology, Delft, The Netherlands
Co-Authors
Matthijs Kok Accenture, Amsterdam, The Netherlands
Maaike Kroon Faculty of Applied Sciences, Delft University
of Technology, Delft, The Netherlands
David Langley TNO Information and Communication
Technology in the Netherlands, Groningen,
The Netherlands
Gary D. Libecap Bren School of Environmental Science and
Management, University of California, Santa
Barbara, CA, USA, National Bureau of
Economic Research, MA, USA, and Hoover
Institution, CA, USA
Nico Pals TNO Information and Communication
Technology in the Netherlands, Groningen,
The Netherlands

vii
This page intentionally left blank
PROLOGUE

The purpose of innovation is to create new business. In industry, methods

and tools are developed on how to organize and manage innovation
processes with the objective to better control added-value, risk and cost.
Employees, suppliers and customers are principal actors in the process.
In academia, information from observations and case studies is
transformed into scientific knowledge with the objective to better understand
the successes and failures in innovation and, ultimately, to improve the
predictability of the outcome.
Through the years, innovation models have been improved. However, we
notice from practice that current models are still too limited to describe the
diversity and dynamics of the real innovation world. This observation is
confirmed by the fact that the rate of failures in innovation remains high,
despite the extensive research in this field.

NEW BUSINESS

Innovation requires change, i.e. change in the way we think and the way we
act. These changes may be small or big. Fig. 1 schematically shows our
business development view on this matter (Berkhout, 2005).
In life cycle management (right-hand side of Fig. 1), the ambition is to
make continuous improvements on existing products and services. Changes
are incremental. In this way the life cycle can be extended for many extra
years. In industry the typical way of doing this is making use of a company
suggestion box: employees on the shop floor are invited to come up with
ideas for the improvement of existing solutions. The Japanese are very good
in this. They call it Kaizen.
In innovation management (left-hand side of Fig. 1), the ambition is to
come up with new concepts. This means moving away from existing solutions.
As a consequence, innovation shortens the life cycle of existing products and
services. Schumpeter calls this property ‘creative destruction’: life cycle
management (LCM) and innovation management (IVM) are in competition
with each other. This may cause major dilemmas in business development.
ix
x PROLOGUE

corporate portfolio management

innovation management life cycle management

market activities

Fig. 1. Business development may be focused on improving existing products and

services (‘Life Cycle Management’) or on designing new products and services
(‘Innovation Management’). Note: A smart business development strategy is to
manage a portfolio with a balanced mix of old and new.

Table 1. Innovation Management and Life Cycle Management Require

Different Working Environments. They Should not be Mixed in One
Organizational Unit.
Innovation Cycle for New Products and Services Life Cycle for Existing Products and Services

Long-term thinking Short-term thinking

New solutions Optimized solutions
Trying to be different Trying to be lean
Creative power Operational excellence
Path with many surprises Path with few surprises
Informal structure Formal structure
Inspiring leadership Competent management

It is not always realized that organizations for LCM and IVM require
significantly different cultures. This is summarized in Table 1. From the
observations in Table 1 it may be concluded that LCM and IVM should not
be mixed in one organizational unit. The experience is that a mixed
organization is neither one thing nor the other.1

INNOVATION DRIVERS
If we look at how innovation is fuelled today, two principally different
drivers can be distinguished. One is technological capability and the other is
societal needs.
Prologue xi

Innovations driven by new technology are of an exploratory nature.

Curiosity is used to make new scientific discoveries (part of the research
process) and creativity is used to generate new imaginative ideas. These
discoveries and ideas are combined to new concepts and then prototyped to
new technical functions (‘products’). Customers have not been identified yet,
at least not explicitly. Here, the innovation trajectory is often presented by
an ‘innovation funnel’, showing the process along a time path subdivided
into stages and decision points.
Innovations driven by customer needs are of a backcasting nature. The
specifications of critical and demanding clients are used to give direction to
the solving power of a company (or alliance of companies for that matter).
Here, the innovation process is often presented by an ‘innovation roadmap’,
showing step by step what needs be achieved to arrive at a solution that
meets user specifications.
In the real world, we can observe many different combinations of
technological capabilities and societal needs that drive the innovation
process. This dual aspect of the forces behind innovation is the topic of this
volume. Using an iterative process of forward-extrapolating emerging
capabilities and backward-extrapolating emerging needs, product-service
can be constructed that influence the strategic decisions how to proceed.
In many industrial sectors, we notice that the innovation culture is still
technology-push.

MANAGEMENT OF CHANGE

If we look at how processes of change are managed today, two principally

different styles can be distinguished. The first one is top-down strategic
planning and the second one is bottom-up adaptive learning (Ortt & Smits,
2006).
Projects being managed according to a strategic plan are regularly judged
by a committee of experts. Project continuation and resource allocation are
decided by this committee. Minimizing risk is an important issue in this
approach. This is the environment of incremental change as we see in LCM.
Projects managed by the self-organizing principle show that the
responsibility for success is delegated to the project teams. Feedback from
success and failure causes continuous adaptations along the innovation path.
These adaptations facilitate a learning process in the teams. Maximizing
opportunity is an important issue in this approach. This is the environment
of radical change as we see in IVM.
xii PROLOGUE

In the real world, a wide variety of combinations of centralized strategic

planning and decentralized adaptive learning can be found in innovation
management. This means that some compromise between minimizing risk and
maximizing opportunity is looked for. In the foregoing we have argued that
such a compromise is not a good choice for a single organizational unit: the
shop floor shows neither creative power nor operational excellence. It is,
however, a good strategy for business development at corporate level. By
forming a dynamic portfolio with leads, prospects, early and mature products,
a balanced mix can be created depending on strategic criteria with respect to
short-term profitability and long-term continuity.
Dynamic portfolio management is beyond the scope of this book. We will
concentrate on improving innovation management by giving new insight in
how innovation systems (should) operate.

DELPHI CONSORTIUM

As mentioned earlier, the purpose of innovation is to develop new business.

In this volume, the environment for new business is represented at three
levels of abstraction: (1) the framework for new business, (2) the cyclic
innovation model and (3) the open technological infrastructure. The
hierarchy ‘business–innovation–technology’ is considered to be an important
feature. It emphasizes that technological research is part of the innovation
model, and that the innovation model is again part of the framework for new
business.
This multi-level concept for new business creation was developed in the
last two decades by a long-lasting industry–university collaboration. In 1983,
the first author founded a geophysical research consortium, the Delphi
consortium,2 at the Delft University of Technology (TU Delft) in the
Netherlands. The mission of the consortium was, and still is, to develop new
imaging technology for the geo-energy sector. This technology collects with
the aid of sound (seismic waves) detailed geological information from below
the surface of the earth, typically up to 10 km of depth. This geological
information is vital for the industry. Not only in the search for new oil and
gas accumulations, but also in monitoring the exploitation of existing
reservoirs. The importance of seismic imaging technology is still increasing
because, nowadays, the easy-to-detect reservoirs have been found already.
The difficult ones are left. In 1982, the consortium started with five
contributing companies and today the consortium has grown to thirty
members. They not only include all major companies such as Shell and BP,
Prologue xiii

but also a large variety of innovative service companies from all continents.
This means that most parts of the entire upstream value chain are
represented in the consortium.
The biggest challenge has been to keep the existing members in the
consortium as well as to attract new companies. Through the years it
became clear that, to stay successful, the Delphi imaging technology should
evolve into new technical capability that would outperform the existing
generation of commercially available products and services. In addition, it
became clear that this new capability should generate new business that
would make the consortium fee for the Delphi members an attractive
investment. This means that it was not only necessary to be successful as a
professor of Geophysics (developing with my team promising geophysical
technology). It was also necessary to understand the bottlenecks and
opportunities in the industry, now and in the future. And it was also
necessary to know whether and how the Delphi technology was transformed
by the consortium members via new products and services into new
business. All experience from that extensive journey of 25 years have been
made explicit and the result can be found in the theoretical framework that
is described in part I of this volume. We are now translating all this
knowledge to a growing number of business areas outside the geophysical
community, where it all started.

CONTENTS OF THIS VOLUME

We have subdivided the contents into three parts:

I. Theoretical framework
II. Interaction with related scientific areas
III. New business applications
In the Epilogue, the authors summarize on what has been achieved so far
and what is next on the research program.

I. Theoretical Framework
The first three chapters contain the theoretical background. Chapter 1
summarizes the rich history of innovation models. In Chapter 2 the total
framework is explained, showing the advantages of the multi-level concept
and the importance of feedback. Chapter 3 attaches the names of prominent
entrepreneurial scientists to the cycles of the process model with the
objective to increase the understanding of the model.
xiv PROLOGUE

II. Interaction with Related Scientific Areas

The next three chapters describe scientific areas that are closely related to
innovation and new business. Chapter 4 discusses how futures research can
be improved by multi-mode foresighting, making use of the cyclic
interaction between those nodes. In Chapter 5 it is argued that market
research should be enriched by the social sciences cycle of the process model.
Emerging and receding markets should not only be observed, those
transitions should also be understood. Chapter 6 provides new insight in
intellectual property by making a new subdivision according to the cycles of
the process model.

III. New Business Applications

The last three chapters illustrate the link between technology, innovation
and new business in the sectors of telecommunication, new materials and
green chemistry. Chapter 7 shows how in the telecom industry the
combination of a well-documented transition path with the cyclic process
model helps to understand the contribution of an innovation project in the
total path of change. In Chapter 8, the cyclic process model is used to select
and position partners for the set up of a new business in the field of
Thixomoldings. Chapter 9 describes a strategy how to develop for multi-
value innovation in the chemical industry by using a revolutionary
technological process.

NOTES
1. It is appropriate to quote Nicholas Negroponte (MIT) here: ‘‘gradual growth is
the worst enemy of innovation’’.
2. http://www.delphi.tudelft.nl

ACKNOWLEDGEMENTS

Some of the chapters in this volume are co-authored by a number of our

colleagues. Chapter 5 with David Langley and Nico Pals of TNO In-
formation and Communication Technology in the Netherlands. Chapter 8
was a collaboration with Matthijs Kok of Accenture and Chapter 9 was co-
authored by Maaike Kroon of TU Delft. We greatly appreciate the very
valuable contributions of all our co-authors.
INTRODUCTION

Gary D. Libecap

Sustained modern economic growth is less than 300 years old. Most of the
human experience has been a Malthusian one – brief periods of relative plenty
for some, followed by collapse due to famine, drought, or other exogenous
factors, or due to internal factors such as war or excessive population growth
that outstripped the resource base. In all cases, general productivity growth
was short term and minimal and each society’s well-being was tied inexorably
to the condition and stock of natural resources.
Something changed, however, in the eighteenth century in Britian and
northwestern Europe – perhaps an unlikely area given that previous brief
flowerings of civilization and economic growth had occurred elsewhere – in
China, along the Indus Valley of India, and in the Middle East. Yet,
economic progress began not in those areas, but in Europe. It broke the link
to resource endownments and brought unimaginable levels of per capita
economic well-being. Many of the early sources of productivity growth began
in agriculture and transportation, but they spread to textiles and energy
sources. Gradually, the industrial revolution began. Factories developed; new
products and processes were created; markets expanded; and the human
condition vastly improved. Mortality dropped; life expectancy increased;
populations grew; cities emerged; education and health care advanced; culture
– elite and mass expanded; and eventually, environmental quality improved.
Modern developed societies appeared.
Today, for populations in the developed world, there is very little that
seems similar to what their remote ancestors experienced. And beginning in
the latter part of the twentieth century, the process of economic

The Cyclic Nature of Innovation: Connecting Hard Sciences with Soft Values
Advances in the Study of Entrepreneurship, Innovation and Economic Growth, Volume 17, 1– 3
Copyright r 2007 by Elsevier Ltd.
All rights of reproduction in any form reserved
ISSN: 1048-4736/doi:10.1016/S1048-4736(07)17011-9
1
2 THE CYCLIC NATURE OF INNOVATION

development again lurched forward with rapid increases in economic growth

in southeast Asia, China, and India. This has brought higher levels of
economic well-being to more of the world’s population than has ever been
experienced. In developed areas, new opportunities for human advancement
seem endless, and there are the means to address lingering problems of
health care, education, and environmental stress. Nevertheless, some areas
of the world that grew earlier have lagged – Latin America is a notable
example, and other parts, especially in Africa, have had limited successful
economic growth at any time. Indeed, the inhabitants of many parts of
Africa have more in common with their remote ancestors than with the
populations of Europe or North America.
The economic growth following the Industrial Revolution in Europe, the
remarkable expansion in parts of Asia today, and the less positive experience
of parts of Africa and Latin America direct attention to the sources of
economic progress. Why did the Industrial Revolution take place in Europe
in the eighteenth century? What are the sources of economic advancement
today? And why does economic development spread to some areas and not
to others?
A key component to the answer to all of these questions is technological
change. Technological change raises productivity and allows societies to go
beyond the constraints imposed by their resource bases. So, what is the
source of technological change? What promotes it? What hinders it? What
institutions are required? How does it take place? These are of course, the big
questions, and they have been addressed in a macro sense by many, including
David Landes (1982) in The Unbound Prometheus: Technological Change and
Industrial Development in Western Europe from 1750 to the Present, Joel
Mokyr (1990) in The Lever of Riches: Technological Creativity and Economic
Progress, Kenneth Pomeranz (2000) in The Great Diverrgence: China,
Europe, and the Making of the Modern World Economy. More micro-oriented
studies of research and development and technological change at the
organizational level are by Nathan Rosenberg (1982) in Exploring the Black
Box: Technology and Economics, David Mowery and Richard Nelson (1999)
in The Sources of Industrial Leadership and many others. Recently, the
importance of entrepreneurship has been emphasized by Carl Schramm
(2006) in The Entrepreneurial Imperative.
Despite all of this effort, technological change, productivity growth, the
contribution of basic university and govenment research, and of more
applied research and development within private firms remain critical issues
to be examined in more detail. This is where this volume, New Insights in
Innovation by Berkhout, Van der Duin, Ortt, and Hartmann, fits in. These
Introduction 3

authors, all from the Delft University of Technology in the Netherlands,

provide 9 chapters on the use of the Cyclic Innovation Model (CIM).
Basically, this model views technological change and innovation as complex
interactive outcomes of research in basic and applied science, leadership,
and market information feedbacks. Real problems are encountered;
research addresses them; processes, products, and organizational structures
are launched; consumers and other users respond; new research takes place;
modifications are provided; new technologies and innovations are offered.
This circular process involves many different collaborations and requires the
constant inflow of new information. As pointed out in the volume, some
organizational structures are better adapted to the interaction and feedback
necessarily required for modern technological change than are others. Both
theoretical arguments and case studies of mobile telecommunications,
magnesium thixomolding, and chemical and pharmaceutical production
processes are provided to illustrate the components of the CIM model of
innovation.
By emphasizing the circular, interactive process of innovation, the
authors provide a valuable contribution to our knowledge of how
technological progress occurs and the organization arrangments, intellectual
property protections, and overall incentives for risk-taking necessary to
sustain it. An outline of the volume is provided in the Prologue that follows.

REFERENCES
Landes, D. S. (1982). The unbound prometheus: Technological change and industrial development
in western Europe from 1750 to the present. NY: Cambridge University Press.
Mokyr, J. (1990). The lever of riches: Technological creativity and economic progress. NY:
Oxford University Press.
Mowery, D. C., & Nelson, R. R. (Eds). (1999). The sources of industrial leadership. NY:
Cambridge University Press.
Pomeranz, K. (2000). The great divergence: China, Europe, and the making of the modern world
economy. Princeton: Princeton University Press.
Rosenberg, N. (1982). Inside the black box: Technology and economics. NY: Cambridge
University Press.
Schramm, C. (2006). The entrepreneurial imperative: How America’s economic miracle will
reshape the world (and change your life). NY: Harper Collins.
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 PART I:
THEORETICAL FRAMEWORK
This page intentionally left blank
CHAPTER 1
INNOVATION IN A HISTORICAL
PERSPECTIVE

ABSTRACT
In order to understand today’s innovation models, we need to look at the
historical development of these models. This chapter describes the
succession of the R&D management generations and discusses the
innovation models in each generation (Section 2). The shortcomings of
these models and the requirements for improved versions are summarized
in Section 3. In Section 4, we will explain why new models of innovation
should be circular and multi-layered.

1. INTRODUCTION

This chapter takes a historical perspective on innovation. Different

generations of innovation models will be compared, and requirements for
new models will be discussed.

1.1. Innovation as Science or Craftsmanship

From the beginning of mankind on, humans have created innovations.

Before the nineteenth century, in many cases scientific findings,

The Cyclic Nature of Innovation: Connecting Hard Sciences with Soft Values
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Copyright r 2007 by Elsevier Ltd.
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ISSN: 1048-4736/doi:10.1016/S1048-4736(07)17001-6
7
8 THE CYCLIC NATURE OF INNOVATION

breakthrough technologies and revolutionary new products resulted from

the painstaking efforts of inventive individuals rather than from coordinated
innovation activities in large organizations. Some of these individuals were
scientists, like Huijgens, the Dutch mathematician, astronomer and
physicist who founded the wave theory of light in the seventeenth century.
Other individuals were anonymous craftsman like those who developed and
improved windmills during the Middle-Ages.
There was hardly any cross-fertilization or cooperation between scientists
and craftsmen. An illustration of the lack of relationship between science
and engineering can be witnessed in the early days of radio research.
Maxwell, a scientist, in 1864 described the principle of radio in theory, Hertz
proved the principle in an experimental setting in 1888. Although these
scientific contributions can be considered very important, the result was
hardly useable in practice. Marconi, an engineer, systematically started to
experiment with different types of antennas and radio systems, and thereby
managed to build a practical radio communication system that could be
used over long distances (Encyclopedia Brittannica, 2004). Scientists did not
cooperate to transfer their knowledge to engineers like Marconi. On the
contrary, they even seem to have disdained the efforts of the engineers a bit.
In some cases, for example in shipbuilding, a more or less systematic effort
to improve products can be witnessed even in the seventeenth century
(Encyclopedia Brittannica, 2004). Shipbuilding yards in this century were
relatively large organizations with a structure that resembled a modern project-
based organization. Their innovation efforts seem to herald an innovation
approach that would be more widely adopted about three centuries later.

1.2. The Rise of Research & Development (R&D)

At the end of the nineteenth century, systematic innovation activities in

large corporations were started. Innovation became Research & Develop-
ment (R&D). Large companies witnessed a gap between the scientific
findings from universities and their innovation requirements. Whereas
universities strived for revolutionary new knowledge, companies strived for
revolutionary new applications of knowledge in their products and services.
From the perspective of a company, innovation should be deliberately
aimed at achieving business goals. By the end of the 1870s, the first
industrial research laboratories were organized in Germany by synthetic dye
manufacturers, who realized that science can create patentable inventions
that, in turn, yield new and improved products. In the first decade of the
Innovation in a Historical Perspective 9

twentieth century, industrial research laboratories were also organized in the

US by General Electric and DuPont (Basala, 2001).
During the twentieth century, different approaches of how to manage
R&D can be distinguished. These so-called R&D management generations
will be discussed in the next section. The first, second and third generations
are based on the idea that R&D is basically performed within a company.
The innovation process during these R&D management generations is
represented by an essentially linear process. The origin of this type of
process lies in the fact that innovation is seen as a particular type of project
that can be planned upfront in subsequent phases.

1.3. The Rise of the Systems Approach

Three developments during the late twentieth century make this linear
approach outdated (Smits & Kuhlman, 2004). First, the increased
uncertainty in the market and technology demands an innovation approach
that enables learning by doing rather than planning up-front (Lynn,
Morone, & Paulson, 1996). Learning by doing requires a process that not
only enables iterations between steps but also requires various mechanisms
of feedback, and feed forward between the separate processes of change like
scientific explorations and technological research. The combination of these
subprocesses will result in something significantly more complex than a
single linear innovation process. Second, in the latest R&D management
generations, innovation processes are managed in networks of organiza-
tions. Instead of the closed innovation paradigm in which companies
develop innovations on their own, an open innovation paradigm emerges in
which organizations cooperate with partners, and sell and buy innovation
components or subresults in different phases of the process (Chesbrough,
2003). Tuning the processes from different organizations will be much more
complex than managing a simple, linear model in a single organization.
Third, innovation processes are influenced by actors and factors on different
levels of aggregation. Innovation can be studied on the level of a nation, an
industry, an organization or on the level of a project (Freeman, 1997).
These developments require a system perspective. The system approach
deserves more attention because it can describe the interlinked activities of
scientific explorations, technological research, product creation and market
transitions. Innovation occurs in the context of a so-called innovation
system (Freeman & Lundvall, 1988; Nelson, 1993; Lundvall, 1992; Barré,
Gibbons, Maddox, Martin, & Papon, 1997). A system perspective makes
10 THE CYCLIC NATURE OF INNOVATION

sense for various reasons. First, the successful market introduction of an

innovation often depends on the adoption of new organizational practices
(in terms of marketing, manufacturing, and so on), the availability of
complementary products and services, infrastructural (re-)arrangements,
and so on. Second, firms cannot innovate successfully without institutions
(rules and standards), qualified people, an adequate infrastructure and a
high level and tuned knowledge infrastructure.

2. THE R&D MANAGEMENT GENERATIONS

IN MORE DETAIL

Table 1.1 provides an overview of four generations of R&D management on

the basis of various sources (Liayanage, Greenfield, & Don, 1999; Miller,
2001; Niosi, 1999; Rothwell, 1994; Roussel, Saad, & Erickson, 1991). The
first column shows the period in which a specific generation is thought to
prevail. The second column describes the philosophy and main character-
istics of each generation as well as their main disadvantages. The last
column briefly mentions the structure of the innovation process that
prevailed during each generation (Chiesa, 2001).

2.1. The First Generation of R&D Management

The first generation of R&D management considers scientific discovery as

the starting point of innovation processes. At that time, universities are
thought to be the primary source of scientific discovery. As a result, R&D
organizations are structured like universities. Departments in R&D institutes
are essentially mono-disciplinary. In general, the structure of innovation
processes is linear sequential and of a technology-push nature (Fig. 1.1).
During the process, different departments subsequently contribute to the
innovation. This type of process has yielded numerous breakthrough
technologies such as the laser, nuclear power plants and DNA ‘finger prints’.
This first generation of R&D management has significant disadvantages.
The final responsibility for the innovation is not always clear if it moves from
department to department because a project management approach is not yet
adopted. The lack of a project approach also implies that little attention is
paid to the overall transformation process from idea to innovation. Scientific
freedom of professionals seems more important than relevance (in terms
of commercial results) for the company. Innovation does not always have
Innovation in a Historical Perspective 11

Table 1.1. Short Description of Four Generations of R&D

Management.
Period of the Description of the Generations Structure of the Innovation
R&D Processes
Management
Generations

1st generation Technology (science) push Linear sequential process from

(1950s–mid- The process of commercialization of department to department,
1960s) technological change, i.e., the starting with scientific
industrial innovation process, was discovery
generally perceived as a linear
progression from scientific
discovery, through technological
developments in firms, to the
marketplace. Because science is
considered the starting point, R&D-
institutes are structured like
scientific institutions
Disadvantages
 Little attention is paid to the
transformation process itself, or the
role of the market place
 Scientific freedom is considered
more important than the relevance
and accountability of the research
itself
 Innovation projects have no
strategic goals, maybe short-term
goals on the level of the project.
There is no direct relationship with
general management
 Commercial aspects are
incorporated quite late in the
innovation process.
 Responsibility for the research is
handed over from manager to
manager (no project leader is
appointed) and, therefore, final
responsibility is not clear
 Professional project management
practices are not applied
12 THE CYCLIC NATURE OF INNOVATION

Table 1.1. (Continued )

Period of the Description of the Generations Structure of the Innovation

R&D Processes
Management
Generations

2nd generation Market pull (need-pull) Linear sequential process in a

(mid-960s– The market role is the source of project, starting with market
early 1970s). innovations and the R&D need
organization merely has a reactive
role. Because innovation processes
are managed as projects, R&D-
institutes are organized in a matrix
Disadvantages
 Neglects long-term R&D programs
and, therefore, leads to
‘‘incrementalism’’ only
 Projects are individual units,
strategic relationships between these
projects and corporate goals were
not yet established. It was impossible
to serve company goals that
superseded the interests of separate
internal clients
3rd generation Market pull and technology push Model of an essentially
(early 1970s– combined sequential process with
mid 1980s) Innovation is a process that, at each feedback loops and
stage, enables interaction between interaction with market needs
technological capabilities and and state of the art technology
market needs. This interaction is at each stage
generally facilitated by intra- and
extra-organizational communication
networks. These networks link R&D
to in-house functions and link the
firm to scientific and technological
communities as well as to the
marketplace. Innovation projects are
considered to be part of a portfolio
of projects. The goals of this
portfolio are aligned with the
corporate strategy
Disadvantages
 Focuses on product and process
innovations rather than market and
organizational innovations
Innovation in a Historical Perspective 13

Table 1.1. (Continued )

Period of the Description of the Generations Structure of the Innovation

R&D Processes
Management
Generations

 Focuses on the creation of

innovations rather than the
exploitation
 Focuses on evolutionary
improvements rather than
breakthroughs
4th generation R&D in alliances; Parallel and Coordinated process of
(mid-1980s– Integrated R&D, from R&D to new innovation in a network of
early 2000s) business development (NBD) partners. The required
R&D departments belong to a network coordination is often attained
of internal departments and external by system integration (with
organizations. R&D management key suppliers and customers)
means managing research links, and parallel development (of
networks and external research components or modules of the
environments. Because of the innovation)
number of actors involved,
development processes are scheduled
in parallel. Parallel development can
significantly increase product
development speed. The 4th
generation is broader than the 3rd
since it includes business and market
models that encompass the
management of knowledge,
technology and market/industry
infrastructure
Future possibilities for improvement
 Increased networking and
integration with internal and
external partners
 Increased use of information
technology to cooperate and
communicate
 Increased flexibility of the structure
of innovation processes

Note: The description is based on Liayanage and Greenfield (1999), Miller (2001), Niosi (1999),
Rothwell (1994) and Roussel et al. (1991).
14 THE CYCLIC NATURE OF INNOVATION

Basic Design and

Manufacturing Marketing Sales
science engineering

Fig. 1.1. The structure of a first generation innovation processes.

strategic goals and there is hardly a relationship between researchers

and general management. Market needs and commercial aspects are
incorporated late into the process. As a result, failures because of a lack of
market need are discovered quite late. During the first generation of R&D
management, much effort is put into developing unsuccessful innovations.

