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Keynote presentation for 17th Savory Flavor Conference,, March 2011, Geneva

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  • Shiftn, 2010 www.shiftn.com 1

    17th Savory Flavor Conference

    TheFutureofOpenInnova1on

    Geneva, February 17-18, 2011

    PhilippeVandenbroeck,Partner,shi4N

  • Shiftn, 2010 www.shiftn.com 2

    Adiverselandscape

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    Understandingthefutureofopeninnova;on

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    Apple's iPod

    > 300 million sold 70% market share in the US iTunes 1 billion USD Q4 2010

    only 6 months development time !

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    Apple's iPod

    > 300 million sold 70% market share in the US iTunes 1 billion USD Q4 2010

    only 6 months development time !

    because

    Apple sourced in the idea from an outside consultant and assembled a team of 8 component technology partners to bring it to market

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    OpenInnova1onisnotnew

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    OpenInnova1onisnotnew

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    Cri1caluncertain1es

    "OpenInnova1onistheuseofpurposiveinowsandou?lowsofknowledgetoaccelerateinternalinnova;on,andexpandthemarketsforexternaluseofinnova;on,respec;vely."

    HenryChesbrough

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    Adiverselandscape

    Sourcinginexternalexper;se Collabora;veinnova;on Valorizingendogenous(dormant)IP Userledinnova;on Corporateventuring

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    Adiverselandscape

    Sourcinginexternalexper;se Collabora;veinnova;on ValorizingendogenousIP Userledinnova;on Corporateventuring

    DierentapproachesDierentgoalsDierentimplica1onsforstrategyandcapabili1es

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    OI Mode Goal Locus Capabilities

    Sourcing in Reduce costs, Speed to Market

    End of stage-gated innovation process

    Frame issues, Find expertise

    Collaborative Innovation

    Radical innovation, New business models

    Fuzzy front end Ecosystem mgt, IP regime design System integration

    Valorizing endogenous IP

    Increase revenues from existing assets

    Modularization, identify application space

    User-led innovation Empower customers, Create brand loyalty

    Ideation, customisation

    Crowdsourcing, Marketing

    Corporate Venturing Secure access to component technologies

    Anywhere Scouting

    Adiverselandscape

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    Sourcinginexper1se

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    Collabora1veInnova1on ? TataNano:only34patentsOpenHardwareModel

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    SOCIAL PRODUCT DEVELOPMENT

    "Together, we develop two new products every week. One could be anything; the other is based on a brief we provide you ... "

    UserledInnova1on

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    ValorizingendogenousIP

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    CorporateVenturing

    Investment focus: consumer products and services, health care, weight management and !tness, media, water, clean tech, environmental services, ...

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    Widescan:P&GConnect&Develop

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    Concluding

    OpenInnova;onisdesigningtheowofknowledgeassetsacrosscompanyboundaries.

    OpenInnova;onisnotamonolithicprac;ce. BuildinganOIpor?oliohastobeanchoredinaclearstrategicvision.

    DeployingfullspectrumOIentailsastrategic'upframing',awayfromproductandtechnologylayertoincludeserviceandbusinessmodelinnova;on.Enormousdegreesoffreedom!

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    Driversbehindopeninnova1on

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    Fragmentation of IP

    Eroding innovation model of majors

    Job mobility

    Prosumership

    The spread

    of Open

    Innovation

    FOR

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    the microprocessor paradigm

    asset liquidity and option density

    from value chain to value constellations: innovative co-productive relationships

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    "Itistheviewsinthemindsofbusinesspeoplethatarethegreatestconstraint,andthesourceofgreatestopportuni;estoday.Thereareno'mature'businesses.Thereareonly'mature'framesofreference."

    NormannandRamirez,1994

    the microprocessor paradigm

    asset liquidity and option density

    from value chain to value constellations: innovative co-productive relationships

  • Shiftn, 2010 www.shiftn.com 23

    Fragmentation of IP

    Failing innovation model of majors

    Job mobility

    Prosumership

    Culture (NIHS)

    The IP conundrum

    Transaction costs

    Elusive business case

    The spread

    of Open

    Innovation

    FOR AGAINST

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    ?TheIPconundrum

    SecrecyorTransparency?SpeedorSecurity?

    GenericorFlexibility?CostorOpportunityCost?

    interna1onaliza1on

    economicvola1lity

    evolvingpartner

    ships

    heterogeneouspartnerships

    Importanceofintangibles

    Increasingspeedofinnova1on

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    SecrecyorTransparency?SpeedorSecurity?

