An Adaptive Response to the Converging Forces of Innovation and Economic Globalisation

An Adaptive Response to the Converging Forces of Innovation and Economic Globalisation March 2010 Neil Movold Managing Director SB2 International Ventures Limited Best way to Predict the Future, is to Create it!

1.0 - Today’s Challenges

New Zealand and the Global Economy “To survive in a world of shrinking economic distance, New Zealand business must organise itself in complex systems spanning many countries, tapping into differences in costs, skill, resources and tastes to maximise overall returns.” (source: Office of the Minister for Economic Development – Advancing Economic Transformation, 2007) “Enhance global knowledge transfer by assisting New Zealand firms and industries to locate, transfer and absorb new knowledge and technologies from overseas.” (source: Office of the Minister for Economic Development – Advancing Economic Transformation, 2007) “New Zealand’s vision need to be firmly connected to the global economy in ways that are in the best long-term interests of all New Zealanders. Achieving this will come about through strengthening connections between local businesses and the global economy. This needs to be done through (1) more sophisticated and integrated in-market support, (2) greater fostering of international investments and partnerships, and (3) promoting increased collaboration offshore.” (source: Export Year 2007 – Platform for the Future)

Need to Manage Innovation Ecosystem “Given our unusual RS&T funding profile... ‘low rate of collaboration and ideas flowing from universities and research institutions to business’… this is not compatible with a future in which New Zealand will have to face many challenges to improve its productivity and maintain its relevance to the world.” (source: Office of the Prime Minister’s Science Advisory Committee, ‘Improving translation of publicly funded research for economic benefit’, Sep 2009) “One reason that improving the commercialisation of science is challenging is that the process of commercialising science is complex, involving numerous connections and relationships among participants and institutions. That is why it is referred to as an ‘innovation ecosystem’. (source: ‘Standing on the shoulders of science: Getting more value from the innovation ecosystem’, The New Zealand Institute, Dec 2009) “The issue of going to scale is critical for a small country far from its potential markets. Consideration must be given to what stage in the innovation chain should international partnering opportunities be sought on the way to market. (source: Office of the Prime Minister’s Science Advisory Committee, ‘Improving translation of publicly funded research for economic benefit’, Sep 2009)

The Evidence-Based Policy “Paradox” Policy is about solutions for the Future – looking forward We can project trends going forwards… but all trends eventually change over time

The Evidence-Based Policy “Paradox” But conventional “evidence” is about the Past – a typical economic development approach

Diversity of Opinions Everyone involved in the Paradox resembles one of these partially sighted persons

1.0 - In Summary • The impacts and challenges of Economic Globalisation are strongly linked with a country’s ability to embrace Innovation • The Evidence-Based Policy Paradox is alive and well! • There are a myriad of opinions around what these impacts and challenges are and how to deal with them that is leading to various silo approaches and inadequate steps forward

2.0 - But Wait! … the World is Evolving and Getting More Complex!!

Turbulent Times and Many Forces at Play! Globalisation Regulation Competition Customer Demand Technology Market Changes

The Need for Adaptability

Influence Has Been Revolutionized A large portion of new ideas and formal collaborative relationships come from external contacts

The Massive Filtering Problem Even once found, few systems currently offer clues about an external contact’s trustworthiness, communication skills or willingness to help What People Value in Expertise: o Trustworthiness o Communication Skills o Willingness to Help o Experience o Currency of Knowledge o Awareness of Other Resources o Extent of Knowledge

Findability as Alternative to Search is Now Key! The cost of not finding the right people and information is too great!!

2.0 - In Summary • While time is spent assessing the current economic situation, the world is evolving with new realities and becoming more complex • Many forces and changes in society are outpacing the ability to educate for change using historical approaches • Growing external networks and realm of influence are revolutionizing business and economic growth • Traditional search and introduction approaches to finding the most appropriate external contacts are becoming inadequate – Findability is now the key!

3.0 - How to Approach a Solution?

