Innovation

1
Practical Steps to Get Involved in International
Partnership Networks in the Field of Innovative
Entrepreneurship and Transfer of Experience
Martin Wassell Celia Gavaud
Innovation
2
The Global Drivers for SME Innovation
Innovation
3
Globalisation 3.0 Driving Innovation

• Globalisation 1.0 Countries
• 1492 to 1800
• Old World and New World trade
• Where does my country fit in?
• How can my country collaborate?
• Globalisation 2.0 Companies
• 1800 to 2000
• Global markets and labour force
• Industrial revolution
• Where does my company fit in?
• How can it take advantage of opportunities
• Globalisation 3.0 Individuals
• 2000 onwards
• Globally powered not just US and EU
• Convergence of 10 flatteners

4
10 Flatteners

• 1 9th November, 1989 Fall of the Berlin Wall
• Global policy
• 2 9th August 1995 Netscape Goes Public
• Global connectivity and accessibility
• 3 Mid 1990s Work flow software
• Driving connectivity and data exchange
• 4 Late 1990s Uploading
• Globalisation of content (Red Lake)
• 5 Outsourcing of Y2K
• IIT

• 6 11th December, 2001 Offshoring
• Engineers growing by 350,000 p.a.
• Productivity increase 17 1995 to 2002
• Sold in China Made in China Designed in China
  Innovated in China
• 7 Supply Chaining
• Postponent
• Wal-Mart costs (-5-10)
• 8 In-Sourcing
• Dynamic design chain management
• UPS and Toshiba
• 9 In-Forming
• Individuals personal analog to uploading,
  outsourcing, in-sourcing, supply chaining etc.
• 10 Steroids
• Digital, mobile, personal, virtual
• Technologies

CONVERGENCE
5
Global Manufacturing Migration Over the Last 25
Years
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Our Response in The 80s and 90s

• Systemising quality
• ISO 9000/9001
• Integrating organisation wide quality
• TQM Kaizen
• Guaranteeing quality
• Zero Defect, Q1 SPC
• Increasing productivity
• Lean 6-Sigma
• Reducing working capital
• Kanban
• Delivering
• JIT vendor parks

• We Can Provide Assured Quality
• We Can Reduce Costs Deliver Faster

7
The Response We Need Now

• We Can Add Greater Value Through Innovation
• Increasing value added by your offerings
• Increasing the value of customer offerings
• Adopting innovation as a Business Process

8
InnovationIs A Business Process
Customers
Competences
9
But How Do I Innovate My Product?
Performance
Flexibility
Functionality
Customer Relationship
10
Barriers to SME Innovation
Innovation
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Innovation Need Recognition
1
Product Maturity QCD
Identifying Market Opportunities
7
Market Entry Building of Volume Supply
Capability
2
Innovative Product/Service Ideas
Key Barriers to SME Innovation
Techno-economics of Realising the Potential
Acquisition of Finance for Volume Supply
Capability
6
Acquisition of Enabling Supply Partners
Product/Service Prototyping Market Testing
5
Acquisition of Pilot Customers Market
Access Partners
Acquisition of Enabling Technology or Skill
Finance to Develop Enabling Technology or
Skill
3
4
12
Evolving Barriers to Innovation
Value Chain Innovation
3
Business Model Innovation
Process Innovation
4
Product Innovation
2
Structural Innovation
Application Innovation
Frontier Research
1
Main Street (Mature)
Revenue Growth
Early Market
Death Valley
Bowling Alley
Tornado
Main Street (Early)
Main Street (Declining)
Fault Line
End Of Life
Indefinitely Elastic Middle Period
Time
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Support Components in the Innovation System
Market Access Network Building
Relationships Business Networks
Value Chain Development
Go-How! Entrepreneurial
Innovation Process Support
Know-How Managerial
Incubators Innovation Centres
Business Skills Advisors
Industry Research Funding
Capital Support
Fiscal Incentives
Finance Risk Reducing
Technology Development Institutes
Academia
Knowledge Technological
Technology Transfer Advisors
Knowledge Scientific
Knowledge Enabling ST
Trading Firm Enabling Capacities
Product/Service Enabling Features
Start-up Venture Enabling Vehicle
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Open Innovation for SMEs
Innovation
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A New Innovation Paradigm!
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Closed Innovation
Open Innovation
We work with smart people anywhere We leverage
external knowledge to build the value of our
own We dont need to originate knowledge to
profit from it Better business models can beat
first arrivals We profit from others use of our
IP and buy others IP when it advances our
business model

