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Network Of Space Innovators Network Of Space Innovators

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The Rise Of Global Innovation Networks: Implications for US Competitiveness Navi Radjou Vice President The Rise Of Global Innovation Networks: Implications for US Competitiveness Navi Radjou Vice President Forrester Research Council on Foreign Relations November 28, 2006

Theme US firms can outsmart competitors by networking globally-available innovation capabilities Theme US firms can outsmart competitors by networking globally-available innovation capabilities

Agenda • Global Innovation Networks in action • Lessons from early US adopters – Agenda • Global Innovation Networks in action • Lessons from early US adopters – and implications for US competitiveness

The Innovation Imperative Customers • Generation Y • Baby boomers • Wal-Mart • Emerging The Innovation Imperative Customers • Generation Y • Baby boomers • Wal-Mart • Emerging markets Competition Compliance • Cell-phone=1 -month • FDA market exclusivity • SOX, BASEL II • BRIC countries • WEEE (Huawei, Cipla) • China’s RFID norm

Globalization amplifies the “ 3 Cs” Over the next 50 years Brazil, Russia, India, Globalization amplifies the “ 3 Cs” Over the next 50 years Brazil, Russia, India, and China could become a much larger force in the world economy

CEOs recognize supply-side deficiencies: “Our internal R&D can’t keep up with exploding innovation demand” CEOs recognize supply-side deficiencies: “Our internal R&D can’t keep up with exploding innovation demand” A. G. Lafley B. CEO C. Procter & Gamble

Innovation-hungry firms seek external help Sources of new ideas and innovation Employees (general population) Innovation-hungry firms seek external help Sources of new ideas and innovation Employees (general population) Business partners Customers Consultants Competitors Assocs. , trade groups, conference boards Sales/service units R&D (internal) Academia Other Think tanks Internet, blogs, bulletin boards 0% 10% Base: 765 CEOs Source: IBM’s Global CEO Study 2006 20% 30% 40%

A New Approach To Innovation Old Model New Model S T A New Approach To Innovation Old Model New Model S T

The “What” — Global Innovation Networks • Global Innovation Networks is a new market The “What” — Global Innovation Networks • Global Innovation Networks is a new market structure (ecosystem) in which: » Firms seamlessly weave internally and externally available invention and innovation services to optimize the profitability of their products, services, and business models.

S Financier T Inventor Transformer S Financier T Inventor Transformer

The “Who” — Specialized Roles in a Global Innovation Network The “Who” — Specialized Roles in a Global Innovation Network

Global Innovation Networks In Action: P&G “We want P&G to be known as the Global Innovation Networks In Action: P&G “We want P&G to be known as the company that collaborates. I want P&G to be the absolute best at spotting, developing and leveraging relationships with best-in-class (innovation) partners in every part of our business. In fact, I want P&G to be a magnet for the best-in-class (inventors)” A. G. Lafley B. CEO C. Procter & Gamble Source: (http: //www. scienceinthebox. com/en_UK/pdf/C_Dbrochure. FINAL. pdf)

Global Innovation Networks In Action: P&G P&G’s GIN roles: -Transformer -Financier -Broker Global Innovation Networks In Action: P&G P&G’s GIN roles: -Transformer -Financier -Broker

Global Innovation Networks In Action: Boeing’s GIN role: Broker Global Innovation Networks In Action: Boeing’s GIN role: Broker

Global Innovation Networks In Action: Best Buy Sand Hill VC Partners $ Inventor Broker Global Innovation Networks In Action: Best Buy Sand Hill VC Partners $ Inventor Broker T Transformer Best Buy’s GIN roles: Broker, Transformer Financier

Global Innovation Networks In Action: IBM “A new corporate entity based on collaborative innovation, Global Innovation Networks In Action: IBM “A new corporate entity based on collaborative innovation, integrated production, and outsourcing to specialists is emerging in response to globalization and new technology. Such ‘globally integrated enterprises’ will end up reshaping geopolitics, trade, and education. ” Samuel J. Palmisano, CEO, IBM

Global Innovation Networks In Action: IBM’s GIN roles: Global Inventor, Global Transformer, Global Financier, Global Innovation Networks In Action: IBM’s GIN roles: Global Inventor, Global Transformer, Global Financier, Global Broker

Agenda • Global Innovation Networks in action • Lessons from early US adopters – Agenda • Global Innovation Networks in action • Lessons from early US adopters – and implications for US competitiveness

Lesson 1: You Don’t Need To Invent To Innovate 1. Knowledge is NOT power Lesson 1: You Don’t Need To Invent To Innovate 1. Knowledge is NOT power Finding and sharing knowledge is power 2. Patents are NOT an indicator of innovation Market value is the BEST indicator of innovation 3. Smart firms will trade ideas with competitors

Lesson 2: Pick A Role Writers Musicians Talent agents Actors Film Directors Studios Technicians Lesson 2: Pick A Role Writers Musicians Talent agents Actors Film Directors Studios Technicians

You Can Choose To Be: A Talented Specialist… A Renaissance Man… You Can Choose To Be: A Talented Specialist… A Renaissance Man…

Current profile of US engineers: I • Deep engineering or scientific expertise • BS, Current profile of US engineers: I • Deep engineering or scientific expertise • BS, MS, Ph. D in a S&E field

Recommended profile #1 of US engineers: T • Business acumen + technical expertise • Recommended profile #1 of US engineers: T • Business acumen + technical expertise • Arts + Science • MBA/MS, MBA/Ph. D, MFA/MS • Example: Stanford’s (Hasso Plattner) Institute of Design

Recommended profile #2 of US engineers: L • Engineering expertise + complimentary analytical skills Recommended profile #2 of US engineers: L • Engineering expertise + complimentary analytical skills • MBA/MS in social sciences (e. g. , anthropology) • Example: Intel’s ‘People and Practices’ research team

Recommended profile #3 of US engineers: M • Engineering + Business + Area Studies Recommended profile #3 of US engineers: M • Engineering + Business + Area Studies + Foreign Language (s) • MS/MBA (major: International Relations), MBA/MA Asian Studies • Example: MIT Sloan Fellows Program in Innovation and Global Leadership; Whirlpool’s Knowledge Brokers

Thank you Navi Radjou +1 650 -581 -3849 nradjou@forrester. com www. forrester. com Entire Thank you Navi Radjou +1 650 -581 -3849 [email protected] com www. forrester. com Entire contents © 2004 Forrester Research, Inc. All rights reserved.