Innovation Policy Toolkit - Introduction to Innovation Policy and Collaboration

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INNOVATION & COLLABORATION

INNOVATION & COLLABORATION

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> How and why firms innovate

> Collaboration in innovation

- C L I C K A S E C T I O N TO G E T S TA RT E D -

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INNOVATION & COLLABORATION

INNOVATION IN THE UK

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There are many ways to define ‘innovation.’ For example ‘the successful implementation of new ideas’ (BIS), ‘Change that creates a new dimension of performance.’ (Peter Drucker), ‘New ideas that work’ (Nesta)

There are also wordy official definitions by organisations like the OECD that help us to collect uniform statistics and measure innovation.

Click the thumbnails to learn more:

THERE ARE MANY WAYS TO DEFINE INNOVATION

There are three important concepts:

I N N O V A T I O NA new product or process

that has proven to be commercially (or socially)

valuable

I N V E N T I O NThe creation of an idea

to do or make something without verification that it works, or is commercially

valuable

D I F F U S I O NThe spread of innovation throughout society that generates its full benefit

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INNOVATION IS SO IMPORTANT BECAUSE LONG TERM ECONOMIC GROWTH DEPENDS ON IT

T H E R E A R E T W O S O U R C E S O F E C O N O M I C

G R O W T H

A.More inputs

B.New ways to get more output from

those inputs=

I N N O V A T I O N

You can grow the size of your economy by increasing the number of people working (& their skills) or the capital they have available to use, e.g. to buy more machines.

But there are decreasing returns to scale. Doubling the number of machines has a limited impact on output if you already have lots of them.

M A K E U P O F U K E C O N O M I C G R O W T H

2 0 0 0 - 2 0 0 8 ( P E R C E N T A G E P O I N T S )

At some point, the only way to increase living standards is to innovate, by creating new products, services, technologies or processes.

In a global economy, innovation is what allows UK firms to be competitive.

The UK’s comparative advantage is disproportionately derived from R&D and innovation intensive sectors.

Nesta’s Innovation Index measures the contribution of innovation to UK economic growth. 63% of the UK’s economic growth between 2000 and 2008 was due to innovation.

Plan I: The Case for innovation-led growth. 2012 (Nesta)

The Innovation Index. 2012 (Nesta)

International bench-marking of the UK science and innovation system. 2014 (BIS)

SOURCE: INNOVATION INDEX (NESTA)

Total factor productivity: a short biography. 2000 (Hulten)

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AND INNOVATION IS ALSO CRITICAL TO SOLVING 21ST CENTURY SOCIAL CHALLENGES

Innovation policies of the past were profit oriented, and nationally focused. Today it is widely recognised that meeting challenges from climate change or water security, to caring for rapidly ageing populations, depends on innovation that seeks to generate social value at the same time.

Scientific and technological innovations have a better chance of scaling up and achieving global impact if they are developed from the outset in conjunction!with social and business model innovations.*Grand challenges disregard national boundaries, meaning global collaboration in innovation and research is more important than ever.

The Gates Foundation’s Grand Challenges in Global Health is focused on overcoming persistent bottlenecks in creating new tools that can radically improve health in the developing world. $458 million has so far been awarded to partnerships in 33 countries. www.grandchallenges.org

In the UK Nesta’s Centre for Challenge Prizes is collaborating with BIS, Innovate UK and others on a new multi-million pound prizes for innovation to tackle grand challenges like resistance to antibiotics and zero carbon flight.www.nesta.org.uk

I N N O V A T I O N F O R G R A N D C H A L L E N G E S

OECD Innovation Strategy. 2010

5 Hours a Day: systemic innovation for an ageing population. 2013 (Nesta)

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EFFECTIVE SCIENCE AND INNOVATION SYSTEMS DEPEND ON A COMPLEX SET OF RESOURCES, INSTITUTIONS, CONDITIONS AND INTERACTIONS

The performance of an innovation system depends not just on the strength of each actor but on the quality of the links between them1*

For example, a firm’s ability to develop a new solar panel technology might depend on public investment in basic research, skills to develop the technology, access to finance for development, environmental regulation that creates market demand, standards that drive new levels of environmental performance, competition etc.

“... the elements and relationships which interact in the production, diffusion and use of new, and economically useful, knowledge ... and are

either located within or rooted inside the borders of a nation

state.”

