04 enkel key note_day 1_ecc2012

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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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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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)

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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.

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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

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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.

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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

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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


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)


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


Who are the most important source for innovation?

Survey study with 9017 innovators in Europe (scale from 1 (less important) - 5 (most important)

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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


WHERE IS THE KNOWLEDGE COMMING FROM?

“Knowledge we have” “People we know” “People we don´t

know”

COMPANY COMMUNITY CROWD

Employees Customers

Investors Public

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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?


The crowd´s pool of knowledge

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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?


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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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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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

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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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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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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


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