2.2. The Second Generation of R&D Management

During the second generation of R&D management, it is recognized that

market aspects should be considered earlier in the process. In fact, the
market is now regarded as the main source of new ideas. Consumer research
becomes the basis for new product ideas (Fornell & Menko, 1981).
Innovation processes are often managed like multi-disciplinary projects in
which R&D and marketing personnel collaborated. In large companies,
R&D projects are often performed for internal company clients. A project
leader, rather than subsequent managers of departments, has the final
responsibility for the overall transformation process. Along with multi-
disciplinary projects, many R&D institutes adopt a matrix organizational
structure. The structure of the innovation process remains essentially linear
sequential, but of a market-pull nature (Fig. 1.2).
The approach of the second generation of R&D management leads to
new disadvantages such as a focus on small improvements of existing
products. The main reason for this focus is that potential consumers
can hardly express any need beyond the needs solved by familiar products
(Bennett & Cooper, 1982; Tauber, 1974). After the second generation of
R&D, the increased influence of marketing in product development is
severely criticized since it neglects the long-term R&D programs aimed
at developing the future technological assets of a company (Bennett &
Cooper, 1982). Another drawback of the second generation is that
the innovation projects are treated separately. As each project serves the
goals of different internal company clients, strategic relationships
Innovation in a Historical Perspective 15

Market need Development Manufacturing Sales

Fig. 1.2. The structure of a second generation innovation processes.

amongst the innovation projects are not established. Relationships between

the projects and the strategic goals of company are not established either.

2.3. The Third Generation of R&D Management

The third generation of R&D management combines the market-pull

and technology-push approaches. Projects are combined in programs
that, in turn, are directly related to strategic company goals. The structure
of innovation processes remains essentially linear, but with feedback loops
and constant interaction with market and technological factors. Companies
try to find partners with essential technological and market knowledge.
Because of this interaction, communication networks are formed with these
partners (Fig. 1.3).
The main disadvantage of the third generation is a focus on product
and process innovations (Miller, 2001). The exploitation of product and
process innovations in many cases also requires organizational and market
innovations. When a manufacturer, for example, is used to produce a
limited number of product variants but after a change in strategy enables
customers to order semi-custom built products, he not only has to change
his products and production processes, but he must also change the
interaction with his customers and the way in which the production process
is planned. The necessary changes in work processes will inevitably bear on
the organizational structure. Traditionally, R&D labs have no experience
with organizational and market renewal, which used to be the domains of
top managers and marketers. Involvement of top managers with R&D and
close links between innovation processes and strategic company goals,
facilitate the transfer of innovations and knowledge from the R&D labs to
the parent company. The transfer of innovations from the company to the
market, however, is hampered by a limited experience of the R&D
departments with market and organizational renewal. In summary, a
disadvantage of the third generation is its focus on initiating innovations
rather than exploiting them.
16 THE CYCLIC NATURE OF INNOVATION

New Needs of society

need and the marketplace

Idea Research, Market-

Prototype Marketing
generation design and Manufacturing place
production and sales
development

New
State of the art intechnology and production
tech

Fig. 1.3. The structure of a third generation innovation processes.

2.4. The Fourth Generation of R&D Management

During the fourth generation of R&D management, innovation projects are

no longer carried out in the isolation of R&D departments, but are carried
out in large networks with internal partners (other company departments)
and with external partners (universities, suppliers, customers, etc.). More
specifically, the degree of integration of innovating companies with their
suppliers and customers increases. New products are developed more
quickly and more frequently because of parallel innovation processes.
Exploitation has always been a bottleneck of R&D. The fourth generation
pays more attention to the market and the organizational innovations
required to successfully introduce product innovations. The term innovation
broadens out from product innovation to process-, organization- and
market-innovation (Trott, 2002). The traditional R&D department gradu-
ally incorporates the new business development department of a company.
A single type of innovation process representing this generation of R&D
management practices can hardly be distinguished.
A disadvantage of the fourth generation of R&D management is the
complexity of R&D in general, and the innovation processes in particular.
To handle this complexity, more flexible organizations and the application
of information technology are proposed. Some authors describe a fifth
generation of R&D from the early 1990s on (Rothwell, 1994). We believe
that this ‘fifth generation’ is merely an implementation of the fourth
generation, a view that Rothwell appears to share. ‘‘The development of 5G
Innovation in a Historical Perspective 17

is essentially a development of the 4G (parallel, integrated) process [y]’’

(Rothwell, 1994).
In summary, Table 1.1 shows that R&D management has changed
significantly in five decades. Organizational structures of R&D departments
evolved from a functional structure to a matrix structure, and finally to
more advanced network structures. Each R&D management generation is
characterized by an innovation process with its particular disadvantages.
New generations are figured out to overcome the disadvantages of a
previous generation but inevitably lead to new disadvantages.
So far, the description focused on internal considerations, i.e., how to
overcome disadvantages of subsequent R&D management practices. From
the 1950s on, conditions in the external environment of innovating
organizations have increased the pressure on R&D management in general
and on the management of innovation processes in particular. It is
important to notice the main changes in the external conditions since these
provide additional explanations for the changes in these practices (for a full
discussion of these conditions see van der Duin, Ortt, Hartmann, &
Berkhout, 2006 and Ortt & Smits, 2006). In short, some of the main changes
in the external conditions are:

 Competition has increased in many markets. Liberalization of markets

and globalization enormously increases the number of potential
competitors, many of which try to develop and introduce innovations
and thereby increase the pressure on innovation processes in separate
companies.
 Technologies that are required to develop new products have evolved. The
number of technologies that have to be mastered to produce a mobile
phone, for example, has increased considerably (Tidd, Bessant, & Pavitt,
2001). Therefore, technological competences to develop new products
have become too complex to be mastered by a single company.
 Globalization forces companies to focus on core competences. As a result,
some of the competences required to innovate are no longer available in a
single firm (Prahalad & Hamel, 1994). The alliances that are needed to
innovate require increased coordination and introduce new risks.
Alliances are often aimed at increasing development speed, and decreasing
the cost and risk of development. But these alliances also demand
additional management attention (Tidd et al., 2001).
 The kind of innovations that R&D should provide broadened out to
comprise of new products, as well as the new production and distribution
processes, organizational and market renewal that come along with these
18 THE CYCLIC NATURE OF INNOVATION

new products. Formerly distinct activities like new business development,

new product development, market development and development of new
organizational structures should be coordinated to form a consistent
picture (Trott, 2002).
 New sustaining technologies, like computing and communication
technologies, enable a more advanced and efficient management of the
design, manufacturing, marketing and distribution processes with
regard to innovations (Miller, 2001). Yet, incorporating these techno-
logies in R&D processes and fully exploit their potential implies that
R&D functions and the parent companies have to renew their own
organization.
 Customers are generally more demanding with regard to products.
Products have to be personalized, of high quality, easily understandable,
yet with all possible features. Moreover, companies are held liable for the
consequences of their products. An increased government and public
scrutiny of business decisions in ethical, social and environmental issues
can be noticed (Gupta & Wilemon, 1996; Wind & Mahajan, 1997).

The result of the combination of the efforts to improve the practice of

innovation and the external pressures on innovation are that R&D
management in general, and innovation processes in particular have become
increasingly complex. In the successive generations, new activities are added
to (rather than removed from) the innovation process and new linkages
between actors are added to (rather than removed from) innovation
processes.
The increasing complexity of innovation processes is shortly summarized.

 The organization of innovation changes from a process in which an

innovation is handed over from department to department (the first
generation) into a multi-disciplinary project process (later generations).
During the third generation, innovation projects become organized in
programs that are directly related to the company strategy. In the fourth
generation, innovations are organized in networks of external and internal
partners.
 ‘Technology push’ and ‘market pull’ approaches from the first and second
generation are combined in later generations because market and
technological aspects are considered to be important throughout the
innovation process. Technology and market factors are sometimes
depicted as two levels, along a sequential process of innovation.
Innovation in a Historical Perspective 19

 Feedback loops are introduced in innovation processes. Like many

complex and multi-phase processes, new findings during an innovation
process sometimes imply that previous steps must be re-evaluated.
 Activities in innovation processes are organized more in parallel to
increase the speed of development.

3. THE PROBLEMS WITH FOURTH GENERATION

MODELS REQUIRE A FRESH APPROACH

This section will discuss some of the problems in recent models of

innovation management. The success rate of innovation processes has
remained low over the last decades. Crawford (1979) estimated that during
the 1970s, one-third of the new products that were introduced in the market
become a success. Similar results are found by Booz, Allen, and Hamilton
(1982). It is remarkable that this success rate has not increased significantly
in the last decades (Crawford, 1987, 1977; Wind & Mahajan, 1997). On the
one hand, it can be stated that the environment of innovation processes has
become much more complex so attaining the same success rate as 30 years
ago may require a lot of improvement. On the other hand, problems with
recent models of innovation may hamper an increase of this success rate.
These problems are reflected in the fact that many companies lag behind in
their innovation practice. Many companies still apply intuitive and informal
ways to innovate (Griffin, 1997; Nessim, Ayers, Ridnour, & Gordon, 1995).
Different innovation practices are reported across companies (Griffin, 1997).
Empirical research shows that in the 1990s many companies adopted
advanced methods of R&D management, although at the same time a
remarkably large percentage of firms did not apply any formal procedures
with regard to product development (Griffin, 1997; Nessim et al., 1995).
Such innovation practices are considered predating even the first generation
of R&D management.

3.1. An Integrated Model Is Lacking

So far, incremental changes in the model of innovation management are

implemented. Sometimes, solutions for specific changes in the environment
are provided separately, such as suggestions on how to increase development
speed in order to cope with the decreasing product life cycles (Cordero, 1991;
Rothwell, 1994; Kessler & Chakrabarti, 1999; Smith, 1999), or suggestions on
20 THE CYCLIC NATURE OF INNOVATION

how to make products that fulfill the needs and wants of customers
(Greenhalgh, 1985). An integrated model, however, is lacking.

3.2. Current Models Diverge Considerably from the Actual Practice of

Successful Firms

Different innovation practices are adopted within successful companies.

From 1990 to 1995, the percentage of US firms using multiple product
development structures increased from 53 to 62% (Page, 1993). Apparently,
the idea of one mainstream model does no longer reflect the actual practice
of companies that deliberately adopt multiple approaches.

3.3. Current Models Lack the Flexibility to Adapt to the Context

Many companies believe that different kinds of processes are appropriate in

different situations. Empirical results prove that different practices yield the
best performance in different situations (Griffin, 1997; Miller & Blais, 1993;
Nessim et al., 1995). The best companies do not succeed by using just one
product development practice more extensively or better, but by simulta-
neously using a number of different practices more effectively (Griffin,
1997). The recent models of innovation management lack the flexibility to
adapt to different situations.

3.4. Current Models Focus on Technology Product Combinations

In innovation management the focus has been on designing new products.

In the previous section, it is described that the kinds of innovations that
R&D should provide have broadened out to comprise of new products, as
well as the new production and distribution processes, organizational and
market renewal that come along with these new products. The third
generation models state that market and technology information should be
applied throughout the entire innovation process, but these models still
focus on one type of innovation.

3.5. Current Models Focus on Creating Innovations Rather Than

Exploiting Them

Many companies suffer from a very valuable yet unused pile of innovations.
Innovation models have focused on creating innovations but forgot to
Innovation in a Historical Perspective 21

describe how the resulting innovations can be successfully exploited in the

market. Chesbrough (2003) suggests creating a preliminary business model
and testing it together with the product concept to increase the chances that
an innovation can be successfully exploited once it is developed. The open
innovation approach also means that already during the innovation process
subresults of this process can be sold or bought (for example by licensing in
or licensing out). So, even before the market introduction of an innovation,
exploitation of the result is possible.

3.6. Current Models Are Essentially Linear

A linear sequential innovation model that just incorporates technology and

market information throughout a product innovation process does no
longer suffice to describe the iterative and very flexible processes that are
required in uncertain circumstances. Lynn et al. (1996) describe such a
process, referred to as probe and learn, in which product concepts are
introduced in the market, improved on the basis of the first market results,
re-introduced, and so on.

