a perspective on innovation fh 2010 innovation festival

“To catalyse innovation for the development of a bio-economy”Copyright Reserved 2008

A PERSPECTIVE ON INNOVATION

2010 Innovation Festival8 & 9 March 2010

F Hendricks – Cape Biotech Trust


• Technological innovation (products & process)• Non-technological innovation

Inventions implemented and taken to market

Anything that is new to business

Innovation - Perspectives

INNOVATION

New ideas or behaviours (need not have scientific

novelty)

… aspect of the Knowledge Transfer process involving

the entrepreneurial exploitation of scientific and

technological knowledge

• Knowledge chain: creation, diffusion, conversion and commercialisation of knowledge• Knowledge Transfer (KT): flow of knowledge amongst all components of knowledge chain

TECHNOLOGICAL SENSE1 BUSINESS SENSE2

KNOWLEDGE SENSE3

TRIPLE HELIX SENSE4

CLUSTER SENSE5

…. process whereby Academia, Gov & Industry collaborate to

create /discover new knowledge/technology/products

/services are transmitted to intended final users……

•Technological innovation (products & process)

• Focus: innovation collaboration (social networks)• Triple helix players: government, educational & research institutions and private sector• KT (tacit & codified) is a major driver of collaboration

• Economic activity - cluster in particular locations, driven by advantages in efficiency (incl. transaction costs) , flexibility (mobility of labour / resources) & innovation (knowledge spillovers & cooperation)• Deep specialisation & co-opetition

….. results from reducing technical & economic

uncertainties, building thick ties, KT & enhanced

environments


INNOVATION – Pathways to a Knowledge Economy

TY

PE

S o

f D

EV

EL

OP

ME

NT

TYPES of ECONOMY

STAGE of ECONOMIC DEVELOPMENT

Subsistence Emerging Developing Transitioning Developed

Subsistence -focused

Economy

Commodity -based

Economy

Knowledge -based

Economy

Knowledge - driven

Economy

Tra

dit

ion

al

e-

De

ve

lop

me

nt

Path C – slowest, costly & more limited way towards a knowledge economy

Path B –costly, slow but more common way in transitioning economies moving towards a knowledge economy

Path A – Faster, easier & better way towards a

knowledge economy

* Adapted from Knowledge Matters, 2008

competitiveness largely from economy

of scale

competitiveness largely through the economy of scope


FORMS OF INNOVATION – Business Sense

Technology Innovation Non-technology Innovation

Product Innovation

Major

Incremental

Process innovation

Changes in Management Techniques

Changes in Corporate Strategy

Changes in Organisational

Structure

Changes in Business

Model

Innovation (narrower sense) inventions implemented and taken to market

Innovation (wide sense) anything that is new (ideas / behaviours) to business

* Adapted from Innovation & Entrepreneurship in Biotechnology


TECHNOLOGY & the ENTREPRENEURSHIP – Business Sense

Technology Entrepreneur

Innovation

Economic Development

Central theme: appropriate application of technology through innovation which is dependent upon the skills and risk taking of an entrepreneur

Emerging technologies have changed the

imperative of competitiveness from

economy of scale (size) to economy of scope

(flexibility)

• clarity of leadership• openness & inquisitiveness• ability to create new value / organisation capability• flexibility & capacity to change• relationship building skills• convince others to share start-up risk• capacity to think for oneself• self-confidence: optimism & personal drive• sense of autonomy, independence & risk-taking• passionate

Innovation Management (R&D & Commercialisation

processes)

Entrepreneuship(entrepreneurial energy - E=MC3)

M (attributes & motivations)

C3 (creativity in business)

• creativity in technology• creativity in planning• creativity in marketing

Consequence

economy of scale no longer hold the key to

competitive advantage as it previously did

Entrepreneurial climate – convergence of people, culture & technology

* Adapted from Innovation & Entrepreneurship in Biotechnology


PE

RC

EN

TIL

E

DISCOVERY SKILLS

Associating

Questioning

Observing

Experimenting

Networking

100

40

80

60

Non-innovators

Scott Cooke

Pierre Omidyar

Michael Lazarridis

Michael Dell

INNOVATIVE ENTREPRENEURS – Innovative Skills

1. Associating: ability to successfully connect seemingly unrelated questions, problems, or ideas from different fields

3. Observing: produce uncommon ideas by scrutinising common phenomena

2. Questioning: asking the questions that challenge common wisdom – to find the right questions – “why’, “why not” & “what if”

4. Experimenting: construct interactive experiences and try to provoke unorthodox reponses to see what insights emerge

5. Networking: devoting time & energy to finding & testing ideas through a network of diverse individuals – sparking radically different perspectives

* Adapted from Harvard Business Review – Dec 2009

Survey of > 3,000 execs & innovators


LINKING THE TECHNICAL AND SOCIAL DOMAINS The Business Model – reducing the technical & market uncertainties

