canadian chamber open innovation 20100420

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Global trends in

OPEN INNOVATION

José Cláudio C. Terra

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Battle of ConceptsChallenges to undergraduate students

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Help our clients

to learn, collaborate and innovate

in more effective ways

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TerraForum ConsultingOur Mission

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More than 300 projects with leading companies within the last 7 years

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Publishing Portfolio – TerraForum Consulting

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TerraForum ConsultingInnovation Center Portal

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What is Open Innovation?

Innovation

distinguishes a leader

from his followers.

Steve Jobs

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Open innovation is the use of purposive inflows and outflows of knowledge to accelerate internal innovation, and expand the markets for external

use of innovation, respectively."

Henry Chesbrough, 2003

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Open Innovation Model – The Innovation Funnel

Through the open innovation model organizations keep strong relationships with

external parties at different stages of the innovation development process

INTERNAL

R&DMARKET

Joint Venuture

Licensing

External Technology

Insourcing

Spin-inMerge and Aquisitions

Divest

Spin-off

Licencing

R&D Services

Research Development Comercialization

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Through Open Innovation businesses are increasingly open to insights,

ideas and collaboration from multiple sources...

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For most companies innovation is a proprietary activity but for

others...

Closed Innovation

Most of the smart people in our field work for us

To profit from R&D, we must discover, develop

and ship ourselves

If we discover it, we will get it to market first

If we are the first to commercialize we will win

If we create the most and the best ideas in the

industry, we will win

We should control our intellectual property (IP) so

that our competitors don´t profit from our ideas

Open Innovation

Not all of the smart people work for us, so we must

find and tap into the knowledge and expertise of

bright individuals outside our company

External R&D can create significant value; internal

R&D is needed to claim some portion of that value

We don´t have to originate the research in order to

profit from it

Building a better business model is better than

getting to market first

If we make the best use of internal and external

ideas we will win

We should profit from others´ use of our IP, and

we should buy others´ IP whenever it advances

our own business model

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Open Innovation creates new revenues opportunities

Revenue

Internal

Development

Cost

Costs

Revenues

Closed Model

Past

Revenue Revenue

Royalties

Spin-Offs

New Businesses

New

Revenues

Closed Model

Present

Internal

Development

Cost

Internal

Development

Cost

Open Model

Future

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How companies will organize themselves to support open innovation approaches?

The best manner to predict

the future is inventing it.“

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Companies are creating their own Open Innovation Systems,

that are composed by...

Infrastructure

Processes

and Governance

Partners´

Network

relationship

Open

Innovation

System

Organizational

structure

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Key Factors for Open Innovation Success

Open Innovation

System

Strategic Alignment

Collaborative Culture

Adequate Partners

Strong Relation Network

Support and Services for

Partners

Clearly Defined IP policies Organizational

Structure and Governance

Infrastructure and location

Funding

Stakeholders Support

Processes and KPIs for Innovation

Mgmt

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Benchmark Study: “Best Practices in Open Innovation Systems”

Participating Companies

Brazil

Global

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Best Practices in Open Innovation Systems (OIS)

Philips established partnerships all over the

innovation stages, from basic research to

commercialization.

Besides, developed a technology park in Eindhoven

that became worldwide renowned that was capable to

attract the strategic competencies to the company.

Philips High Tech Campus offers infrastructure for

their partners, e.g.: suppliers, consultants, patents

office, venture capitalists, governmental research

organizations, research specialists.

It also offers paid services, such: offices for rental,

incubation and laboratories.

“

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High Tech Campus, a new concept on Open Innovation

System

Modern technology park

More than €500M in investments;

Technology-based startups incubation

The design stimulates and forces collaborationbetween partners

Close to universities

“Research Hotel” concept

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Best Practices in Open Innovation Systems (OIS)Philips High Tech Campus (Eindhoven)

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Best Practices in Open Innovation Systems (OIS)

Telefónica has established a network that

involves more than 1,000 partners. The

company structured 7 research centers, most in

Spain and close to technology parks.

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Nokia promotes “Day Dreams” with

their partners, where they discuss

about the technology and products

trends and forecast.

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Syngenta keeps a full time

partnership manager to manage

collaboration and the network

relationship, stimulating new

business and solving conflicts.

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Using web2.0 tools to improve open innovation in organizations

The best manner to predict

the future is inventing it.“

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What facilitates this NEW approach to innovation is the rise of

Web 2.0 – as an open and participatory platform...

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Procter & Gamble Tremor

Competitive Intelligence

• Capture impressions and trends

from teenagers

• Establish relationships and

understand specific publics

• Benefits:

• Improve the relationship of P&G

products with strategic customers.

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Dell IdeaStorm

Ideas and Insights

Users can:

• Submit ideas;

• Comment ideas posted;

• Vote on ideas

• More than 12.000 ideas

• 84 comments and votes

• 347 ideas implemented

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Innocentive

R&D

Companies propose challenges to

researchers and universities and

give prizes up to US$1M.

Benefits:

• Increase the network

• Improve the quality and speed on

development of new solutions

• Reduce the R&D investments

More than 70.000 researchers

50 universities

Companies such Basf, Syngenta e

DuPont participate.

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Kraft First Taste

Testing

Community to discuss new

products where users can:

• Provide feedback to new

products

• Share opinions

• The most participative users

have a “first taste” new

products first than others

Benefit:

Kraft improves products by using

costumers experiences.

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Yet2.com

Commercialization and Scaling up

Companies buy and sell licenses

for the usage of technologies and

patents.

Benefits:

• Profits from non-strategic and

not used technologies

• Companies can innovate

without internal R&D

Partnerships with DuPont, P&G

and Honeywell.

Participation of 90% of Fortune

500.

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Any company can use the ideas (more than 10.000) submitted by users

Fiat Mio:

Open source design

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Peugeot Design Contest

Open Design

• More than 4 million

page views

• 5 demonstration

models exhibited at

automotive

marketing events

• Designers of around

100 nationalities

• € 10.000 prizes

• 5th year of the

contest

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Threadless

Co-creation made by users

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Accelerating product innovation and turning Lego MindStorms into a

highly profitable product for Lego

Lego

Open source community

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Global trends in

OPEN INNOVATION

Jose Cláudio Terrajcterra@terraforum.com.brwww.slideshare.net/jcterra