Ten years ago, Silicon Valley icon Steve Jobs introduced the iPhone. Hailing the device as a “revolutionary product,” Jobs gleefully walked a MacWorld convention audience through iPhone’s 3-in-1 capabilities: a widescreen music player, a revolutionary mobile phone, and a breakthrough internet communications device.

While the Apple faithful celebrated, detractors outside that community vented. Technology columnist John C. Dvorak urged Apple to “pull the plug” on the iPhone and exit the phone industry altogether. A Bloomberg reviewer called it “nothing more than a luxury bauble that will appeal to a few gadget freaks.” Others criticized it for being too thin, having an inherently flawed design, and packing in too much functionality. An infamous TechCrunch review exclaimed “The iPhone Will Bomb!”

Predicting the value of a technical innovation is incredibly difficult

I bring up these reviews not to poke fun at the reviewers, but to make a point: Predicting the value of a technical innovation is incredibly difficult. You may recall infamous quotes like “I think there is a world market for maybe five computers,” by the chairman of IBM, and “There is no reason why anyone would want a computer in their home,” by the founder of Digital Equipment Corporation.

The history of technology innovation is littered with such statements. The folks at Western Union didn’t think the telephone would amount to much. Friends of David Sarnoff ridiculed him for his invention of radio. And the president of Warner Bros. movie studios exclaimed, “Who the hell wants to hear actors talk?”

These critics weren’t idiots. In fact, many were brilliant industry leaders who had established impressive technology-based ventures with a demonstrated record of serving the public. Indeed, this very fact points out how difficult it is to foresee the value of a technical innovation. This is because innovation isn’t enough.

technical innovation must be crafted to create value

Simply put, technical innovation must be crafted to create value. As it is infused into a new product or service, whether commercial or for social benefit, technical innovation must be balanced to meet people’s needs and, at the same time, must be economically viable. The inability to craft this balance is why more than 80 percent of startups fail and why more than 90 percent of new product development initiatives flop. Even with all the mental firepower and business acumen invested in these efforts, nearly all fail—usually because they don’t pay attention to what people need.

Increasingly, employers want to hire engineers who not only have outstanding technical skills but who also have the savvy to understand the subtleties of creating competitive products. A survey of executives from 20 companies revealed that 50 percent would raise the starting salary for such engineers by 10 to 15 percent, and that these engineers would most likely progress through the ranks of a company faster than others.

Accordingly, we’ve created new educational opportunities for our engineers at Santa Clara University. These include programs in design thinking, courses in product innovation, and support for new student ventures. Such experiences will allow future Santa Clara engineers to identify and develop the innovations that will best create value and transform our world.