Electronics
From Invention to Innovation
The traditional approach to company R&D has been internally focused and typically only the large or multinational companies have engaged in this activity: a closed innovation approach. Over the last decade however, a collaborative approach to research, development and design has emerged, where companies recognise the value of a collaborative, more open approach.
Larger companies such as Cisco, Procter & Gamble, Johnson & Johnson have developed their processes to engage collaboratively, and realise the benefits of this approach understanding that: Technology innovations move quickly, therefore they may not necessarily have the ?best? people or skills to develop innovations in new and evolving technologies or markets. Identifying partners to develop their technology needs may be a more effective, cost efficient alternative to internal R&D and at a minimum keeps their technology teams closer to developments in the market.
Collaborative partnerships extend an organisations capacity to innovate, sharing the risk and cost (and benefits) with their partners. Small to medium sized companies, because of their scale, can often react dynamically to a new market need and provide a technology solution, realising new concepts or products faster than the larger companies. Through collaborative partnerships, large companies can attain flexibility and speed through their relationship with smaller organisations focused on their needs.
Small to medium sized companies can also benefit from collaborative partnerships by:
- Establishing a route to market for their concept or product.
- Sharing the risk/cost and benefit from a collaborative approach.
- Increasing their effective bandwidth by collaborating and sharing tasks and roles across larger, multi task, multi technology and multi disciplined projects.
- Accessing skills and expertise that it would be difficult to recruit and retain.
| Closed innovation Principles | Open innovation Principles |
| The smart people in our field work for us. | Not all the smart people work for us. We need to work with smart people inside and outside our company. |
| To profit from research and development (R&D), we must discover it, develop it and ship it ourselves. | External R&D can create significant value; internal R&D is needed to claim some portion of that value. |
| If we discover it ourselves, we will get it to market first. | We don't have to originate the research to profit from it. |
| The company that gets an innovation to market first will win. | Building a better business model is better than getting to market first. |
| If we create the most and the best ideas in the industry, we will win. | If we make the best use of internal and external ideas, we will win. |
| We should control our innovation process, so that our competitors don't profit from our ideas. | We should profit from others' use of our innovation process, and we should buy others' intellectual property (IP) whenever it advances our own business model. |
The Challenge for the UK Electronics Sector
On the face of it, Open Innovation should represent a real opportunity for small to medium sized companies to engage in the innovation process, bringing real benefits to the UK economy:
| Pulling UK companies out of ?process? design into ?product? design, realising the greater value and margins at the product end of the value chain. Moving business models away from commoditised products or processes to innovative products scalable at a global level. |
Open Innovation should also present a great opportunity for the electronics sector, since most innovation today integrates electronic technology, whether to actuate, control, sense or communicate. There is also a need to identify what ?mega trends? are going to occur over the next years to come.
Electronics components and systems will be used in future products which is currently not the place. Major brand owners will be confronted to source technologies for their future product portfolio which goes above and beyond of their skills and track record. A few examples:
| Clothing brand owner incorporate electronic systems and sensor to sense body characteristics. FMCG brand owners extending their existing brands into new adjacent markets. |
Enabling electronic design companies, with this range of expertise, to engage across all market sectors, identifying market needs and solving problems that realises ?market ready? products would benefit the UK economy immensely, and be a significant part of the equation in the race to the top of the value chain.
The challenge for the Electronics KTN is to provide the electronic design community in the UK with the knowledge of the tools and processes that work for effective collaborative product development. This is not just about corporate product development. But needs to be about defining an innovation strategy aligned with business aspirations. This is true for a company with 5 or 500 staff giving access to new markets, new problems and therefore new opportunities, enabling the UK?s electronics sector to form new collaborative relationships that add value to their top line.
Open Innovation will only work if the basics of an Innovation Strategy are already in existence. Open Innovation will benefit those companies that are engaged at the ?Product Level?, or who have ambition to move into this space. The Electronics KTN is launching its Innovation Management Academy in Autumn 2008, delivering a series of products to enable the sector to meet this challenges of Open Innovation and Collaboration, and will include the following resources:
Webinars: a series of twelve webinars, taking the participants on a learning journey, delivering content that will help companies to engage in collaborative partnerships, understand the issues around product codevelopment, enable them to identify prospective partners.
Master Classes: Complimenting the webinars, the Electronics KTN will deliver networking events, to reinforce the webinar content, give an opportunity for the community to feedback on the content and propose future themes.
Facilitated Market brokerage: More than just brokerage, these events will work through the process of Brand needs, match SMEs, assess best fit, allow SMEs to pitch to the Brands, followed by brokerage.
Executive Coaching: Members of the programme will be able to ask questions about the company specific issues they are face as they progress through the programme. We will have a faculty of experts who will represent different industries and geographies.
Online resource library: Relevant material to support the programme, peer-to-peer exchange and networking, etc.
If you would like to enrol for the
Innovation Academy in Autumn
(free to members of the Electronics KTN),
then contact us at: