A Perspective On Innovation Fh 2010 Innovation Festival


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A Perspective On Innovation Fh 2010 Innovation Festival

  1. 1. A PERSPECTIVE ON INNOVATION 2010 Innovation Festival 8 & 9 March 2010 F Hendricks – Cape Biotech Trust
  2. 2. <ul><li>Technological innovation (products & process) </li></ul><ul><li>Non-technological innovation </li></ul>Inventions implemented and taken to market Anything that is new to business Innovation - Perspectives … aspect of the Knowledge Transfer process involving the entrepreneurial exploitation of scientific and technological knowledge <ul><li>Knowledge chain: creation, diffusion, conversion and commercialisation of knowledge </li></ul><ul><li>Knowledge Transfer (KT): flow of knowledge amongst all components of knowledge chain </li></ul>… . process whereby Academia, Gov & Industry collaborate to create /discover new knowledge/technology/products/services are transmitted to intended final users…… <ul><li>Technological innovation (products & process) </li></ul><ul><li>Focus: innovation collaboration (social networks) </li></ul><ul><li>Triple helix players: government, educational & research institutions and private sector </li></ul><ul><li>KT (tacit & codified) is a major driver of collaboration </li></ul><ul><li>Economic activity - cluster in particular locations, driven by advantages in efficiency (incl. transaction costs) , flexibility (mobility of labour / resources) & innovation (knowledge spillovers & cooperation) </li></ul><ul><li>Deep specialisation & co-opetition </li></ul>… .. results from reducing technical & economic uncertainties, building thick ties, KT & enhanced environments INNOVATION New ideas or behaviours (need not have scientific novelty) TECHNOLOGICAL SENSE 1 BUSINESS SENSE 2 KNOWLEDGE SENSE 3 TRIPLE HELIX SENSE 4 CLUSTER SENSE 5
  3. 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. 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
  5. 5. TECHNOLOGY & the ENTREPRENEURSHIP – Business Sense Technology Entrepreneur Innovation Economic Development Central theme : appropriate application of technology through innovation which is dependent upon the skills and risk taking of an entrepreneur Emerging technologies have changed the imperative of competitiveness from economy of scale (size) to economy of scope (flexibility) <ul><li>clarity of leadership </li></ul><ul><li>openness & inquisitiveness </li></ul><ul><li>ability to create new value / organisation capability </li></ul><ul><li>flexibility & capacity to change </li></ul><ul><li>relationship building skills </li></ul><ul><li>convince others to share start-up risk </li></ul><ul><li>capacity to think for oneself </li></ul><ul><li>self-confidence: optimism & personal drive </li></ul><ul><li>sense of autonomy, independence & risk-taking </li></ul><ul><li>passionate </li></ul>M (attributes & motivations) C3 (creativity in business) <ul><li>creativity in technology </li></ul><ul><li>creativity in planning </li></ul><ul><li>creativity in marketing </li></ul>Consequence economy of scale no longer hold the key to competitive advantage as it previously did Entrepreneurial climate – convergence of people, culture & technology * Adapted from Innovation & Entrepreneurship in Biotechnology Innovation Management (R&D & Commercialisation processes) Entrepreneuship (entrepreneurial energy - E=MC3)
  6. 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
  7. 7. LINKING THE TECHNICAL AND SOCIAL DOMAINS The Business Model – reducing the technical & market uncertainties <ul><li>Appropriate adjustments to BUSINESS MODEL </li></ul><ul><li>Identified Market Segment </li></ul><ul><li>Defined Value Proposition </li></ul><ul><li>Elements of the Value Chain </li></ul><ul><li>Defined Cost and Margins </li></ul><ul><li>Position in Value Network </li></ul><ul><li>Competitive Strategy </li></ul>Economic Value from Technology – choice of Business Model rather than some inherent characteristic of the Technology The Management Team understands how their decisions impact the defined Value Proposition Measured in Technical Domain <ul><li>Technology </li></ul><ul><li>Feasibility </li></ul><ul><li>Technology </li></ul><ul><li>Performance </li></ul><ul><li>Other Technology Criteria </li></ul>TECHNICAL INPUTS High Technical uncertainty & ambiguity ECONOMIC OUTPUTS <ul><li>Consumer </li></ul><ul><li>Value </li></ul><ul><li>Price </li></ul><ul><li>Profit </li></ul><ul><li>Other Economic Criteria </li></ul>Measured in Social Domain High Market uncertainty & ambiguity
