nordic marine innovation - Øyvind fylling-jensen

OPEN INNOVATION – APPLICABLE IN THE SEAFOOD SECTOR?

Competition and Cooperation – Innovation as a driver for competitiveness in the Nordic Marine Sector Nordic Marine Innovation Conference - Oslo, January 25th 2012 Øyvind Fylling-Jensen, CEO Nofima AS

25.01. ©Nofima/ØF-J/2012/NICE 1 1

©Gregory Colber

Agenda

• A few words on Nofima

• Some words on innovation

• Some words on open innovation

• Some examples

• Answering the question: Is open innovation applicable in the seafood sector?

25.01. ©Nofima/ØF-J/2012/NICE 2

25.01. 3

Nofima – Norwegian Institute of Food, Fisheries and Aquaculture Research

• Established Jan 1 2008, with history dating back to 1931

• Research, development and innovation partner for the food, fisheries and aquaculture industries with focus on industrial value creation along the value chain

• Approx. 460 employees – Approx. 220 researchers

• 75% with PhD – 220 Scientific papers and more than 500

industry reports in 2011 – Modern R&D infrastructure – Broad experience in EU projects

• Turnover of NOK 474 mill (2010) (approx. 61 mill) (Non dividend policy)

• Owned 56.8 % by the Norwegian State, 43.2 % by private-public interests

©Nofima/ØF-J/2012/NICE


Innovation is needed in the seafood sector

Innovation is about creating new and sustainable growth over time

Start-up

Growth

Maturity

Stagnation

New growth

©Nofima/ØF-J/2012/NICE 25.01. 6

Innovation drivers


Technology

Price &

Costs

Market & demand

There are many drivers for innovation in the seafood sector…

• Profitability – New entrants – New products – New packaging – New channels – New processes – New technology

• Consumer trends • Value chain power shifts • Procurement directives

• Technology shifts

• Legislation • NGOs


©ØF-J

©Nofima/ØF-J/2012/NICE 9

Health

Environment Indulgence

& taste

Convenience

25.01.

Innovation is coming from different sources


• State of the art R&D • Disruptive technologies • Breakpoints

• Market demand • Product innovation • Packaging • Distribution • Branding

• Other industries (meat, poultry, ingredient etc.)

• Cost reduction • Process innovation • Packaging

• Cost improvement • Productivity/Efficiency gains • Process optimization • Incremental improvements

Company Suppliers

RTOs & Universitiy

R&D Customers

Innovation takes place along the whole seafood value chain, but….


Foto: EFF

The seafood industry is innovative!


25.01. 13 03.02.2012 13

A lot of focus is on product development…

Source: Doblin - On Innovation Effectiveness, March 2005

Volume of innovation efforts over 10 years

Finance Process Product/Offering Delivery

Business model

Product system

Service

Channel

Brand

Customer experience

Network

Core process

Enabling process

Product perform-

ance


25.01. 14 03.02.2012 14

Cumulative value creation over 10 years

…but this is not creating the greatest value”


Business model

Product system

Service

Channel

Brand

Customer experience

Network

Core process

Enabling process

Product perform-

ance

Source: Doblin - On Innovation Effectiveness, March 2005 ©Nofima/ØF-J/2012/NICE

Therefore, the analysis of innovation has to include several dimensions:


Business model & Service

Market

Product &

technology

Geography

Segment


Business model

Product system

Service

Channel

Brand

Customer experience

Network

Core process

Enabling process

Product perform-

ance

Channel

- which sum up to four opportunities for innovation


Finance

Process

Product

Distribution

Source: Doblin - On Innovation Effectiveness, March 2005

Open Innovation


Open Innovation is an important tool in the fragmented seafood industry

• Risk reduction • Reduced cost of innovation • Increased innovation speed • Improved success rate • Broader access to ideas • Learning • Capability building • Competence sharing • Solving grand challenges

together (i.e. salt, sugar, fat) • etc..


Cooperation in areas where competition is of lesser importance

To create successful innovations you need an innovative mindset

Courage to be innovative

Behaviour and Attitude

Ability to synthesize and put into action

Challenge the ”status quo”

Taking risks

Ask questions

Observe and learn from others

Build and use networks

Try and fail

Think outside the box

Innovative business opportunities

©Nofima/ØF-J/2012/NICE 25.01.