3.7. Current Models Focus on the Level of the Innovation Project

and the R&D Organization

Innovation can be described at different levels of aggregation like the

project, organization and industry or country level. On the project level, the
focus is on a singular innovation process, its staffing, structure, procedures,
and so on. On the organization level, the focus is on the position of
innovation in an organization. On the industry level, the focus is on the
network of organizations in an industry. On the country level, the focus is
on the all sustaining and stimulating facilities, like the regulation and
legislation, the availability of education facilities and the existence of
complementary partners that foster innovation in general and across
industries. In general, innovation management models focus on the project
and organization level of innovation. However, the previous section clearly
indicated that multiple partners from different organizations nowadays
cooperate to innovate. In order to describe and analyze these patterns of
cooperation, a higher level perspective should be chosen. A system
perspective can be adopted to form models of innovation that describe
multiple subprocesses of renewal.
22 THE CYCLIC NATURE OF INNOVATION

4. A NEW DIRECTION IN MODELING INNOVATION:

CIRCULAR AND MULTI-LAYERED

New models of innovation are required to cope with the issues in the previous
section. In this book, we take the stance that the purpose of innovation is
to create new business and that an important enabler of innovation is new
technology. As a consequence, innovation systems function as an interface
between new technology and new business. Together they form a multi-layer
environment that describes the wide variety of activities on three inter-
connected layers. These layers imply that innovation is more than technology,
and business is more than innovation.
In addition, the involved processes in innovation are not positioned in
a chain: together they form a ‘circle of change’. Like in a circle, there is no
fixed beginning or end. To put it differently: Each of the positions can turn
out to be the beginning in specific cases of innovation. In some cases, market
transitions turn out to be the starting-point, other cases start with a scientific
discovery. Moreover, the circle may be completed multiple times and thereby
reflects the iterative nature of many innovation processes. The approach to
connect different processes of change reveals new types of interactions such
as the interaction between the soft sciences and engineering issues or the
interaction between the hard sciences and social values.
We will show that this new way of positioning – circular and multi-layered
– not only enables a better understanding and explanation of the processes
that we observe in practice (why they succeed or fail), but also provides new
ways to govern and to influence those processes.

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Tidd, J., Bessant, J., & Pavitt, K. (2001). Managing innovation; integrating technological, market
and organizational change. Chichester: Wiley.
Trott, P. (2002). Innovation management and new product development. Harlow: Prentice-Hall.
Wind, J., & Mahajan, V. (1997). Issues and opportunities in new product development: An
introduction to the special issue. Journal of Marketing Research, 34(February), 1–12.
CHAPTER 2

CONNECTING TECHNICAL
CAPABILITIES WITH SOCIETAL
NEEDS: THE POWER OF CYCLIC
INTERACTION

ABSTRACT

Innovation models should give insight into the success and failure of
generating new business. Considering the high degree of complexity, it is
proposed to view such models at different levels of abstraction. It is also
proposed to make feedback an essential property of the process model.
The result of this line of thinking is an integrated environment for the
creation of new business. In this multi-layer environment, innovation is
positioned as the interconnecting activity between the development of new
technology and business, and the involved process model is represented by
a circle of change.

1. INTRODUCTION

In former times, economies were largely based on the traditional production

of goods, using the two factors of production: capital and labor.
Industrialization and globalization have brought about growing competition,

The Cyclic Nature of Innovation: Connecting Hard Sciences with Soft Values
Advances in the Study of Entrepreneurship, Innovation and Economic Growth, Volume 17, 25–48
Copyright r 2007 by Elsevier Ltd.
All rights of reproduction in any form reserved
ISSN: 1048-4736/doi:10.1016/S1048-4736(07)17002-8
25
26 THE CYCLIC NATURE OF INNOVATION

forcing companies to produce goods with higher performance and at lower

cost. This started the knowledge economy, in which smarter tools and
machines expanded possibilities; formal knowledge became the third factor
of production.1 Workflows were designed more intelligently, and training of
employees assumed ever greater importance. Today, technical know-how
and improved skills, particularly in the field of information and commu-
nication (IC), have made existing work processes far more productive. We
can also observe that, due to outsourcing and offshoring, different parts of
the value chains are spreading out geographically.
Yet, we have not mentioned the most important development in the
economy. The real changes are now taking place in the so-called innovation
economy, in which – besides capital, labor and knowledge – creativity is
the fourth principal factor of production. The emphasis on creativity makes
the difference. In a knowledge economy logic is predominant, while in an
innovation economy everything revolves around imagination.2 In an inno-
vation economy, processes are not only designed more efficiently (with
knowledgeable solutions), above all they are made more effective (with
creative solutions). Innovation starts, therefore, with ‘management of ideas’.
Florida (2003) correctly argues that creativity has become the principal
driving force behind sustainable economic growth, and Brown (2003)
concludes that the innovation process itself needs to be innovated as well.
We can best describe the innovation economy as a creative knowledge
economy. An apt description of the activities in an innovation economy is
‘creative enterprise with knowledge’. It is not just a question of creativity or
knowledge or enterprise. It is the combination that counts: creativity and
knowledge and entrepreneurship – that is what makes the innovation
economy so powerful in generating new business (Berkhout, 2000).

1.1. More than Technology

The whole idea behind innovation is to successfully bring new (systems of)
product–service combinations to the market. Market acceptance is, there-
fore, an essential aspect of innovation. No matter how creative the design
and how clever the development behind a technological invention may be, it
can never be classified as an innovation if market introduction fails. There
can be no innovation without customers.3 In other words, new product–
service combinations may only be viewed as innovations if they fulfill an
explicit or implicit social need.
Innovations can also be geared toward production processes. That is what
we call process innovation. It involves technological processes (clever
Connecting Technical Capabilities with Societal Needs 27

manufacturing), logistics processes (clever supplying) and social processes

(clever organizing). Process innovation can precipitate great strategic
advantages over competitors, not only in terms of costs but also from the
perspectives of environment and safety. It is interesting to observe that with
integrated process innovation, the outsourcing of production to low-wage
countries may be avoided or even reversed. Process innovation is internally
oriented, which is why it is also known as invisible innovation. In this
chapter, we will argue that process innovation plays a key role in reversing
the over-exploitation of planet earth by mankind. Chapter 9 will illustrate
this by an example of new technology that may have far-reaching
consequences for the chemical industry.
Finally, innovation can also be directed toward the business model. How
can I position my company within the entire – often geographically
distributed – value chain? Do I change the business emphasis from hardware
to software, from products to services? What will I do myself and what will
I outsource? How will I cooperate with my partners and suppliers? How will
I utilize the creativity of (potential) customers? How do I combine financial
targets with environmental goals? It is generally difficult to copy an
innovative business model. Indeed, such an innovation is therefore the
dream of every CEO (Business Week, 2006).
In the discussion on how to strengthen innovation, industrial sectors often
proclaim that more money needs to be spent on technological research.
Investing in the production of new technical knowledge – technological
progress – is beyond any doubt an essential factor, but one that gives us a
one-sided view of innovation. In fact, knowledge of changes in society –
societal transitions – and the effect it has on markets is a decisive matter,
precisely for innovation. More to the point, the two-way interaction between
hard (technical) and soft (social) knowledge is something that needs more
attention.
Innovation is, therefore, more than the development of technology. It is a
matter of bringing together what is technically possible and socially desirable.
Here, the commercial aspect operates as an integral part of society at large.
The behavior of people, as consumers and producers, is central.

1.2. More than Innovation

The purpose of innovation is to generate new business. Therefore,

innovation has not only established itself as a fact of life for firms to stay
competitive, it is also becoming an important instrument for governments to
improve the quality of life by influencing the way business is done. As a
28 THE CYCLIC NATURE OF INNOVATION

consequence, innovation has to be all about a community’s future, about

how we plan to realize our ideals. Not only nationally, but also at global
scale. It is time we rethink our innovation models. In this chapter,
rethinking will be done at different levels of abstraction: from leading
innovative organizations to managing technological projects.

2. OPEN LEADERSHIP

Fig. 2.1 shows the basic elements – image of the future, transition path,
process model – which are needed to guide change for new business.
Leadership provides the function of, and the cement between, these elements.
The traditional way of interpreting leadership – a hangover from the
previous century – primarily positions leaders as managers that concentrate
on the life cycle of existing products and services. They largely focus on
controlling internal production processes and the reduction of costs
(Volberda, 1998). That management focus keeps them fully occupied,
which is why they hardly get around to key questions like: where do I want

image
of the future
internal external
ambitions trends
vision

open
gy cap
te leadership ab
s tra ilit
y

transition process
path model

innovation
projects
Fig. 2.1. To cope with change, leadership must be future oriented. Note: It should
give direction to an organization by providing an image of the future, a transition
path to roadmap that future and a process model to realize that future. Images of the
future, transition paths and process models reveal the way how new business is
generated. Therefore, Fig. 1 acts as a framework for new business.
Connecting Technical Capabilities with Societal Needs 29

to go with my organization? Do I have the right people for that? What

do users demand of my products, now and in the future, and how am I going
to tackle external uncertainties? In stock exchange listed companies
shareholder-steered thinking has enhanced that kind of closed leadership.
Administrators are under pressure to realize fast returns (quarterly figures)
and to tick off points in complicated legal checklists (compliance rulings). In
such companies, the top management level is under tremendous pressure.
Fig. 2.1 visualizes the different aspects of leadership that are needed
to manage innovative companies. Leaders must have a passion for the
future: showing a vision that serves as a beacon for the entire organization,
detecting early changes in the market (as an integral part of societal
transitions), turning such changes to good advantage in line with their own
vision, and convincing shareholders that the right direction is being
followed. Leadership must also be strategic: making transition paths
visible, providing the contours of the company course, defining the required
in-house competencies and showing how to combine those with others
(who do I need to collaborate with?). And, last but not least, leadership
must also be angled at capability: selecting people, inspiring people and
connecting people to achieve process excellence. Differences in emphasis on
the three modules determine the type of leadership. In innovation, the
ultimate requirement of leadership is to be successful in realizing new
business.
In the following we will see that in situations with high uncertainty, such
as innovation, transition paths may be very unpredictable. This means that
the road to the desired future should be kept wide open to new concepts.
This requires a style of so-called open leadership, where it is realized that the
transition path should represent a voyage of discovery (innovations build on
innovations), and where the quality of the process together with the
capability of the organization determine the success along the path.

2.1. Image of the Future

In the Western world, there is no such thing as a formalized view of the

future, no integrated vision telling which route to take. Of course, we do not
want a mechanistic blueprint, but there are certain notions that indicate the
direction we want to follow. There are post-industrial images that direct our
thinking and actions, which offer perspectives and vitalize society with
renewed energy. These notions are not only linked to financial betterment
and material growth, but also to satisfaction and fulfillment. In fact, they
particularly involve good stewardship to further improve the quality of life.
30 THE CYCLIC NATURE OF INNOVATION

What kind of living environment do we leave behind for our children and
grandchildren?
Fig. 2.1 demonstrates that an image of the future has two sides. On the
one hand, there are the worldwide (changes in) trends and scenarios: for
which product–service combinations are large-scale market introductions
expected, and at what moment in time? Worldwide, various international
institutes have already published a number of technological prognoses
and global market explorations.4 They act as strategic information sources
that endeavor to clarify the chances of breakthroughs. They function as
an objective framework of reference, as global background infor-
mation sources.
On the other hand, there are in-house ambitions attached to any image of
the future: in what areas does an organization excel, and does it want to
maintain its head start in that area and continue to further develop that?
Good examples are the priority areas as laid down in the European
framework themes, the key areas relating to the Dutch Innovation Platform
and the sectors in which a company wants to be a market leader. For
example, the electronics firm Philips has opted for the key areas of lifestyle
electronics, high-tech lighting and medical equipment. Within those three
key areas Philips wants to remain among the best in the field.
The combination of external trends and internal ambitions must result in
a focus that provides a direction for organizations to realize a profitable and
sustainable business. Note that an image of the future does not specify how
to reach that future. It provides a direction only, a beacon, common to the
whole organization.

2.2. Transition Path

The transition path visualizes the envisaged road – from the present to the
future – by showing the anticipated innovations for the short, medium and
long-term. In that way, the roadmap is formulated in terms of time paths
that reveal new product–service concepts for the near and far future. This is
schematically shown in Fig. 2.2. Within such an integrated innovation
program all the various short, medium and long-term projects are linked so
that cohesion is created between the envisaged market introductions of new
products and services with different time horizons. Note that in this way
ambitious business targets are realized in a stepwise fashion. In The
European Centre for Innovation (ECI), this approach is called ‘kaleidoscopic
programming’. In a kaleidoscopic program new innovations will build upon
existing innovations.5
Connecting Technical Capabilities with Societal Needs 31

image of the
future

introduction market
innovation trajectory

present
time
Fig. 2.2. The transition path connects the past via the present with the future.
Note: Along such a path innovations build on innovations. Therefore, a transition path
is not straightforward. It is full of crossings with business dilemmas. A perceived main
road may lead to a dead end, and side streets may become a vital part of the main road.
In innovation, a transition path should represent a voyage of discovery.

The new business strategy of an organization, given by the roadmap along

the transition path, can be judged by looking at how the following dilemmas
are being handled:

 short versus long-term projects

 closed versus open networks
 producer versus user solutions

Following Carlota Perez (2002), we are now beyond the turning point of
the fifth technological revolution, i.e., the era of IC. According to Ray
Kurzweil (2005), we will enter the next technological revolution around
2020, i.e., the era of genetics, nanotechnology and robotics (GNR).
Therefore, a balanced innovation strategy should aim at a kaleidoscopic
program showing the deployment of IT-technology (short-term projects)
and the development of GNR-technology (long-term projects).
Henry Chesbrough (2003) shows that innovation becomes more and more
a process that crosses traditional borders, both geographically and
organizationally: ‘open innovation’. Companies become aware that the
chance of success is higher if excellence within the firm is combined with
excellence from outside, leading to global networks of talents. This important
trend in innovation will cause a revolution in today’s institutional structures.
32 THE CYCLIC NATURE OF INNOVATION

Eric von Hippel (2005) shows that users of products and services – both
firms and end users – are increasingly contributing to the innovation process:
‘democratizing innovation’. Companies become aware that not only critical
lead users but also talented and passionate communities may come up with
creative improvements and solutions that are of interest to large markets.
Choices within all three dilemmas – short versus long, closed versus open,
producer versus user – determine the innovation strategy of a company, i.e.,
how to move along the transition path to the preset goals.
In innovation, transition paths are by definition unpredictable. The
degree to which things can be steered is limited. Just as with a family tree,
some braches come to a dead-end, whilst others perpetuate the line of
progress, sometimes due to serendipity. Obviously, such progress is guided
by the preset view of the future. Indeed, without any concrete ideas about
the future, ambitions would branch off in all directions. This is illustrated by
Fig. 2.2. Note that in open innovation, a side street for one company may fit
in the main road for another company.
Well-documented transition paths contain vital information that helps
companies to better understand the present and, above all, it helps
companies to avoid repeating the same mistakes in the future. Therefore,
documenting transition paths should be an important part of their new
business strategy.

2.3. Process Model

Traditional innovation models describe the processes along the transition

path as a pipeline: government investments in scientific research must lead
to application-oriented development routes which subsequently – with the
aid of risk capital – ought to result in successful market introductions (see
Chapter 1). If we invest enough in science and technology then the rest will
work out all right, that is the reasoning.6 Such a linear knowledge-push
approach in innovation policies is still taking place on a large scale, with the
result that the innovation system cannot flourish.
Chesbrough (2003) shows that the in-house, stage-gate model – a pipeline
where promising ideas are developed toward successful products and
services, can be extended to a more open version, that allows external
interactions from outside the pipeline. This pipeline was extended by Robert
Kirschbaum (2005) by introducing the possibility of spin-in and spin-out.
Successful innovation processes are not a matter of one-way pipelines, but
rather of interlocking cycles with feedforward and feedback connections: from
linear to nonlinear thinking. In that way, a dynamic environment is created in
Connecting Technical Capabilities with Societal Needs 33

which the soft sciences are linked to engineering, and where the hard sciences
connect with valorization goals. The links, which go forwards and backwards
(cyclic processes), are an essential feature of dynamic systems (Forrester, 1961;
Senge, 1994). To improve the scientific insight into innovation processes, we
should make feedback more explicit in our models.
In the foregoing we have argued that in innovation the transition path
should represent a voyage of discovery (new innovations build on existing
ones) and, therefore, any strategic planning should not be biased toward old
thinking but should be wide open for new concepts. Breakthroughs are the
result of surprises.
In addition, we have argued that in innovation, large emphasis should be
given to the quality of the process and the capability of the organization to
execute those processes. Therefore, the remainder of this chapter will be
devoted to the process model. We will focus on the nonlinear behavior of
innovation processes as they occur along the different stages of a transition
path. We will see that improved understanding leads to new insight into how
to organize those processes.

3. THE PRINCIPLE OF CYCLICAL INTERACTION

With the explicit addition of feedback paths, models of transitions are

represented by two-way interactions, leading to cyclic processes.7 With the
presence of feedback, organizations are continuously exposed to reactions of
their environment, providing them with an important source of information
and inspiration. In addition – thanks to feedback – organizations are
constantly confronted with the consequences of their actions, preferably
through built-in ‘early signals’. In that way quick adjustments can be made in
the event of unexpected occurrences. And, last but not least, the cyclical
architecture also ensures that mistakes can be learned from, a very important
property for innovation.
In summary, the combination of feedforward and feedback – cyclic
interaction – is a fundamental property of dynamic systems. It also provides
the basic elements to model the culture in innovative organizations: start
quickly, adjust quickly and learn quickly.8

3.1. Elementary Building Block

Fig. 2.3 illustrates the basic principle. A represents an entity that maintains a
cyclical interaction with entity X. Examples are interactions between
34 THE CYCLIC NATURE OF INNOVATION

inside-out

A X

outside-in
Fig. 2.3. Cyclical interaction is the basis for open innovation and a precondition for
operational flexibility. Note: It is also a necessary condition for sustainability. Here,
A and X represent two interacting entities.

governments and their citizens, commercial organizations and their

customers, hospitals and their patients, etc. A particularly interesting
example is the innovation strategy of large companies with respect to
spinning-out (A-to-X) and spinning-in (X-to-A) start-ups. New in-house
ideas are developed outside the original business unit and, after successful
prototyping, reintroduced in the organization where it all started. It is
interesting to note that by including the time axis Fig. 2.3 transforms into a
helix. This property is used in Chapter 4.
The cycle in Fig. 2.3 is proposed as an elementary building block (basic
unit) for designing nonlinear models to represent innovation systems,
similar to those we find everywhere in ecological systems. In particular, open
innovation models for technical, economic and socio-cultural change can be
constructed from the basic unit in Fig. 2.3.
Looking closer at the basic unit, Fig. 2.4 shows the network version
of one cycle. The integration of different resources realizes a preset goal
(A-to-X), and the specifications of a preset goal determine the resources
that are needed to be successful (X-to-A). Fig. 2.4 illustrates that
collaboration of skills is the key to success. Using an optical metaphor,
the network acts as a lens that enhances the resources to an optimum in the
focal point, representing a high socio-economic value. In a fragmented
organization there is no coherence between the resources, and the result will
be out of focus.
Note that Fig. 2.4 can also be represented by a spreadsheet or matrix, the
columns referring to the resources and each row representing a selection of
resources that contributes to a specific goal (Berkhout, 2000).
Connecting Technical Capabilities with Societal Needs 35

vir
ns
X
tu
al le
le al
ns tu
vir

socio-economic goals
A A
contributing resources contributing resources
a. integration path b. specification path
Fig. 2.4. The network version of one cycle, showing the integration and allocation
of resources for one specific goal. Note: The involved processes are many-to-one
(A-to-X) and one-to-many (X-to-A). Using an optical metaphor, the cycle functions
as a lens and the goals represent focal points. The network represents focusing
(A-to-X) and defocusing (X-to-A).

3.2. Double Dynamics around Technological Research

Fig. 2.5 shows two linked basic units – the double loop – in which
technological research plays a central role. The cyclical interaction processes
for the development of new technology take place in the so-called technical-
oriented sciences cycle (the left-hand side of Fig. 2.5) with the help of a wide
range of disciplines from the hard sciences.9 Technological research in this
cycle is a multi-disciplinary activity: a team of scientists from different
disciplines of the hard sciences is needed to develop a new technology
(many-to-one relationship).
Similarly, the cyclical interaction processes for the development of new
products take place in the integrated engineering cycle (the right-hand side
of Fig. 2.5). Modern product development is a multi-technology activity: a
package of different – often patented – technologies is needed to design and
prototype a new product (many-to-one relationship). Like multi-disciplinary
science, here too we see that many different specialists are needed to succeed.
In most industrial sectors the creativity, knowledge and skills of specialized
suppliers play an important role in making the engineering process
successful. This is consistent with the open innovation concept.
Fig. 2.5 visualizes that in the hard sciences cycle technological research is
driven by new scientific insights: ‘science push’. It also shows that in the
engineering cycle, technological research is driven by new functional
Another random document with
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 "Ah, yes," he said, smiling with innocence. "He ver' good speak
tongues. He vat-you-call my neveu—you unnerstan' that vord?"

Yes, the man understood. Nephew was near enough.

"Smeet, de name. My seester make marriage wid Mons. Smeet. He my

neveu."

"Indeed? Was he brought up in England, then?"

"Brought up" was too idiomatic for Vronsky. When it had been
explained he said, "Part one, part de oder. Part England, part France. His
moder veuve depuis longtemps."

This likewise had to be explained.

"I would say she have no more a man," said Vronsky, making confusion
worse confounded by his explanation.

This difficulty, however, was also solved. And he went on to mention

casually that his nephew and he had come from France together about six
months before—a time when, as the detective, whose name, by the bye, was
Burnett, knew, Felix Vanston was in jail. There was an air of genial
simplicity about Vronsky, a kindliness in his beautiful soft dark eyes, which
was misleading. Burnett had found out from inquiries that he was an
engineer, an inventor, who had come to push his patent. He did not see how
he could be a member of the Anarchist gang which had sucked poor Felix
in. Moreover, probabilities considered, he could hardly be at Basingstoke
by appointment.

He owned candidly that he had risked all he had in order to bring his
patent to the notice of prominent English mine owners, so that his "neveu"
had been obliged to find work meanwhile to support himself. Now he hoped
that all was plain sailing. Then he wished them good-night and went to bed,
leaving Burnett pretty sure that he had missed the clew somewhere, and
determined to take the last train to Plymouth, and try to pick it up there,
before wasting more time in Basingstoke.
 He was nowhere to be seen when Felix stepped ashore next morning.
The young man hurried to his work, for he had sat up to write to Rona and
overslept in consequence. At the dinner-hour he went to the post-office to
see, before posting his letter, whether there was one for him. The spy was
still not in sight, and the glorious idea that he had departed rejoiced the
heart of Felix. There was a letter for him. It was written on very thick paper,
with a crest in purple upon the envelope. He stared at the crest, which was
his own. Rona's clear, immature hand had addressed the letter; but it was
obviously written on Normansgrave stationery.

He had promised to look in on Vronsky at dinner-time, and have some

bread and cheese with him, so he hastened to the inn without opening the
letter, or posting his own. At the first possible moment he broke the seal,
and read the contents with surprise.

Rona was in his brother's house. She described it with rapture. She was
evidently treated as an equal, and as evidently found this quite natural. They
were very kind, she had never been so happy. She was glad and thankful
that David had pulled her back when she tried to fling herself upon the
railway.

Inclosed with her letter was a brief, kind note from Miss Rawson,
saying that they were much interested in Rona, and could see that the two
young people were guarding some kind of a secret. They were ready to
befriend the girl in a substantial way, but this must be upon condition of
perfect frankness on his part. They hoped that he would come, on his return
from Basingstoke, and explain to them in confidence how he and his sister
came to be in such a plight, as they saw quite well that Rona was a well-
brought-up girl, carefully educated, and they realized that some strong
reason for her unaccountable destitution must exist.

Here was a dilemma for poor Felix. Rona urged him to allow her to
make a clean breast of things. He knew that she could not tell her story
without Denzil's becoming aware of his identity, since he must have
received the letter he had left for him upon the table of his room at Hawkins
Row.

He sat plunged in disquieting thought.

 Vronsky was out, at the post-office, and Felix was alone in the parlor,
among the shrouded and bulky packages of model machinery.

With a new clear-sightedness, born of harsh experience, the young man

faced the thought of taking the girl away with him, out of England. Every
pulse in his newly-stirred manhood was urging him to this course.

Till Rona fell into his arms he had had no object in life. Now she was
his object in life. A new kind of excitement, white and blazing, flamed up in
him. Let them be once married, no police, no interfering uncles could part
them. She was young, but not too young for love. He could cherish her....

On a pound a week?

For a moment he saw the other side of the medal—saw the slender
figure bowed with household toil, the hands—which to him had seemed
like a child's hands—roughened with hard work.

Could he propose such a course? Would she agree? Suppose she refused
to marry him, what could be done in that case? Feeling as he did, could he
act the big-brotherly rôle? He told himself that he could. He could do
anything for her that she demanded of him.

... And she was there, at Normansgrave, under the roof which had
sheltered his infancy and boyhood! Why, she might even be sleeping in his
old room, for aught he knew to the contrary!

He could picture her, moving through the rooms, sitting in the hall,
crossing the trim lawns. It was the right home for her.

And it appeared that it was actually offered to her! Denzil and Miss
Rawson were willing, he gathered, to keep her there. If, as seemed fairly
certain, the detective Burnett did not know where she was, were not their
hands far more competent than his to guard her from evil?

With such thoughts he was struggling when Vronsky came in. He

unreservedly told him all, and translated Miss Rawson's letter to him. The
Russian listened gravely, and was silent for a while. Then he said, "But this
seems the solution of the problem, does it not?"

"How?" asked Felix, hoping against hope, yet guessing that Vronsky's
answer would be:

"They offer to befriend her—ask them to do so—accept their offer, until

such time as you can keep the girl better than you can now." He saw the
light fade out of the young man's sensitive face, and he sat down near him.

"My son, she is too young to marry you and to rough it. But she cannot
go about with you and me, unless you and she are married. You see that?"

"I have been trying not to see it for the past hour," faltered Felix.

