1. A PERSPECTIVE ON INNOVATION 2010 Innovation Festival 8 & 9 March 2010 F Hendricks – Cape Biotech Trust

3. INNOVATION – Pathways to a Knowledge Economy TYPES of DEVELOPMENT TYPES of ECONOMY STAGE of ECONOMIC DEVELOPMENT Subsistence -focused Economy Commodity -based Economy Knowledge -based Economy Knowledge - driven Economy Traditional e- Development 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 Subsistence Emerging Developing Transitioning Developed

4. 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

6. 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

8. COMPONENTS OF SUCCESSFUL INNOVATION – Business Sense Honest & Inspiring Leadership Sustainability Competitiveness * Adapted from The Game Changer INNOVATION CENTRED Technology Push Product-Centric Technology Pull Customer-Centric Coherent & Connected Culture Reliable & Consistent Core Systems Realistic & Achievable Goals Focused Strategy to Realise Goals Build Enabling Organisational Structures Build & Deploy Core Strengths Driven by the BUSINESS MODEL Purpose-led & Value-driven

9. INNOVATION PROCESS ( NPD & NBD) – Business Sense Proof of Concept Spin-outs Start-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 Fundamental Research Applied Research Technology & Prototype Development Commercialisation & Product Launch STAGE 3 Feasibility STAGE 4 Development STAGE 5 Validation STAGE 6 Market Launch STAGE 7 Consistent Business Operation G3 G4 G5 G6 STAGE 2 Detailed Assessment G2

10. FORMS of the INNOVATION PROCESS (2) – Business Sense 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 MARKETS Closed Innovation Open Innovation competitiveness largely from economy of scale competitiveness largely through the economy of scope Intangible-assets (IA) intensive process * Adapted from Knowledge Matters, 2008 Extent to which innovation outsourced / partnered Supply of Intellectual Capital Tangible-assets (TA) intensive process

14. Innovation is about the convergence of …….. Thank You !!! I N N O V A T I O N PEOPLE CULTURE TECHNOLOGY FINANCIAL CAPITAL HUMAN CAPITAL PHYSICAL CAPITAL KNOWLEDGE CAPITAL MARKET CAPIAL SOCIAL CAPITAL