We are Dealing with Complex Times Complex times require a toolkit that allows for: o managing high levels of uncertainty o understanding intent in a rapidly changing environment o doing more with less o making decisions in inherently complex environments o managing knowledge critical to the organisation and nation o evaluating impact of initiatives o making invisible issues visible

Solving the Paradox It is NOT about: Predicting the future based solely on preconceived ideas and the past It IS about: Exploring possibilities for the future to ensure that strategies are robust

Solving the Paradox It is NOT about: Just accumulating, extracting and recording what everyone knows It IS about that… AND: Looking ahead, beyond usual timescales and looking across, beyond usual sources while fostering innovation and Communities of Practice to harness intangible assets

Harnessing Collective Intelligence The trends are undeniable and the opportunities compelling “No one knows everything, everyone knows something...“ Pierre Lévy (1997)

We Cannot Ignore Technologies Available to Us

Adjusting to the 21st Century Society

It’s Not the Technology! “... it’s the emerging social practices” Howard Rheingold

Approach Needs to Embrace Legacy

The Cost of ‘What We Don’t Know, We Don’t Know” “People had to be aware of their lack of relevant knowledge and be prepared to explore the area of their ignorance with suitable questions and help from other people in similar positions.”, source: Reginald Revans “… the lackof efficient and reliable search often results in delayed decision, quality of work and missed opportunity which does not get classified in the right bucket.”, source: Search2.0

3.0 - In Summary • Complex times requires a Toolkit approach • The primary focus must be one of embracing social practices, with secondary focus on the evolving interconnection of these practices and technology • We must break free of the dependency on pre-conceived notions • The focus must be on looking ahead, fostering communities of practice, while harnessing intangible assets • Awareness of the cost of the “what we don’t know, we don’t know” culture • Harnessing collective intelligence, a transdisciplinary approach is necessary to take into consideration the complexity of the problem, integrating understandings, approaches, data, methods, and arguments from more than one discipline

4.0 - Pulling It All Together – Informed Navigation

Building Competitiveness & Innovation It is about: o Embracing complexity o Knowing that there is no one right answer o Working within the contours of the Organisation, the Nation and the World o Knowing that context is key

Its All About Informed Navigation Informed Navigation is not about searching, but finding; not about access, but sharing. Informed Navigation recognizes that human beings do not seek and utilize information as individuals, but as communities.

Value of Informed Navigation o Targeting the right knowledge and insight to develop a finely-tuned strategy o Providing a deep, forensic analysis of internal and external contacts and opportunities that would not otherwise be found o Mapping a highly qualified value network of synergistic partners, development opportunities and funding o Providing in-market support, advice and engagement, going past introductions to complement and extend public sector approaches o Sharing risks and rewards, co-creating accelerated and sustainable success

Supporting Two Converging Forces Supporting Structures and Systems - harnessing and fostering the convergence of Open Innovation and Economic Globalisation, while firmly grounding both to the ability to access Resources, Capital and Pathways to Market

Creating a New Reality for Success This Value Creation comes together by understanding the Purpose and Nature of International Organisations, Markets and Society and mitigating risk by ensuring that activities are Extending and Complementing existing programmes

Identifying Value Creating Opportunities

Multi-Sector Integrated Approach This approach provides the following measures of success: • Investing in skills and knowledge • Increasing international business connections • Investing in infrastructure for a stronger economy • Lowering business costs • Strengthening the environment for innovation • Forming key partnerships to strengthen the economy • Increasing business exports and international readiness Three Key Stakeholder Groups: 1) Public Sector 2) Private Sector 3) Academic / Research Three Core Drivers for Success: 1) Enhance Collaboration 2) Drive Economic Growth 3) Accelerate International Success Business influencing / guiding Public and Academic/Research Sector support

Multi-Layered Stakeholder Engagement This approach and focus spans across countries

