Battelle: International Partnership Strategy

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BattelleInternational Partnership Strategy

• Richard C. Adams
• Senior Vice President, Battelle
• February, 2007

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Agenda

• Battelle Overview
• Forces Driving International Partnerships
• Next Steps for Battelle

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Battelle Worlds Largest Non-Profit RD
Organization
3.7B in RD 20,000 employees worldwide
Pacific Northwest National Laboratory Richland,
Washington
Corporate Headquarters Columbus, Ohio
Brookhaven National Laboratory Long Island, New
York
Idaho National Laboratory Idaho Falls, ID
Oak Ridge National Laboratory Oak Ridge, Tennessee
National Renewable Energy Laboratory Golden,
Colorado
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Battelles purposes, defined in the Will of
Gordon Battelle, focus on innovation

• Non-profit, charitable trust
• Distributions that provide the greatest good to
  humanity
• Purposes
• Creative and Research Work
• Making of discoveries and inventions
• Better education of men and women for employment
• Governed by a self-perpetuating Board of
  Directors

For over 75 years, we have been engaged in
scientific discovery and refining approaches to
translating discovery into practical applications
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This approach has helped Battelle expand its role
in US laboratory management
2.8B in managed RD and 15,000 affiliated staff
Now the leader in management of the energy and
science national labs
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Integrated ST and Business Strategies Generate
Battelle Signatures
Homeland Security
Energy/Environment
National Defense
Health and Life Sciences
Advanced Materials
Management Operationsof RD Laboratories
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Battelle Ventures an independent seed/early
stage venture fund
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International Partnerships
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Forces Driving International Partnerships

• Changing geography of science and technology
• Changing nature of technology innovation
• New perspectives on what it takes to be a
  globally preeminent RD organization

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RD Increasingly a Global Enterprise

• RD is widely recognized as key to creating
  competitive advantage, economic growth, wealth
  and social benefits
• Growing international markets
• Global RD expenditures will likely increase 3-4
  times over the next 20-25 years
• US and European shares will decline
• Largest growth in Asia (increase from 30 today
  to over 50 in 2030)

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Dissatisfaction with returns on RD Investments

• Public sector RD investments
• Expensive and inefficient operations
• IP of limited value
• Limited translation to commercial value
• Limited investment in and development of human
  resources
• Private sector RD investments
• Focusing on engines or platforms to drive
  future business
• Increasing focus on outsourcing and in-licensing
• Looking for technology fusion opportunities
• Cost driving reductions in size and scope of RD

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Changing Nature of Technology Innovation

• Higher value (and increasingly complex) products
  are responsible for most of the growth in global
  trade
• Innovation of higher value products increasingly
  a product of technology fusion
• Innovation processes are increasingly complex and
  based on
• Clear market targets
• Self organizing teams
• Trust among a diverse array of organizations (not
  just RD)

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International RD PartnershipsKey to Success

• Growing focus on international collaborations
• Too expensive to go alone
• Technology and knowledge a two way flow

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New Perspectives on what it takes to be a
Globally Preeminent RD Organization

• Partner first and partner often
• e.g., joint Global Research Alliance
• Gain access to the best technology and ideas
  wherever they are located
• Develop an enhanced understanding of global
  challenges and local perspectives
• e.g., global climate change, biofuels in Asia
• Gain access to high quality and well trained
  scientists and engineers wherever they are
  located (sometimes at a substantially lower cost)

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In Sum

• Ultimately, a global perspective is critical to
  achieving a substantial positive impact on the
  world this is what drives Battelle
• And, not unimportantly, a global perspective is
  also key to establishing competitive advantage
  for Battelle and substantial return on investment

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Next Steps
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International Path Forward

• Strong focus on Asia
• Established Battelle-Korea and Battelle-Japan
  earlier this year
• Battelle-Japan a joint venture with Mitsubishi
  Corp.
• Battelle-Korea wholly owned subsidiary
• Next areas of focus is likely India
• Seek to build RD operations with strategic
  partners
• Seek to tackle the tough challenges with global
  consequences

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Battelle International initiatives
Korea (Seoul, 2005)
India (2007/08)
Organization Types
Under One Roof Program Office