01 petr kotal on open innovation

The Role of The Role of SME`sSME`s, Public , Public Sector and Large Enterprises Sector and Large Enterprises

in the in the Open Innovation JourneyOpen Innovation Journey

PetrPetr KotalKotal

ArkoArko consultconsult Arko consultGeneva, Prague

Personal History

• Ph.D., D.Sc. in biochemistry

i. 20 years in academic clinical research

ii. 15 years at Procter & Gamble (R&D, External & Government Relations)

iii. Consultancy(Open innovation)

•

Arko consultGeneva, Prague

•• Current challenges in innovation Current challenges in innovation

•• Open Innovation Open Innovation …… The early yearsThe early years

•• Looking forwardsLooking forwards

Today’s Agenda


Discovery Market

Develop/Develop/EvaluateEvaluate

Adapt/Adapt/AdoptAdopt QualifyQualify LeverageLeverage


SME`sSME`s Large Large EnterprisesEnterprises

Public Public SectorSector

Product launches: New but not novel

Hardly any breakthroughs

Less innovation at top companies

Pace of Innovation Accelerating

Cost Increasing

Fast Followers Following Faster

Resources Constrained

Consumers More Demanding

The realities of modern innovationThe realities of modern innovation

Scope50% of innovations from outside

“Proudly found elsewhere”<10% of innovation from outside

Focus 3600Mostly technology leads that are brought to practice

Risk/Reward Shared Pay for and own everything

IntellectualProperty Manage as appropriate Keep it inside

Organization Manage Know-How and Know-Who Manage know-how

Old WorldOld World

A Vision for Change

Level of outsourced R&D?

Procter & GambleProcter & Gamble

Over Over $68$68 billion in salesbillion in sales

300 brands in over 300 brands in over 160 countries160 countries

#1 or #2 in #1 or #2 in 80%80% of our categoriesof our categories

140,000140,000 employees (incl. Gillette)employees (incl. Gillette)

The Innovation Challenge

Almost $100 million additional sales every week

Reliance on external partnersReliance on external partners

$5 Billion/yrNew NOS Generation

P&G R&D9,000 People

Challenge

•• Current challenges in innovationCurrent challenges in innovation



Today’s AgendaToday’s Agenda


Cross-Fertilization

The Synthetic Detergent

• Surfactant

• Builder-enhancing detergency power by chelating calcium in water

EHDP

Tartar control toothpaste

Prevent tartar formation by chelating calcium

EHDP

Bisphosphonate drugs Common Therapy for Osteoporosis

Binds to bone calcium and inhibits bone destruction

X

Annual sales > US$1.5 Billion

Bone destruction due to osteoporosisProtected bone

Cross-Fertilization

• Opportunity for SME`s?

• Reapplication of “drug”technologies in e.g. consumer products


Open Innovation3600 View

• Product • Packaging • Production • Marketing• Distribution

• Commercial innovation

• Cost innovation• Public funding


Public Funding• 7th Framework Program• European Structural Funds

Discoverwhere the EU and your Company

goals are in line andget a funding

European Structural FundsEuropean Structural Funds175 billions of 175 billions of €€ in 2007in 2007--1313


Benefits of Open InnovationBenefits of Open Innovation

Drive growth & profit

Speed

Risk

•• Challenges in innovationChallenges in innovation



Today’s Agenda


Both SME`s and Large Enterprises (LP) can lead !

ReactiveReactive““LP`sLP`s dondon’’t know what they wantt know what they want””

SME`sSME`s drive the process anddrive the process andhave convincing data on the value of the have convincing data on the value of the

innovationinnovation

ProactiveProactive““LP`sLP`s know what they wantknow what they want””

LP`sLP`s drives the process and can rapidly drives the process and can rapidly evaluate candidate solutionsevaluate candidate solutions

Success Stories

• Consumer product industry

• IT industry

• Automotive industry

• Electro technical industry Arko consultGeneva, Prague

P&G’s Global Innovation Vision

“We will acquire 50% of our technologies and products from outside P&G.”

A.G. Lafley, CEO (2002)GBUs

Employees/ Retirees

CorporateNew

Ventures

Technology Council

Communities of

PracticeTrade Partners

Joint Development Partners

Virtual Networks

Venture Capital

Alliances

Contract Labs

Research Institutes

Suppliers

MDOs ConsumersIndependent

Entrepreneurs

.

Results (July 2006)

52%

Over 70% from SME`s

A.G. Lafley

“Innovation is our lifeblood”

“Simply put, innovation is a pre-requisite for sustainedgrowth. There is no other path.”

“

QuotesQuotes

• Outstanding consumer and regulatory understanding

• Manufacturing expertise/scale• World class marketing• Global distribution• Financial Muscle

What can Large Enterprises offer to SME`s


Tips for SME`s• Reapply “Cross-fertilization” in a daily

practice• Leverage “know who” in addition to

“know how”• Understand and focus on EU long term

objectives and engage in EU funding• Engage in public/private partnerships• Reflect needs of large enterprises and

learn about their business needs• Build regulatory and IP capability

Thank youThank you

PetrPetr KotalKotal


01 petr kotal on open innovation

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