Then Vronsky grew eloquent. There was no doubt that these kind
English people had taken a fancy to the girl. Then he, Felix, with his
miserable record and doubtful prospects, had no right to interfere. At
Normansgrave she would be safe and happy. What he had to do was just to
disappear from view until he had retrieved himself.

He fought against argument, but he was contending against his own

better sense all the time.

By a most fortunate chance, the detective had missed the clew. And, as
he had done so, Veronica was most probably safer at Normansgrave than
anywhere else in England.

It may as well be mentioned here, that Mr. Burnett, on arriving at

Plymouth, heard of the embarkation of a couple answering with some
exactitude to those of whom he was in search, in a cargo boat, for America.
He asked his employers whether he should go to America in a fast steamer
and intercept them on landing; but this was too great an expense for Rankin
Leigh to undertake. The girl was gone. Well, he was relieved of the
necessity for keeping her. He called off the pursuit, and there the matter
rested.
 Felix naturally did not know this. But he could see that, if he were out
of England, the risk of Veronica's being tracked was halved.

But on one point he was obstinate. He would, at all costs, see the girl
once more before he went away out of her life.

How could he know how she felt about it? Suppose she did not wish to
be left behind? If that were so, he vowed emphatically that he would take
her with him, prudence or no prudence.

Vronsky thought him mad, but sympathized with him in every fiber of
his emotional being. Together they evolved a plan. Felix knew every nook
and corner of the home which now sheltered his waif. He knew the place
where it would be safest to meet, he knew the hour when it could be done
with least risk.

Down at the far end of the shrubbery which skirted the paddock was an
old summer-house, long since passed out of use, which the gardener each
winter filled with the brushwood intended for pea-sticks next year. It was in
the most solitary part of the grounds, and the approach to it, for one who
knew as he knew every inch of the way, was covered, all along from the
entrance to the park. Every soul at Normansgrave went to evening service at
six o'clock on a Sunday evening, except those who were left in charge of
the house. He knew Rona could not yet walk as far as the church, and that
no power could induce Denzil to have out the motor on Sunday evening.

He wrote to her, careful not to betray his own knowledge of the

grounds, skilfully suggesting that there might be some arbor wherein a
meeting could take place.

She sent a line in reply, describing what he knew so well, and saying
she would do her best to be there, should the evening be fine.

He received her answer on Saturday morning, and set about making his
final arrangements.

It became evident during the day that Burnett had left the town, and this
gave greater freedom to his movements.
 He received his wages, told them at the timber-yard that he should not
be coming back on Monday, and went down to the abode of Old Man
Doggett, to make him a present and take leave of him. Doggett was
cordially pleased to hear of his good fortune in being given work by the
Russian engineer, and told him he would always do him a good turn if it
came his way.

That being so, Felix's request was at once preferred. Comrade Dawkes
was to know nothing of his movements. If he inquired, as he surely would
do, upon the next arrival of the Sarah Dawkes at Limehouse wharf what
had become of the runaways, the story was to be the same that he had given
to the detective; namely, that Felix and the girl had tramped to Plymouth
and there embarked for America.

He earnestly assured Mr. Doggett that a consistent adherence to this

story might be worth quite a considerable amount of whisky and tobacco.

The force of the argument seemed great, as thus stated; and Felix wrote
down the exact address of his late employer, in order to be able to send a
postal order when circumstances connected with his exchequer should
enable him to do so.

On Sunday morning Vronsky and he left Basingstoke with the model

machinery and all their other effects. At Weybridge the young man left the
train, Vronsky proceeding to London without him; and Felix started upon
his ten mile walk in some trepidation.

He was now respectably dressed, and might be recognized by any native

in the regions of his old home. But he was greatly altered. He had not been
to Normansgrave, except on the occasion of his mother's funeral, since he
was seventeen. He was now twenty-three, but looked far older, with the
strain of his disgrace printed in deep lines upon his sensitive features. He
had been clean-shaven, but the difficulties connected with shaving on board
the barge had induced him to allow his beard and mustache to grow. The
young, soft dark beard gave him a foreign look.

The only thing upon which he ventured in the way of disguise was a
pair of blue-tinted spectacles. As a matter of fact, his eyesight was perfect,
and no one who had known him in boyhood would have connected the idea
of Felix and weak eyes.

He put on a necktie of a kind which in his own proper person he would

never have worn; and though he could not suppose that he could be seen at
close quarters by anybody who had known him well without recognition,
ultimate, if not instantaneous, he yet felt it possible that even a friend
should not know him at a glance.

From the police he thought the risk not great. He did not suppose that
Rankin Leigh had more than one agent, and his agent had left the
neighborhood. The police were not looking for Felix Vanston alive, but for
a corpse, which, if their theories were true, could not be in the place where
he now was. And even were they seeking for him alive, they would not seek
anywhere near his old home.

If he could pass unrecognized by any of the natives round about

Normansgrave, all would be well.

And well he knew the habits and haunts of the natives upon a fine
spring Sunday!

If he could not keep out of people's way, with his foot upon his native
heath, it was a pity!

And moreover, there was a point in his meditations, when risk ceased to
count, and a mounting excitement took his breath and made the lovely
landscape reel before his dazzled eyes. He was going to see Rona—the girl
who was a stranger—the girl who was everything—the girl whom he had
snatched from the wolves. Nothing else really mattered. No considerations
of prudence must be allowed to intervene. Who knew what might, or might
not, happen when they actually met?

He had taken some food in his pockets, and on leaving the station he
made for the woods. They were full of Sunday strollers; but these, like a
flock of sheep, kept all to beaten tracks, and Felix knew every wild hollow
and deep thicket in the countryside. He plunged away deep in the glorious
spring woodland, amid a white smother of wild cherry bloom, contrasting
with the delicate bronze and purple of the bursting hazel bushes. The pale
green tips of the larches rose as feathery and faint, as an exquisite dream. It
was a wood of fairyland.

There, hidden away, he lay in solitude, eating his bread and cheese,
drinking from a tiny spring which he knew like an intimate friend, and
trying to still the wild thoughts in his heart by reading a book he had
brought in his pocket. But his heart refused to be stilled. He had had
nothing to love for so long—nothing ever to love much, for his feeling for
his mother had been merely instinctive, and had grown less with advancing
intelligence. Now all of a sudden, he loved—for no reason than because a
helpless creature had sought his protection. He was going to look once more
into her "lost dog" eyes. And to say good-by, after ... that was the bitter
thing.

As afternoon faded into evening, he walked by hidden ways down to the

old home. The air was full of church bells. He knew every note, and they
cried out to him of his boyhood, of his days of innocence and youth. He
shook with emotion, he could have wept for the thought of those two dread
years cut from his wayward life.

As he approached the corner of the shrubbery he did not meet a soul. All
was whelmed in Sabbath peace and stillness. Then he noticed something
fresh. A young plantation of healthy-looking beech and copper beech,
fenced round from the cattle in the park. He stopped to look at that; and as
he halted he saw someone strolling along through the pasture grass,
apparently bound for an inspection of this very plantation. It was his brother
Denzil. He wore his Sunday clothes, and a decorous hat, and held his Prayer
Book under his arm. He stood in contemplation of the promising growth of
his new venture—and his reprobate brother stood behind the trees of the
shrubbery in contemplation of him.

Then a voice called, "Denzil! Denzil! Are you coming?"

The sound of steps on the gravel sounded, not at all far from where he
stood. Miss Rawson was coming down the long drive, and by her side,
walking slowly, was a girl as tall as she herself, with chestnut hair falling
below her waist, and with a cloak wrapped about her to shelter her from the
keen air of the April evening.

CHAPTER XII

RONA'S KNIGHT
"Lady," he said, "your lands lie burnt
And waste: to meet your foe
All fear: this have I seen and learnt.
Say that it shall be so,
And I will go."

****

And there the sunset skies unseal'd

Like lands he never knew,
Beyond to-morrow's battlefield
Lay open out of view
To ride into.
—D. G. ROSSETTI.

This was something new—something for which Felix, unused to

women, to society, to youth and charm, was oddly unprepared. Was that
Rona? That young immortal, with faintly blooming cheeks, elastic tread,
and all those burnished locks? As frequently happens to girls of her age, she
had grown considerably taller during the weeks of her illness.

The young man gazing at her felt his heart shaken by a pain which was
worse than anything he had suffered yet. He was a skulking fugitive, a
disgraced man, one who had taken dark oaths against society and authority,
and was seeking to flee from the men who would have held him to them.
What link was there between him and Veronica Leigh?

He bitterly recalled the proverb, "Necessity makes strange bed-fellows."

Necessity had obliged the maiden, in the throes of her desperate struggle for
liberty, to trust herself to him for a few short hours. Those hours had
changed the face of the world for him. For her they were no doubt already
half-forgotten. She had, as it were, set her foot upon his neck to climb out of
the pit. Here she was once more, seated at her ease among the elect, safe,
cherished, and no more in need of her slum companion. He thought of the
kindly, peremptory, half-patronizing letter he had written to her, and grew
hot all over to think that he had dared.

The figures of the three were disappearing down the drive together. He
crept into the summer-house, where there were not so many pea-sticks as
usual, sat down upon the dusty bench, and let his head drop into his hands.
There was a swelling at his throat as if he must choke. The air was full of
the tossing chimes, which, as he sat there, changed to the monotonous
stroke of the five minutes bell. It was a knell, ringing for him, he thought—
the knell of Felix Vanston, now forever dead and lost.

Ask her to run away and marry him, upon a pound a week!

Only in that bitter moment did he realize that he had meant to beg and
pray her to do so.

One sometimes has no measure by which to gauge height, except the

violence of one's fall.

* * * * * *
*

A sound, slight but distinct—the rattle of gravel beneath a light foot, the
rustle—indescribable—of a woman's apparel—and he lifted his dim eyes to
see Rona standing in the doorway. With no word spoken she slipped inside
the hut, round behind the bunches of sticks, to where he sat. "David—here I
am," she said, timidly.
 He made her no reply, but let his craving eyes rest upon her. She
flushed, and began to tremble. His evident misery pained her. Also, the
surprise was not only upon his side. This young man was not the ragged,
famished outcast who had grappled with her in his weakness and extremity,
dragging her back to safety as she overhung the abyss. She, too, was
smitten with the feeling that they were strangers.

Into his soul were thronging all kinds of desires and consciousnesses,
for the first time. He wished he were shaved. He wished he had a better suit;
he wished he were handsome; he longed to be rich.

True, the disfiguring blue glasses were hidden in his pocket; but even
so, what kind of a champion was he, dusty pilgrim that he was, for this
princess?

He stood up awkwardly, and his face was dyed crimson, with a shame
the more awful because it was wholly inarticulate. His first words left his
lips before he had time to consider them.

"Forgive me. I ought not to have come."

She gazed at him pitifully, her trouble growing. "Ought not to have
come? Oh, David, why? I—I thought you were—my brother."

She was overswept with a sudden consciousness—much like that which

had just overtaken the young man. After all, what was the link that bound
them? A few hours of common danger, of frantic flight? She felt curiously
friendless, and as though she had lived these past weeks under a comforting
delusion. "Why ought you not to have come?"

He said, brokenly, "I have no right." Then, with passion, "I have no
right, have I? You are happy, and among kind people of your own class. You
have no need of a ruffian like me."

He turned away his face, lest she should see the working of his features,
which he could not control. But Rona, with woman's swiftness of
apprehension, had now the key to his unexpected mood. "David," she said,
reproachfully, "are you jealous? Did you think I had forgotten you? How
silly of you! You—you can't have a very high opinion of me."

She took his hand, in a steadfast, trustful grasp. She sat down upon the
bench, and with a gentle pull drew him to sit by her. "Have I deserved it?
Am I ungrateful?" she asked, wistfully.

He held on to the hand as if he had been drowning. Its warm contact

sent comfort thrilling along his veins.

"Why should you have anything to do with me? Nobody else ever
wanted me, or cared what became of me," he stammered, incoherently.

She lifted to his her shadowy eyes, full of understanding. "Perhaps you
have not saved other people's lives at the risk of your own," she sweetly
said.

"Then you do feel—you do consider that there is a kind of link between

us," he faltered. "You don't wish me to resign you entirely? Oh—let us have
no doubt about it! I haven't much heart for life, but if I thought you would
not forget me it would make such a difference—such a difference——"

She broke in, "Forget you? Are you going away, then?"

He held his breath, for there was dismay in her clear tones. All the
emotions that in his wild youth had never been called forth till now, woke to
life and filled him with an ecstasy which made his heart pound, and his
breath pant, and the currents of his being flow together till his head swam.
"You care?" he gasped. "It matters to you whether I go or stay?"

"Matters? Oh, David! how can you?"

She turned to him impulsively. His arms went round her; and in a
moment—exalted, unlooked for, sweet with a sweetness unbelievable—her
head, with all its tumbled curls, was on his shoulder, and he was holding her
close, close, as though again she was striving to hurl herself into eternity.
 "Rona," he said at last. "Rona, I ought not to let you. I am not a fit man
for you to love!"

"You are the man that saved me," said Rona, clinging to him. "How
strange it seems. I never thought of you as a young man, somehow, until I
saw you sitting here with such a sad, grave face."

