Innovation Processes in Transition by Erkki Ormala Professor of Practice, Innovation Management...

Innovation Processes in Transition

by Erkki Ormala

Professor of Practice, Innovation Management

Aalto University, Business School

What do we want to achieve?

• Build industrial ecosystems to gain leadership of the new emerging value domains

• Capture the critical knowledge assets to enhance value generation in the network economy

Innovation Management

• People are the most valuable assets to enhance innovation-innovation is driven by individual champions

• Maintain, attract and enrich human capital to provide a solid base for innovations

• Encourage and nurture individual creativity and energy while maintaining guidance and direction

• We need people with a proper level of education in mathematics, science, technology and business

Innovation process

• Mapping the future business environment• Innovation strategy• Implementation of the strategy• Expanding the markets and ecosystems

Mapping the future business environment

• Changing political, economic and regulatory landscapes, technology developments, global and regional markets and value chain analyses, competitor and competing ecosystem evolution, changes in customer preferences in terms of functionality, design and usability, etc.

Connectivity Scorecard 2011

ArgentinaBrazilChileColombiaMexico

CanadaUSA

Bangladesh ChinaIndiaIndonesiaMalaysiaPhilippinesSri LankaThailandVietnam

Australia JapanKoreaSingaporeNew Zealand

EgyptKenyaNigeriaSouth AfricaTunisia

RussiaUkraineTurkey

Austria BelgiumCzech DenmarkFinland

France GermanyGreece Hungary Ireland

ItalyNetherlandsNorwayPolandPortugal

SpainSwedenUK

Innovation economies

Resource & Efficiency economies

IranPakistanSyria

Connectivity Scorecard 2011 May 2011

© 2011 Nokia Affordable

mobile communications, TCO study 2011

2010 returned the TCO development back on track after negative development in 2009

- 4 %

- 12 %

- 43%0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

2005 2007

USD

handset 11%

service 74%

tax 15%2009 was the first year since 2005 that witnessed increase in TCO as an aftermath for the financial crisis. 2010 put the development to the right track and overall TCO has decreased by 14% between 2005 and 2010.

handset 8%

service 78%

tax 14%

2008handset 7%

service 79%

tax 14%

2010handset 7%

service 76%

tax 17%

2009 unpublished

results NOTES

© 2011 Nokia Affordable

mobile communications, TCO study 2011

8

TCO < USD 5 enables the majority of the lower-income consumers to use mobile communications

US d

olla

rs

0

5

10

15

20

25

Average 11.47 US dollars

Bangla

desh

Sri

Lanka

Chin

aPa

kist

an

In

dia

Uzb

eki

stan

Kenya

Egypt

Vie

tnam

Sudan

Iran

Eth

iopia

Cam

bodia

Thaila

nd

Ghan

aU

ganda

Tanza

nia

Hait

iIn

donesi

aA

lgeri

aPhili

pp

ines

Tunis

iaB

oliv

iaG

uate

mala

Moza

mbiq

ue

Nig

eri

aSenegal

Syri

aH

ondu

ras

Côte

d'Iv

oir

e

Kaza

khst

an

Ecu

ador

Dom

inic

al

Rep

ublic

Guin

ea

South

Afr

ica

Madag

asc

ar

Zim

babw

eB

urk

ina F

aso

DR

CC

olo

mb

iaZ

am

bia

Mala

wi

Chile

Cam

ero

on

Moro

cco

Turk

ey

Chad

Arg

enti

na

Peru

Bra

zil

Eleven countries reach the monthly TCO target of 5USD or less.From regions APAC is most affordable with average TCO with less than 5USD monthly.

NOTES

Innovation strategy

• Involves the SWOT analysis of the company capabilities with respect to the changing global competition and defines the key objectives and actions required to achieve them.

