10 Dec 2019

Open Innovation: The Way Forward


In today’s digitalised world, open innovation helps keep businesses and world economies competitive

Innovation has always been an important competitive differentiator for organisations. What has changed is that many successful companies have realised that they can no longer keep the innovation pipeline going with just in-house research and development (R&D).

Increasingly, more organisations are embarking on what is known as open innovation, using both internal and external knowledge, resources and networks to improve their organisational performance by addressing current problem statements.

With this approach, more ideas and innovation flow into an organisation from centres and individuals who may complement or have more experience than in-house experts to solve a particular problem. Moreover, in today’s market place where time-to-market is crucial, a company can accelerate product-to-market through licensing the right to use an available IP to develop a product under the open innovation model.

In order to develop a true open innovation ecosystem, companies need to work with a wide range of external partners with different capabilities and promote the use of knowledge inside-out. Building such an ecosystem is not easy and it requires perseverance and creativity.

During IPI Singapore’s TechInnovation held at the SFF x SWITCH (Singapore Fintech Festival x Singapore Week of Innovation and TeCHnology), Professor Ric Parker, Chairman, Singapore Aerospace Programme, and former Chief Technology Officer of jet engine maker, Rolls-Royce, noted that companies innovate in order to get a “little bit of margin, called competitive edge”. These can be fine margins so “any little help from technology is very welcome”.

It is precisely for this reason that companies may be fearful of open innovation as there is less control over IP that provides the “competitive edge”. However, as Prof Parker observes, these fears are often overblown and it was possible to control open innovation, have rules around it which define ownership of IP and also protect it.

Rolls-Royce is a good example of a company with a successful open innovation model. In 1986, the high tech jet engine maker took a decision that the company would not have an in-house research centre. Instead it would work with universities and contract them to do research for it. Rolls-Royce has taken this model around the world, working with universities and research institutes. In Singapore, Rolls-Royce has a Corporate Laboratory at Nanyang Technological University (NTU) where cutting-edge research work goes on.

Innovation has many dimensions and a company needs to be prepared to look at every opportunity to improve work processes. According to Albert Pozo, Chief Digital Officer, SATS, who also spoke at TechInnovation this year, the first step in developing an innovation agenda is to develop an innovation culture. “The word culture is extremely important because anything we do from the top in terms of driving innovation and new capabilities will not have the stickiness and adoption if the company as a whole (especially the actual users of the new piece of innovation) is not ready to embrace changes that make their way of working better.”

Partnerships are at the core of open innovation, so strategic fit is crucial. Another speaker, Dr Philip Bolton, Outside Innovation Director at RB notes strategic misalignment is one of the reasons why partnerships can often fail. “If you aren’t clear on your overall strategy and what you are looking for in a partner, you won’t know if you have found it. You need to be transparent in your brief and be clear on what you expect and what you have to offer to ensure a win-win partnership is created.”

Speaking at TechInnovation, Philipp Gneiting, Head of Open Innovation, Mercedes-Benz AG, observes that it is important to have a transparent set of mutual expectations regarding the outcome and way of collaboration between both partners at the beginning of a cooperation.

For Singapore, the open innovation model offers opportunities. While large multinationals have invested heavily to build their global internal R&D teams to develop new technologies and products, small and medium-sized enterprises (SMEs), with limited resources, have a leaner or no in-house R&D set-up. For them, open innovation is the way forward to find the right technology partners to carve out a niche for themselves in a competitive market.

To further develop the open innovation ecosystem in Singapore, Enterprise Singapore, along with the Infocomm Media Development Authority, jointly launched the Open Innovation Network (OIN) at SFF x SWITCH. OIN is an online directory that will serve as a national gateway to feature open innovation platforms and challenges happening island-wide. This aims to encourage industry growth and transformation through open innovation.

Solution providers including SMEs and start-ups with an innovative idea or technology can use OIN to search for relevant problem statements, propose solutions, and access co-development, test-bedding and market opportunities with partners across private and public sectors. Corporates and agencies with pain points can also use the OIN to connect with partners within the ecosystem to embark on open innovation to discover new ideas and solutions.

An example is IPI’s TechInnovation Challenge featured on the OIN. The Challenge poses twenty problem statements from corporates such as Changi Airport Group and Johnson & Johnson, which are utilising the platform to engage the global innovation community and crowdsource solutions to address existing pain points or seek new business ventures.

IPI matchmakes enterprises with relevant enabling technologies to help meet innovation and business requirements. SMEs can work with IPI to access a global network of technology partners and navigate the innovation ecosystem.

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