Adapted from Christensen et al, The Innovators DNA

19

A process of opening and concentration


• Analysis • Observations • Interviews • Challenge the

truth • Look to other

industries • etc.

Diverging ideas

Synthesis Analysis

& Insight

Innova-tion

portfolio

Analysis & insight as basis for

idea generation

Business opportunities

Selection

Open Innovation alters the borders of the firm Closed Innovation Principles • The smart people in the field work for us

• To profit from R&D, we must discover it,

develop it and ship it ourselves • If we discover it ourselves, we will get it to the

market first

• The company that gets an innovation to the market first will win

• If we create the most and the best ideas in the industry, we will win

• We should control our IP, so that our competitors don’t profit from our ideas

Open Innovation Principles

• We need to work with smart people inside and outside the company

• External R&D can create significant value, internal R&D is needed to claim some portion of that value

• We don’t have to originate the research to profit from it

• Building a better business model is better than getting to the market first

• If we make the best use of internal and external ideas, we will win

• We should profit from other’s use of our IP, and we should buy others’ IP whenever it advances our business model

Source: (Chesbrough, 2003)


Open Innovation is all about combining nine dots with four lines without lifting the pen?

25.01. ©Nofima/ØF-J/2012/NICE 22 22

Important points to remember in the process

1. Know the decision boundaries

2. Ask the right questions 3. Select the right people 4. Divide to smaller groups 5. Keep everybody informed

and aware of expectations 6. Narrow down the ideas 7. Keep speed in the

following process 8. Know when to close for

own value creation


©ØF-J

A systematic approach to value added seafood through research, development and innovation (RDI)

25.01. 24

Action points •------------------ •------------------ •------------------ •------------------ •------------------ •------------------ •------------------ •------------------ •------------------

Pilot WS

WS R&D

WS Industry

Compile &

Prioritize

Trend workshops •Researchers •Industry representatives •Alone and toghether

List RDI trends by • Probability • Importance

Prioritize and implement the RDI strategy


The seafood sector has to move from the traditional development model….

The selected projects are developed in own company

Some projects are repositioned from ”no-go” to ”go” Creative phase Realization


… to a model were different strategies lead to increased value creation

Existing, external companies are developing the Innovation project

Innovation projects are developed within the company

”Spin off” – projects are developed with new players

Creative phase Realization


In the seafood sector open innovation is a good tool.. Large differences in RD&I capacity:

• Very few large corporations with own R&D

• The industry is characterized by: – Fragmented value chain – SMEs with low R&D capability – Low R&D spending – Cooperative R&D financing

• High focus on product innovation, but – Nine out of ten introductions

fail in the market • High focus on process innovation

as this historically renders more value



Arcimboldo

Value chain comparisons

• What can producers of pelagic fish learn from other value chains for food?

• Comparison with chicken,

potatoes and coffee • 4 competitors in the group • Very different regarding

resources and position – Different lessons learned


Learning from other industries – The poultry industry


Nye bearbeidede produkter Foto: Marine Harvest


Developing the sushi market for retail

• Sushi is a growing trend – But still a restaurant phenomenon (at least in Norway)

• Starting a project to develop the retail market – Along with producers, distributors, retailers


Competitor process benchmarking

• 1999-2000: comparing the production processes of two producers of frozen fillet

• Very similar firms (from the outside)

• Both equally convinced that the competitor would have the most to learn…

• Both had lessons to learn!


Technology innovation


NIR sorting of household waste

NIR sorting of salmon (fat & colour)


Thank you for your attention Contact address: [email protected]

Cell: +47 917 48 211

Acknowledgements: Norwegian Research Council NICE EU FWP 6&7 FFL FHF Audun Iversen Hilde S. Mortvedt Astrid Nilsson Jens Petter Vold

mailto:[email protected]�

nordic marine innovation - Øyvind fylling-jensen

Business

analysis of innovation

innovation effectiveness

cooperation innovation

isopen innovation applicablein

significant value

seafood sector25

external rd

ourselvesinternal rd