• Integration with the business strategy; In house v.s. Partnering; Open innovation; IPR solutions, Public/private partnership, Crowd sourcing,

Open Innovation

• Access and drive global intellectual vision and insight

• Form strategic collaborations with world-leading institutions to multiply our efforts

• Build global test beds to learn from broader audiences

Engaging the World’s Leading Institutions

EO.PPT /Lund 7-8.7.2009

Open Innovation

Research

Education

Knowledgesharing

University

EO.PPT /Lund 7-8.7.2009

Open Innovation/Knowledge Sharing

• Complementary competence and excellence

• Genuine commitment for knowledge

sharing/trust

• Collaboration platforms/joint campus

presence

• Mobility of research personnel

• R&D/recruitment/education all involved

• Transparent management and collaboration

rules

• Fair rules for IPR ownership and use

• Reformed reward and incentive systems

IPR solutions

• Full ownership – open access• How to manage the IPR portfolio: Licensing, (FRAND

principles) sharing, free access• Joint ownership• Right to use• Foreground, Background, Sideground

IPR Guidelines for ICT Shok

1) Foreground: all parties have access right royalty-free to all foreground generated in the project

2) Background:

• A) parties shall grant access right to background if it is needed for the project work (royalty free)

• B) parties shall grant access right to background if it is needed for the commercialization of foreground (FRAND)

• C) each consortia decides if they will create inclusion lists or exclusion lists

3) Ownership: Joint ownership is not preferred

Implementation of the strategy

• Involves resource allocation, product and service specifications, milestones and progress approval decision

Expanding the markets and ecosystems

• Expanding the market prospects of the new innovation

Implementation of the strategy

Phase 1 Phase 2 Phase 3

ProjectLaunch

Control point 1Decision go/no go

Control point 2go/no go

Control point 3To the market

Issues to be followed in addition to the progress: business environment,competition, markets, opportunities for partnering/outsourcing etc.

Time

Involves resource allocation, product and service specifications, milestones and progress approval decision

Expanding the markets and ecosystems

• Expanding the market prospects of the new innovation

Innovation networksenable new ways of knowledge creation and utilization

Demand orchestration

Innovationorchestration

Architectureorchestration

Supply orchestration

































Core

Partners

with orchestration capability

to extended enterprise

Core

From traditional large

enterprise

Crowdsourcing

Open Innovation

User InnovationCo-Creation

Social media

Source: Modified from Schenk and Guittard, 2009

Concluding remarks

• Innovation processes are in transition; Network collaboration, open innovation, public/private partnerships; crowd sourcing; social media; etc.

• Respect the new innovation paradigm• Innovation processes are complex and systemic; not linear• Will challenge the innovation policy intrument portfolio• A joint R&D program with Aalto, TEKES, Technology

Industries and the Federation of the Finnish Industries• A wider European study in preparation in collaboration with

the OECD and the ERT

A Pilot Study in Finland; Industry

Sponsors: TEKES, the Federation of the Finnish Industries and the Federation of Technology Industries;

Interviewed around 25 large corporations and 60 SMEs

Prelimanary observations:• Business environment analysis comprehensive, but implications to own business

development/innovation strategy remains vague• Internal innovation magement process discrimate often disruptive innovations• Innovation gap: large corporations market interest > 100 milloin €, SMEs < 10

million €• The use of new innovations tools is activily discussed but thier implementation to

the innovation process weak (open innovation, growd sourcing, big data, industrial Internet, PPPs)

An extensive training campaign for companies in autumn 2014 organized by the industry federations

A Pilot Study in Finland; Policy

• Innovation policy instruments tend to orient towards incremental innovation; new tools required to support disruptive innovation

• Innovation policy should support network building/systems integration and the implemenation of the new innovation tools

• More emphasis on new value domains, services, business models, value chains and value creation

• Instruments to support the accumulation of VC• New incentives needed to support PPPs• Eliminate skills shortages• How to promote innovation when manufacturing is ’off shored’

Thank you

Innovation Processes in Transition by Erkki Ormala Professor of Practice, Innovation Management...

Documents

Transcript of Innovation Processes in Transition by Erkki Ormala Professor of Practice, Innovation Management...