L U N D V A L L , 1 9 9 2

N A T I O N A L I N N O V A T I O N S Y S T E M S C A N B E

D E F I N E D A S :

Oxford Photovoltaics is an Oxford University spin-out that has used Innovate UK grants to commercialise publicly funded research into low cost, transparent solar cells that can be printed on glass. Regulations on the carbon emissions of new buildings may help create a market for this new type of solar cell.

For more examples of SME success stories see the Innovate UK website.

National Systems of Innovation. 1992 (Lundvall)

The impact of standards on innovation. 2013 (Blind)

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THERE ARE VARIOUS WAYS TO VISUALISE INNOVATION SYSTEMS

F O R E X A M P L E F R O M T H E P O I N T O F V I E W O F F U N C T I O N S A N D

C O N D I T I O N S :

O R F R O M T H E P O I N T O F V I E W O F I N S T I T U T I O N S :

SOURCE: EDLER, J. ET AL (2011) MEASURING WIDER FRAMEWORK CONDITIONS FOR SUCCESSFUL INNOVATION, NESTA, LONDON.

MAIN ORGANISATIONS SHAPING THE SCOTTISH INNOVATION SYSTEM:

SOURCE: THE SCOTTISH INNOVATION SYSTEM: ACTORS, ROLES AND ACTIONS (2006)*

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‘INNOVATION POLICY’ REFERS TO ALL PUBLIC INTERVENTIONS THAT SEEK TO SUPPORT THE GENERATION AND DIFFUSION OF INNOVATION

It involves increasing the S U P P LY of resources

for innovation:

Examples:

Through grants, subsidies, skills, entrepreneurs and

research

But also influencing D E M A N D to pull innovation through the system and influence markets

Examples:

Through regulation, standards and using government’s huge purchasing

power.

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INNOVATION POLICIES HAVE DIFFERENT GOALS

G O A L E X A M P L E S

Increasing inputs to innovation R&D tax credits, grants for R&D, public support for venture capital

Increasing non-financial capabilities (eg access to skills and expertise)

Support for exploiting IP, technical support services, skilled migration and mobility schemes

Enhancing connections and complementarities

Cluster policy, support for networks, collaborative R&D programmes, support for intermediaries

Enhancing demand for innovation Public procurement policies, pre-commercial procurement of R&D

Improving framework conditions for innovation

Regulation, standards, business environment

Improving discourse and preparedness Foresight and horizon scanning, technology roadmapping exercises

The Compendium of Evidence for Innovation Policy. 2012. (MIoIR)

The OECD-World Bank Innovation Policy Platform

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INNOVATION POLICIES MAY HAVE A SIGNIFICANT IMPACT (EITHER INTENTIONAL OR UNINTENTIONAL) ON INTERNATIONAL COLLABORATION

AT H O M E

UK policies may attract R&D

investments (eg low corporation tax) or talent from abroad (eg

favourable immigration policy or

targeted scholarships); or they may

facilitate introduction of those technologies, business models or

new practices that are generated

abroad (eg ‘soft landing’ incubators or business support)

A B R O A D

The host country policy

environment affects export opportunities for innovative UK

companies (eg protectionism &

subsidies), the opportunity to co-

develop products and take them to market (eg IPR regime & wider legal

environment) and the ability of UK

companies to access funding (e.g requirement to conduct R&D

locally or transfer technology)

B E T W E E N

Programmes to foster international

research collaboration produce new knowledge, but also build

bridges and relationships that

additional stakeholders may

exploit. Funds for collaborative R&D help support partnerships

between firms and universities

internationally.

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H O W & W H Y F I R M S I N N O VAT E

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A RANGE OF FACTORS INFLUENCE FIRMS’ DECISIONS TO INNOVATE

Innovation is risky and often expensive. The value of new ideas and intellectual property is only as great as the firm’s ability to exploit them.

The community innovation survey, conducted every two years across Europe, reaches over 28,000 UK firms, and shows us which factors influence innovative UK companies to invest in innovation.

The chart opposite shows the factors which influence a firm’s decision to innovate.

INNOVATION FACTORS (% OF ALL BROADER INNOVATORS RATING “HIGH”)

Community Innovation Survey. 2012 (BIS)

Factors influencing a firm’s decision to innovate

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WE HAVE A GENERIC UNDERSTANDING OF HOW THE ‘INNOVATION PROCESS’ WORKS

SOURCE: GREENHALGH AND ROGERS (2010) INNOVATION, INTELLECTUAL PROPERTY AND ECONOMIC GROWTH

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YET THIS ‘LINEAR’ MOVEMENT FROM BASIC RESEARCH TO THE MARKET DOESN’T CAPTURE THE RANGE OF WAYS IN WHICH INNOVATION TAKES PLACE

S E R V I C E I N N O V AT I O N

This isn’t just about the service industries. Service innovation takes place in many different sectors.

