OPEN IN INNOVATION IN IN IR IRIS ISH TECH / ENGINEERING SMES IF EVERYBODY’S DOING IT WHY AREN’T WE? KATHRYN LYNCH
• Inbound Acquire external knowledge for internal use • Outbound Reveal / Sell / Exploit IP or technology externally • R& D Collaboration with specialist knowledge partners • Access specialist talent OPEN IN INNOVATION? HUH?
Reduce the cost of innovation through partnerships with other organisations Increase the reach of firms in identifying new ideas, technologies and markets Reduce the risk of commercialising new ideas, technologies or products Increase the speed of development from idea to innovation WHY COLLABORATE? ….yet only 9% of Irish SMEs engaged in collaborative innovation (and 30% innovating overall)
Although limited by financial and human resources…. • SMEs better positioned to use their social capital to collaborate • SMEs can address niche markets that larger firms are not interested in • SME innovation can proportionally ‘move the needle’ for a smaller firm vs a larger peer • SME agility and entrepreneurial culture fosters open innovation • SME Founder/CEO competences SO WHY NOT MORE SMES and experiences drive innovation culture DOING IT IT?
• Rural Irish SME adopted MS Hololens and shared the equipment and know- how with cluster members…. and now exporting to Asia! • Cluster members sharing specialist resources. • Another 8- member cluster creating a ‘shared’ graduate programme. • Belgian bicycle maker now collaborating with a design house (of garden furniture!) - turnover x 4 in 6 years • Danish quilt manufacturer licensed tech from NASA to create ‘Temp Controlled’ quilts and dominates new niche market • French ‘ Technopole’ companies meeting every week and working together with wrap-around IP/Legal/Business services provided by the business park
I.D I.D. . CRITICAL SU SUCCESS SS FACT CTORS FOR OI Research for last 15 years pointed to : • Leadership • Internal Innovation Capability • Network & Relationships • Strategy • Technology Management • Culture
• STRONG FOUNDER/CEO LED INNOVATION EVIDENT, RELIANT ON THEIR SKILLS • LIMITED CAPACITY TO DEVELOP INNOVATION LEADERSHIP AND MANAGEMENT COMPETENCES IN SMALLER FIRMS <100 EMPLOYEES. • SME LEADERS RECOGNIZE IMPORTANCE OF EXTERNAL NETWORKS BUT NONE WITH ANY DEFINED STRATEGY FOR ENGAGEMENT. • NETWORK PARTNERS RECOGNIZE THE NEED TO PROVIDE ‘LEADERSHIP’ IN ABSENCE OF SMES. • UNCLEAR IF ANY SME LEADER WOULD STEP UP TO ACT AS NETWORK ORCHESTRATOR IF NOT PUBLICLY FUNDED. LEADERSHIP
IN INTERNAL IN INNOVATION CAPABILIT ITY • All SMEs show dynamic capabilities to build/develop new skills – primarily in response to customer demand, but little evidence of governance or structures. • Informal knowledge exchanged in cluster memberships enhances overall competences and shares expenditure. • 1 of 6 SMEs with clear appropriation strategies around IP management, selective revealing and collaborative R&D. • 3/6 network partners recognise the need for directed training supports for SMEs to build their innovation capacity
• Limited IP management strategies - 2/6 (larger SMEs) with IP protocols. • Informal coordination of professional and personal links to create relationships, rather than purposeful networks or alliances. • Trust in potential partners and lack of information on their trustworthiness is a key ‘market failure’ for OI. • Geographical proximity and regular contact key for building trust . • SMEs in Clusters utilizing the relationship to share knowledge, not create products. • Quality rather than quantity of partners is key – 3- 5 (4.2 optimum) or ‘cognitive overload’ • Competitors in networks not welcome in NETWORK & RELATIONSHIPS reality (although Literature says otherwise!)
• ALL SMES COMMITTED TO INNOVATE. INVESTMENTS OF 5-10% OF TURNOVER GREATER THAN THE INDUSTRY AVERAGE (3%) • 1 OF 6 SME WITH AN EXPLICIT STRATEGY TO SOURCE EXTERNAL KNOWLEDGE • CHALLENGING TO ASSESS ABSORPTIVE CAPACITY OR IMPLEMENTATION COMPETENCE DUE TO VARIANCE IN SIZE OF FIRMS AND LIMITED EXTERNAL ENGAGEMENT. • OPPORTUNISTIC PARTNERING RATHER THAN PURPOSEFUL SEARCHING • NETWORK PARTNER: CONCERN THAT ‘CHASING FINANCES’ OR GOING FROM ONE FUNDED PROJECT TO THE NEXT IS NOT A SUSTAINABLE APPROACH. STRATEGY
• ALL SMES AT ‘EXPLORING’ STAGE. 1 /6 SMES EXPLOITING NEW TECH WITH IP. • 1 SME SHARING TECHNOLOGY AND KNOW-HOW WITH CLUSTER MEMBERS. • NO SMES MEMBERS OR PARTICIPANTS IN STRATEGIC TECHNOLOGY NETWORKS. • LIMITED COMPETENCE TO FULLY CALCULATE TRANSACTION COSTS IN TECHNOLOGY PARTNERSHIPS OR TECH TRANSFER. • EXPECTATION MANAGEMENT KEY FOR SME ENGAGEMENT WITH TECHNOLOGY ACADEMIC TECH RESEARCH. MANAGEMENT
• Driven by the CEO – entrepreneurs – seeking ‘new combinations’ - higher risk tolerance. • 1 SME had an explicit company value ‘ Everybody is responsible for innovation ’ • Larger SMEs (+100) had the resources for R&D departments, metrics and organisational learning • All SMEs demonstrated experimentation and free flowing of info. • Limited evidence of objective alignment to promote diversification • Is it innovation or evolution? CULTURE
• Rethink what it is to innovate collaboratively – its not just about product! • Orient the firm to source knowledge externally • Create/lead a culture of looking externally for potential innovation – not just customer led as may ultimately limit the overall innovation capability of the firm. • Recognise the limitations or knowledge gaps of the organisation and potential avenues to upskill existing resources or bridge the gaps externally. • Think creatively about resource financing and ownership - (BES scheme), shared resources, shared usage, licensing. SO WHAT NOW?
• Leverage personal, educational and professional networks to identify potential collaborative partners (3-5 max). • Must include a customer • Local and proximate – meet regularly • Similar size and characteristics • Complementary skills and motivations • Set clear outcomes and objectives • Qualify any invitation to join networks or alliances – motivation; commitment, no competitors; regular meeting schedules BUILD TRUST !
BE PERSISTENT! • Identify what skills and knowledge or resources you are prepared to share. • Be a champion of innovation or network orchestrator in your area. • Identify key personnel or agencies who can assist the development of innovation capabilities. • Leverage all available supports. Dedicate/share resource time to applying for supports.
CONSIDER……. • Are you truly leading an innovation culture? • Are you prepared to be a champion of innovation? • Can you identify resources or knowledge that you need for your organization? • Can you identify 4 other, complementary companies who could help you with that? • What information, resources or machinery could you share with them? • What are you prepared to commit to developing a relationship with them and build trust? • What supports can you avail of to develop innovation in your company?
CONNECT COLLABORATE TRANSFORM EMAIL: KATHRYN@CHRONOS.IE WEB : WWW.CHRONOS.IE
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