Collaboration: A Driver of Innovation

 Collaboration  No Responses »
May 142012
 

Innovation is a highly interactive, multidisciplinary process which increasingly involves cooperation and partnerships between a growing and diverse network of individuals and organizations. We find increasingly more organisations innovate through partnerships and collaborations.

Collaboration is defined as the process where two or more people or organizations work together towards achieving mutually beneficial goals and objectives. Collaboration extends over a range of activities, including the provision and transfer of skills, sharing of information, conducting research and product development, accessing channels to market and creating new market opportunities.

The aim of collaboration is the co-creation of value through sharing, creating new insights, and leveraging existing resources. The diagram below outlines a continuum of collaboration intensity from traditional business approaches of engaging customers and suppliers, to a shared destiny of creating new competitive space.

Collaboration in Australian firms has been comparatively low as reflected in the 2010 OECD Working Party of National Experts in Science and Technology Innovation (NESTI) project data outlined in the graphic below. The graph shows the percentage of innovative firms with national and international collaboration on innovation during the period 2004–06.

Therefore, what could be the causes of the low percentage of collaboration. A number of issues and barriers can occur in pursuing potential collaborations, including:

  • Lack of professionalism on both sides of the collaboration, including poor project and intellectual property management
  • Diverging interests and cultures, including impulsive relationships
  • Problems over speed of negotiation, ownership of results and intellectual property, including exclusivity
  • Compensation for indirect costs and background knowledge
  • Equitable returns in the event of successful commercialisation

From a government policy perspective, a lack of incentivisation and program support for collaboration could also be a factor of low level collaboration in certain countries.

The concept of open innovation is worth re-visiting as collaboration plays a significant role. Open innovation implies that an organization has the willingness and desire to source and utilize external knowledge, ideas, intellectual assets and technologies, in addition to its internal capabilities, to identify solutions to problems, capitalize on opportunities, develop new technologies, create new products and services, improve processes, or design new organizational systems and business models. A great example of an organization practicing open innovation is Proctor & Gamble, where many of its products have been developed with external partners providing research, development and cross-licensing of intellectual property.

A number of benefits can be gained by firms and organizations through collaboration and open innovation:

  1. Reduced costs due to utilising others people’s experience, skills & equipment and sharing costs of research
  2. Higher quality research and development
  3. Accessing new and different skills, networks, contacts and distribution infrastructure
  4. Risk mitigation – collaboration can have reduced risk as it is shared
  5. Increased speed to market

How can we better collaborate to drive innovation?

Dr John Kapeleris

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Strategies for Successful Commercialization of Biotechnology

 Collaboration, Innovation  No Responses »
Jan 312012
 

The rapidly changing biotechnology environment, influenced by globalization, competition, financial pressures and the advancement of new technologies has impacted on the small to medium biotechnology firm. Entrepreneurship and innovation, in addition to collaboration, are the key factors that are needed to ensure emerging and small to medium biotechnology firms survive the discontinuous change.

Commercialization is broadly defined as the process of taking an idea to a successful outcome in the market, whether it is a product, service, process or organisational system. Commercialization should also include knowledge diffusion, consulting services and contract research rather than just the linear transfer of technology or intellectual property (IP).

The following five strategies for successful commercialization are founded on the three key factors of success: entrepreneurship, innovation and collaboration.

Create an Entrepreneurial Culture

The small biotechnology firm is exposed to a number of challenges impacting on its survival and sustainability. Therefore, an entrepreneurial culture must be implemented to ensure the effective leadership and management of the limited expertise, resources and funding that may be available to successfully commercialize opportunities. Many small biotechnology firms are dominated by a research or academic culture that must quickly evolve to become entrepreneurial and commercially focused. Establishing an advisory board with the required business expertise will ensure access to a balanced resource pool. Furthermore, the small to medium biotechnology companies, at an early stage, need to start defining the products and services that will address a market need, rather than focusing on the technology itself. Companies that quickly develop the products and services that customers need or want will have a greater chance of success.

Undertake Early Stage Market Research

Biotechnology companies need to carry out market research early to identify the specific market needs in order to drive their product and service development strategy. Firms need to identify a differentiated market niche to ensure that a demand exists for the specific type of product or service. Market research therefore informs a market driven strategy that allows biotechnology firms to commercialize more effectively and rapidly. Speed to market of a first generation product for a defined market allows the biotechnology firm to leverage success in an initial market to further fund and develop core technology to migrate into secondary markets with similar customer needs.

Embed Innovation across the Organization

In today’s environment, to achieve success, embedding innovation across the whole organisation is required, not just within the R&D functions. Innovation should include process innovation, organizational innovation, business model innovation and marketing innovation, in addition to product and service innovation. Biotechnology entrepreneurs need to better understand the business aspects of biotechnology and what is required to ensure successful commercialization. They also need to think creatively in order to solve complex problems and to differentiate their business model from their competitors. The ability to leverage the intellectual capital of employees through idea capture and encouraging team participation will impact on the firm’s future success.