    GenericorFlexibility?CostorOpportunityCost?

    interna1onaliza1on

    evolvingpartner

    ships

    Clearstrategicvision

    Dieren1atedsuiteofagreementsandexit/divorceplansClearbutmodulartypologyofknowledgeassets

    ClearphasingofR&Dprocess

    heterogeneouspartnerships

    economicvola1lity

    Importanceofintangibles

    Increasingspeedofinnova1on

  • Shiftn, 2010 www.shiftn.com 26

    ElusiveBusinessCase

    "Contrarytoourexpecta;ons,itiscollabora1oninexplora1vetechnologicalac1vi1es,ratherthancollabora;oninexploita;vetechnologicalac;vi;es,thatleadstoareduc1oninrmvalue."

    "Thesendingsques;ontherelevanceofopenbusinessmodelsfortechnologicalac;vi;es.Inpar;cular,theysuggestthatthepoten1aladvantagesofcollabora1onfor(explora;ve)technologicalac;vi;es(i.e.accesstocomplementaryknowledgefromotherpartners,sharingoftechnologicalcostsandrisks)mightnotcompensateforthepoten1aldisadvantages,suchastheincurredincreaseincoordina;oncostsandtheneedtoshareinnova;onrewardsacrossinnova;onpartners."

    ResearchOrienta-on EXPLORATIVE EXPLOITATIVE

    SOLITARY

    COLLABORATIVE Collabora;veInnova;on,Insourcing

    ValorizingdormantIP

    Belderbosetal.2009Datareecttechnologicalac;vi;esof168samplerms,19962003R&DintensiveEuropean,USandJapanesermsinveindustries

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    TheFutureofOpenInnova1on

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    Cri1caluncertain1es

    Drivingforces

    Poli1calGeopoli;calsecurityExtentofmul;polarity

    EconomicIntensityofglobalcompe;;onAccesstocapitalEconomicsurplusEmergenceofnewbusinessmodels

    EnvironmentalImpactofclimatechangeScarcityofenergy/rawmaterials

    SocialDemographicsAvailabilityofhumancapitalAcceptabilityofclosedIP

    Technological:Informa;onsecurity

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    Cri1caluncertain1es

    Cri1calUncertain1es

    Strategicagilityofinnovators

    Intensityofexogenouspressures

    Low High

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    Abackoftheenvelopescenarioframework

    highstrategicagility

    lowstrategicagility

    moderatepressures

    highpressures

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    Scenarioframework

    highstrategicagility

    lowstrategicagility

    moderatepressures

    highpressures

    Pressingsocietalneeds(health,climate),Expensiveinputs,Toughglobalcompe11onLowsocietalacceptanceofclosedIP

    Willingness/abilitytoembracenewbusinessmodels,partnerships.

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    4thumbnailscenarios

    highstrategicagility

    lowstrategicagility

    moderatepressures

    highpressures

    Technohybridiza1on

    Focus on time-to-market and !exibility Strong focus on 'user-embedded' technology Soft IP (licence of right) Highly dierentiated innovation landscape Convergence on interoperability standards OI-oriented public procurement

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    4thumbnailscenarios

    highstrategicagility

    lowstrategicagility

    moderatepressures

    highpressures

    Technohybridiza1on

    Ac1vistOI

    Open source/commons-oriented innovation Limits on patentability and copyright Erosion of IP base through hacking and theft State control of IP rights in strategic areas

  • Shiftn, 2010 www.shiftn.com 34

    4thumbnailscenarios

    highstrategicagility

    lowstrategicagility

    moderatepressures

    highpressures

    Technohybridiza1on

    Big=beau1ful Ac1vistOI

    Business as usual: insourcing logic Incumbents dictate terms of semi-OI Patent-anchored hard IP

  • Shiftn, 2010 www.shiftn.com 35

    4thumbnailscenarios

    highstrategicagility

    lowstrategicagility

    moderatepressures

    highpressures

    Technohybridiza1on

    Big=beau1ful Ac1vistOI

    BlueOcean

    Strong focus on user experience 'Blue Ocean' service/business model innovation Fluid value constellations Brands trump IP

  • Shiftn, 2010 www.shiftn.com 36

    Concluding

    ThefutureofOpenInnova;onisanopenfuture. Theques;onisnotwhetherwecanprovethesescenariostrue.Theques;onis:iftheymaterialize,whatdoesitmeanforourinnova;onmodel?

    Undertheassump;onsstudied,thedominantIPregimeisverylikelytoundergosignicantchanges.

    VerylikelyalloftheseformsofOpenInnova;onwillmanifestthemselves.Inthatsensethescenarioframeworkcons;tutesatypologyof