"And I," said Felix, with a depth of wonder that was almost stupefaction
—"I actually never knew that you were beautiful until this evening. But
now I know. I see everything with a new clearness. I am a man, and you are
going to be a woman in a year or two. And I want you for my wife."

She was silent, hushed with a new awe. "For your wife? Oh, David!"

"Will you?" he urged, beseeching her with eyes and hands and voice.
"Will you promise that, if I can make a home for you, you will come and
live in it? Will you give me something to work for, something to keep me
from despair? Oh, Rona, I ought not to ask it! How can I be mad enough to
ask it?"

"But of course I shall promise, if you wish it," said the girl, in her youth
and immaturity eager to promise she knew not what, eager to give joy to the
being who, apparently, depended upon her for all his hopes in life.

Even at the moment, even holding her against his heart, and feasting his
famished nature with the sweetness of her womanhood and the brilliancy of
his new hopes, her dutiful words, emphatic though they were, sent a chill
through him. In spite of his inexperience, there is an insight which love
gives; and he knew that Rona did not love him, but was merely willing that
he should love her. She was not grown up, he told himself. When she came
to be completely a woman she would love, as he now loved, with that
surrender which to him was so new, so unexampled a sensation. It was long
before he could calm down the turbulence of his emotions to anything like a
consideration of the situation. But their time was short, and after ten
minutes of more or less incoherent bliss and shy caresses, he began to
explain to Rona some of his thoughts and plans. Now that they understood
each other, these were far more easily explained than he had thought
possible.
 It appeared that the girl had not been informed of the extent of the
benevolent intentions of the Squire and Miss Rawson on her behalf.

But she was quite sensible enough to understand that, as she and David
were not really brother and sister, but desired another sort of relationship, it
would not be fitting for them to travel about together, until the time came
when they could be husband and wife.

Felix explained to her, fully and with care, the good prospect opened out
to him by the patronage of Vronsky. He was also able to make her see
clearly that it was dangerous for him to stay in England, seeing that the
police supposed him to be dead.

He ascertained, by guarded and careful questioning, that neither Denzil

nor his aunt had said a word to Rona concerning the black sheep of the
family, nor his disappearance. As far as Normansgrave was concerned, it
appeared that he was as though he had never been.

The main difficulty which Felix had foreseen in this interview, was that
of convincing Rona that they must not make a clean breast of their
circumstances, without giving her the true reason for his silence.

But on this point he found her unexpectedly amenable.

He began, with much diffidence.

"You know, Rona, you asked me in your letter, whether you might not
tell Miss Rawson everything?"

"Yes," said the girl impulsively, "but I am sorry for that. As soon as I
had written, I was sorry. Because, of course, I see that we can't do that."

He was puzzled. "You do see that we can't?"

"Certainly we can't. Because, if we did, they would have to know that

you had been in—prison—and that they shall never know through me."

He gazed at her with ever-increasing admiration. "You see that?"

 "Yes. I am growing up, you see. I think and hope I grow more sensible
every day. I am learning, learning, every minute. Oh, David, you can't think
how ignorant and foolish I am, or was. Inside those convent walls there was
no world, only the circle of our everyday life, and the question of lessons
and punishments, and being good, and being naughty, and fasts and
festivals and penances and so on. But I believe that really I have plenty of
brains, and I have a strong will too——"

—"That you have, or you never would have escaped, the determined
way you did——"

—"And I know that, if these people, who are as kind as the people in a
fairy-tale, do give me a chance to learn more, I shall take full advantage of
it. Oh, David, by the time you come back, I shall be so changed! Twice as
sensible and better instructed, and able to help you—to earn my own living,
or help you earn yours."

"You are happy here?" he wistfully asked.

"Happy? I should think so. It is such a nice place, and they are so good.
I don't mean only kind to me, but good to everyone. They do their duty all
day long, and the priest and the doctor seem to come to them for everything
they want."

"And you like the Squire?"

"Oh, very much. Not as much as I like Miss Rawson, of course. Miss
Rawson is more—more—I don't think I can describe it. She has more
mischief in her, somehow. He is fussy over little unimportant things, and he
is rather prosy sometimes. But he is very kind, and he takes such an interest
in me."

He sat gazing upon her as she spoke out her innocent thought. The idea
of her being there, in his own home, until he came to summon her forth into
the world with him, was so surpassingly sweet that it was with the utmost
difficulty that he refrained from telling her how he had first seen the light
within the walls that now sheltered her.
 "It—it would disappoint you very much if they should decide not to
keep you?"

She looked earnestly at him. "What would that mean? Would it mean
that you would take me away at once?"

"Yes. They demand that I should make a clean breast of things to them.
I can't do that. I will tell them all I can. But not everything. If they say,
'Very well, we can't keep her'—then I should have to fetch you, and we
should have to fare into the wide world together. And I swear that I would
take the same care of you that your own brother might."

He leaned forward, fervently, gazing deep into her eyes; and her lips
curved into an adorable smile. "I don't think I should be so very much
disappointed," she slowly said. "I believe you would let me learn as much
as we could afford—wouldn't you?"

"I'd worship you—you should be to me like a saint—like a thing apart

from the world," he whispered.

And she smiled happily.

After a few moments' thought, he asked her:

"You never heard of any other relative of yours, with the exception of
this one uncle?"

"No, never."

"What did the Reverend Mother tell you?"

"That both my parents were dead. That was all she knew."

"You have no sort of clew to their family? Have you nothing that
belonged to your mother?"

"I had one or two things—a pearl ring, a gold watch and chain, and a
few other things, such as a cashmere shawl and some lace. But my uncle
took them all away. There were no letters or papers of any kind: nothing
that one could find out anything from."

"Then it appears that nobody but this brute has any claim upon you?"

"As far as I know, nobody at all."

"They would not run much risk in keeping you," said Felix, his brows
knit in thought.

"I expect that was what Mr. Vanston was thinking of when he asked if I
had ever been abroad," remarked Rona. "Suppose they should let me go
abroad to be educated?"

"You would like that?"

She assented. "I want to see the world," she announced, very simply.

Felix smiled at the thought of Denzil's benevolence. He knew of old his

pleasure in a certain tepid, but always well-meant philanthropy. The
resentment and hatred of his half-brother, which for years back had filled
his heart, seemed to him a thing to be ashamed of, now that, in love's light,
he saw his own career with new eyes. He pitied Denzil, in an impersonal
kind of way, for having such an unsatisfactory brother. No wonder they
never spoke of him—the scapegrace for whom the old honorable family
must blush when his name was mentioned.

And then came an idea which caused him to smile to himself. What
would Denzil say, did he know that he was befriending that same
scapegrace brother's future wife? He had no scruple in the feeling that
money was being expended for such a purpose. But it reminded him of
another matter.

"Listen, Rona," he said. "I shall send you money whenever I can. At
first it will not be much. But as soon as I am in regular work, I should like
to send you enough to buy your own clothes, and so on—so that you should
not be beholden to these good people for absolutely everything. I have
brought you half a sovereign to-day, just for pocket-money, and I shall send
more at the first opportunity. That will make me feel as if you were real—as
if, one day, you really would belong to me."

As he spoke, the church clock chimed a quarter to eight. In ten minutes,

folks would be coming out of church. Their enchanted interview was almost
over.

He looked at her with a kind of despair. "Rona, I must go! I never

thought that it could be as terrible as this to say good-by!"

She looked at him helplessly, her eyes swimming in tears.

—"And I have nothing to give you—nothing to offer but my wretched

self——"

He dived into his pocket, brought out a sixpence, and with a pair of
pocket-pliers, divided it neatly in two pieces. Then, with a piercer in his
pocket-knife, he drilled a tiny hole in each half, and made her promise that
she would suspend the charm about her own neck, as he would about his—
as the only tangible sign of their plighted vows.

There was but a moment, after this ceremony, to be spent in leave-

taking. Felix, to his own utter astonishment, broke down completely.

"You'll be true to me, Rona—you won't fail me?" he gasped, half-

blinded by the choking tears; and Rona, with those tears wet upon her
cheek, promised, knowing no more than a kitten what she was promising,
nor why.

For one instant their lips were together, the young man trembling,
ashamed of his weakness, his hot heart filled with a surge of emotion so
unexpected as to be to him alarming; and then he was running from her, not
daring to look back, stumbling away in the evening dusk with a heart more
joyful, but with pangs more dire than he had imagined possible.

And now the future lay before him, like the battle-field upon which to-
morrow's conflict should take place. To the old Felix he had bidden
farewell. He had now no mind to regenerate society, only to make one
woman happy. Rona, who knew the worst of him—Rona, who had come to
him at the moment when he touched bottom—Rona loved him.

Then to conquer the world was a mere detail. It could be done, and he,
Felix, was the man to do it.

* * * * * *
*

In the course of the ensuing day, Miss Rawson received the following
letter.

It was typewritten, and dated from a London hotel.

"Miss Rawson (Private).

"DEAR MADAM,—I must begin this letter with some attempt to

express my deep sense of the great kindness you have shown to my young
sister. I scarcely know how to write. Words mean so little. But as I have
nothing else, I must, all the same, make use of them to tell you of my
undying gratitude to you and Mr. Vanston for a help so prompt and so
effectual as that you have already bestowed. But, madam, not only am I
your debtor for all these favors—you actually speak of interesting yourself
further in my sister's case—upon conditions.

"I cannot tell you how much it would mean to me to know that she was
safe, and in trustworthy hands, during the next year or two. I have thrown
up my old work, and, for reasons I shall explain, I cannot return to it. I have
now the offer of work which will, I trust, turn out well for me, but of such a
character—involving residence abroad and much movement from place to
place—as would make it very difficult at first to have my sister with me.

"But now, madam, we come to the crucial point. You most naturally
stipulate that the kind offer you make is contingent upon my frankness.
Before we go further, let me avow, without disguise, that I dare not be
perfectly frank with you. The reason for this is that we are fugitives. We
have an uncle, who was in charge of my sister, and from whose wicked
hands she was escaping when she met with her accident. Should he find out
where she now is, he would no doubt try to repossess himself of her.

"We are orphans; and in justice to your kindness, and relying on your
secrecy, I will own to you that our name is not Smith in reality, but Leigh.
My uncle made an unjustifiable attempt to compel my sister to adopt as her
profession the music-hall stage—to which she was strongly averse. He paid
a premium for her complete training to a man who was neither more nor
less than an unprincipled scoundrel. On my sister's declining to submit to
his treatment, he tried to starve her into submission by locking her up and
leaving her without food. In rescuing her from this terrible position—only
just in time—I was so unfortunate as to allow her to fall from a
considerable height, with the result that, as you know, she was seriously
hurt.

"We made our escape, penniless and without resources, in the canal
barge.

"You will see that I am being frank with you as regards the
circumstances. I refrain only from the mention of names and places. I am
fully aware that, by so doing, I put it out of your power to verify any part of
my story. But what can I do? My uncle is furious at having paid down a
large sum for my sister's training, only to lose her. He will leave no stone
unturned to recapture her. He has set detectives upon our track, though he
has not allowed the newspapers to make our flight known. I cannot even
give you the address of the school at which my sister was educated, as this
is the first place in which my uncle would make inquiries; and the lady-
principal might think it her duty to answer them, should you let her know
where we are.

"My uncle is my sister's legal guardian until she comes of age. Any
court of law would, on his application, restore her to his care, unless we
could adduce satisfactory proof of his brutality, which would be very
difficult.

"I hope you will see that there are strong reasons for my reticence.
Nevertheless, on reading this over, I feel that it is very likely that you may,
even if you believe what I say, wish to disembarrass yourself of a charge
who might quite possibly prove a difficulty should her guardian discover
her place of refuge.

"But I am perfectly determined that, whatever happens, she shall not go

back to a life she justly loathes—a life in which she would be ruined, body
and soul. Should you decide not to keep her, I will fetch her away, take her
abroad with me, and manage as best I can for her.

"I will add no more to a letter already long enough to need apology.
Accept, then, madam, my profound thanks, and my assurance that, however
you decide, I consider myself deeply your debtor. If you feel that you do not
care to accept further responsibility in the matter, please let me know at
once, as I must then make arrangements to fetch my sister.—I am, madam,
your grateful and obliged servant,

"DAVID SMITH.

"P.S.—With the exception of the uncle in question, we have no

relations."
 CHAPTER XIII

THE FINISHED PRODUCT

But on a day whereof I think
One shall dip his hand to drink
In that still water of thy soul,
And its imaged tremors race
Over thy joy-troubled face...
From the hovering wing of Love
The warm stain shall flit roseal on thy cheek.
—FRANCIS THOMPSON.

Summer sunshine lay broad and calm upon the lawns at Normansgrave.

Over all brooded that peace and well-being, that calm which is like the
hum of well-oiled machinery, or the sleeping of a top which, nevertheless,
spins on in the apparent repose. It is pre-eminently a characteristic of
English country life, this regulated prosperity, the result of long centuries of
experiment, issuing in perfect achievement.

In England we have thoroughly acquired the art of domestic comfort.

And we have the means to carry our knowledge into effect.

