In a world where technology and product knowledge have become easily accessible, technology firms need to look outside their own R&D departments to find sources of new technologies and innovations. It no longer seems possible for any company to innovate alone. But how could such companies successfully identify the right partners and ensure successful exchanges? Technology scouting strives at presenting answer to such questions. It helps firms in identification of new technology developments and the facilitation of the sourcing of technology.
The human, technological and financial resources of any organisation are limited. With the expansion of new technologies, and growing complexity of products and services in worldwide economy, it barely appears possible for any organisation to merely innovate. Hence, companies tend to open up and share their knowledge by partnering up with other firms so as to reach the market as quickly as possible while minimising risk. In the most competitive sectors, relations based on the buyer/contractor model tend to disappear and give way to collaborative projects.
The concept of open innovation is not new. It was brought into picture by Henry Chesbrough who published his study of practices from Lucent Technologies and Cisco Systems. The popular image below depicts the many ways technology can either go into your development pipeline or how you can spin-out technology that is not core to your business. The question that needs to be addressed here is how to identify the best partners to develop collaboration. Technology scouting helps in addressing this question by helping firms identify the knowledge that is necessary for its future from outside its traditional ecosystem.
Below are some examples of open innovation – success stories of some big companies:
Open Innovation: Pringles Print
P&G discovered a ground-breaking process of printing edible dye images on potato crisps. It helped in cutting the cost of development to a great extent and also reduced the concept to market time.
P&G and a Bakery in Bologna, Italy
In the current scenario, P&G is known to be one of the top innovation giants in the world with more than 35% of their ideas coming from outside sources. But this wasn’t the case long back.
Earlier, P&G used to rely on internal resources and had a network of trusted contacts to develop new products. This actually helped P&G sustain their growth of 4-6% annually. But as the new century dawned, their analysis revealed that they won’t be able to reach their targets if they relied solely on internal innovation. It was then that former CEO AG Lafley declared that besides internal innovation, the company will give equal attention to Open Innovation activities.
2002 was the year when P&G was thinking about ways of making snacks more fun. They decided to come up with a line of Pringles Potato crisps that would have pop culture images on top of them. Although, it was considered a brilliant idea, they were unable to figure out as to how they would do it. They tried ink-jetting pictures onto the potato dough and a test-run was organized using an office printer which did not work out well.
Novel Snack Novel Approach:
Company soon realised that they need a novel approach to create a novel snack as it was more challenging to print on crisps than it was previously imagined. Company scientists realized that every crisp would have to be printed as it came out frying, when humidity and temperatures were still high. Moreover, multiple colors would be required, and the image resolution had to remain sharp on the thousands of crisps that would be printed each minute. Plus, the edible dyes had to meet food safety requirements.
To come up with a solution, P&G decided to bend its traditional ways of going about business, which in this case may have involved finding a company working in the field of ink-jet printers, asking them to devise such a printer and later, negotiating the right to use it. This would’ve required a considerable financial investment.
Searching for a Solution:
It was through technology scouting that they discovered a bakery in Bologna, Italy. The bakery was run by a University professor who also happened to manufacture baking equipments. He had already discovered ways to print images on cakes and cookies and his technology only needed a few tweaks here and there to be adapted to solve P&G’s problem.
It would have otherwise taken a couple of years at least for P&G to bring Pringles Print to the market, with the company stumping with fund. But their desired product hit the grocery stores in less than a year, only by embracing technology scouting and open innovation practices.
Open Innovation: Diabetes Genetics Initiative
A successful open collaboration to crack the genetic basis of type 2 diabetes – one of the world’s fastest growing public health threats.
Broad Institute of MIT and Harvard University – USA, Lund University from Sweden, and Novartis from Switzerland, United States
Diabetes is a life-long disease that affects the way your body handles glucose, a kind of sugar, in your blood. The body of a diabetic person either stops producing enough insulin or the insulin that is produced is abnormal. The condition affects more than 170 million people across the planet, a number that is predicted to increase to 300 million by the year 2025.
