Innovation really matters, apparently. The wonderfully named Endless Frontier Act, “the most important piece of legislation no-one has heard of”, is right now locked in debate on the floor of Congress. Its goal is to commit $100 billion to the National Science Foundation.

Both the Scottish and UK Governments are committed to innovation in the post-pandemic transformation. Yet ask 100 people in business, science, politics what is innovation? You will get 100 different answers. For something so important we have a hazy understanding of what it is.

The definition matters if we want to measure how good we are at it. We end up with contradictions whereby Scotland can claim success for the number of patents per head, our upper quartile performance in higher education research and development, our spin-out rate. Yet we are in the lowest quartile in business R&D and our spin-out success has led to a handful of companies that scale, and limited impact on job creation.

Our understanding of how we nurture innovation is even more hazy. The prevailing view is that density begets innovation. Greater density drives more serendipitous collisions of ideas and people; a vat of people bouncing off each other like Brownian motion. Dr Vivienne Ming of Socos Labs has been musing on how we innovate on innovation and challenges this perspective. It requires “an absurd amount of time lingering around the watercooler waiting for just the right off-hand comment to spark an aha moment.” In these pandemic times with no in-person conferences, silent corridors and watercoolers bubbling in the corner alone, what happens to innovation?

It turns out that when we look to the science, while co-location and proximity does encourage innovation, the way it works is much more subtle. Ming points out that, yes, co-location is a catalyst for collaborative innovation as the novelty and quality of projects drops off as people become comfortable with each other and ideas normalise – innovation needs the constant tension of challenge and diversity to flourish. Co-location on its own can have the opposite of the intended effect and dampen innovation, leading to groupthink and comfiness.

She further points out that small, flat, diverse, challenging teams are far more innovative in the early stages – being exposed to the bustling crowds too early is a killer. This is why corporate innovation is so difficult – without endorsement from the top, ringfenced budgets and dedicated teams, an organisation’s white blood cells will surround the innovation and bland it to death. Conversely, a vibrant community of start-ups pivoting, morphing and learning can be so very innovative with limited resources.

Community Lab, the Edinburgh based start-up, has been wrestling with this challenge and is responding with an online platform for truly open innovation. Andrew Barrie, its founder, says: “We need to democratise innovation. Make it easy to create, share, discover and collaborate on ideas and challenges.We know that innovation comes from the grass roots and that trust and diversity of thought are key.”

Down in the grass roots you have people who twin passion and insight. We can do so much more to connect them to the resources, experience and talent to cultivate their ideas.

We need to explore innovation more deeply. One thing we do know, innovation is all about people. How they interact, share, learn, transform. How they bring their diverse talents, experience, ideas together.

To use Ming’s favourite metaphor by Jung, “the meeting of two personalities is like the contact of two chemical substances, if there is any reaction, both are transformed”.

We need to create more opportunities for chemical reaction. These chemical reactions, in turn, will transform our future.

Sandy Kennedy is the chief executive of the Entrepreneurial Scotland Foundation