This document summarizes a presentation given by Prof. Dr. Ellen Enkel on how to boost innovation in an economic region. The key points discussed include: (1) Companies need to open up and cooperate with internal and external partners to survive and be innovative; (2) Regions need to foster connectivity between companies, industries, and regions to illustrate available knowledge; and (3) Regions must enable companies to prepare for changing environments and leverage new opportunities arising from technologies, business models, and other factors.

1. How to boost innovation of an economic
region ?
Prof. Dr. Ellen Enkel
Head of Dr. Manfred Bischoff Institut of EADS
Chair of Innovation Management
Zeppelin University
Editor of the R&D Management Journal

2. Prof. Dr. phil Ellen Enkel
• Head of the Dr. Manfred Bischof Institute of Innovation Management of
EADS and Chair of Innovation Management at Zeppelin University,
Friedrichshafen
• Editor of the R&D Management Journal, R&D Management publishes
articles which address the interests of both practicing managers and
academic researchers in R&D and innovation management.
• Research focus: Open und Cross-Industry Innovation, Networks,
Innovation Culture, Communication und Controlling.
European Commission
Enterprise and Industry 2

3. Agenda
• How do innovative companies act today?
– Innovate in a system of experts inside and outside
– Cooperation for innovation and efficiency
• Which are current trends in innovation management?
– Closer integration of partner and the crowd
– Integration of analogue solutions for disruptive innovation
• Discussion: How to boost innovation of an economic region?
European Commission
Enterprise and Industry 3

4. How do innovative companies act today?
THE OPEN INNOVATION ERA
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5. Todays Corporate reality
 Decreasing research and development budgets
 Shorter innovation cycles
 Increasing employees’ mobility
 Merging of technologies
 Multiplicity of new business models, new corporations,
new opportunities and risks
Opening up the innovation process
(Open Innovation)
European Commission
Enterprise and Industry
4/25/2012 5

6. Open Innovation in practice I
 Innovation Jam (2006)  2005: Reorganization of the
research and development
 biggest Online-Brainstorming structure through implementation
worldwide of the Connect & Develop strategy
 150.000 people|  Emphasizing on opening the
72 hours| innovation process for external
over 46‘000 ideas sources and strong engagement in
 IBM invests 100 Mio $ networks
in further development and  Open Innovation projects (external
implementation of the best input of more than 50%) achieve
ideas 70% higher Net Present Value than
internal projects.
European Commission
Enterprise and Industry
4/25/2012 6

7. Open Innovation in practice II
 „We borrow with Pride“  Regular cross-industry networks to
future-orientated topics (Future
 Network with 500.000 Logistic, Future Living etc.) with
external inventors other industries (e.g. HochTief,
 Investments in customer Geberit, Schindler, Hilti)
integration, min. of 500 customer  Development of a multi-
visits per year perspectives future scenario
 Verifiably more radical
innovations realized through the
systematic cross-industry
approach
European Commission
Enterprise and Industry
4/25/2012 7

8. DOES OPEN INNOVATION INFLUENCE
COMPANY PERFORMANCE?
Broad usage of sources
Intensity of the
cooperation
Source: Laursen, K. & Salter, A. (2006). Open for innovation: the role of openness in explaining innovation performance among
U.K. manufacturing firms. Strategic Management Journal, 27, 131–150.
European Commission
Enterprise and Industry
4/25/2012 8

9. Opening up the innovation process
means trading knowledge and growing
markets for knowledgeBoundaries of
the company
Outside-in
Process
External
knowledge Locus of
innovation
within the
Inside-out corporation
Process
Commercialization
outside of the
company
Coupled
Process
Joint Innovation
and commercialization
European Commission
Enterprise and Industry
4/25/2012 9

