September 29, 2011

Open innovation, entrepreneurs and resources

Cross posted from the Engineering Entrepreneurship blog.

We had our first entrepreneur of the academic year speak today at KGI in Claremont. Eric McAfee is a chronic serial tech entrepreneur, having started two biofuels company, a solar company and a software company (among others).

I’ve met a lot of tech entrepreneurs and heard a few Silicon Valley entrepreneurs speak. Even so, I felt he made an important point about leverage and open innovation for startup companies.

For McAfee, the distinction between an entrepreneur and a manager is that an entrepreneur is someone “who allocates resources that they do not currently control,” while the manager allocates resources they control.

To me, this is the flip side of the oft-quoted Teece 1986 formulation. Teece focused on what entrepreneurs should do if they can’t control resources. McAfee’s point is that entrepreneurs often shouldn’t even try — that it’s usually better to buy or license the missing piece of the puzzle.

He explained two examples from his current biofuels company, Cupertino-based Aemetis. First, to get key bioprocessing technology he bought another company — U. Maryland spinoff Zymetis — rather than develop the technology in-house.

His reasons were completely in consonance with the open innovation paradigm. From a technology standpoint, “most companies are stuck with the not-invented syndrome,” McAfee said. “We’ve got to be the best technology company which sometimes means we have to buy other companies or license technology.”

The other approach is that they’re taking that technology and using it to improve the cost-effectiveness of existing ethanol plants — which are often stuck in a commodity business. So instead of buying and owning those plants, Aemetis partners with the existing owners and shares in the proceeds.

So if in Teece’s world of 25 years ago, the goal was to control as many resources as possible and make do when you cannot, in McAfee’s world, the goal is to control the resources that are important and partner for the rest. I think there are clearly cases when the latter approach is superior — particularly in a fast-moving industry where capital is scarce and the window of opportunity may close.

September 22, 2011

New opportunities in technology transfer research

At the annual T2S (Technology Transfer Society) conference, a major emphasis has been the use of university science by existing or startup firms. Firms using university technology fits into the category of “innovation explorer” or “innovation benefactor” identified by Chesbrough (2003) and later mentioned by West, Vanhaverbeke and Chesbrough (2006).

Papers on university innovation were numerous among the 29 paper sessions at this week’s T2S conference in Augsburg, Germany. Among the keynote speakers, Mike Wright — recently appointed to Imperial College London — made academic entrepreneurs the subject of his keynote address.

A lot of the research has been conducted on US universities using the annual licensing survey by AUTM, the Association of University Technology Managers. In a session where I presented my own work (on solar energy), there were two new perspectives on this issue.

One was an (in progress) two-year study of European universities and research institutes presented by Franz Barjak of Fachhochschule Nordwestschweiz (FHNW) in Switzerland. The study was funded by the European Commission to follow up on its recommended principles for knowledge transfer (European Commission, 2008), and looked at the EU and other adjoining regions.

An early survey noted that the most systematic knowledge transfer policies were in the largest (UK, Germany, France, Spain) and Nordic countries — but that Switzerland and Israel had effective informal policies. In a second phase, a comparison to the AUTM licensing survey showed significant differences between Europe and the US — and also between European universities and other research institutes. More information on the study can be found at www.knowledge-transfer-study.eu.

An even more novel study was the one by Mary Beth Hughes of the Science and Technology Policy Institute, examining the 1000+ Federal Research Laboratories back in the US. Among other findings, the study found major variance in how revenue is split with researchers (15-40%), the resources devoted to tech transfer, and the ease of which industry can learn about the labs’ research.

A few labs had best practices — using SBIR grants, allowing employees to take entrepreneurial leave, bringing in an entrepreneur in residence — although the benefits of these practices are not proven. The fact that there is no integrated Federal site to identify lab technologies — or standardized reporting to monitor tech transfer efforts — suggests that (IMHO) Congress hasn’t been all that serious about its nominal transfer goals.

The full study is on the STPI website. Hughes encouraged researchers to study tech transfer in the research labs, both by using their data and by working through the 700 members of the Federal Laboratory Consortium for Technology Transfer.

References

Chesbrough, Henry. 2003. “The era of open innovation,” MIT Sloan Management Review, 44 (3), pp. 35-41.

European Commission. 2008. “Commission Recommendation on the management of intellectual property in knowledge transfer activities and code of Practice for universities and other public research organisations,” Directorate-General for Research, DOI: 10.2777/13162.

West, Joel, Wim Vanhaverbeke and Henry Chesbrough. 2006. “Open innovation: A research agenda,” In Henry Chesbrough, Wim Vanhaverbeke and Joel West (Eds.), Open Innovation: Researching a New Paradigm, Oxford: Oxford University Press, pp. 285-307.

September 6, 2011

The Open Innovation (Web 2.0) Community

When Henry Chesbrough and I relaunched OpenInnovation.net last year as the Open Innovation Community, one of our major goals was to create a community by which open innovation scholars could meet to discuss important issues. (Here I confine my focus to the role of the OIC for an academic audience, which we see as distinct from the industry audience that the revamped website now serves).

To reach a broader academic audience, one obvious approach was to work with our former co-author, Wim Vanhaverbeke, to leverage the Exonovate network of scholars that he has built in Europe. (This was even more obvious because Wim and Hank are part-time faculty at ESADE in Barcelona, where they have been organizing OI classes for industry and PhD students.)

However, Henry and I also decided to form an academic advisory board and — to overcome the bias of our being in the same country and state — get a broader geographic representation. We approached three promising young open innovation scholars. (Young in this case being a relative term).

We were pleased when all three of our first choices agreed to serve: Oliver Alexy (Imperial College London), Sabine Brunswicker (Fraunhofer IAO) and Alberto Di Minin (Scuola Superiore Sant'Anna). Not surprisingly, all have been (or will be) speakers at Henry’s open innovation speaker series at UC Berkeley.

Oliver has been quietly adding information about teaching cases to the OIC teaching section. He also plans to add syllabi, teaching modules and other material that would be useful to faculty teaching classes about (or including) open innovation topics.

Alberto has launched a Facebook page that is the first official OIC presence away from the OIC website. The page can be found at http://on.fb.me/OIcommunity. We are also discussing possibly creating communities on other popular sites, such as LinkedIn or Xing.

Sabine is planning for discussions on the OIC website itself. Our goal would be to develop conversations on the website about any content that’s on the site. We also plan to link these discussions with Henry’s Twitter feed and this blog.

As with the rest of the web, there is a fine balancing act between encouraging conversations and attracting spam. I know from my own blogs that attempts to post overt spam (links to promote commercial transactions) are quite common. But I also know from the 1.0 website, email discussions and of course conference presentation that academics are often tempted by free opportunities for blatant self-promotion. (“The best OI paper ever published is … mine!”).

So the advisory board will be having discussions about the best way to encourage healthy conversations about ideas and opportunities — whether for research or teaching — that are relevant to open innovation scholars. Please feel free to contact any of us with your ideas or suggestions.