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How to boost innovation of an economic region ?
Prof. Dr. Ellen Enkel Head of Dr. Manfred Bischoff Institut of EADS
Chair of Innovation Management Zeppelin University
Editor of the R&D Management Journal
European CommissionEnterprise and Industry
Prof. Dr. phil Ellen Enkel
• Head of the Dr. Manfred Bischof Institute of Innovation Management of EADS and Chair of Innovation Management at Zeppelin University, Friedrichshafen
• Editor of the R&D Management Journal, R&D Management publishes articles which address the interests of both practicing managers and academic researchers in R&D and innovation management.
• Research focus: Open und Cross-Industry Innovation, Networks, Innovation Culture, Communication und Controlling.
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European CommissionEnterprise and Industry
Agenda
• How do innovative companies act today?
– Innovate in a system of experts inside and outside
– Cooperation for innovation and efficiency
• Which are current trends in innovation management?
– Closer integration of partner and the crowd
– Integration of analogue solutions for disruptive innovation
• Discussion: How to boost innovation of an economic region?
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THE OPEN INNOVATION ERA
How do innovative companies act today?
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European CommissionEnterprise and Industry
Todays Corporate reality
Decreasing research and development budgets
Shorter innovation cycles
Increasing employees’ mobility
Merging of technologies
Multiplicity of new business models, new corporations, new opportunities and risks
Opening up the innovation process (Open Innovation)
4/25/2012 5
European CommissionEnterprise and Industry
Open Innovation in practice I
Innovation Jam (2006)
biggest Online-Brainstorming worldwide
150.000 people| 72 hours| over 46‘000 ideas
IBM invests 100 Mio $ in further development and implementation of the best ideas
2005: Reorganization of the research and development structure through implementation of the Connect & Develop strategy
Emphasizing on opening the innovation process for external sources and strong engagement in networks
Open Innovation projects (external input of more than 50%) achieve 70% higher Net Present Value than internal projects.
4/25/2012 6
European CommissionEnterprise and Industry
Open Innovation in practice II
„We borrow with Pride“
Network with 500.000 external inventors
Investments in customer integration, min. of 500 customer visits per year
Verifiably more radical innovations realized through the systematic cross-industry approach
Regular cross-industry networks to future-orientated topics (Future Logistic, Future Living etc.) with other industries (e.g. HochTief, Geberit, Schindler, Hilti)
Development of a multi-perspectives future scenario
4/25/2012 7
European CommissionEnterprise and Industry
DOES OPEN INNOVATION INFLUENCE COMPANY PERFORMANCE?
Intensity of the cooperation
Broad usage of sources
Source: Laursen, K. & Salter, A. (2006). Open for innovation: the role of openness in explaining innovation performance among
U.K. manufacturing firms. Strategic Management Journal, 27, 131–150.
4/25/2012 8
European CommissionEnterprise and Industry
Opening up the innovation process means trading knowledge and growing markets for knowledge
Outside-in Process
External knowledge
Inside-out Process
Commercialization outside of the company
Coupled Process
Joint Innovation and commercialization
Boundaries of the company
Locus of innovation within the corporation
4/25/2012 9
European CommissionEnterprise and Industry
Why do companies conduct Open Innovation? Targeted objectives are key
0% 10% 20% 30% 40% 50% 60%
Ausweitung Produkt-/ Servicepalette
Steigerung oder Erhalt des Marktanteils
Erschließung neuer Absatzmärkte
Kostenreduktion
Reduktion der Entwicklungszeit
Erhöhung der Produktqualität
Efficiency oriented
Innovation oriented
Increase productivity
Reduce development time
Reduce costs
Exploit new markets
Increase or maintain market share
Enlarge product/service offering
Source: Open Innovation Survey 2011
European CommissionEnterprise and Industry
Stra
tegi
c Po
siti
on
ing
FF
TL
Relative level of competence in this technological field
LOW HIGH
Tendentially External sourcing: | Acquisition of know-how, external procurement of
technologies & technological services (from own and/or foreign industries, cross-industry)
Tendentially Cooperation: | Integration of missing competences
& acquisition of strategic relevant technologies
| Cooperation with start-ups, universities, research institutions, further external experts
Preference of Internal development: | Control of key technologies and phases of value creation, augment own competences
Tendentially Cooperation: | Mutual exploitation and outsourcing of technologies
TL = Technological Leader FF = Fast Follower
When do companies need to cooperate? Organize technology management according to the strategic positioning and the relative level of competence
Source: Gerybadze (2004)
European CommissionEnterprise and Industry
COMPARISON OF OPEN INNOVATION ACTIVITIES IN 2010 AND 2011
Lead User integration
Cross Industry Innovation
Customer integration
Supplier integration
Web ideas generation & solution platforms Creativity workshops with external
parties Acquisition of knowledge through M&As
Knowledge networks
Provision of contract research results to externals
Systematic search for new marekts
Commercialization supported by other companies
Spin-offs and corporate ventures
Off-licensing of products and/or services
Joint development (JD) projects with customers JD projects with suppliers
JD projects with universities etc.
JD projects with own industry partners
JD with companies of foreign industry
New co-operative business models
Source: Open Innovation Survey 2011
European CommissionEnterprise and Industry
Who are the most important source for innovation?