10. Why do companies conduct Open
Innovation?
Targeted objectives are key
Erhöhung der Produktqualität
Increase productivity
Reduktion der Entwicklungszeit
Reduce development time Efficiency
oriented
Reduce costs
Kostenreduktion
Erschließung neuer Absatzmärkte
Exploit new markets
Steigerung oder Erhalt des Marktanteils
Increase or maintain market Innovation
share oriented
Ausweitung Produkt-/ Servicepalette
Enlarge product/service
offering
0% 10% 20% 30% 40% 50% 60%
European Commission
Enterprise and Industry
Source: Open Innovation Survey 2011

11. When do companies need to cooperate?
Organize technology management according to the strategic
positioning and the relative level of competence
TL Tendentially Cooperation: Preference of Internal
development:
| Integration of missing competences
& acquisition of strategic relevant | Control of key technologies
technologies and phases of value creation,
Strategic Positioning
| Cooperation with start-ups, augment own competences
universities, research institutions,
further external experts
Tendentially
External sourcing:
| Acquisition of know-how,
external procurement of
Tendentially Cooperation:
technologies & technological
services (from own and/or
| Mutual exploitation and
foreign industries, cross-
FF outsourcing of technologies
industry)
LOW HIGH
Relative level of competence in this technological field
TL = Technological Leader
FF = Fast Follower
European Commission
Enterprise and Industry Source: Gerybadze (2004)

12. COMPARISON OF OPEN INNOVATION
ACTIVITIES IN 2010 AND 2011
Customer integration
Supplier integration
Lead User integration
Cross Industry Innovation
Web ideas generation & solution
platforms
Creativity workshops with external
Acquisition of knowledge throughparties
M&As
Knowledge networks
Commercialization supported by other companies
Spin-offs and corporate ventures
Provision of contract research results to externals
Systematic search for new marekts
Off-licensing of products and/or services
Joint development (JD) projects with
customers
JD projects with suppliers
JD projects with universities etc.
JD projects with own industry partners
JD with companies of foreign industry
New co-operative business models European Commission
Enterprise and Industry
Source: Open Innovation Survey 2011

13. Who are the most important source
for innovation?
3.5
3
2.5
2
1.5
1
0.5
0
Customers Patent Scientific CompetitorsTechnical Suppliers Universities
and Users Literature Literature Conferences Research
Survey study with 9017 innovators in Europe (scale from 1 (less important) - 5 (most important)
Source: Giuri und Mariani 2005: Everything you wanted to know about innovators , by LEM Sant Anna in Pisa, Working Paper
European Commission
Enterprise and Industry
4/25/2012 13

14. WHERE IS THE KNOWLEDGE COMMING
FROM?
“People we don´t
“Knowledge we have” “People we know”
know”
Is your cluster adequately connecting people in order to exchange
knowledge?
Does everybody knows where the other might be able to help?
How do you provide your cluster with new knowledge?
Employees Customers
Investors Public
COMPANY COMMUNITY CROWD
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Enterprise and Industry
4/25/2012 14

15. The crowd´s pool of knowledge
IdeaConnection
YourEncore NineSigma
Innocentive Yet2.com
Example Initiatives R&D Solution Innovaro
Hypios RedesignMe
Platforms
99designs
Marketing &
iBridge Network HumanGrid
Design
Ideas Campaign Amazon Mechanical Turk
Galaxy Zoo Freelancer Chaordix
Fold It Public Intermedia- Idea Crossing
Ideation
initiatives tes Innovation Exchange
Platforms
Apache
Is your cluster a pool of knowledge or only the random location of some companies?
Software
Market- Firefox
internet Joint free
Is your cluster better than theCrowd in connecting knowledge?
Linux
Zazzle places for solution
JuJups idea owners finding
Wikipedia
Spreadshirt CrowdSpirit
Dream Heels Hardware
Openstreetmap
Corporate
Initiatives Yahoo Answers
Produrct Ideation Branding &
& -Solutions Design
BMW Via Lego Factory
Ideas4Unilever Electrolux Design Lab
Source: adapted from IBM Innovation Jam Osram LED-Emotionalize
Gassmann (2010)
European Commission
Enterprise and Industry
4/25/2012 15