International Co-Creation of Value Facilitating and managing the “docking” of selected value network partners and resources with the competencies to fit an organisation’s individual needs e.g. Research & Development (Academic e.g. Business e.g. Logistics Sector) Services Services In- Market Partners (Private Sector) (Private Sector) and Resources SOLUTION: (Public, Private and Academic Organisation’s / Research Sectors) International Readiness and e.g. Market e.g. Financial Success Analysis Services (Public Sector) (Private Sector) e.g. Manufacturing Facilities (Public Sector) Domestic Partners and Value occurs by mitigating the risks created by an Resources individual partner’s bounded areas of focus and expertise (Public, Private and Academic / Research Sectors)

The International Expressway On Ramps = Government, Incubators, Investors, Organisations, EDAs, Academic / Research, etc. Off Ramps = License, Trade, Capital Markets, Entry / ROI Market Access and Growth, Investment, Gateway Physical Presence, Partnerships etc. Entry / ROI Gateway

Where Should We Be Looking For Off Ramps? Regions in the Sector Synergies / Niche Market Opportunities World which have: Sector Synergies / Niche Market Opportunities BRAINS + MONEY + CULTURE Culture  Demand-based, Outward Focused Innovation  Entrepreneurship has Deep Roots  Increased Speed (commercialisation, innovation) Money Brains  Improved Scope =  Scalability  Multi-dimensional Innovation  They “Huddle Well”

These Regions are Intelligent Communities of Practice

Why Are They Different? Intelligent Communities of Practice: • Promote awareness and collaboration • Strong levels of trust and integrity • Identify and leverage high-value individuals • Share best practices • Stable and diverse economic growth • Have superconductivity of connections • Produce unintended consequences Assumptions: • Learning is fundamentally a social phenomenon • Knowledge is integrated in the life of communities that share values, beliefs, languages, and ways of doing things • Real knowledge is integrated in the doing, social relationships, and expertise of these communities • The processes of learning and membership in a community of practice are inseparable • Knowledge is inseparable from practice • It is not possible to know without doing. By doing, we learn. • Empowerment – or the ability to contribute to a community – creates the potential for learning

Intelligent Community Indicators Source: John Jung, Intelligent Community Forum (www.intelligentcommunity.org)

What Makes These Communities Successful? They actively engage in “Future-Proofing” – Creating Intelligent Futures and building on a new economy with the following elements: 1. High Quality INFRASTRUCTURE 2. Exceptional EDUCATION creating, attracting and sustaining SKILLED WORKERS 3. Attracting INNOVATION and CREATIVITY 4. Building on COLLABORATION and inspiring Superior LEADERSHIP 5. Effective and stable GOVERNANCE 6. Excellence in ARCHITECTURE and URBAN DESIGN 7. Nurturing CULTURE and DIVERSITY 8. Attracting RISK CAPITAL, Incubating and Commercializing 9. Promoting DIGITAL INCLUSION 10. Ensuring SUSTAINABILITY 11. Ensuring HEALTH and SAFETY 12. Effective MARKETING and ADVOCACY Source: John Jung, Intelligent Community Forum (www.intelligentcommunity.org)

4.0 - In Summary • The problem is complex and there is a necessity to embrace the contours and contexts of its complexity • An Informed Navigation approach provides needed knowledge, insight, engagement and influence • Informed Navigation provides a key support and engagement mechanism for the two converging forces of Open Innovation and Economic Globalisation • Value creation is achieved through a multi-sector integrated approach, recognising the need to understand the relationships between resources • Domestic efforts to deal with the complex problem cannot be isolated from international activities, which should be centred around engaging Intelligent Communities of Practice – parallel activities must occur!

5.0 - Discovering and Understanding Relationships

Flow of Discovery Discovery is less about predicting precisely right about what someone wants It is more about the entire flow of discovery, with all the hits and misses

Co-Creating Value Through Flow of Discovery 1 2 3 4 5 6 8 7

If People Were Perfect If people were perfect, we wouldn’t need to collaborate – we would just clone!

