INNOVATION: THE GRAND CHALLENGE - Imperial College London

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Selectively revealing your intellectual property – challenges and solutions Ammon Salter and Oliver Alexy (Imperial College Business School) ‘Selective revealing’ is where firms choose to voluntarily give away some of their intellectual property (IP). They do this in order to obtain potential benefits such as lower costs, faster time-to-market, better quality and higher market impact. Ammon Salter Oliver Alexy A prime example of firms selectively revealing their IP is where firms engage in open source software (OSS) development. In this case, firms waive some of the IP rights to the software they develop and instead grant access and modification rights to third parties in order to achieve the advantages mentioned above. Despite the potential benefits available and the increasing numbers of firms embracing OSS development, the proportion of firms actively revealing some of their IP is still relatively small. Additionally, even among those firms long active in OSS, problems regarding selective revealing are common. We conducted a series of interviews and empirical studies with industrial partners such as IBM, Siemens, Nokia, Microsoft and Google. As a result of these interviews, we identified two main roadblocks to further engagement in OSS. The first roadblock is IP management. The role of intellectual property, such as patents, has to shift dramatically in an environment in which firms want to actively reveal some of their IP. Firms need to develop competences in IP management that go beyond mere ‘file everything’ or other defensive IP strategies. Another roadblock is research and development management. Working in OSS development, where selective revealing is common, is inherently different from traditional software development. This difference has a significant impact on the daily job routines of the individuals involved, whose tasks and responsibilities will be affected. The resulting change for these employees might cause them to resist working in such a selective revealing environment if they cannot see a benefit to it. Preliminary findings from this series of studies also indicate that both these roadblocks may be tackled successfully through top management involvement. First, top management needs to develop and lay out an innovation and IP strategy that appropriately accounts for selective revealing. For example, IBM’s IP strategy is targeted at leveraging the IP generated in-house through selective revealing. As part of this strategy, IBM has actively pledged several hundreds of patents from its portfolio to the OSS community, which is now able to make free use of these patents. Second, top management needs to create an organisational culture that promotes selective revealing. This may be achieved, for example, by modifying employees’ incentive schemes to reward them for engaging in selective revealing. To delve deeper into this issue, more case studies with multinational organisations and additional interviews with current industrial partners will be conducted. In these studies, we will analyse whether and why firms decide to reveal some of their IP. More specifically, we intend to examine the antecedents, goals, and eventual outcomes of the revealing decision, and study the processes and people involved. From this, we hope to gain a better understanding of how IP may be revealed successfully, and which measures firms and their management may undertake to ensure a positive outcome to their revealing endeavours. Top management needs to develop and lay out an innovation and IP strategy that appropriately accounts for selective revealing. 12 Innovation: The Grand Challenge Results from the Innovation and Productivity Grand Challenge
Shortening the tail – developing absorptive capacity to increase demand for knowledge John Bessant (Imperial College Business School) John Bessant Firms grow through what they know. A key theme in innovation is the extent to which firms are prepared and able to take on new external knowledge in order to do new things – a concept which has been termed ‘absorptive capacity’ (AC). This capability is not equally distributed across firms – some are clearly well equipped to take on and use external knowledge and even become net ‘exporters’ of useful knowledge to others. But at the other end of the spectrum are many firms that may not even realise the need for change, still less where and how to access external knowledge to help them achieve it. This raises important questions around innovation and productivity. If we are able to enhance and develop absorptive capacity, it would enable weaker firms to take advantage of knowledge and innovate in products, processes and services. The challenge becomes one of ‘shortening the tail’ – meeting the needs of the long tail of firms in the UK, often small and medium-sized enterprises (SMEs), which do not tap into the rich knowledge base already available. In our research we have been looking at ways in which AC might be developed and how this increases the demand pull aspect of the innovation and productivity challenge. This is an issue of concern to a variety of policy agents – national and regional governments but also trade and sector business associations and supply chain ‘owners’ who recognise that their success is often dependent on the weakest link in the chain. We have identified and explored three modes of intervention to help develop absorptive capacity within less experienced firms: • Broadcast mode – making information widely available, for example through awareness campaigns, websites, business briefings, etc. • Agent assisted mode – helping firms develop capability through the use of intermediaries such as innovation counsellors, Manufacturing Advisory Service, etc. • Peer-to-peer assisted mode – bringing groups of firms together to enable peer-to-peer learning and support for capability development – for example via regional clusters and sectoral initiatives such as Industry Forum, etc. In one of our projects, Profitnet, a sample of approximately 400 firms was involved in around 30 learning networks – essentially peer-assisted groupings of SMEs where the emphasis has been on learning together how to grow and develop their businesses. This study strongly suggests that the demand for using external knowledge – from other firms, from suppliers and significantly from higher education institutions – is considerably enhanced as a result of working in such learning networks. There is also a strong indication of longterm capability development – having learned the value of using external knowledge, and opened up channels for doing so, such firms are increasingly likely to do so in the future. In another study, working with UK Trade & Investment, a government body, the value of working internationally – learning by exporting – to develop absorptive capacity has also been explored. A third project, working with Chemistry Innovation – the Knowledge Transfer Network for the chemistry using industries – is looking to develop innovation capability (and hence AC) through a programme of workshops and a supporting innovation management toolkit. Around 75 SMEs from this important sector have been involved in this work. Many firms may not even realise the need for change, still less where and how to access external knowledge to help them achieve it. Innovation: The Grand Challenge Results from the Innovation and Productivity Grand Challenge 13
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INNOVATION: THE GRAND CHALLENGE - Imperial College London

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