Novartis had been looking for partners to unravel the disease’s genetic code to understand how genes contribute to it as well as presenting researchers with new targets for the development of therapeutics.
It was through rigorous scouting that Novartis found out that MIT, Harvard, and Lund University were working on figuring out the genetic code of Diabetes. Novartis collaborated with the universities which led to the initiation of a new project known as The Diabetes Genetics Initiative (DIG) which aimed to determine the molecular basis of type-2 diabetes and to make research freely available to scientists worldwide. The group believed that such kind of a collaborative approach and openness will far outweigh those of secrecy and will speed up research efforts by allowing others to come up with new therapies. In fact, according to Thomas Hughes, Head of Diabetes and Metabolism Research at the Novartis Institutes for BioMedical Research, the interdisciplinary team approach was the best way to understand complex disorders which could quickly turn this knowledge to therapeutic advantage.
Professor Eric Lander, the founding Director of the collaboration says that their aimed to pull together a community of researchers to tackle complex problems that require multi-disciplinary teams and that are difficult to solve otherwise.
Type 2 diabetes is a complex common disease. It’s difficult to find genes for such disorders for two main reasons:
- There are multiple genes involved in the disease, any one of which contributes only in a minor way.
- These genes have interactions between them which could be influenced due to environmental factors such as diet and stress.
To decipher the genetic basis of Type 2 diabetes scientists scoured the human genome looking for single nucleotide polymorphisms. These are subtle changes in the body’s genetic building blocks that can act as signposts, highlighting the presence of nearby genes that may cause the disease. To find these signposts the scientists compared the DNA from thousands of affected individuals with the DNA of unaffected people. The team was amongst the first to apply a suite of genomic resources, such as the Human Genome Project to clinical research.
Novartis’ unprecedented move was premised on the idea that more minds working on the same problem could produce faster and better solutions. After decades of fruitless work, this program began to produce breakthrough results in just three years.
In 2007, DGI announced that they found three unsuspected regions of DNA that contain eight clear genetic risk factors for type 2 diabetes. Researchers were also able to identify a region of DNA lying far away from any genes with known functions. These genomic “outsiders” are usually hard to find by traditional hypothesis-driven approaches.
The results of the analysis are accessible to anyone free of charge on the Internet. They provide the most extensive view yet of the root genetic causes of type 2 diabetes which is a massive boost to research in this field.
For finding “Partners of Choice”, companies sometime seek assistance of external consultancies. Such firms help a company identify relevant developments in technological white spaces. Once the company has a fair understanding of the technological whitespaces and possible partners of choice, it can focus its R&D in right direction to advance their technology.
One major advantage of hiring outside consultancies is that companies don’t need to digress from their core competencies to find the partners of choice. Also, keeping the internal technology scouts idle once the job is done increases the company’s overheads. Hiring outside consultants helps a company achieve its economies of scale. These firms have experienced technology scouts. They possess a detailed knowledge of the innovation process and good interpersonal skills; they are bilingual, with a strong credibility within their firm; they have a broad technological expertise; they are autonomous and have very special and rare profiles.
Should it be Outsourced?
All companies do not have the resources of P&G. Depending on its size, the type of industry, its maturity regarding innovation and its openness to the outside world, a firm will be able to implement several strategies.
Initially, companies hesitate to outsource scouting work. Though, it is easy indeed for an external company to provide a technological solution to a problem. They are at the heart of the knowledge economy, by developing sophisticated search engines, analyzing publications, patents, conference proceedings. Among the millions of experts available on the planet, they are able to qualify and retain those that can offer a relevant solution, are open to collaboration. Last but not least, they help establishing the relation. Technology scouting often starts with a perfect integration into its territory and the knowledge of the ecosystem of regional and national innovation. This last fact is crucial for SMEs that generally lack the resources to lead an international network.
However, companies may still be sceptical about the privacy and confidentiality issues, most of the Technology Scouting companies have Confidentiality agreements and strict Privacy measures in place.
Stellarix – Technology Scouting Case Studies
This is a case example of a live project we did for one of top F&B Companies in the world.
