It is important to emphasise these are ‘preferred’ behaviours, i.e. these statements about activity are generalisations. There may beorganisations that have occasionally carried out some of these ‘open innovation’ activities on an ad hoc basis, but an organisation committed to OI has it embedded in their strategy, their culture and their everyday operations.
Stefan Lindegaard defines open innovation as “...bridging internal and external resources throughout the entire innovation process”. See “The Open Innovation Revolution” by Stefan Lindegaard (2010) John Wiley & Sons LtdHenry Chesbrough, the academic most associated with the study and understanding of open innovation, defines it as:“...the use of purposive inflows and outflows of knowledge to accelerate internal innovation, and expand the markets for external use of innovation, respectively. [This paradigm] assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as they look to advance their technology.”Henry Chesbrough, Open Innovation: Researching a New Paradigm (2006)
Data is from:Frank Evan (2009) “Defining Success in Open Innovation” , a white paper from ninesigma. Data were provided to ninesigma by AG Lafley, CEO of P&G at the time. Download this documentfrom:http://www.ninesigma.com/Uploads/Resources/Defining%20Success%20in%20Open%20Innovation.pdf
Website for the Forum Virium partnership of Finnish companies:http://forumvirium.fi/enA case study of Thomson Reuters and its transition to an open innovation organisation can be found at NESTA:http://www.nesta.org.uk/publications/business_briefings/assets/features/making_the_transition_to_collaborative_innovationA report of NATS using Formula 1 software toreduce aeroplanecarbon emissions can be found at:http://edition.cnn.com/2011/TECH/innovation/08/24/f1.air.traffic.control/index.htmlThe story behind Lego Mindstorms, where Lego decided to collaborate with enthusiasts hacking into its own systems, can be found at:http://www.ideaconnection.com/open-innovation-success/Lego-Success-Built-on-Open-Innovation-00258.html
The community/network aspect is critical to the whole open innovation approach. Open Innovation is about collaboration and co-development, which rely on connecting, sharing, and communicating. Knowledge, ideas, opinions and data need to flow easily between groups, organisations, disciplines and sectors. Stevenage Bioscience Catalyst will be built on face-to-face and virtual communities that let innovation thrive.
Background:Professor Ron Burt at the University of Chicago conducts research into the ways that social networks create competitive advantage. People who are connected to multiple networks can cross-fertilise ideas between those networks, and his research indicates they are ‘at higher risk of having a good idea’ because of this connectivity. See for example: Ronald S. Burt (2003) “Structural holes and good ideas” pp1-2, University of Chicago Booth: pre-print of an article to appear in the American Journal of Sociology. Download from http://faculty.chicagobooth.edu/ronald.burt/research/index.htmlSBC’s open innovation strategy is built on this principle – creating a physical and virtual space where companies, academics, clinicians, investors and business professionals can bring together knowledge and expertise to create something that truly is more than the sum of the parts.
Stevenage Bioscience Catalyst and Open Innovation
Stevenage Bioscience Catalyst and Open Innovation
What is Open Innovation?• It’s a strategic approach • Best defined by degrees rather than absolutes:• On the surface, it has What’s the organisation’s elements in common with habitual behaviour? Are its traditional environments - partnerships genuinely but takes them further and collaborative or just deeper supply/demand transactions?
What is Open Innovation? It’s a mindset – it’s not just about out-sourcing some R&D Closed/ Preferred / habitual behaviour: Open TraditionalPro-actively seek and adopt external IP x Share IP and knowledge with others (including creation of x publicly available databases)Confine innovation to the R&D dept xControl all stages of the innovation process xShare responsibility with partners for investigating x opportunities and fixing problemsCollaborate & co-develop with partners, rather than x supply & demand transactions
What is Open Innovation: the SBC definitionOpen Innovation is about combining internal and external assets viacollaboration at any point in the innovation process. It ischaracterised by:• highly effective use of connections and networks to exchange knowledge, expertise and ideas• external partners being involved at any stage, not just idea- generation• equitable win-win business relationships where issues are tackled together• openness towards new business models to maximise the value of IP and other assets
Open Innovation: why?Benefits shown in other companies and sectors:• Enhanced strength of pipeline• Increased revenues• Faster time to market• Access to know-how, IP, ideas, knowledge, databases, new technologies• Becoming ‘the partner of choice’
Open Innovation: why?As an early front-runner in open innovation, Procter & Gamble hasshown what it can do. 2003 2008Innovations developed with outside partners, 15% 50%as % of all innovationsRevenues $43.37 billion $83.5 billionR&D budget $1.92 billion $2.32 billionR&D budget as % of revenues 4.8% 3.4%
Open Innovation: why?Open Innovation works in a diverse range of sectors:• Digital/telecom (Forum Virium partnership in Helsinki; ‘open source’software such as Linux)• Financial services (Thomson Reuters)• National Air Traffic Services (NATS) and Formula 1• Toys and Games (Lego Mindstorms)
Open Innovation: benefits to SMEsBy partnering with a large company, the SME can:• Access new markets that were otherwise beyond its reach• Access know-how, facilities, IP, ideas, networks• Enjoy a faster route to market
Open Innovation: works through a strong community of shared interests Charities/public sector Academia and Bioscience SMEs eg CRUK, MRC technology transfer offices ProfessionalBig pharma service firms eg VCs, angels Stakeholders: Wellcome Trust Tenant Referrals SBC as an incubatorGSK, BIS, TSB, EEDA
How will tenants experience SBC’s approach to open innovation?The tenant is in charge, as a free agent in an open environment:• No commitments whatsoever to SBC or GSK, including IP rights (other pharma-owned incubators have insisted on rights just for tenancy)• Free to work with any organisation, including other pharma• If SME does choose to collaborate with GSK, terms are negotiated on a project by project basis• Access to GSK expertise, facilities, e-Journals, services• Access to SBC’s open innovation community: investor network, start- up funding, professional advisors, academics, vibrant science networks, other SMEs, virtual tenants, open calls for solutions to selected biomedical challenges
Open Innovation: what it means to SBC• SBC is well-positioned to become a national resource for biomedical open innovation• SBC is uniquely positioned to boost collaboration at a business-to- business level, alongside academic-business interactions• SBC is one part of a wide-ranging commitment to open innovation by GSK. Sister initiatives include Tres Cantos; pricing policy on diarrhoea vaccines; and publicly available data on 1000s of potential anti-malaria compounds.
What gets us excited about open innovation? We want everyone to be at higher risk of having a great idea and making it work... ...biotechs, pharma, stakeholders, and UK plc
Get in touch with SBC and join the discussion Website: www.stevenagecatalyst.com Twitter: twitter.com@SteBioCatLinkedIn group: Stevenage Bioscience Catalyst Open Innovation