For example the business model innovation that emerged in Europe from the deregulation of European airspace in the 1990s resulted in low-cost carriers like Ryanair and EasyJet. While the core business remains passenger transportation, it transformed the European airline industry and the travel industry in general.

The application of ICT has led to disruptive service innovations across many different parts of the economy.

S O C I A L I N N O V AT I O N

This directly creates value for society in addition to the economy. It engages new actors, resources, systems and processes in areas from education and healthcare to climate change and financial inclusion. !Microfinance is regarded as one of the most important social innovations of a generation. Muhammad Yunus was awarded the Nobel peace prize in 2006 for his work with the Grameen Bank. With 2,500 branches, this microfinance bank provides credit to almost 8 million people, recovering over 98% of loans.

***

Innovation in services. 2007 (DTI)

The Open Book of Social Innovation. 2010 (Young Foundation)

The Process of Social Innovation. 2006 (Mulgan)

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FOREIGN DIRECT INVESTMENT CONTRIBUTES TO NATIONAL CAPACITY FOR INNOVATION

Foreign direct investment (FDI) occurs when overseas businesses invest in the UK, either by acquiring a British company or a stake in one, or by setting up a new subsidiary.

The UK’s!2014/15 Inward Investment Annual Report, published by UK Trade and Investment (UKTI), shows the UK has continued to strengthen its position as the leading European destination for foreign direct investment. The US and the Netherlands are the biggest inward investors into the UK.

Almost one in five private sector workers in the UK is employed by a foreign business; between 1997 and 2010, foreign–owned firms went from employing 11 per cent of the UK’s private sector workforce to employing 19 per cent.

Critics have argued that FDI, in the form of acquisitions, hollows out the UK’s productive capacity since foreign owners are more likely to shift high–value functions overseas and to neglect UK supply chains. However, survey evidence shows that foreign firms have a significant positive impact on the innovative capabilities of their suppliers in the UK.

Foreign Direct Innovation: The effect of FDI on innovation in the UK. 2012 (Nesta)

NISSAN CAR MANUFACTURING PLANT IN SUNDERLAND

Inward investment report 2014/15 (UKTI) BOMBARDIER TRANSPORTATION PLANT IN DERBY

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DIFFERENT STAGES OF GROWTH REQUIRE DIFFERENT TYPES OF FUNDING FOR INNOVATION

The source of funding for innovation adapts as a start-up evolves, adjusting to changes in risk, capital needs and the relative due diligence cost, but in some stages finance may be too costly or simply not available.

Venture capital for innovation is concentrated in a few sectors like ICT and biotech, and is available to a very small proportion of innovative firms overall. Contracts to develop and supply products and solutions are a far more common route to growth.

Public sector spending by large departments such as health and defence is also an important driver. Innovate UK’s Small Business Research Initiative taps into the spending power of government departments to create opportunities for small, innovative companies to access R&D contracts.

Public venture capital schemes (public funds

or co-investment models)

P U B L I C S U P P O R T F O R A C C E S S T O F I N A N C E I N C L U D E S :

Business angel network support

Tax credits for investors in innovative companies

(directly or through funds)

Loan guarantees

Grants (from R&D to

innovation prototyping)

From Funding Gaps to Thin Markets. 2009 (Nesta)

Exploding the myths of innovation policy. 2011 (Connell)

Bridging the valley of death.2013 (HoC S&T select committee)

The Small Business Research Initiative (TSB)

SOURCE: BRIDGING THE VALLEY OF DEATH PARLIAMENTARY REPORT, 2013

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THERE HAS BEEN A RISE IN ALTERNATIVE FORMS OF FINANCE FOR INNOVATION LIKE CROWDFUNDING

T H E C R O W D F U N D I N G P R O C E S S

Find a range of practical resources, research and publications here.

The financial crisis spurred a range of new financial innovations. Models like crowdfunding and peer-to-peer funding are remarkable for their transparency and simplicity. This new ‘alternative finance’ movement uses technology to bring those with money to invest closer to those who need it, allowing investors to create diversified portfolios, avail of tax incentives and back growing businesses, all without the need of large traditional institutions.

For example, in 2013 Zovolt, a UK based startup, raised £90,000 through crowdfunding platform Crowdcube for its miniature wireless ECG/Heart Rate sensor, which is able to send data in real time to mobile devices.