  8. 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. 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. 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
  11. 11. LINKING THE TECHNICAL AND SOCIAL DOMAINS The Knowledge Value Chain - Knowledge Transfer (KT) Mobility of Human Capital within & between Domains Mechanisms of Knowledge & Technology Transfer Tacit Knowledge Codified Knowledge Absorptive Capacity SOCIAL DOMAIN <ul><li>Industry </li></ul><ul><li>Private Sector </li></ul><ul><li>Public Sector </li></ul><ul><li>Governmental </li></ul><ul><li>PPP </li></ul><ul><li>Community </li></ul>SCIENCE & TECHNICAL DOMAIN Formal & Informal contacts within Professional Network Researchers Knowledge Production & Diffusion IP Licensing Spin-outs Joint Academic-Industry Ventures
  12. 12. REGIONAL ECONOMIC & INNOVATION PERFORMANCE Regional Specialisation (clusters – firms (including suppliers, consumers & communities) , financial, public, universities, organisations for collaboration & media) Urbanisation ( offer diverse & creative environments – proximity to academic institutions) Regional Economic Performance (Innovation Performance) Business environment: <ul><li>Funding – financial capital </li></ul><ul><li>Skills & recruitment – human capital </li></ul><ul><li>Assets & infrastructure – physical capital </li></ul><ul><li>Intellectual assets – knowledge capital </li></ul><ul><li>Global marketing position – market capital </li></ul><ul><li>Networks – social capital </li></ul>New Product Development (NPD) & New Business Development & commercialisation (NBD) Processes * Adapted from Cluster Red Book Business R&D Public R&D Patent Output <ul><li>incremental reduction of technical and economic uncertainty </li></ul><ul><li>continuous interaction across organisations </li></ul><ul><li>transferring technology & tacit skills </li></ul><ul><li>commercialising new technologies </li></ul><ul><li>innovation enhancing environment </li></ul>Innovation is based on:
  13. 13. Business Strengths <ul><li>Large contributors to provincial GDP </li></ul><ul><li>Areas of specialisation </li></ul><ul><li>Sectors with apparent presence of innovative enterprises </li></ul>University Research Strengths Government Strengths <ul><li>Public research institutions: ARC, CSIR, MRC, iThemba Labs, African Astronomical Observatory </li></ul><ul><li>Provincial government entities support of knowledge intensive activities & innovation </li></ul><ul><li>Supportive government programmes: SPVs, THRIP, Regional TIA, RIF, PIC </li></ul><ul><li>Medicine and medical sciences </li></ul><ul><li>Engineering </li></ul><ul><li>Environmental sciences </li></ul><ul><li>Biological sciences </li></ul><ul><li>Social sciences </li></ul><ul><li>Business & commerce </li></ul><ul><li>Mathematical sciences </li></ul>WESTERN CAPE TRIPLE HELIX – COFISA Findings * Adapted from COFISA study – Oct 2009 <ul><li>Biomedical, drug discovery & pharmaceuticals </li></ul><ul><li>ICT: software, information management & media </li></ul>Current Potential <ul><li>But </li></ul><ul><li>Lack of trust between players </li></ul><ul><li>Business & academia not innovation oriented </li></ul><ul><li>Dispersed innovation activities across players </li></ul><ul><li>Specialisation focus not matched amongst players </li></ul><ul><li>Divergent objectives amongst players </li></ul><ul><li>Increased bureaucracy & admin – gov. &universities </li></ul><ul><li>Inadequate VC funding, & uncertainty of capital & operational funding </li></ul>