• Smart people in our field work for us
• To profit from knowledge we need to discover,
  develop, apply ship it
• We will discover new knowledge get it to market
• If we get an innovation to market first we will
  win
• If we control IP our competitors dont profit
  from our ideas

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FP7 as an Enabler of Open Innovation
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Mini Case Study Programmes
Innovation
19
SME Support Programmes
Innovation Programme
Hi Growth Programme
Value Chain Innovation
Business Model Innovation
Process Innovation
Product Innovation
Structural Innovation
Application Innovation
Frontier Research
Main Street (Mature)
Revenue Growth
Early Market
Death Valley
Bowling Alley
Tornado
Main Street (Early)
Main Street (Declining)
Fault Line
End Of Life
Indefinitely Elastic Middle Period
Time
FP7 Support Programme
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High Growth Programme
Innovation
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Hi-Growth SME Support Programme

• Objectives
• Innovation, change business management
  Specialist advisor support
• Demand led
• Defined more precisely than traditional support
• In-depth, offering core products and tailored
  support
• Carried out over a period of time that is
  sufficient to see improvements implemented
  through coaching
• Support existing, established SME with high
  growth characteristics
• Enable them to transform into businesses that are
  able to compete in the global market
• Complementary to existing provision

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Hi-Growth SME Support Programme

• Target Clients
• Existing, established, medium sized regional
  companies with high growth characteristics
• gt7 million turnover p.a.
• growth potential for gt20 p.a. increase in sales
  t/o for next 5 years
• established sustainable in the region as a
  business
• have a differentiated market offering and growth
  plans
• strong, committed competent management that
  recognise the need to grow
• commercial track record of success

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Hi-Growth SME Support Programme

• Methodology
• Select a group of potential high growth companies
  
• Provide a range of support to ensure these
  companies realise this potential
• Facilitate a tailored package of support to
  enable companies to realise their potential
• In capability acquisition
• In accessing finance investment
• Delivery funding aspects
• Programme delivery carried out by trained
  consultants
• Core team supported by existing consultants
  academic base in the country
• Funding aspects
• For the delivery of support
• Mix between
• National public funding
• Private funding from SMEs

24
SME Innovation Support Programme Scottish
Enterprise Tayside Pilot Programme
Innovation
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Planned Objectives and Deliverables

• Target 15 SMEs across a range of sectors
• Implement an innovation process with 10 to create
  
• Report and Innovation Action Plan for 10
  participating companies
• Roadmap to implement the highly differentiated
  product and service ideas
• Predicted profit and turnover impact
• 3 Scottish companies incorporated into EC
  proposals
• Ensure 80 of companies implement the action plan
  to realise
• Additional or new sales 3.75M pa
• Additional profit 750K pa
• New/safeguarded Jobs 46

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Actual End of Project Deliverables

• Report and Innovation Action Plan for 9
  participating companies (Sidey to be completed)
• Roadmap to implement the highly differentiated
  product and service ideas
• Predicted profit and turnover impact
• JD Wilkie leading DTI Technology project and
  Pacson incorporated into EC project and DTI
  project
• Potentially 4 more companies to engage in EC or
  DTI projects (Matrix, JT Inglis, DonLow,
  Allett)
• Cumulative company benefits to date (forecast 3
  years)
• Additional/new sales 26M pa
• Additional profit 2.83M pa
• New/safeguarded Jobs 260

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Programme to Support Engagement in FP7
Innovation
28
FP7 as an Enabler of Open Innovation

• Coordinator Support Programme (Northern Ireland)
• 15 coordinators supported
• 9 successful proposals
• Value of RTD gt13m
• Value Chain Partner Support Programme (Rioja)
• 52 partners in proposals (final call of FP6)
• Each with a defined exploitation role
• 24 in successful proposals with value of gt35m
• University Support Programme
• Collaborative large instruments
• Tailored support in concept development, proposal
  authoring, contract negotiation and project mgmt.
• B2B relationship across a European network

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Recommendations for SME Support Programmes
Innovation
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Recommendations

• An Open Innovation approach is key to SME
  innovation and exploitation
• Base Innovation support programmes on an open
  innovation approach with focus on collaboration
  across the EU
• Weight Innovation support where impact can be
  greatest
• Dont assume high-tech high growth
• Gazelles hi-grow potential companies
• Implement an Innovation Support Programme
• Focused on the front end of the innovation
  process define market drivers and the
  differentiators
• Flavoured to address different barriers at
  different stages of company growth
• Leverage local capability first to build capacity
• Then national .. Then International
• Implement an FP7 Support Programme
• Targeted at SMEs and focusing on partnering and
  coordination
• Engage Universities and RTOs in this programme as
  recipients of EC funding

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Innovation