Nesta research found that in 2013 alternative finance intermediaries facilitated almost half a billion pounds of business funding, through crowdfunding, peer-to-peer lending and invoice financing. While this is still a relatively small proportion of the overall funding for SMEs, it is growing fast.*

*

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C O L L A B O R AT I O N I N I N N O VAT I O N

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COLLABORATION IN INNOVATION TAKES DIVERSE FORMS, THESE RELATIONSHIPS HAVE DIFFERENT DEGREES OF INTENSITY AND RISK

C O O P E R AT I O N

§  Information sharing§  Informal

§  Separate resources

§  Low intensity

§  Low risk

C O M B I N AT I O N

§  Some joint planning§  Formalised partnership

§  Communication channels

§  Resource matching

§  Medium intensity§  Low-medium risk

C O - C R E AT I O N

§  Shared mission/goal

§  Comprehensive joint planning

§  New hybrid structure

§  Pooled resources§  High risk

§  Shared reward

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GOVERNMENTS USE A RANGE OF METHODS TO SUPPORT COLLABORATION ON INNOVATION

UK EXAMPLES OF GOOD PRACTICE FROM ELSEWHERE

Bilateral agreements

RCUK has an extensive range of bilateral agreements on joint research funding calls. Innovate UK has begun to organise joint innovation calls.

While international agreements are often non-commital, Sweden’s innovation agency, Vinnova, is well known for the number of bilateral programmes that it runs.

Multilateral agreements

The goal of the Global Innovation Initiative, a British Council programme, is to strengthen global research through multilateral partnerships. The UK also participates in the EU’s Horizon 2020 programme.

Germany’s CLIENT project involves BRIC countries as well as South Africa and Vietnam in order to work together on environmental technologies and services.

Researcher mobility schemes

The UK has one of the most extensive lists of researcher mobility schemes in the EU. Examples include the Royal Society’s Newton International Fellowship and several research council schemes.

Sweden’s Advanced International Training programme, run by SIDA and VINNOVA, aims to promote innovation-led sustainable growth by funding inward mobility and training.

Partnership programmes and initiatives

One example of a UK innovation collaboration initiative is the Lancaster China Catalyst Programme, which aims to support the development of partnerships between UK and Chinese R&D intensive companies.

The Initiative Entreprises Innovantes promotes partnerships between French SMEs and their counterparts in abroad.

Foreign branches or subsidiaries

The UK is well represented internationally by SIN, UKTI, Prosperity Officers and, in key countries, RCUK.

Austria, Denmark, Germany, Italy, the Netherlands, and Sweden all have S&T attachés, mostly focused on the BRICS, the USA and Japan. Germany is notable for its international network of Max Planck and Fraunhofer research centres.

SOURCE: ADAPTED FROM EU COMMISSION REPRORT ON INTERNATIONAL SCIENCE, TECHNOLOGY

AND INNOVATION COOPERATION (2013)

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The OECD defines a joint venture as:    

“a contractual agreement between two or more parties for

the purpose of executing a business undertaking in which the

parties agree to share in the profits and losses of the enterprise

as well as the capital formation and contribution of operating

inputs or costs. It is similar to a partnership, but typically differs

in that there is generally no intention of a continuing

relationship beyond the original purpose.”

W H Y D O C O M P A N I E S S E E K P A R T N E R S H I P S A N D C O L L A B O R A T I O N S R E L A T I N G T O I N N O V A T I O N ?  

§  Access product and financial markets;§  Share costs of R&D;§  Share risk, reduce uncertainty;§  Access complementary resources and skills of partners, such as finance, complementary technologies;§  Benefit from research synergies or access facilities;§  Accelerate return on investments through more rapid diffusion of innovation§  Co-opt competition;§  Attain legal and political advantages in host countries.  

FROM JOINT VENTURES TO STRATEGIC ALLIANCES, THERE ARE MANY DIFFERENT FORMS OF COLLABORATIVE AGREEMENT BETWEEN FIRMS

 But there are many kinds of collaboration on innovation beyond joint ventures. As companies find increasingly flexible models of collaboration, strategic partnerships are common.

These entail some degree of strategic and operational coordination and may include things such as joint research and development (R&D), technology exchanges, exclusionary market and manufacturing rights, and co-marketing agreements.  