The Necessity – Understanding Relations Between Resources (Contours & Context)

Problem of Two Separate Worlds Intangible assets and human interactions represent 50-70% of business value and activity, yet management practices are poor to non-existent THE PROBLEM: Human interactions and business transactions are treated as two separate worlds Source: Intangible Asset Magazine, Jan 2009, Accenture 2004

Utilizing Tangible and Intangible Assets Transactions Roles Deliverables Utilize Assets Realize Value Tangible and Intangible Assets Transactions Transactions Roles Deliverables Roles Deliverables Utilize Assets Realize Value Utilize Assets Realize Value Tangible and Intangible Assets Tangible and Intangible Assets Participants in a Value Network, either individually or collectively, utilize their tangible and intangible asset base by assuming or creating roles that convert those assets into more negotiable forms of value that can be delivered to other roles through the execution of a transaction. (Source: Verna Alee, ValueNetworks.com)

The Informed Navigator’s Value Network

5.0 - In Summary • Findability is more about the entire flow of discovery than precision predictability • The flow of discovery can be harnessed to co-create economic value and potentially unpredicted new value creation • It is a necessity to understand the relations between resources in the flow of discovery, with particular focus on the various contours and contexts involved • Discovering the tangible and intangible assets utilised between resources will bridge the gap between human interactions and business transactions • Informed Navigation centres its strength around the relationships necessary for fostering co-creation of more negotiable forms of value

6.0 - An Action Learning Case Study

Intelligent Communities of the World Nearly 90 cities and regions around the world are officially recognized as Intelligent Communities Source: Intelligent Community Forum (www.intelligentcommunity.org)

Case Study: Why is it Canada’s Technology Triangle (CTT)? Diverse. Innovative. Entrepreneurial. Creative. Enterprising.

Case Study (CTT): World Class Academic / Research Institutions University of Waterloo (UofW) Wilfrid Laurier University (WLU) • World’s largest Mathematics / Computer Science Faculty • Canada’s second largest Business and • World’s largest Co-operative Education Program (12,000+) Economic School • Canada’s largest Engineering School – fully Co-op • Schlegal Institute of Entrepreneurship • No. 1 reputation ranked University in Canada • Largest Business Co-Op Program • One of Canada’s most research intensive Universities • 12,000+ students • Spins off 25% of all technology start-ups in Canada • Policy 73 – You Make it, you Own it, end of story! • New School of Pharmacy – 1st in decades in North America Conestoga College • Centre for Entrepreneurship, Business and • Highest ranking Polytechnic Institute in Technology – MBA in Entrepreneurship Ontario for 9 consecutive years • 25,000+ students • 83,000+ students On a regular basis, Microsoft hires more Over 150 Research Institutes, many world graduates from UofW than from any other institute in the world renowned, including: Bill Gates’ only Canadian visit on recent North • Institute of Quantum Computing America University tour was to UofW on 21st • Perimeter Institute of Theoretical Physics February, 2008 • The Centre for International Governance Innovation (CIGI) • Giga-to-Nano Electronics Laboratory University of Guelph (UofG) • The Centre for Wireless Communications • One of Canada’s most research intensive Universities • Waterloo Centre for Automotive Research • Largest MBA in Agriculture in North America • Schlegel Centre for Entrepreneurship • World leader in agriculture and bio-science research • Guelph Food Technology Centre • Understood to patent more bio-science patents than any other research • Academic Council on the United Nations System institution in the world Over $344 million in R&D. • College of Biological Science – only one of its kind in Canada • 18,000+ students

Case Study (CTT): A World Class Eco-System Evolving

Case Study (CTT): Tapping Into the Ecosystem

LignoTech is a bio-composites company based in Ashburton, New Zealand SB2 facilitated a 3 day intense in-market visit to Ontario in July 2009 Their in-market objectives: 1. To identify a location to establish their North American Headquarters 2. To identify a location to establish a Centre of Excellence and Pilot Plant facility 3. To identify opportunities to raise capital (USD$5 to $8 million) to deal with 1. and 2.

Harnessing Informed Navigation - Down to Business! 30+ Multi-Sector Organisations 40+ Decision Makers / Influencers Not a Show and Tell visit!