All other nations feel it. There is hardly a civilized person in the world
who would not own that in England we have solved the riddle of making
ourselves perfectly comfortable.

Aunt Bee's competent hands still ruled over Normansgrave. During the
two years which had elapsed since the disappearance of his brother Felix,
the Squire had not married, neither was he engaged to be married.

During the first months following the bereavement, with its curious and
mysterious surrounding circumstances, it had been natural that Denzil
should withdraw himself somewhat from society. But as weeks rolled by,
and the police found no clew, there was nothing for it but to acquiesce in
the uncertainty, and to assume either that Felix was dead, or that he wished
to be thought so.

The newspapers had, of course, made the most of the mystery. They had
flung it forth in flaming headlines, they had printed the letters written by the
suicide, they had striven to whip up flagging interest by suggesting clews
which the police had not really found. One enterprising journal actually had
a competition, "Where is Felix Vanston?"

All kinds of letters and answers were sent in, and the Editor promised a
prize, when the truth should at last be brought to light, to the competitor
who had guessed nearest to the truth.

In the December of that year, when the trees lost their leaves, and a
man's decomposed corpse was found in a thicket in one of the London
parks, the whole hateful discussion leapt from its ashes and revived in full
force. Was it, or was it not, Felix Vanston?

The police thought that it was. No identification was possible, the thing
had had too many months in which to decompose. But in what had been a
pocket was a newspaper; and this, being folded very small, the date was
legible on one of the innermost pages: and it was the date of the
disappearance from the Deptford lodging.

Denzil and Miss Rawson, in the absence of more cogent proof than this,
declined to accept the remains as being those of the missing youth.

The Editor of the paper who had started the competition, however,
awarded the prize to the candidate who had foreshadowed such a discovery.

And thereafter, silence fell upon the Press, and the Case of the
Disappearance of Felix Vanston was over.

The world slipped back by degrees into its groove, and after a while
Denzil grew less shy of going to London hotels, and began to lead his usual
life, without the dread of being interviewed. But time flowed on, and he
was still a bachelor, having apparently acquired a habit in that direction—or
—as his aunt in her heart believed—because he was waiting.

If that were so, the period of his waiting was at an end. Two days ago,
Rona Smith, the girl for whom his benevolence had done so much, had
returned from her two years abroad.

She was coming slowly along the graveled terrace, a book in her hand, a
rose-colored sunshade over her head tinging her white gown with reflected
color. Miss Rawson, seated by the tea-table under the big beech, watched
her approach with eyes full of interest, wonder, and amusement.

Denzil, who had been yachting with a friend, was expected home that
afternoon; and his aunt was more than curious to see the meeting.

The letter which the soi-disant David Smith had written with so much
anxiety and care and hesitation—the letter upon which Rona's future had
hung—had been the cause of much doubt and deliberation between Miss
Rawson and her nephew. Aunt Bee was inclined to advise that they should
hold out—should stipulate for frankness under seal of secrecy. She believed
that, had they done so, the young man would have made a clean breast of
the whole affair. And she was probably right. Felix would, most likely, have
acknowledged his true name, and relinquished all hope of calling Rona his,
sooner than do her the injustice of dragging her about Europe in company
of two men, neither of whom was related to her, when but for his
selfishness she might be living the sheltered life of the English upper
classes. He could have been forced into avowal. But they did not force him.
Denzil, with that curious streak of romance which lurks in most
Englishmen, was, perhaps, rather pleased that there should be a mystery
about Rona. The notion that she was to be protected against secret enemies
appealed to a mild vein of plotting which existed in him. He undertook the
risks so vaguely hinted at by Felix, not merely readily, but with eagerness.

The smuggling of Miss Smith out of England was the first thing which
helped to turn his mind off the distressing case of his brother.

Miss Rawson and he took the girl abroad. They traveled here and there,
from one place to another in Germany, visiting the educational centers,
seeking a place where they could with confidence leave their charge.

They found, at last, in a pretty south German town, an English lady,

widow of a German officer, who took a few girls to board, and gave them a
sound education, having masters for music and drawing. Here Rona, whose
health was completely re-established, was left; and from that day to this she
and Denzil had not met.

The girl developed a great ambition to learn. She was happy and content
with Frau Wilders, and willingly remained there during the Christmas
holidays. The following summer Miss Rawson journeyed out to see her, and
found her thoroughly proficient in German, and most anxious to be allowed
to pass her second year in France. This was satisfactorily arranged. Aunt
Bee traveled with her to Rennes, where Frau Wilders knew a lady in the
same line as herself. Rona lived with this lady and attended the public day-
school in the university town.

And now she was educated. Moreover, she was a woman grown. And
Miss Rawson had brought her home from France, wondering not a little as
to what the outcome of the situation was to be.

During all these two years there had been, so far as she was aware, no
attempt to gain possession of the girl, certainly no annoyance of her, on the
part of the uncle who was supposed to be so malign a being.

Had it not been for the girl's own personality, Miss Rawson, who was a
sensible, unimaginative woman, would have been inclined to think that the
tale of persecution was the invention of the brother, as a way of extricating
his sister and himself from destitution. But, in some manner wholly
indescribable, Rona refuted this theory, simply by being Rona.

Miss Rawson, who had been her companion for four or five weeks each
summer, had seen a good deal of her, and was not an easy person to
deceive. She knew well enough that the girl believed herself to have cause
to dread something, or someone. Under the keen scrutiny of Miss Rawson's
criticism, there had never appeared one trait, one phrase, which was out of
harmony with Rona's claim to gentle birth and breeding. Her tastes were
innately fastidious. In all the small minutiæ of a refined girl's habits, she
was above reproach. Her convent breeding had given her an atmosphere of
purity and simplicity, upon which the modern culture of her later education
sat with a curious charm. But there was more than this underlying the
fascination which the elder woman felt but could not classify. She was only
conscious of thinking that Rona was the most attractive maiden she had
ever seen. There was not a girl of their acquaintance who could hold a
candle to her. She was more than pretty, she was truly beautiful, with a
somewhat grave beauty, as of one over whom hung some menace or
anxiety.

But at the nature of this anxiety Miss Rawson could make no guess.

Rona had left the gravel now, and her feet trod the shorn turf, her white
gown slipping over its verdure like lake-foam over water-weed. She had
dignity, she had poise, those things now most rare in the modern girl, who is
generally ill-assured, in spite of her free-and-easy pose. But under the fine
calm of her manner there was a shadow.

Rona carried a secret in her heart. This secret, at first half-delightful,

had gradually grown to be a distress, a burden—at last an out-and-out
nightmare. Within a few days of her parting from Felix in the summer-
house she was feeling strongly the discomfort of the situation in which he
had placed her.

She was secretly betrothed to the young man who posed as her brother!

She saw plainly that David must naturally be unwilling that his own
prison record should be known. But why should he insist upon her adhering
to the brother-and-sister fiction? She thought the deceit unnecessary and
unwise, since when he returned to claim her promise, their true relations
must be avowed, and she would stand convicted of a long course of
deception and untruth.

For the first week or so after her promise, so readily, so ignorantly

given, she had suffered horribly. And the climax of her revolt came when
she received, from Hamburg, his first wild love-letter.
 Poor Felix! He let himself go, in that letter, as only a young man in his
first love can fling himself prone upon the love he imagines in the beloved
one.

There was, in the girl, no passion to kindle at the breath of his: the
unveiled vehement thing almost paralyzed her with apprehension.

In her first panic fear she wrote and bade him never so to address her
again. Did he not realize that her letters might be overlooked? Miss Rawson
might reasonably, naturally expect to be shown her letters from her brother.
They must be such as she could produce if necessary—the kind of letter a
brother might write to a sister.

Felix never admitted, even to himself, how cruelly this reproof flung
him back upon himself. Her appeal touched his tenderest feeling, and
overwhelmed him with self-reproach. He answered meekly, abjectly,
imploring forgiveness for his rashness, vowing never so to offend again;
and inclosing more money than he could conveniently spare that she might
have all she needed.

Veronica graciously accepted both the apology and the remittance.

She was not at that time old enough to see how the mere acceptance of
his money bound her to him. But it was not long before this dawned upon
her—this, and many other things.

She was a girl of fine intelligence, and she took full advantage of all the
culture put within her reach. Her mind developed apace. She read books,
she saw plays. The world as it is began to emerge before her vision,
heretofore bounded by convent walls; and soon she saw clearly that a girl
under seventeen has no right to promise herself in marriage. She knew that
she had given a promise that meant nothing. She formed, in her secret heart,
an Ideal of marriage, which was not in the least like the gaunt young man,
with the hunted eyes, who had implored her to be true to him. Looking back
upon the little scene in the arbor she could not but think that he had taken
an unfair advantage of her gratitude and friendlessness. By the end of her
first vacation the thought of her secret engagement was a millstone round
her neck.
 She still kept to her habit of writing to him. He stood for something in
her life, after all. He was sympathy, kindness, a creature to whom she could
turn for fellow-feeling in joy or trouble. He was as interested as she in her
powers of mind, in her improvement in languages, her music, and her
reading. He wrote more and more hopefully of his own prospects. Always
he kept to her commands, and his letters might have been shown to
anybody. Yet sometimes there breathed through them a current of feeling
which sent a chill foreboding through her. What was she to say when at last
he came to claim her promise—she who knew she had nothing to give?

Her obligation to him weighed upon her far more heavily than her debt
to Mr. Vanston. She became deeply, feverishly anxious to earn her own
living. She had a record of every remittance that David had ever sent, that
one day she might repay him.

Her own complete change of mind encouraged her to hope at times that
he might have changed his. It seemed impossible that he, a grown man, in a
world full of women, could remain faithful to the memory of a girl whom
he had only seen two or three times—a girl of whom he knew so little.

What if his heart were as empty towards her as hers towards him? What
if he still wrote, still paid, only from a sense of duty, and because he had
given his word?

One day it was borne in upon her to try in a letter to ascertain his real
feeling; and she wrote to him, about six months before her final return to
England, after this fashion:

"We write to one another, you and I, of what we do, but not of what we
think. Yet, since we last met, we must have changed, both of us. At least, I
have changed, and it seems foolish to believe that you alone, of all men,
have stood still in a world full of movement, of interest, of men, and of
women too.

"I wonder—I often wonder—and at last my curiosity is so great that I

feel I must let it out—what you seriously think, now, of the little comedy of
our betrothal in the garden that Sunday evening?

"I wonder if you have realized how rash we were to promise any
lifelong bond—we who knew nothing of either life or bonds: we who knew
nothing of each other, of our respective characters and tastes?

"It seems to me impossible that you should not have traveled as far
since then, in mind, as you have done in body. And I want to tell you this. If
you have come to the conclusion—as it is borne in upon me that you must
have—that we were a couple of silly, unreflecting things; please be sure that
I, too, am growing up, that I, too, shall soon be able to work for myself, and
to repay your goodness to me financially, if not in other ways; and finally,
that I, too, see how unreasonable it would be for one of us to hold the other
to such a compact in the future."

After the dispatch of this letter, she had awaited a reply in some
trepidation.

It did not arrive for some weeks, since Felix and Vronsky, out in Siberia,
were much occupied with certain happenings hereafter to be recorded fully.
When at last a letter was received, it was inconclusive. Felix wrote that he
hoped, before the end of the year, to get leave to come and see her. Until
then he thought it best not to discuss the nature of their feelings for each
other. For himself, if he wrote of what he did, and not of what he thought,
that, as she must know, was out of deference to her commands. What he
desired was, as always, her happiness. Just now he was not in a position to
write more definitely, but as soon as his plans cleared, she should hear from
him again.

That letter had reached Rona towards the end of February. She had not
heard since, and it was now July. A remittance had arrived, however,
regularly each month as usual.

The ceasing of letters from David had not troubled her much. Its effect
had been to relegate the whole affair more and more to the background of
her young eager mind, full of plans for the future and not eager to busy
itself with the past.

Such was the Veronica now moving over the grass towards Aunt Bee.

"Come, child, tea will be cold," said Miss Rawson.

"Nothing could be cold to-day," laughed back Rona, raising her eyes
from her book, but quickening her steps obediently.

The stable clock chimed a quarter past four.

"Denzil ought to be here soon if he comes by that train," said Aunt Bee.

"I am impatient to see him again," said Rona, in tones of candid interest.
"I owe him so much, I feel inclined to act like a young person in a novel of
a century ago, and fall on my knees, seizing and kissing my benefactor's
hand! Wouldn't he be astounded!"

"Indeed he would! Denzil never gave way to an impulse in his life."

"No. I remember well how dignified and proper he always was. But
think how good he has been to me!" She sat down in a low chair and took
her tea from Miss Rawson's hands.

As David had been so careful to keep her in funds, her dress had always
been her own affair. And she had a style of her own.

It was daring to wear a rose-lined hat with the warm chestnut of her
abundant locks; but she achieved it.

Aunt Bee caught herself thinking that, if Denzil really wanted her, he
had better make up his mind at once. Nameless and dowerless though she
was, the Girl from Nowhere was not likely to go long a-begging.

Even as the thought crossed her mind, the puffing of the arriving motor
could be heard upon the still air.