Key terms in FDI. 2008 (OECD)

For more on this see the work of Professor Nicholas Vonortas at the Center for International Science and Technology Policy, George Washington University

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THE VALUE CREATED BY UNIVERSITY-BUSINESS INTERACTION GOES FAR BEYOND PATENTING, SPIN OFFS AND LICENSING

There are many ways in which public research can be transferred, exploited, and commercialised.

Knowledge flows and commercialisation channels are not unidirectional and often operate in simultaneous and complementary ways.

A recent survey by the UKIRC identifies the various channels through which knowledge flow between universities and businesses, and highlights the importance of ‘people interaction’ from conferences and advisory boards to student placements and invited lectures.

While 17% of the firms surveyed said their interaction with the university had been initiated by a Technology Transfer Office (TTO), this was the least common way to initiate a relationship.

Direct approaches and follow up to chance meetings at conferences were more common, highlighting the importance of building dense, informal networks between universities and businesses.

International league tables show the UK ranking highly for academic-industry collaboration.

T H E L A M B E R T T O O L K I T

Various toolkits have been developed to help universities and industries interact successfully. The Lambert

Toolkit is widely recognised, and although less than 10% of university-business

collaborations in the UK use a Lambert-style agreement, it is still seen as a useful template and starting point

for good practice.

Commercialising public research. 2013 (OECD)

The Connected University. 2009 (Nesta)

Business perspectives on knowledge exchange in the UK. 2013 (UKIRC)

The Lambert toolkit 8 years on. 2013 (IPO)

LAMBERT  toolkit  link  dead,  new  link:  h-ps://www.gov.uk/government/uploads/system/uploads/a-achment_data/file/311757/ipresearch-­‐lambert.pdf  

Business  perspec9ves  link  dead,  new  link:h-ps://michaelkitson.files.wordpress.com/2013/11/ivory-­‐tower-­‐nov-­‐13.pdf  

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CHANNELS OF KNOWLEDGE FLOW BETWEEN UNIVERSITY AND INDUSTRY ARE DIVERSE, WITH VARYING SIGNIFICANCE FOR INDUSTRY

CHANNEL DESCRIPTION INTERACTION INTENSITY?

INDUSTRY SIGNIFICANCE?

PUBLISHING Most traditional and widespread mode of knowledge transmission Low High

CONFERENCES & NETWORKING

Professional conferences, informal relations, casual contact and conversations are seen as among the most important channels by industry across sectors

Medium High

COLLABORATIVE RESEARCH & RESEARCH PARTNERSHIPS

Resources are jointly committed by academic researchers and private companies. Range from small scale projects to large scale strategic partnerships eg PPPs

High High

CONTRACT RESEARCH

Commissioned by a private firm to pursue a solution to a problem of interest, involves creating new knowledge as per the specifications of the client. Usually more applied than collaborative research

High High

ACADEMIC CONSULTING

Research or advisory services provided by researchers to industry clients. Often led by individuals and not institutionalised.

High High

INDUSTRY HIRING, STUDENT PLACEMENT

Firms get access to talent pipeline but main benefits for universities (joint supervision of theses, internships collaborative research)

Medium Medium

PATENTING &LICENSING

Ranked among the least important channels by both industry and researchers. Despite policy focus, little transfer of tacit knowledge

Low Low

PUBLIC RESEARCH SPIN OFFS

Receives substantial attention, but in fact a rare form of entrepreneurship compared to alumni and student startups

Low Low

PERSONNEL EXCHANGES

May take many forms, usually university or industry researchers spending time in alternate settings

Medium Low

STANDARDS According to OECD research, at least as important a knowledge transfer channel as patents

Low Medium

SOURCE: COMMERCIALISING PUBLIC RESEARCH, NEW TRENDS AND STRATEGIES, 2013, OECD

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R O L L S – R O Y C E , E P S R C A N D U N I V E R S I T Y T E C H N O L O G Y C E N T R E S

Rolls–Royce has co–funded large amounts of engineering research alongside the EPSRC.

Their network of University Technology Centres provides stable funding partnerships with specific institutions, focused on research areas of interest to the company. Beyond this, they have participated in research collaborations such as the ADAM (advanced aeroengine materials) project, a five year collaboration between Rolls–Royce, QinetiQ and six universities, with funding from EPSRC and DTI (now BIS). This investigation into the behaviour of high–temperature materials contributed to major engine improvements that Rolls–Royce has put into production.

D U N D E E ’ S B I O T E C H N O L O G Y C L U S T E R

The division of signal transduction therapy, run by Sir Philip Cohen, is supported by the MRC and the University of Dundee, and attracts £2.7million per year in funding From 5 of the world’s largest pharmaceutical companies: AstraZeneca, Boehringer Ingelheim, GlaxosmithKline, Merck–Serono and Pfizer.