Appropriate adjustments to BUSINESS MODEL

• Identified Market Segment

• Defined Value Proposition

• Elements of the Value Chain

• Defined Cost and Margins

• Position in Value Network

• Competitive Strategy

The Management Team understands how their decisions impact the defined Value

Proposition

Economic Value from Technology – choice of Business Model rather than some inherent

characteristic of the Technology

Measured in Technical

Domain

•Technology Feasibility

•Technology Performance

•Other Technology Criteria

TECHNICAL INPUTS

High Technical uncertainty &

ambiguity

ECONOMIC OUTPUTS

•Consumer Value

•Price

•Profit

•Other Economic Criteria

Measured in Social Domain

High Market uncertainty &

ambiguity


COMPONENTS OF SUCCESSFUL INNOVATION – Business Sense

INNOVATION CENTRED

Technology PushProduct-Centric

Technology PullCustomer-Centric

Honest &Inspiring

Leadership

Coherent&

Connected Culture

Reliable &

Consistent Core

Systems

Realistic &

Achievable Goals

Focused Strategy

to Realise GoalsBuild

Enabling Organisational

Structures

Build & DeployCore

Strengths

Driven by the BUSINESS

MODEL

Sustainability

Competitiveness

Purpose-led&

Value-driven

* Adapted from The Game Changer


INNOVATION PROCESS (NPD & NBD) – Business Sense

FundamentalResearch

Applied Research

Technology & Prototype Development

Commercialisation & Product Launch

STAGE 3Feasibility

STAGE 4Development

STAGE 5Validation

STAGE 6Market Launch

STAGE 7Consistent BusinessOperation

G3 G4 G5 G6STAGE 2Detailed

AssessmentG2

Proof of ConceptSpin-outsStart-ups

Entrepreneurship Skills Professional

Management Skills

Start

Proof of Principle

Internal ideas, IP & projects only

Open Innovation – internal & external paths to market

Closed Innovation – successful innovation requires internal control

External ideas & outsourced projects acceptable


FORMS of the INNOVATION PROCESS (2) – Business Sense

Extent to which innovation outsourced / partnered

Su

pp

ly o

f In

tell

ectu

al C

apit

al Outsourcing decisions

based on companies needing to control the

innovation process

Outsourcing decisions based on leveraging on the intangible assets –

learn vs control innovation process (collaboration &

partnership)

REFORMED MARKETS

REDEFINED MARKETSClosed Innovation

Open Innovation

competitiveness largely from economy

of scale

competitiveness largely through the economy of scope

Tangible-assets (TA) intensive

process

Intangible-assets (IA) intensive

process

* Adapted from Knowledge Matters, 2008

TA

IA

TA

IA

TA

IA

TA

IA


LINKING THE TECHNICAL AND SOCIAL DOMAINS The Knowledge Value Chain - Knowledge Transfer (KT)

Mobility of Human Capital within & between Domains

SOCIAL DOMAIN

•Industry

•Private Sector

•Public Sector

•Governmental

•PPP

•Community

Mechanisms of Knowledge

& Technology

Transfer

SCIENCE & TECHNICAL

DOMAIN

Formal& Informal

contacts within Professional

Network

Researchers

KnowledgeProduction

&Diffusion

IP Licensing

Spin-outs

Joint Academic-Industry Ventures

Tacit Knowledge

Codified Knowledge

Absorptive Capacity


REGIONAL ECONOMIC & INNOVATION PERFORMANCE

Regional Specialisation (clusters – firms (including

suppliers, consumers & communities) , financial,

public, universities, organisations for

collaboration & media)

Urbanisation (offer diverse & creative

environments – proximity to academic

institutions)

Regional Economic Performance

(Innovation Performance)

Business R&D

Public R&D

Patent Output

• incremental reduction of technical and economic uncertainty• continuous interaction across organisations• transferring technology & tacit skills• commercialising new technologies• innovation enhancing environment

Innovation is based on:

Business environment:

• Funding – financial capital• Skills & recruitment – human capital• Assets & infrastructure – physical capital• Intellectual assets – knowledge capital• Global marketing position – market capital• Networks – social capital

New Product Development (NPD) & New Business

Development & commercialisation (NBD)

Processes

* Adapted from Cluster Red Book


Business Strengths

• Large contributors to provincial GDP• Areas of specialisation• Sectors with apparent presence of innovative enterprises

University Research Strengths

Government Strengths

•Public research institutions: ARC, CSIR, MRC, iThemba Labs, African Astronomical Observatory• Provincial government entities support of knowledge intensive activities & innovation• Supportive government programmes: SPVs, THRIP, Regional TIA, RIF, PIC

• Medicine and medical sciences• Engineering• Environmental sciences• Biological sciences• Social sciences• Business & commerce• Mathematical sciences

WESTERN CAPE TRIPLE HELIX – COFISA Findings

* Adapted from COFISA study – Oct

2009

• Biomedical, drug discovery & pharmaceuticals• ICT: software, information management & media

Current Potential

But• Lack of trust between players• Business & academia not innovation oriented• Dispersed innovation activities across players• Specialisation focus not matched amongst players• Divergent objectives amongst players• Increased bureaucracy & admin – gov. &universities• Inadequate VC funding, & uncertainty of capital & operational funding


Innovation is about the convergence of ……..

Thank You !!!

PEOPLE

CULTURETECHNOLOGY

FINANCIAL CAPITAL

HUMAN CAPITAL

PHYSICAL CAPITAL

KNOWLEDGE CAPITAL

MARKET CAPIAL

SOCIAL CAPITAL

I N N O V A T I O N

a perspective on innovation fh 2010 innovation festival

Business

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