Summarising

Evidence Based Paradox! Collective Intelligence Findability is Key! Getting on planes … failing! Understanding Relations Innovation is Co-Created! Engaging Communities of Practice Culture Money Brains Knowledge and Insight

How Can This Work? Behaviour, habit & culture changes always come first Culture Monetization is a possible consequence Money Brains (not a starting point!) Every large and engaged audience can be turned into economic value Attract the right people by providing relevant content with context Get and hold their attention – build trust Think Followers not Users Offer added values to convert followers and intangibles into currency

Start Simple With Small Steps!

Untap the Potential

Inventing the Future!

Neil Movold Managing Director neil@sb2ventures.com www.sb2ventures.com

APPENDIX: Understanding the Tangibles and Intangibles

Research and Innovation Research is the transformation of money into • Knowledge new to the offering • Knowledge new to the company • Knowledge new to the industry • Knowledge new to the world Innovation is the transformation of knowledge into money “The traditional focus on direct support to R&D has been reduced and more attention has been given to improving market and systems mechanisms for sustained innovation performance” (OECD)

True Innovation True innovation is not the making of novel units of output but the designing and creating of new markets through service provision Source: Steve Vargo, sdlogic.net

Value is Always Co-Created

Is It About Open Innovation?

Open Innovation means that Companies (or Countries / Individuals) should make much greater use of external ideas and technologies in their own business, while letting their unused ideas be used by the other counter parties (Cross-borderly). Source: Chesbrough, 2006

Enterprise Behaviours to Open Innovation: • Networking • Collaboration Knowledge can only ever be volunteered: • Corporate Entrepreneurship • IP Management it cannot be conscripted • Research & Development Open Innovation Issues: • It’s really uncomfortable (generational issue) • Governance, control • What is the asset? • Shared assets • Openness (tools, content, process) • Vulnerability Collaboration Sensemaking Knowledge Ideation Insight Collective Intelligence People + Interest

Why is Insight Important?

The “Ah Ha” Moment Insight – 2 Types 1. As seen from Cognitive Science Community • To name the process by which a problem solver suddenly moves from a state of not knowing how to solve a problem to a state of knowing how to solve it • Complex, deep, qualitative, unexpected, and relevant • A Moment of Enlightenment or Spontaneous Insight 2. As seen from Information Visualisation Community • An individual observation about the data by the participant, a unit of discovery • An advance in knowledge or a piece of information • Knowledge Building Insight

Insight and Units of Knowledge Insight as knowledge and information is more or less units of Knowledge Partial Situated Tacit Explicit Scientific Intuition Living

Lack of Insightful Decisions

Tacit and Explicit Knowledge are Inseparable “While tacit knowledge can be possessed by itself, explicit knowledge must rely on being tacitly understood and applied. Hence all knowledge is either tacit or rooted in tacit knowledge. A wholly explicit knowledge is unthinkable.” Source: Michael Polanyi “Knowing and Being”

The Swing in Approach Source: The Gilbane Group

Apprehending the Inner Nature Insight is the act or result of apprehending the inner nature of things or seeing intuitively Source: Websters

Informed Navigation: Different Perspectives Perspectives filter an information space according to particular situations Perspectives A and B preferentially select different types of resources and relations Source: Mark Gahegan, University of Auckland

Informed Navigation: Remembering Situations of Use Same Resource resource Different Situations Source: Mark Gahegan, University of Auckland

Collaboration Teaches Context “Human collaboration is what wraps context around and within a knowledge element/object” Source: Richard Close

Combining Tangibles and Intangibles Concepts Tasks Knowledge Resources Nexus Places Tools People

Intangibles are Real They are real assets that accumulate as a result of specific observable, manageable activities They are real negotiables that can be traded for other tangible and intangible value They are real deliverables that build relationships

An Adaptive Response to the Converging Forces of Innovation and Economic Globalisation

by InsightNG Solutions Limited on Mar 09, 2010

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An Adaptive Response to the Converging Forces of Innovation and Economic Globalisation — Presentation Transcript