The companies share the right to exploit the technical know–how, kinase profiling service and unpublished results, but they pay for special services and to license the unit’s IP. Forty per cent of the funding for this collaboration goes to a service facility with 25 staff in a series of ‘backup’ teams that support the 14 research groups. This expert team can be accessed by the companies, providing reagents and chemicals which generate a further £4 million per company over the four–year period. The unit has successfully spawned a number of start–up companies, most of which remain in Dundee.

THERE ARE MANY EXAMPLES OF SUCCESSFUL LARGE SCALE UNIVERSITY-INDUSTRY COLLABORATIONS IN THE UK

SOURCE: Plan I, NESTA SOURCE: Plan I, NESTA

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Proprietary digital platforms associated with products, which provide an opportunity for third party commercial innovations, have revolutionised the mobile and digital services industry. For instance, while the direct contribution to profits of Apps sold in Apple’s App Store is not huge, the indirect contribution, through value added to iphone and ipad products is enormous. There are now over 300,000 Apps on Google’s competitor Android platform, which have been downloaded over ten billion times. This model is likely to spread beyond the mobile industry.

ONLINE PLATFORMS ARE PLAYING AN EVER BIGGER ROLE IN ENABLING INNOVATION COLLABORATIONS

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A growing number of platforms enable online collaborative development. Marblar is an online collaborative development platform that lets users generate commercial applications for scientific discoveries. It attracts patents from NASA and commercial support for product development from Samsung. Launched over a year ago, 30 patents have so far been curated on the site, resulting in thousands of product ideas. Open IDEO is a collaborative design platform.

Crowdsourcing solutions, involves defining a unsolved challenge or problems, and creating an online infrastructure through which the widest possible range of participants can submit solutions, be judged according to a set of strict criteria and be rewarded for their achievement. Online ideas marketplace Innocentive, a spin out from pharma firm Eli Lilly, has 250,00 registered solvers from 200 countries competing for over $35 million in prizes. The US government has created new legislation to allow government departments to solve innovation challenges with crowdsourced prizes..

Whether it’s the 250 million strong global Linkedin platform, or the Technology Strategy Board’s _connect platform for the UK innovation community, there are a growing range of professional networking platforms that help firms to identify expertise, deals and track industry specific knowledge. These loose networks are a complement to offline networking programmes and their potential is rarely fully realised.

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COLLABORATING INTERNATIONALLY EXPOSES INNOVATIVE COMPANIES TO ADDITIONAL RISKS WHICH REQUIRE TAILORED MITIGATION STRATEGIES

Innovative companies face specific risks that are less relevant to other businesses:

§  They are likely to require a higher risk tolerance, since the rapid and regular development of new products or services is key to their competitive advantage;

§  They depend more than other industries on IP for their value and growth strategies.

The risks innovative companies face, and their mitigation strategies, vary depending on company size and technology:

§  Small companies may not have the resources to undertake market research, build government relationships and defend their IP.

§  Advanced technologies are more difficult to copy as they embody a large amount of knowledge which is

not published in patents.

The risks that companies face when collaborating internationally can be categorised as:

§  Preventable risks that result from poor preparation or ineffective operational practice. E.g. failing to apply for a patent; choosing the wrong partner. They may also result from having a poor understanding of the local culture or from language barriers

§  Strategic risks that companies take in the knowledge that they are likely to generate strategic or financial returns; e.g. conducting R&D in China exposes a company to the risks of a relatively weak legal system, but they also gain access to local resources and markets.

§  External risks such as political and economic factors and natural disasters that cannot be controlled, but can sometimes be influenced  

The real risk equation. 2013 (Nesta)

Risk management and innovation in business. 2013. (Allianz insurance)

Managing Risk: A New Framework. 2012 (Kaplan)

The  real  risk  equa9on  link  dead,  new  link:  h-p://www.nesta.org.uk/sites/default/files/chinas_absorp9ve_state_0.pdf#page=79  

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While patents and other formal rights are often thought of as the main ways to protect IP, businesses use a wide range of formal and informal approaches.

For example, trusted relationships are key to innovation collaborations and must be cultivated over time. In a recent survey 74% of firms surveyed said that cultivating commitment and loyalty is an effective way to protect IP, compared to just 51% for a patent.

