The Internationalization of Corporate R&D

More documents

Recommendations

Info

THE INTERNATIONALIZATION OF CORPORATE R&D7.1.1 Purpose and QuestionsThe purpose of this study is to describe the emerging trend of new marketplaces forproblem solving and technologies, and to discuss their role in corporate R&D strategies.This chapter will address the following questions:• What types of R&D challenges are the new marketplaces able to address?• Which industry sectors are the main users of these new marketplaces?• What are the potential limitations of the new marketplaces for problem solving andtechnologies?• What are useful insights for the Swedish policy discussion?This chapter describes four of the specialized organizations that are active in the new externalinnovation markets. They have been identified as the main actors and they are dominatingthe U.S. market in this field. InnoCentive and NineSigma are intermediary actors ona problem solving market and act as “brokers” who bring together a problem solutionseeker with a global network of problem solvers. These companies are sometimes referredto as e-R&D networks. YourEncore is another intermediary actor that connects experienced,retired researchers and engineers with member companies for short-term assignments.yet2.com is an example of a web-based company that offers customers help withbuying and selling technologies (intellectual property) on an open market.These marketplaces are examples of how companies are using internet-based technologiesto overcome traditional barriers and outsource some components of R&D operations.There might be great potential for these global networks to develop and grow.However, it is yet too early to say how large and effective they will become.This study is limited to exploring the new marketplaces, and does not cover the broaderand evolving phenomenon of external, corporate R&D. These marketplaces are onlyone tool that companies can use in their search of external knowledge. The study isbased on interviews with the actors on the innovation marketplaces as well as a numberof secondary sources, including news articles, literature and various internet sources. Itis important to note that the study relies on a limited number of sources and interviews.Most of the information about the marketplaces has been made available by the “broker”companies themselves, which means that the views of their customers, along withother independent perspectives, might be underrepresented in this study.7.2 New Sources for Corporate InnovationWhen the demands of quicker access to new innovations increase, more companiesrealize that it is no longer cost-efficient to rely only on in-house R&D. Many companieshave implemented an open innovation model where internal R&D is comple-170
THE INTERNATIONALIZATION OF CORPORATE R&Dmented with external innovation sourcing and different forms of external cooperation.“Open innovation” (Chesbrough 2003) is a term used to describe the new model inwhich the company’s R&D process is integrated with an external flow of new ideas,knowledge and technologies (Karlsson 2004).The open innovation model drives the development of a global innovation marketwhere the trade of research projects, patents, licenses, technologies, knowledge andproblem solving is carried out. Change to an open innovation model requires a changein corporate culture – a new thinking that will have to be enforced from the top to makean impact (Teresko 2004). Using global innovation networks resourcefully and findinga balance between internal and external R&D activities are challenges for multinationalcompanies (see the discussion in Chapter 2).Procter & Gamble is one multinational company that has developed the open innovationmodel, by utilizing external R&D networks and new marketplaces for problemsolving and technologies.7.2.1 Procter & GambleThe consumer product company Procter & Gamble (P&G) has been a leading user ofexternal R&D networks for some time and is among the first to use the new marketplacesfor problem solving and technologies. P&G, founded in 1837 and headquarteredin Cincinnati, Ohio, is a multinational company with 98,000 employees in over 80countries worldwide. P&G has three product categories: global beauty care, globalhousehold care and global health, baby and family care. With brands like Pampers,Ariel, Tide, Pantene, Olay and Pringles, P&G had a net sale of over 51 billion dollarsin 2005. The company’s competitors include Unilever and Johnson & Johnson. P&Ghas a large, global R&D presence with twenty R&D facilities in nine countries on fourcontinents. P&G is granted, on average, one U.S. patent per day, and has more than28,000 active patents worldwide (P&G 2006).P&G spent 1.8 billion dollars on R&D in fiscal year 2004–05. In comparison, Ericssonspent 2.5 billion dollars on R&D in 2004 (see Chapter 2). The CEO of P&G, Alan G.Lafley, decided in 2003 that the goal should be to have 50 percent of the company’sideas and innovations come from external sources – a significant increase from the2000 goal set at 10 percent (Greene 2003). Today, P&G retrieves more than 35 percentof its innovations from outside the organization (Huston & Sakkab 2006). The companyhas 7,500 researchers employed in-house all over the world. According to LarryHuston, Vice President for Innovation and Knowledge at P&G, there are an additional1.5 million researchers in the world with the same skill sets. P&G’s strategy is to includethem in its organization and expand their knowledge network.171
Page 1:
A2006:007The Internationalizationof
Page 4:
ITPS, Swedish Institute For Growth
Page 7 and 8:
THE INTERNATIONALIZATION OF CORPORA
Page 9 and 10:
Page 11:
Page 14 and 15:
Page 16 and 17:
Page 18 and 19:
Page 20 and 21:
Page 22 and 23:
Page 24 and 25:
Page 29 and 30:
Page 31:
Page 35 and 36:
Page 37 and 38:
Page 39 and 40:
Page 41 and 42:
Page 43 and 44:
Page 45 and 46:
Page 47 and 48:
Page 49 and 50:
Page 51 and 52:
Page 53 and 54:
Page 55 and 56:
Page 57 and 58:
Page 59 and 60:
Page 61 and 62:
Page 63 and 64:
Page 65 and 66:
Page 67 and 68:
Page 69 and 70:
Page 71 and 72:
Page 73 and 74:
Page 75 and 76:
Page 77 and 78:
Page 79 and 80:
Page 81 and 82:
Page 83 and 84:
Page 85 and 86:
Page 87 and 88:
Page 89 and 90:
Page 91 and 92:
Page 93 and 94:
Page 95 and 96:
Page 97 and 98:
Page 99 and 100:
Page 101 and 102:
Page 103 and 104:
Page 105 and 106:
Page 107 and 108:
Page 109 and 110:
Page 111 and 112:
Page 113 and 114:
Page 115 and 116:
Page 117 and 118:
Page 119 and 120:
Page 121 and 122: THE INTERNATIONALIZATION OF CORPORA
Page 171: THE INTERNATIONALIZATION OF CORPORA
Page 223 and 224:
Page 225 and 226:
Page 227 and 228:
Page 229 and 230:
Page 231 and 232:
Page 233 and 234:
Page 235 and 236:
Page 237 and 238:
Page 239 and 240:
Page 241 and 242:
Page 243 and 244:
Page 245 and 246:
Page 247 and 248:
Page 249 and 250:
Page 251 and 252:
Page 253 and 254:
Page 255 and 256:
Page 257 and 258:
Page 259 and 260:
Page 261 and 262:
Page 263 and 264:
Page 265 and 266:
Page 267 and 268:
Page 269 and 270:
Page 271 and 272:
Page 273 and 274:
Page 275 and 276:
Page 277 and 278:
Page 279 and 280:
Page 281 and 282:
Page 283 and 284:
Page 285 and 286:
Page 287 and 288:
Page 289 and 290:
Page 291 and 292:
Page 293 and 294:
Page 295 and 296:
Page 297 and 298:
Page 299 and 300:
Page 301 and 302:
Page 303 and 304:
Page 305 and 306:
Page 307 and 308:
Page 309 and 310:
Page 311 and 312:
Page 313 and 314:
Page 315 and 316:
Page 317 and 318:
Page 319 and 320:
Page 321 and 322:
Page 323 and 324:
Page 325 and 326:
Page 327:
The Swedish Institute for Growth Po
show all

The Internationalization of Corporate R&D

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?