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Innovation Hubs are part of 4G Innovation

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Innovation Hubs are part of the fourth generation (4G) of innovation theory and practice. These 4G Hubs are practiced by the Department of Energy.

Innovation Hubs are part of the fourth generation (4G) of innovation theory and practice. These 4G Hubs are practiced by the Department of Energy.

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Innovation Hubs are part of 4G Innovation Presentation Transcript

  • 1. Innovation Hubs – What, Why, Who, Where, When and How Industrial Research Institute Emeriti Activity Group Webinar August 22, 2012 Bill Miller, PhD President, 4G Innovation LLC CEO, Strategic Radical Innovation LLCCopyright – 4G Innovation LLC. All rights reserved 1
  • 2. Agenda of Webinar Why & What are Innovation Hubs (iHubs) Describe the Gaps filled by New Core Principles of iHubs Describe the New Principles an how they are applied in iHubs Describe the Genealogy of Innovation Theory and Practice in iHubs Describe Who, Where & When is an Example of an Innovation Hub (iHub) Department of Energy’s (DOE) Innovation Hub Program begins in 2010 Innovation Hub on Energy Efficient Buildings iHub built in an Energy Regional Innovation Cluster (E-RIC) $122 million competitive award from DOE; 754 page grant proposal Awarded in 2011 to the greater Philadelphia Innovation Center (GPIC) GPIC has 22 member organizations in a large regional public/private partnership Goal – Radical Innovation: reduce energy consumption in US Buildings (USB) sector by 50% within 20 years (USB 40% of US energy) ; target retrofit of commercial buildings of less than 100K SF (58% of commercial USB energy and 99% of all commercial buildings) with 50% reduction by 2020 Describe How the E-RIC’s iHub is Organized and Governed by WhoCopyright – 4G Innovation LLC. All rights reserved 2
  • 3. Why an Innovation Hub? Gap Problem: low business growth and weak demand Gap Cause: poor innovation methods that don’t effectively create radical innovation that transforms industries for growth Gap Solution is a new generation of innovation with Hubs which practice a new approach to R&D and Sales Example of new sales approach (Insight Selling) : July – August HBR cover story is The Secret to Smarter Sales HBR Article “The End of Solution Sales” says “The old playbook no longer works. Star salespeople now seek to upend the customer’s current approach to doing business.” And Hubs are part of the new Insight Selling. 3Copyright – 4G Innovation LLC. All rights reserved
  • 4. What is an Innovation Hub? (What) A new type of fourth generation (4G) innovation LARGE SCALE private–public partnership and project integrated with Insight Selling with many members and linked laboratories in multiple industries with a specific problem-solving focus, collaboration and funding (Why) To TRANSFORM A SET OF LINKED INDUSTRIES with RADICAL INNOVATION – Modeled after the Manhattan Project of WWII, but using extended 4G methodsCopyright – 4G Innovation LLC. All rights reserved 4
  • 5. Who forms an Innovation Hub? (Who) Multiple members from government, academia and industry centered in a regional cluster with a new goal and who create and operate a commercial/technical LARGE SCALE test bed Typically focused on overcoming commercial, technical and regulatory barriers that block achieving a specific radical innovation goal that would transform an industry to achieve a new level of economic performance and other value metrics Example of a Hub Goal: reduce energy consumption in the USA commercial building sector by 50% with retrofit of about one million buildings within 20 years – demonstrate the 50% in a real building retrofit within three yearsCopyright – 4G Innovation LLC. All rights reserved 5
  • 6. 4G Integrates Sales with R&D in Hub Core Industry Problem New 4G R&D 4G project Dominant Design Partners from Multiple industries Insight Selling Government & Academia 4G Innovation Hub – 4G Sales Demonstrates a New Way of Doing Business in an Industry as a new Dominant Design 6Copyright – 4G Innovation LLC. All rights reserved
  • 7. Sample of USA Regional clusters Innovation Hubs are located in ClustersCopyright – 4G Innovation LLC. All rights reserved 7