INTELLECTUAL PROPERTY IS THE ‘GRAMMAR’ OF COLLABORATION ON INNOVATION, AND THERE ARE MANY DIFFERENT ROUTES TO PROTECTING IT

APPROACH TO PROTECTION

DESCRIPTION

Patent An invention which is a product or a process that provides a new way of doing something, or offers a new technical solution to a problem.

Design right Design Right refers to the specific legal protection available to unregistered designs in the UK.

Trademark A sign (logo/words that make a brand) which distinguishes goods and services from that of a competitor.

Copyright Artistic and creative works

Secrecy/non-disclosure agreement

Inventions that haven’t been patented

Restricted access to information

Trade secrets that have not been registered for legal protection

Division of duties Involves splitting stages of the production or research process between different partners or suppliers

Cultivating commitment & loyalty

Allows partners to share information without fear of IP theft

Fast innovation cycle Bringing products and services quickly to market reduces risk of being copied

Complex product design

Products that do not embody large amounts of advanced knowledge are relatively easy to copy and manufacturers often make them unnecessarily complex in order to mitigate this

Collaborate to innovate. 2013. (Big Innovation Centre)  

IPO: Types of IP   IP toolkits and guides  

Collaborate  to  innovate  link  dead,  new  link:    h-p://www.biginnova9oncentre.com/universi9es-­‐and-­‐innova9on-­‐centres  

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OECD (2005) Oslo Manual: Guidelines for Collecting and Interpreting Innovation Data, 3rd Edition. Available at: http://www.oecd.org/sti/inno/oslomanualguidelinesforcollectingandinterpretinginnovationdata3rdedition.htm

Nesta (2012) Plan I: The Case for innovation-led growth. Available at: http://www.nesta.org.uk/publications/plan-i"

Nesta Innovation Index. Available at: http://www.nesta.org.uk/project/innovation-index

Allas, T. (2014) Insights from the international bench-marking of the UK science and innovation system. Available at: https://www.gov.uk/government/publications/science-and-innovation-system-international-benchmarking

OECD (2002) Frascati Manual: Proposed Standard Practice for Surveys on Research and Experimental Development, 6th edition. Available at: http://www.oecd.org/innovation/inno frascatimanualproposedstandardpracticeforsurveysonresearchandexperimentaldevelopment6thedition.htm

Hulten (2000) Total factor productivity: a short biography. Available at: http://www.nber.org/papers/w7471

Nesta (2013) 5 Hours a Day: systemic innovation for an ageing population. Available at: http://www.nesta.org.uk/publications/five-hours-day"

Lundvall (1992) National Systems of Innovation: Toward a Theory of Innovation and Interactive Learning Available at: http://books.google.co.uk/books/about/National_Systems_of_Innovation.html?id=iDXGwacw-4oC&redir_esc=y

Blind (2013) The impact of standardization and standards on innovation. Available at: https://www.nesta.org.uk/sites/default/files/the_impact_of_standardization_and_standards_on_innovation.pdf

OECD (2010) The OECD Innovation Strategy. Available at: http://www.oecd-ilibrary.org/science-and-technology/the-oecd-innovation-strategy_9789264083479-en;jsessionid=ouwfbd5krd7i.x-oecd-live-01*

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Elder et al (2011). Measuring wider framework conditions for successful innovation. Available at: http://www.nesta.org.uk/PUBLICATIONS/MEASURING-WIDER-FRAMEWORK-CONDITIONS-SUCCESSFUL-INNOVATION

Manchester Insitute of Innovation Research (2012) The Compendium of Evidence for Innovation Policy. Available at: http://www.innovation-policy.net/compendium/

The OECD-World Bank Innovation Policy Platform. Available at: https://www.innovationpolicyplatform.org/

BIS (2012) Community Innovation Survey: Available at: https://www.gov.uk/government/collections/community-innovation-survey"

Roper (2006) The Scottish innovation system: actors, roles and actions. Available at: http://www.scotland.gov.uk/Resource/Doc/89713/0021562.pdf

DTI (2007) Innovation in services, DTI Occasional paper. Available at: http://www.cambridgeservicealliance.org/uploads/downloadfiles/DTIpaper9.pdf

Mulgan, G. (2006) The Process of Social Innovation, Innovations, MIT, Boston. Available at: https://www.nesta.org.uk/sites/default/files/the_open_book_of_social_innovation.pdf

Chesbrough (2006) Open Innovation: the new imperative to creating and profiting from technology. Available at: http://books.google.co.uk/books/about/Open_Innovation.html?id=OeLIH89YiMcC&redir_esc=y"