Establish Strong Alliances and Networks

Biotechnology firms also need to establish strong alliances, research collaborations and commercial relationships, if they are to be a significant player in the biotechnology industry. One of the impediments to converting biotechnology opportunities into tangible outcomes is the “commercialization chasm” that divides the early stage “proof of concept” from the latter stage translation of the technology to a product or service.  To overcome this chasm small biotechnology firms need to adopt an open innovation mindset that facilitates networking and collaboration in order to access expertise, channels to market and novel funding options; not just continue to rely on government support and funding.

Identify Novel Funding and Resources

A novel approach to accessing expertise, resources and funding that has successfully been used in biotechnology is the “stepping stone” approach to commercialization. The approach involves the small biotechnology firm establishing a collaborative strategic alliance with another larger, established organisation or institution to co-develop the technology. The technology is essentially “incubated” in the other organization where expertise, resources and funding can be applied to fast-track the development of the product or service. The small biotechnology firm will need to offer the other organization either an equity contribution or a percentage share (royalty) of the revenue generated by the product or service.  The terms of the arrangement will need to be established during the preparation of the collaborative agreement prior to forming the strategic alliance.

In conclusion, in order for a commercialization strategy to be successful it must be effective, efficient and focus on outcomes as soon as possible. A biotechnology commercialization strategy, specifically, should focus on creating an entrepreneurial culture in the firm, founded on early stage market research, leverage innovation and creativity across the firm, integrate strong alliances and networks, and incorporate novel funding and resources where possible.

Dr John Kapeleris

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Stimulating Innovation at the Industry Sector Level

 Collaboration, Innovation  3 Responses »
May 102011
 

Innovation can occur at different levels – at the individual, organizational, and industry sector levels. Most of the focus on innovation has been at the individual and organizational levels. Government innovation programs have been historically targeting skills development and incentives for the individual entrepreneur, and funding and support for organizations.

An opportunity exists to stimulate innovation at the industry sector level by taking into consideration the needs of the stakeholders within a specific industry sector or sub-sector. More specifically, an “innovation ecosystem” of an industry sector or sub-sector consists of a variety of stakeholders including inventors, entrepreneurs, researchers, innovators, small to medium enterprises (SMEs), large corporations, government agencies and end-users. Many new and emerging industry sectors, such as clean  technology and nanotechnology, are characterised by fragmented and dispersed players, many possessing a piece of the puzzle and trying to make a difference on their own.

The Australian Institute for Commercialisation (AIC), through its experience in delivering a number of innovation programs on behalf of the Australian and state governments, and its own innovation and commercialisation programs that are focused on addressing immediate issues and opportunities facing businesses, has developed the “Industry Innovation Framework” (diagram below), which drives innovation and collaboration at the industry level, and is focused on development across new or emerging industry opportunities.

The Industry Innovation Framework engages multiple stakeholders across a particular value chain to develop specific industry sectors that can strengthen a nation’s economy by:

  • adopting new knowledge or technology;
  • enhancing collaboration activities;
  • building new value chains; and
  • increasing innovation capability.

The core components of the Industry Innovation Framework include the process of Value Chain Mapping and TechClinics™.

Value chain mapping determines the activities, participants, and capabilities that a particular industry needs to develop so that it can build industry sectors. For example, in order to establish a viable algae-based biofuels industry in Australia a large-scale algae production and oil extraction capability needs to be established. Australia currently has the research, development, processing, refining and end-user capabilities for this industry sector, but lacks adequate scale in algae production and oil extraction. However, algae production and extraction integrate between the development and processing activities of the value chain (refer to diagram below) and therefore are integral to the building of a viable algae based biofuels industry in Australia.

The TechClinic™ is a forum that brings together multiple stakeholders (research organisations, industry, government and end users) across the value chain to interact and engage in collaborative activities. The TechClinic™ strengthens an industry sector that is fragmented and dispersed, and allows organisations and firms to identify opportunities and overcome challenges.

Government stakeholders who participate in the TechClinic™ forums are informed of the issues and opportunities, but also the specific needs required to build industry level capability in established or emerging economic sectors. Government can therefore target support and incentive programs specifically towards identifiable market failure to fill the gaps across the value chain.

The TechClinic™ facilitates and encourages firms, to collaborate with other stakeholders across the value chain to:

  • facilitate collaborative opportunities with researchers and other firms;
  • promote awareness of solutions available to industry;
  • provide networking opportunities with end-users and larger corporations;
  • improve uptake of technology by industry; and
  • increase industry and innovation capability.

The challenge for governments is to change their mindset, assume new paradigms of thinking and adopt novel globally leading programs to assist the development of industry capabilities, so that specific industry sectors remain competitive on the global arena.

Government funding, support and incentive programs must be aligned with the needs of industry sectors to build value chains and strengthen the organisations that operate across these value chains, in addition to specifically targeting the different needs of businesses.

Dr John Kapeleris

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