Tips for innovative success from the creator of the MP3

In Germany, where the population tends to be more risk averse than in Israel, innovation tends to happen under the umbrella of big industry or government-funded research centers.

Karlheinz Brandenberg (photo credit: Courtesy Fraunhofer IDMT)
Karlheinz Brandenberg
(photo credit: Courtesy Fraunhofer IDMT)
BERLIN – Israel may be the start-up nation, but it’s rugged, high-risk and high-payoff model is not the only one for taking innovation from the research lab to the market.
In Germany, where the population tends to be more risk averse than in Israel, innovation tends to happen under the umbrella of big industry or government-funded research centers.
Perhaps the best known of these is the Fraunhofer Society, an application-oriented research center based in Germany.
With a nearly 2-billion- euro budget and 22,000 workers in 66 institutes, it is the largest center of its kind in Europe. Among the many innovations that have sprung forth from its halls is the MP3, the compressed-music file that altered the music industry and paved the way for products like the iPod.The Jerusalem Post sat down with the “father of the MP3,” Karlheinz Brandenburg, at the sidelines of the recent “Innovation Days” conference in Berlin to ask what innovation meant to him.
What is the key to turning innovation into financial success, in your opinion? It takes vision, effort, persistence, but also luck. There are a lot of good ideas and good work that do not make it. The issue is not about knowledge, but problem solving.
It’s also important not to get mired down in your own work; look at what others are doing, and don’t be afraid to incorporate it. You also have to really listen to the market.
Early on, an MP3 codec we were selling was leaked for free on the Web. We dramatically lowered the price of our encoders, and it turned out to be a blessing, because suddenly everyone was using MP3s.
In Israel we have a lot of innovators that start their own small companies, but your team developed the MP3 in a lab. Do you regret now having gone out on your own?
On one hand, there’s the incentives; on the other hand, the resources and availability.
There is a law here for inventions that if the company licenses it, the inventors have to get a share of that income.
So for me that’s still an amount that dwarfs my professor salary. I liked it the way it worked out very clearly. In Germany, the innovation environment seems to work.
The system allows professors to pick their research topics, which is what gave us the possibility of exploring something people said was “impossible.”
So what you’re saying is that the payoff is good enough, but you had the advantage of resources. If you had gone out on your own, you might never have been able to develop the MP3.
Exactly. There was a time after its success when I looked around for funding to go out on my own. But without a good idea it doesn’t make sense. You still need people with an entrepreneurial spirit; otherwise it wouldn’t work.
That’s the same whether you’re in a start-up company or in an organization such as this one.
Did you know this would upend the music industry?
Yes. I still remember that in 1994 a British entrepreneur called Riki Adar wanted to do music over the Internet, and when he visited us and saw the demo, he said: “Do you know that you will destroy the music industry.” Even earlier on, I did a calculation of silicon storage of audio a la Moore’s Law, and it became clear that there would be a time when music stored on silicon would be better than anything else. There are six billion devices in the world that use this technology. That blows my mind.
How well do you think industries are dealing with the influx of new media?
There is nothing new about new media. The phonograph and radio were both considered game changers at the time they became popular.
They hit the record industry by something like 80 percent, but it survived. The same things happened to the news and cinema industry with the advent of television.
What are you working on these days?
Spatial hearing: how ears and brain work together. There are ways of creating an illusion of three-dimensional sound from just one speaker.
The research on it is far from finalized. What we see is that what you hear depends on not just what you expect but what environment you are in.
So the same signal hitting our eardrums can change in different rooms.
This article, edited for content and space, was made possible by generous funding from the Goethe Institute.