Decline in Corporate Research? or, Increased Partnership Opportunities?

Here at seed, we recently came across an interesting research paper published by HBR that detailed the potential reasons that corporate R&D has seen a decline in activity.  Between 1980-2007, the number of patent declarations from industry decreased but the total number of total patents declared did not decline.

The authors point out two overarching reasons for this decline in internal R&D:

  • The rise of small research startups
  • Considerations of commercially minded corporate R&D managers.

Boiled down, we are finding that corporations have started spending more time on development and less time on research. Subsequently outsourcing basic research. Which lends well as studies have shown that that researchers are more productive when they are working in a less structured environment [like a university setting] so managing them and providing appropriate support can prove difficult for both parties.

What does this mean for university researchers? For budding scientific entrepreneurs?

Now, more than ever, industry is looking to make partnerships with universities, PIs and scientific startups. They have learned that they can accelerate innovation with technology scouting. But what are the ways to take advantage of this opportunity and what does this information mean for your startup or research?

In the 1990s open innovation was emerging as the only way to stay competitive. The product life cycles became shorter as companies began to invest in new technology.

There are plenty of resources available on how to spark connections with promising deep technology startups. But what if your firm has yet to make open innovation standard practice?

As open innovation evolves and digital tools become more sophisticated, it is more important than ever to make sure your company is prepared for successful partnerships with universities and startups. Fortunately, these tried and true strategies can help today’s firms design a modern open innovation game plan

1. Set clear expectations

Setting expectations internally is key to successful open innovation. It’s easier to scout new technologies and move opportunities through the pipeline if a team has clear goals and benchmarks to live by.

Some guiding questions

• What technology readiness level and subject areas should we consider for partnerships?

• What can we offer potential partners?

• What volume of opportunities can we accommodate at one time?

• How should we share information with other tech scouts and other departments?

Since innovation in the areas of science and engineering are information intensive and involve many parties, it’s vital to have clear expectations on how responsibilities and information will be handled.

Clear internal expectations can also make things simple for prospective partners, who expect consistency and clarity from your team.

2. Leave it to legal

Intellectual property protection is by far the most complex issue that companies have to understand and overcome in open innovation. This is an issue that faces both inventors of technologies and corporations. The difference is that bigger corporations typically have the means to put processes in place to help protect both parties. While this is a bit of a catch-22 due to organizations needing information that is confidential and inventors needing to prove the value of their work, there are a couple things the industry partner can do to control the situation. “Companies implementing open innovation programs can control the costs and potential liabilities by using an automated system to guide submitters on what to disclose, what not to disclose and how to disclose information. It also documents the history of communications between corporation and inventor, which is critically important to preclude downstream litigation.”1

3. Escape red tape

Or, make it work. Process, structure and sometimes complicated processes and structures are ubiquitous in large organizations. With open innovation it is important to know the process, the approvals, and strategy. Without that, the company cannot execute against their goals. Luckily there has been a rise in the CINO – Chief Innovation Officer – whose job it is to open up operations and make these types of activities feasible. “An open innovation program with a strong internal structure is one that:

  • Effectively solicits ideas;
  • Reviews ideas in a timely manner;
  • Makes decisions whether or not to pursue the submission just as efficiently; and
  • Communicates regularly with the innovator on the status of the submission.”2

Since that study by HBR, open innovation has remained a cornerstone of corporate strategy and many large organizations have seen success by focusing on open innovation – look at GE, Clorox, DSM, Orange, and Samsung. These companies succeed by chance, they made a conscious effort to accept new ideas and commercialize emerging technologies.

Interested in open innovation opportunities?



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