To identify replacements and substitutes that can reduce overall sodium content in prepared shelf stable snacks.
A major European packaged foods manufacturer
What Stellarix did
- Identified used cases of sodium in food, not limited to just snacks but also covering other food items like dairy, breads etc.
- Understood regulatory guidelines around daily intake limits for sodium and other commonly known substitutes like potassium chloride etc.
- Identified Technology Centers, Universities, thought leaders and Companies which are currently working on ways to reduce sodium in their shelf stable food products. A survey was carried out on information published by these key players to develop an initial understanding about the current research focus in the industry.
- A detailed search and survey of all technical publications including patents published worldwide and scientific literature was conducted to understand sodium replacement compounds, taste masking and off flavour removal in replacement compounds, food processing techniques to reduce the overall sodium content in the prepared shelf stable foods.
- A detailed database was prepared to shortlist all possible sodium replacements/substitutes. They were further rated on the basis of parameters like efficacy, shelf stability, taste/flavour, recommended daily intake limits, toxic/adverse health effects (if any), regulatory aspects, positive/negative PR around the ingredient etc.
- A detailed database was prepared to shortlist all processing techniques that could results in overall low sodium content in the prepared food product.
- Identified technologies were further analyzed to check if they are currently protected by IP or are free to be used.
- Top technologies and solutions were identified working along with the client that could fit the current production capabilities of the client well.
- Possible technology in-licensing and partnership targets were identified on the basis of parameters developed while working together with the client.
How the client used our service
- The client was able to identify certain substitutes that they could use in their snacks.
- They also identified processing techniques to reduce overall sodium content in their products.
- The client was able to identify one Nordic university with which they partnered for co-development.
This is a case example of a live project we did for one of top Consumer Products manufacturers in the world.
To identify novel formulations (active agents) for skin whitening for a product to be launched in South-East Asia.
A US consumer products company
What Stellarix did
- Background study was conducted on South-East Asian skin types and understanding was developed on salient characteristics of the skin.
- Stellarix team further broke down the study in three parts
I). Top skin whitening products companies and their commercially available products in South East Asia were identified.
i) A detailed analysis was done on active agents used in all of these products
ii) The identified active agents were further rated on the basis of efficacy, recommended daily usage limits, top agents being most commonly used etc.
iii) A patents study was done to identify those active agents which might not be protected by an active patent currently
iv) Further analysis of recently published patents of these companies was undertaken to identify skin whitening formulations that are not available as a commercial product yet
v) A database was prepared for all the identified skin whitening agents and their ratings
II). A detailed study was carried out on the Indian, Chinese and other South Asian traditional medicine texts to identify plants and agents useful for skin whitening and overall skin care
i) All identified plants and active agents were further searched in scientific publications to identify studies on their efficacy and use
ii) A patents search was done for the top agents to understand which of them are currently protected by active patents
iii) A database was prepared for all the identified plants and agents
III). Detailed patents and scientific literature search was carried out to identify any other skin whitening agents that were missed in the above two steps
i) A search was carried out for all scientific studies done on South East Asian population for testing the effects of any skin whitening agents
ii) All identified new agents were included in the database
iii) A comprehensive database of all skin whitening agents was prepared and shared with the client.
iv) All identified agents were rated with Stellarix proprietary algorithm on the basis of certain parameters decided in consultation with the client and top skin whitening agents were shortlisted.
iv) Technology acquisition targets were identified and communicated to the client.
How client used the study
The client was able to identify the formulations that they would use in their products and were able to get in touch with some companies for technology transfer and possible in-licensing.
Stellarix business research team helped the client with some key opinion leaders interviews related to their product concepts. We also conducted a consumer study in China to understand the consumer purchase behaviour and the insights were shared with the client’s marketing team.
With the emergence of the knowledge economy, knowledge producers are encouraged to disclose their science. Researchers publish among other reasons because it is part of their evaluation, public authorities themselves encourage SMEs to lodge patents they don’t have the means to defend.