February 12, 2008

EU does OI

The European Commission has launched its “Enterprise Europe Network” to help 23 million small/medium enterprises in the EU.

Parts of this seem to be standard EC industrial policy. But there is a wrinkle: recognizing the interdependence of these firms as part of the network of suppliers and complementors for Europe’s large multinationals. As PublicTechnology.net noted:

Finally, many multinational companies are opening up their innovation systems so that the 'Open Innovation' concept is now becoming a reality for business. Many multinationals have established structures to purchase or license innovative products with third parties. Brokering deals with these large companies requires skills, experience and a negotiating power that many SMEs do not possess, despite the potential of their innovations.

So this hits at the fundamental synergy between little companies and big companies, as with biotech startups and big pharma. The little companies (as in Teece 1986) lack the resources to commercialize their internally-generated innovations, while big firms need more and more innovations to grow and their corporate R&D labs are too big, too slow, or too inefficient to generate all that they need.

As a researcher sitting here in the US, a standard problem is that it’s hard to tell whether to take these government initiatives seriously. It reminds me a little of a paper I wrote back in 1994 (published in 1996): Japanese policymakers were reacting rapidly to US “National Information Infrastructure” policy, even though that policy was clearly going to have little impact on how US companies built the Internet.


Bluenove said...

Hi Joel, i agree with you about needing extra support to make 'Open Innovation' happen beyong EC guidelines. That is why i started a strategic consulting firm, Bluenove, aiming at supporting major corporations to imdefine and implement efficient 'Open innovation' programs. Our first customer is Orange (www.orange.com) and we have been learning a lot from the development of the 'Orange Start-Up Program we have designed adn are managing.
More on http://nextstreams.blogspot.com/2008/02/making-open-innovation-work-for-you.html

Joel West said...

That's a pretty shameless (and off-topic) self-advertisement.