Nooteboom et al (2008) Network Embeddedness and the Exploration of Novel Technologies. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=903743

Murray et al (2010) The Open Book of Social Innovation, Young Foundation., London. Available at: http://www.nesta.org.uk/publications/open-book-social-innovation""

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OECD (2013) Interconnected Economies: benefitting from Global Value Chains. Available at: http://www.oecd.org/sti/ind/interconnected-economies-GVCs-synthesis.pdf"

Kraemer et al (2011) Capturing value in global networks. Available at: http://pcic.merage.uci.edu/papers/2011/Value_iPad_iPhone.pdf

OECD (2013) UK participation in global value chains. Available at: http://www.oecd.org/sti/ind/GVCs%20-%20UNITED%20KINGDOM.pdf

Nesta (2012) Foreign Direct Innovation: The effect of FDI on innovation in the UK. Available at: http://www.nesta.org.uk/sites/default/files/foreign_direct_innovation.pdf

Dedrick et al (2008) Who profits from innovation in global value chains? Industry Studies. Available at: http://web.mit.edu/is08/pdf/Dedrick_Kraemer_Linden.pdf"*

UKTI (2013) Inward Investment Report 2014/15. Available at: https://www.gov.uk/government/publications/ukti-inward-investment-report-2014-to-2015

Connell and Probert (2011). Exploding the myths of innovation policy. Centre for Business Research, University of Cambridge. Available at: http://www.cbr.cam.ac.uk/fileadmin/user_upload/centre-for-business-research/downloads/special-reports/specialreport-explodingthemyths.pdf

House of Commons Science and Technology Select Committee (2013) Bridging the valley of death: improving the commercialisation of research. Available at: http://www.publications.parliament.uk/pa/cm201213/cmselect/cmsctech/348/348.pdf"

The Small Business Research Initiative (SBRI): https://sbri.innovateuk.org/"

Nesta (2009) From Funding Gaps to Thin Markets: UK government support for early stage venture capital. Available at: http://www.nesta.org.uk/publications/funding-gaps-thin-markets

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Find a range of practical resources, research and publications here: http://www.nesta.org.uk/project/crowdfunding"

OECD Key terms in FDI (2008). Available at: http://www.oecd.org/investment/investmentfordevelopment/2487495.pdf

For more on this see the work of Professor Nicholas Vonortas at the Center for International Science and Technology Policy, George Washington University: http://elliott.gwu.edu/nicholas-s-vonortas

OECD (2013) Commercialising public research, new trends and strategies. Available at: http://www.oecd.org/sti/sci-tech/commercialising-public-research.htm

Technopolis (2012) Overview of international science, technology and innovation cooperation between Member States and countries outside the EU and the development of a future monitoring mechanism. Available at: http://ec.europa.eu/research/iscp/pdf study_cooperation_countries_outside_the_eu.pdf *

Nesta (2009) The Connected University. Available at: http://www.nesta.org.uk/publications/connected-university

IPO (2013) Collaborative research between business and universities: The Lambert toolkit 8 years on. Available at: http://https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/311757/ipresearch-lambert.pdf

OECD (2013) Commercialising public research, new trends and strategies. Available at: http://www.oecd.org/sti/sci-tech/commercialising-public-research.htm

Nesta (2012) Plan I: The case for innovation-led growth. Available at: http://www.nesta.org.uk/publications/plan-i

UKIRC (2013) Connecting with the ivory tower: Business perspectives on knowledge exchange in the UK. Available at: http://ukirc.ac.uk/object/report/8325/doc/Business-UniversitySurveyReport.pdf"

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Nesta (2013) The Real Risk Equation. Chapter in China's Absorptive State: Research, innovation and the prospects for China-UK collaboration. Available at: http://www.nesta.org.uk/sites/default/files/chinas_absorptive_state_0.pdf#page=79

Kaplan (2012) Managing Risk: A New Framework. Harvard Business Review. Available at: http://www.eurocert.org.uk/Files/Posts/Portal1/risk%20management.pdf

IPO : Types of IP. Available at: http://www.ipo.gov.uk/types.htm

Allianz Insurance (2013) Risky Business: A report comparing how combining risk management and innovation in business can deliver growth. Available at: http://docs.allianzebroker.co.uk/PDF/AC/General/Allianz-Risky-Business-Report-April-2013.pdf *

The Big Innovation Centre (2013) Collaborate to innovate: how businesses can work with universities to generate knowledge and drive innovation. Available at: http://www.biginnovationcentre.com/universities-and-innovation-centres

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