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Open innovation


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Presentation on ‘Open Innovation – a Critical Component of Innovation Ecosystem’, Dr. Makarand Phadke, Chairman, FICCI National Committee on S&T and Innovation & Sr. VP – Innovations, Reliance Industries Ltd.

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Open innovation

  1. 1. “Open Innovation – a Critical Component of Innovation Ecosystem” Makarand Phadke November 2013
  2. 2. What is Innovation? Ideas Technology New questions Integration New customer needs „Out-of-the-box‟ Obstacles Values thinking New products & service Action Credit: Pravin Rajpal 2
  3. 3. Outline  Why Innovate?  “Word on the Street” - Innovation Performance of Organizations  Challenges  “Innovation Ecosystem”  Open Innovation – Current Status 3
  4. 4. Why Should Organizations Innovate?  To stay ahead of competition  In ever-more connected world, velocity of change is ever increasing.  Product Life Cycles are shrinking  Avoid commoditization risk “We will fight our battle not on the low road to commoditization, but on the high road of innovation” - Howard Stringer, Chairman and CEO, Sony 4
  5. 5. Innovative Companies Deliver Higher Sales Growth and Margins 10 Yr Median Growth in Net Margin (%) Innovative Companies 3.40% 5 Yr Sales Growth (%) 346% Most Innovative Companies Standard & Poor's 500 0.40% Source: Business Week 2006 138% Less Innovative Companies 5 Yr Sales Growth (%) Source: Pricewaterhouse Coopers 2005 5
  6. 6. Innovative Companies Deliver Higher Sales Growth and Margins 10 Yr Median Growth in Net Margin (%) Innovative Companie s 5 Yr Sales Growth (%) Standard & Poor's 500 Most Innovative Compani… 346% Source: BusinessWeek 2006 138% Less Innovative Compani… 5 Yr Sales Growth (%) Source: PricewaterhouseCoopers 2005 6
  7. 7. Innovation as a Strategic Priority 7
  8. 8. Key Elements of Innovation Ecosystem Reward & Recognition Ideation System Alligned HR Policies Open Innovation Network R&D Infrastructure Venture Fund The term „Open Innovation‟ was coined by Chesbrough (2003); this model claims that “the company commercializes both its internal ideas & external ones from other companies, and search for ways to put their ideas on the market through the developments of different products that are not part of its usual business” Dedicated Resources 8
  9. 9. Open Innovation Networks Concept Know what you don‟t Know Technologies Intellectual property Know what you Know Research Prototypes Business Models Know what others know 9
  10. 10. Open Innovation Network at Work 10
  11. 11. Open Innovation Concept - Benefits 11
  12. 12. Notable Examples of Innovations that Came from Outside a Company Bluetooth Dialysis Ultra Sound 12
  13. 13. P&G‟s Connect + Develop 2 Million $5 Billion/y New Sales 9,000 P&G R&D People 13
  14. 14. Some users of Open Innovation Framework 14
  15. 15. Reliance Innovation Council (RIC) : Stimulating Innovation led Growth  Implement RIL innovation agenda  Acts as a catalyst in providing leadership and support to the business of RIL by harnessing cutting-edge, futuristic but practical, science, technology and innovation initiatives from both within and outside the organization  RIC members have provided new ideas and give direction to young researchers & shape the technology organization  Nerve Centre with the sole quest of propelling RIL to the forefront of global business leadership Bringing Together World Thought Leaders to initiate Innovative Technology Developments 15
  16. 16. Closing Remarks  Innovations as a Strategic Imperative  Innovative Companies take Ecosystem Approach  Open Innovation – Strategic Component of Overall Ecosystem  India Needs to Build Strong Ecosystem – including enabling Environment for Open Innovation 16