  • 8. Targeted Industries for Innovation Hubs on the DOC EDA(1) Roadmap These industries or sectors of the economy need radical innovation to improve productivity and quality, and reduce costs that have been increasing for decades Energy (supply, distribution and consumption …) Healthcare … life sciences Building Systems …Design, Build (retrofit) Industries are linked in the Construction Industry (Buildings consume 40% of energy in the USA) (1) Reference EDA paper in Science Progress 2009 “The Geography of Innovation” http://scienceprogress.org/2009/09/the-geography-of-innovation/ 8Copyright – 4G Innovation LLC. All rights reserved
  • 9. 4G Hubs enable Radical Innovation in Linked Industries Economic value Regulations Goal: 50% reduction in consumption Construction Energy Buildings Barrier: Retrofit Capability - People with knowledge, tools, technology and processes Information HVAC, windows, lighting and Technology (IT) other building 9 materialsCopyright – 4G Innovation LLC. All rights reserved
  • 10. Five (5) Department of Energy Innovation Hubs (to date) Formed since 2010 Fuels from Sunlight – Joint Center for Artificial Photosynthesis (JCAP) : Cal Tech & LBNL … Goal: Fuels from Sun 10 times more efficient than current crops Energy Efficient Building Systems - Greater Philadelphia Innovation Center (GPIC) – a hub in a regional cluster http://energy.gov/articles/energy-efficient-buildings-hub http://www.eebhub.org/ Nuclear Simulation & Modeling – Consortium for Advance Simulation of LWRs (CASL): Oak Ridge (ORNL) is lead, NC State, Los Alamos, EPRI, MIT, Sandia, UofM, TVA, INL, Westinghouse … Batteries and Energy Storage – Feb 2012 FOA; award pending Critical Materials Research – May 31, 2012 FOACopyright – 4G Innovation LLC. All rights reserved 10
  • 11. Michael Porter’s Model of the Forces of Change in an Industry is Modified with Hubs Michael Porter’s Model of an Industry controlled by Five Forces lacks two forces that block radical innovation and also lacks linkages in supply chains and between industries These two missing forces and linkages are managed with Hubs which create a larger scale of 4G effort following a new 4G process that is required to create and validate a new 4G dominant design to transform linked industries Uncertainty of new market demand for a new dominant design candidate that can transform linked industries Lack of individual and coordinated group capability of new entrants, suppliers, buyers, and substitutes to do radical innovation that requires creating and validating a new dominant design with linkages within and between industries 11Copyright – 4G Innovation LLC. All rights reserved
  • 12. Hubs manage New Forces added to Michael Porter’s Model 6th With 4G, Manage Uncertainty of New Market Demand for a New Dominant Design (DD) candidate linking industries 7th With 4G, Manage Capability to do Radical Innovation which requires creating a new DD from entrants, suppliers, buyers and substitutesCopyright – 4G Innovation LLC. All rights reserved 12
  • 13. Genealogy of Innovation Hubs reveals the 4G Principles & Practices Application of1. 1998: Michael Porters’s Regional Cluster Theory and Practice2. 1998 & 2001: Fourth Generation (4G) R&D and Innovation Theory and Practice • Apply Part of 4G’s 10th principle • Create new Innovation Application Labs to facilitate collaborative open innovation involving customers and suppliers • Apply Part of 4G’s 12th principle • Create Scalable Radical Innovation Projects to Transform Linked Industries3. 2009: Federal Government’s DOC EDA Regional Innovation Cluster Initiative Initial Focus: Energy Energy - a federal government identified “national challenge” DOE creates Innovation Hubs … Example: Energy Efficient Buildings Hub with $122M DOE grant 13Copyright – 4G Innovation LLC. All rights reserved
  • 14. Hub Principles adopted from fourth generation (4G) innovation Begin with a Large Problem (Opportunity) in an industry and a goal to radically transform that industry and linked industries with rapid learning of customers and suppliers in a large scale collaborative project that pulls solutions from multiple suppliers in linked industries and regulators To achieve radical goals - Apply a fast, iterative, prototyping process of discovering and testing the market needs and business models of both customers and suppliers that pulls solutions from many suppliers and regulators – Recognize this effort is much more than open innovation Have a realistic large scale test bed as a geographic HUB in one location to “learn by doing” and test revised industry practices and demonstrate achieved goals and stakeholder values Involve customers, suppliers and regulators in all the learning and testsCopyright – 4G Innovation LLC. All rights reserved 14
