GES 2011 vanhaverbeke

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How public policy can help SMEs in learning from good open innovation practices.

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GES 2011 vanhaverbeke

  1. 1. Enabling the silent revolution of open innovationin low-tech SMEs?<br />Wim Vanhaverbeke<br />Hasselt University - Belgium<br />Esade Business School - Spain<br />Vlerick Leuven Gent Management School - Belgium<br />1<br />GES 2011, Kiel<br />October 6, 2011<br />
  2. 2. What is Open Innovation?<br />“Open innovation is the use of purposive inflows and outflows of knowledge to accelerate internal innovation, and expand the markets for external use of innovation, respectively.”<br />Chesbrough, Vanhaverbeke, WestOpen Innovation: Researching a New Paradigm <br />(OUP, 2006)<br />
  3. 3. Outside in : <br />Filling the gaps with external technology<br />Internal<br />Technology<br />Base<br />New <br />Market<br />Current<br />Market<br />External<br />Technology<br />Base<br />Technology in-licensing<br />External research projects<br />Technology<br />acquisition<br />Venture investing<br />R<br />D<br />Source: H. Chesbrough, Sloan Management Review, Spring 2003<br />
  4. 4. Inside out OI: Profiting from others’ use of your technology<br />Other Firm’s <br />Market<br />Licensing<br />Internal<br />Technology<br />Base<br />Technology Spin-offs<br />New <br />Market<br />Current<br />Market<br />External<br />Technology<br />Base<br />R<br />D<br />Source: H. Chesbrough, Sloan Management Review, Spring 2003<br />
  5. 5. Some observations<br />Open innovation is a booming research area<br />Main focus on:<br /><ul><li>High-tech industries
  6. 6. Large manufacturing (and now also services) companies
  7. 7. What do we know about open innovation in SMEs:
  8. 8. Few articles published so far
  9. 9. A few case studies or some survey based evidence
  10. 10. No systematic analysis yet of OI in low-tech SMEs </li></ul>5<br />
  11. 11. Some observations<br />Introducing OI in low and medium tech SMEs is important:<br />SMEs are responsible for a large part of employment in manufacturing and services industries<br />SMEs are the drivers of the employment growth<br />Most of them face increasing pressures of globalization and commoditization of their products<br />New ways to explore differentiation of product / services, or trying out experience based competitive advantages <br />SMEs usually do not have internal resources to make these changes – OI is required <br />SMEs are focused on day to day operations. Learning about strategic changes and OI should be practical and time efficient <br />6<br />
  12. 12. CURANA<br />7<br />
  13. 13. Curana: Combining innovation and industrial design<br />8<br />The old situation: <br />Steel mudguards and fenders <br />Belgium as market (10 million inhabitants)<br />Family owned business<br />Challenge:<br />Growing economies of scale and globalization of the industry<br />Strategic change: <br />differentiation through innovation <br />or price competition with low-cost import<br />
  14. 14. Curana: B"Lite: Mudguard of Curana<br />9<br />
  15. 15. Combination of internal and external knowledge <br /><ul><li>Curana: customers + steel bending
  16. 16. external design company and polymer extrusion manufacturer</li></ul>Coordination with lead-customers (bicycle manufacturers) in exchange of an exclusive deal that is limited in time (Batavus and Sparta)<br />IPR<br />Progressively increasing the ecosystem of innovation partners: <br /><ul><li>Locus of innovation is in the network: viability of the network determines the health of your company
  17. 17. Network as enabler: rapidly changing designs and use of new materials – competitive advantage
  18. 18. Economic strength ≠ f(firm size)
  19. 19. Network management becomes a crucialnetwork</li></ul>A new management mindset is necessary to realize this <br />10<br />Curana: innovation combined with industrial design in low-tech markets<br />
  20. 20. 11<br />Curana: Impact of OI on revenuesandprofits<br />
  21. 21. Curana: Open BM innovation in a stepwise way<br />12<br />OEM<br />ODM<br />OSM<br />OBM<br />><br />><br />><br />Original <br />Design <br />Manufacturer<br /><ul><li>price setting
  22. 22. design driven
  23. 23. addedvalue</li></ul>Original <br />Equipment<br />Manufacturer<br /><ul><li>pricepressure
  24. 24. technologydriven
  25. 25. noaddedvalue</li></ul>Original <br />Strategic<br />Management<br /><ul><li>visiondriven
  26. 26. proactive design</li></ul>solutions<br /><ul><li>Innovative</li></ul>Original <br />Brand <br />Management<br /><ul><li>image driven
  27. 27. reliability&</li></ul>authenticity<br /><ul><li>market pull from</li></ul>customers<br />
  28. 28. How to enable the silent revolution?<br />Speeding up the learning of good practices in low-tech SMEs?<br />13<br />
  29. 29. How do SMEslearn?<br />What does not work?<br />Explanations of academia and consultants <br />Most government led initiatives to stimulate entrepreneurship<br /> FP7 programs are to slow and too bureaucratic for most SMEs<br />What works?<br />Stories of entrepreneurs that have been successful<br />Talking to other entrepreneurs with similar ambitions<br />Share experiences and learn from them<br />Some local innovation networks do nice work<br />14<br />
  30. 30. Problemsandfinding a way out<br /><ul><li>Local innovation network initiatives
  31. 31. 60 km action radius
  32. 32. Non- or semi professional coaches
  33. 33. Few good local cases, few managers as speakers
  34. 34. Reinventing the wheel problem!
  35. 35. High set up costs!
  36. 36. How to drastically improve the situation?
  37. 37. There are many excellent cases in Europe / world
  38. 38. Make a YouTube like movies (10-15 min) about these companies with subtitles in English
  39. 39. Put these movies on the web together with a syllabus and some (open) innovation management tools – feedback Web 2.0!</li></ul>Huge impact on the number of companies that learn OI practices and strong improvement in the quality of learning<br />15<br />
  40. 40. www.exnovate.org<br />16<br />

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