Survey study with 9017 innovators in Europe (scale from 1 (less important) - 5 (most important)
4/25/2012 13
0
0.5
1
1.5
2
2.5
3
3.5
Customers
and Users
Patent
Literature
Scientific
Literature
Competitors Technical
Conferences
Suppliers Universities
Research
Source: Giuri und Mariani 2005: Everything you wanted to know about innovators , by LEM Sant Anna in Pisa, Working Paper
0
0.5
1
1.5
2
2.5
3
3.5
Customers
and Users
Patent
Literature
Scientific
Literature
Competitors Technical
Conferences
Suppliers Universities
Research
European CommissionEnterprise and Industry
WHERE IS THE KNOWLEDGE COMMING FROM?
“Knowledge we have” “People we know” “People we don´t
know”
COMPANY COMMUNITY CROWD
Employees Customers
Investors Public
4/25/2012 14
Is your cluster adequately connecting people in order to exchange knowledge?
Does everybody knows where the other might be able to help? How do you provide your cluster with new knowledge?
European CommissionEnterprise and Industry
The crowd´s pool of knowledge
4/25/2012 15
Intermedia-
tes
Joint free solution finding
Corporate Initiatives
Market-places for
idea owners
Public initiatives
Example Initiatives
Crowd
iBridge Network
Ideas Campaign
Galaxy Zoo
Fold It
Zazzle
JuJups
Spreadshirt
Dream Heels
BMW Via
Ideas4Unilever
IBM Innovation Jam
Lego Factory
Electrolux Design Lab
Osram LED-Emotionalize
Produrct Ideation
& -Solutions
Branding &
Design
Apache
Firefox
Linux
Wikipedia
CrowdSpirit
Openstreetmap
Yahoo Answers
Software
Hardware
Source: adapted from Gassmann (2010)
IdeaConnection
YourEncore
Innocentive
R&D Solution
Platforms
Marketing &
Design
Freelancer
Ideation
Platforms
NineSigma Yet2.com Innovaro
Hypios RedesignMe 99designs
HumanGrid Amazon Mechanical Turk
Chaordix Idea Crossing Innovation Exchange
Is your cluster a pool of knowledge or only the random location of some companies? Is your cluster better than the internet in connecting knowledge?
European CommissionEnterprise and Industry
How to do this? How to connect to the best knowledge of the world?
• Big enterprises with well known brands in B2C markets have a key advantage in open innovation but are often captured in their bounded rational (e.g. internal bureaucracy in sales departments or NDA)
• SMEs have learned to cooperate in order to compete but economy of scale hinders them to invest a lot of resources to identify and launch new partnerships or get in touch with international companies
• Clusters are key instruments to support emerging industries and to facilitate SME-internationalization
• Some successful practices how to enhance connectivity of cluster members „European Cluster Excellence Initiative„ and „Cluster Collaboration Platform"
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European CommissionEnterprise and Industry
Benchmarking of Clusters: Dimensions and Indicators
Dimensions Indicators • Age of the cluster • Focus areas of the cluster • Nature of the cluster • Composition of the cluster • Value chain covered by the cluster • Regional concentration of the cluster members • Utilization of regional potential • International cluster members • Legal form of the cluster management • Membership development • Cooperation between cluster members Structure of the cluster • Assignment of tasks/clarity of role definitions • Number of cluster management staff • Role of cluster management • Human resource development
Cluster management and governance • International working experience • Continuity of cluster management • Involvement of key actors in strategy development and implementation • Elements of the strategy development and implementation process • Content of the strategy • Services and activities of the cluster management • Sources of financing when cluster was established • Sources of financing today • Annual budget • Development of financing Financing • Sustainability of financing • Visibility of the cluster • Collaboration with other clusters • Impact on R&D activities of cluster members • Impact on business activities of cluster members Achievements and recognition • Internationalization of cluster members
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European CommissionEnterprise and Industry
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European CommissionEnterprise and Industry
Trends – Where is the journey headed?
• Search for new knowledge outside of the own value chain to identify existing solutions and copy successful business models
4/25/2012 19
European CommissionEnterprise and Industry
Idea of Cross Industry Innovation
• More than 80% of all innovation are recombination of existing knowledge (Schumpeter 1937)
• Within the own company and within the value chain (including customer and supplier) companies have already recombined more or less every knowledge asset through integration and cooperation
• Only a recombination of knowledge outside of the common sources can grant competitive advantage through disruptive innovation with low development risk (existing successful solution already exist in other industry)
• Imitation can be used to create new products, services, processes and even business models (more than 50% of the entrepreneurs imitate parts of their business models)
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Does your cluster foster cross-industry innovation or is it too industry focused?
SUMMARY & DISCUSSION Key Take Away
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European CommissionEnterprise and Industry
How to foster the innovativness of a region?
• Companies need to open up and cooperate in order to survive and be successful! Companies are an "Innovations Development System“ which need to use all available resources – Hence: A region need to foster connectivity of its companies and
illustrate their knowledge
• Companies are “linked units of experts” inside and outside the cooperation or cluster and inside and outside their core industry – Hence: A region need to foster connectivity of its companies inside
and outside their core industries and towards other regions
• Companies are acting in changing environments with new opportunities arising from new technologies, new business models, new competencies, new employee profiles and new actors in their front yard – Hence: A region need to enable its companies to prepare for change
and to leverage new opportunities – “Chance only favours the prepared mind” Pasteur
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European CommissionEnterprise and Industry
Contact information
Prof. Dr. phil Ellen Enkel
Zeppelin University Dr. Manfred Bischoff Institute of Innovation Management of EADS
Chair of Innovation Management
Am Seemooser Horn 20
D-88045 Friedrichshafen | Bodensee
Tel. +49 7541 6009- 1281
E-Mail: [email protected]
Home: www.zeppelin-university.de
European CommissionEnterprise and Industry
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