  • 15. Fast 4G Process with iterative prototyping of interim objectives Interim Objective 4G is a NON-linear model of innovation or process 15Copyright – 4G Innovation LLC. All rights reserved
  • 16. 3G Linear Model of Innovation – now obsolete Time Technology Transfer Market Product Basic Applied Or Research Research Service Development Entrepreneurship With a Business PlanCopyright – 4G Innovation LLC. All rights reserved 16
  • 17. 3G Linear Model of Innovation Time Technology Transfer Market Product Basic Applied Or Research Research Service Development Entrepreneurship With a Business PlanCopyright – 4G Innovation LLC. All rights reserved 17
  • 18. The Linear Model even with “use – inspired” research is replaced in HubsCopyright – 4G Innovation LLC. All rights reserved 18
  • 19. The Linear Model even with “use – inspired” research is replaced in HubsCopyright – 4G Innovation LLC. All rights reserved 19
  • 20. Limited University Research Funding by Industry – Why? According to NSF data Only 6% of the $55 million of university science and engineering research funding in 2009 came from industry Conclusion “Open innovation” is being blocked by the 3G linear model of innovation promoted by universities as technology transfer and licensingCopyright – 4G Innovation LLC. All rights reserved 20
  • 21. Paradigm Shift in 4G Hubs 4G 21 Copyright – 4G Innovation LLC. All rights reserved
  • 22. What are NOT Hubs Research parks, incubators, federal labs, venture capital funded entrepreneurship, proof-of-concept centers, any R&D organization like SEMATECH OR NIH , P&G “CONNECT AND DEVELOP”, ATP/TIP projects, SBIR projectsCopyright – 4G Innovation LLC. All rights reserved 22
  • 23. Example – Energy Efficient Buildings 4G: Begin with an Core INDUSTRY problem and need to change the dominant design in that industry Energy Energy Sources Consumption Sinks Problem #1 is low energy efficiency 23Copyright – 4G Innovation LLC. All rights reserved
  • 24. Analysis of Energy Use in BuildingsCopyright – 4G Innovation LLC. All rights reserved 24
  • 25. 4G Dominant Design (DD) To Achieve the Goal of 50% Reduction in Building Energy Consumption Radical Innovation is Required to Change the DD DD has Four Layers: Top – Economy model consisting of multiple linked industries (traded and non-traded) Industry model with linked supply chains & networks Business models of customer and suppliers in the markets and market segments in the industry Capabilities of customers and suppliers People with knowledge, tools ,technology and processes influenced by workforce education, regulations …Copyright – 4G Innovation LLC. All rights reserved 25
  • 26. 4G Process: Identify the Root Causes of an Industry Problem and Define a Solution Hypothesis as a new 4G Dominant Design Root cause of the energy efficient buildings problem (high consumption and cost) is fragmentation of the construction industry and an inefficient collection of design, build , operate and maintenance processes Solution Hypothesis (to be tested) is New industry structure and practices : “virtual vertical integration” and “integrated process” enabled with new information technology (new industry dominant design) Plus new technologies, education and regulationsCopyright – 4G Innovation LLC. All rights reserved 26
  • 27. Hub Project: Break the Project into Parts of the Solution as Task Teams Overall leadership by Penn State University Architecture Department 1. Design Tools – led by IBM 2. Integrated Technologies – led by UTC 3. Policy, Markets and Behavior – led by U of Penn 4. Education and Workforce Development – led by Ben Franklin Technology Partners 5. Commercialization and Deployment – led by Princeton U – Plasma Physics LabCopyright – 4G Innovation LLC. All rights reserved 27
  • 28. Example: Hub Test Bed 28Copyright – 4G Innovation LLC. All rights reserved
  • 29. HUB Organization & Governance Public-private partnership Industry, Academia, Government other partners Regional Innovation Center Greater Philadelphia Innovation Center National Problem: Energy Goal #1: Reduce Energy Consumption DOE Grant: Energy Efficient Buildings – Innovation Hub 22 members Executive Board Operating Committee Task Team LeadersCopyright – 4G Innovation LLC. All rights reserved 29
  • 30. Executive Board 30
  • 31. Operating Committee 31
  • 32. Task Team Leaders 32
  • 33. Copyright – 4G Innovation LLC. All rights reserved 33
  • 34. QuestionsCopyright – 4G Innovation LLC. All rights reserved 34