Sales & Marketing Alignment: How to Synergize for Success
Innovation Intermediaries and Mutual Trust
1. INNOVATION INTERMEDIARIES !
AND MUTUAL TRUST:!
The effects of open innovation to (IP) law
!
Paulius Jurčys
!
2014 Annual Conference
Kyushu University Faculty of Law
!
February 10-11, 2014
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2. OUTLINE
•
The significance of mutual trust
•
Open innovation and changing approaches to technology
management
•
The role of innovation intermediaries in creative industries
•
Mutual trust and changing role of (IP) law
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5. TRUST AND DECISION-MAKING
Positive contribution to trust
SUCCESS
TRUST
RELIANCE
FAILURE
Negative contribution to trust
Do it myself?
Delegate?
Delegation
Autonomy
!
!
Do nothing?
as a trust-based
action
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!
or Control?
6. MULTI-DIMENSIONAL CONCEPT OF
MUTUAL TRUST
Integrated concept of trust: complex structure with various components which help
explain and justify various roles, functions and definitions of “trust”
Socio-cognitive notion of trust: not merely epistemic notion, but integrates beliefs with
motivation (actions leading to results)
Analytic & explicit: positive and normative dimensions of trust
Multi-factor and multi-dimensional model: trust in alter based on beliefs about alter’s
powers, qualities and capacities, but also sub-forms of trust in specific qualities of alter
(e.g., expertise, loyalty, persistence, etc.)
Dynamic notion of trust: trust is not fixed, but depends on context, reasoning and time
Trust is structurally related to other notions such as previsions, expectations,
trustworthiness, uncertainty and risk, reliance, delegation, cooperation and reputation
Micro and macro dimensions of trust: virtuous loop between trust and social order
(social order is basis of and requires trust; at the same time trust exploits and fosters
social order)
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8. Fuzzy frontend
Development
Commercialization
CLOSED
R&D MODEL
MARKET
REVENUE
CLOSED R&D MODEL:
•
In the traditional (“closed”) R&D model, the firm is the core of innovation:
the technology is generated and nurtured within the vertically integrated
firm
•
Very limited output: only few ideas are materialized into commercially
viable products
•
In such a “closed” model of innovation, there is huge “spillover” of
unintended byproducts and processes. This was regarded as a
unavoidable “sunk cost”
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10. OPEN INNOVATION
AS OPPOSED TO PRIOR BUSINESS MODELS
•
Equal importance is given to external and internal knowledge: internal gaps within
the firm may be easily filled with abundant external knowledge
•
The centrality of business model for converting R&D
into commercial value
•
Purposive outbound flows of knowledge and technology: the firm seeks not only to
accelerate innovation, but also the expect external markets
•
Knowledge management: open innovation requires to create new architectures for
identification, access and incorporation of knowledge
•
The proactive and nuanced role of IP management: there numerous ways to
generate revenue, not necessarily by means of IP
•
New metrics for assessing innovation capabilities and performance !
•
The rise of innovation intermediaries and intermediary markets
(bridging and boding)
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11. •
MAC is a manufacturer of
cosmetics products and seeks to
expand the distribution of its
products
•
In order to boost sales MAC uses
various marketing strategies,
promotions and advertisements,
which often involve famous stars
from entertainment industry
•
Backstage make-up artists as
intermediaries (their relations with
MAC and famous star)
•
Innovation ecosystem
INNOVATION INTERMEDIARIES IN MAKE-UP INDUSTRY
How to facilitate the development
of innovation ecosystems? What
role should law play in this
process?
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MAKE-UP
ARTIST
RETAIL
STORES
12. PRODUCT LIFECYCLE, IPRs AND GROWTH
GROWTH
EARLY
STAGE
EARLY!
Non-Listed
Listed
GROWTH
MATURITY
DECLINE
BASIC PRODUCT
Sales
Proof of concept
IPRS
Business
Plan
What really matters in the
commercial practice is the
maximization of revenues
Team
in
place
Product
development
Market
introduction
IPO
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Time
13. CHANGING UNDERSTANDING OF “APPROPRIATION”
Appropriation of
knowledge by means
of IP rights
Appropriation of
revenues
(Business plan)
•
The notion of “appropriation” has transformed as open innovation developed:
traditionally firms sought to appropriate internal knowledge by obtaining IP rights.
•
In an open innovation era firms shift towards appropriation of revenues. This
requires innovative business plan while IP rights become merely a tradable asset
•
Intermediaries and intermediary markets facilitate the creation of new
mechanisms for learning and appropriation. The crucial factor is mutual trust
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15. MUTUAL TRUST AND
THE FUNCTIONS OF (IP) LAW (1)
•
Normative → cognitive: if the law is loosing normative powers to
guide human behaviour, perhaps there is no need to focus of
substantive issues (“cognitive openness”)
•
Formalisation of expectations: Instead, law should provide an
architecture for stabilizing expectations which arise from trustbased informal structures
•
Facilitating function of law: in addition, law should serve as a
tool facilitating means of interface, learning and appropriation
•
Law reform as an attempt to reestablish trust
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16. MUTUAL TRUST AND
THE FUNCTIONS OF (IP) LAW (2)
•
Trust has been usually understood as a phenomenon which is established over time
during repetitive interactions.
•
Recent emergence of digital communication technologies occurs rapidly and the
degree of repetition, is, arguably, decreasing -
•
Repetition is replaced by networks and social capital
(“the sum of actual and potential resources embedded within, available through and
derived from the network of relationships possessed by an individual or social unit.
Social capital thus comprises both the network and the assets that may be mobilized
through that network.” [Nahapiet])
•
The role of reputation and information cascades where own experiences are
replaced with the experiences of other
•
Are we witnessing de-personalisation of mutual trust?
•
Mutual trust and law as triggers of action: mutual trust triggers action,
Law and Economics assumption that “law can, does and should” trigger action
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