16. How to do this? How to connect to
the best knowledge of the world?
• Big enterprises with well known brands in B2C markets have a
key advantage in open innovation but are often captured in
their bounded rational (e.g. internal bureaucracy in sales
departments or NDA)
• SMEs have learned to cooperate in order to compete but
economy of scale hinders them to invest a lot of resources to
identify and launch new partnerships or get in touch with
international companies
• Clusters are key instruments to support emerging industries
and to facilitate SME-internationalization
• Some successful practices how to enhance connectivity of
cluster members „European Cluster Excellence Initiative„ and
„Cluster Collaboration Platform" European Commission
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Enterprise and Industry

17. Benchmarking of Clusters: Dimensions
and Indicators
Dimensions Indicators Cluster management and governance
• Age of the cluster • International working experience
• Focus areas of the cluster • Continuity of cluster management
• Nature of the cluster • Involvement of key actors in strategy development
• Composition of the cluster and implementation
• Value chain covered by the cluster • Elements of the strategy development and
• Regional concentration of the cluster members implementation process
• Utilization of regional potential • Content of the strategy
• International cluster members • Services and activities of the cluster management
• Legal form of the cluster management • Sources of financing when cluster was established
• Membership development • Sources of financing today
• Cooperation between cluster members • Annual budget
Structure of the cluster • Development of financing
• Assignment of tasks/clarity of role definitions Financing
• Number of cluster management staff • Sustainability of financing
• Role of cluster management • Visibility of the cluster
• Human resource development • Collaboration with other clusters
• Impact on R&D activities of cluster members
• Impact on business activities of cluster members
Achievements and recognition
• Internationalization of cluster members
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Enterprise and Industry 17

18. European Commission
Enterprise and Industry
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19. Trends – Where is the journey headed?
• Search for new knowledge outside of the own value chain to identify
existing solutions and copy successful business models
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Enterprise and Industry
4/25/2012 19

20. Idea of Cross Industry Innovation
• More than 80% of all innovation are recombination of existing
knowledge (Schumpeter 1937)
• Within the own company and within the value chain (including
customer and supplier) companies have already recombined
more or less your cluster fosterasset through integration and
Does every knowledge cross-industry innovation
cooperation or is it too industry focused?
• Only a recombination of knowledge outside of the common
sources can grant competitive advantage through disruptive
innovation with low development risk (existing successful
solution already exist in other industry)
• Imitation can be used to create new products, services,
processes and even business models (more than 50% of the
entrepreneurs imitate parts of their business models)
European Commission
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Enterprise and Industry

21. Key Take Away
SUMMARY & DISCUSSION
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22. How to foster the innovativness of a
region?
• Companies need to open up and cooperate in order to survive and
be successful! Companies are an "Innovations Development
System“ which need to use all available resources
– Hence: A region need to foster connectivity of its companies and
illustrate their knowledge
• Companies are “linked units of experts” inside and outside the
cooperation or cluster and inside and outside their core industry
– Hence: A region need to foster connectivity of its companies inside
and outside their core industries and towards other regions
• Companies are acting in changing environments with new
opportunities arising from new technologies, new business models,
new competencies, new employee profiles and new actors in their
front yard
– Hence: A region need to enable its companies to prepare for change
and to leverage new opportunities
– “Chance only favours the prepared mind” Pasteur
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Enterprise and Industry 22

23. Contact information
Prof. Dr. phil Ellen Enkel
Zeppelin University
Dr. Manfred Bischoff Institute of Innovation Management of EADS
Chair of Innovation Management
Am Seemooser Horn 20
D-88045 Friedrichshafen | Bodensee
Tel. +49 7541 6009- 1281
E-Mail: ellen.enkel@zeppelin-university.de
Home: www.zeppelin-university.de
European Commission
Enterprise and Industry

24. Back up
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