The Stanford Institute for Economic Policy Research’s recent study on innovation highlighted the rising costs associated with bringing new products and processes into the world. The report demonstrated that today’s companies are investing considerably higher comparative sums than their historic peers in order to achieve results of a similar quality. This can be illustrated by levels of staffing: the Stanford Institute found that firms employ 20 times as many people in R&D departments as their equivalents did in 1930, but the level of output is not rising accordingly. The authors note that a traditional train of thought on how to maintain growth has been to hire even more staff – only to exacerbate the problem, with R&D expenditure doubling every 13 years to achieve the same standard of output. This is, clearly, not sustainable.
Working in science and technology has always been a team sport and changing ways of working are placing an ever stronger emphasis on collaboration. In pharma, for instance, it’s now commonplace for projects to involve a multitude of partners – perhaps a university together with one or more biotechs. In the tech sector, the digital solutions that continually change the world we live in are often just the result of a bright idea getting the support it needs to make it a success.
The breathtaking advances and convergence of new technologies such as artificial intelligence has only upped the ante. With the development of each new technology, it becomes increasingly difficult for individual scientists to conduct ground-breaking research on their own. Think of a small drug discovery firm wanting to apply AI to the vast amounts of data produced by a drug candidate, or a security start-up utilising the latest technology to increase cybersecurity. This does not merely invite scientific collaboration, it demands it.
Our economy needs the life blood of innovation flowing into the system from entrepreneurs, university spin-outs and research institutions, and to provide opportunities to access researchers, expertise, facilities and collaborate with universities, hospitals and local government. Equally, large corporations and the public sector are increasingly looking to tap in to the expertise afforded by the agile entrepreneurs and early-stage start ups in other industries to make breakthroughs in their research and development. This co-innovation approach sees multiple organisations working together to innovate and accelerate the development of an output, and is key to improving R&D outcomes while reducing inefficiencies.
The government’s innovation survey for 2017 found that 63% of large firms were actively innovating, compared to under half of SMEs. While these figures are encouraging, they also illustrate that bigger businesses are traditionally more willing to take the risks associated with innovation. Collaboration is key to mitigating such risks, both through the sharing of costs and intellectual prowess which will make success more likely.
At Alderley Park we often witness how co-innovation and collaboration can save businesses time, money and support successful drug selection and clinical development. For example, non-clinical safety experts Apconix, pharmaceutical development and clinical pharmacology specialists Seda and leading CRO Aptus Clinical have joined together to offer a one-stop-shop for these core technical disciplines through a consortium called APTrans. We have also seen a series of technical networking groups spring up around areas such as mass spectrometry and chromatography that allow attendees to discuss each other’s work and share the benefits of their own expertise.
The successful blueprint of collaborations like APTrans is not unique to the life science sector. Indeed, for many years the field of co-innovation has been spearheaded by many of the large operators in the automotive sector. The focus for this form of co-innovation has been direct consultation and collaboration with consumers to research possible new ideas and to research the substance behind emerging market concepts.
To maintain a competitive advantage, it is necessary for businesses across every sector to look outside their own immediate circle to bring in different skill sets and specialities. This is known as ‘open innovation’, and is a collaboration model that was defined by the organisational theorist Henry Chesbrough as ‘a distributed process of innovation that depends on purposefully managed knowledge flows across the boundaries of an organisation using financial and non-financial mechanisms conforming to the company’s business model’.
This definition is useful as it illustrates both how open innovation combines a flexible approach to ideas with a rigid structure to great effect. We’ve experienced this first hand at Innovation Birmingham where large corporations such as Gymshark, National Express and the West Midlands Academic Health Science Network are collaborating with digital entrepreneurs and SMEs as part of our Serendip open-innovation programme.
Such structures are imperative when the private sector is collaborating with the public sector on sensitive projects. Take, for example, the UK government’s National Cyber Security Programme, which has open innovation at its heart. The programme is designed to allow tech start-ups access to GCHQ’s wealth of expertise to develop novel technologies in its software engineering accelerator. As the world becomes evermore entwined with the online sphere, the internet becomes an increasingly important target for a myriad of security threats, from the hacking of personal data to state-sponsored espionage.
In the private sector, we’ve seen Hewlett Packard Enterprises (HPE) announce their relocation to Manchester. HPE understands that innovation and breakthroughs cannot happen in vacuums and it was this understanding that led them to choose Circle Square. Already home to the Manchester Tech Incubator, where over 20 data science and technology innovation entrepreneurs and start-ups such as Wakelet and Blockrocket are based, providing the co-location and co-innovation opportunities required in today’s marketplace.
An increasing number of businesses are realising this - a 2018 survey by Hitachi found that 61 per cent of companies said that co-innovation enabled them to produce more successful new products and services.
Co-innovation is not the future - it is already here, and is an inescapable reality of bringing dynamic products and services to the world, whether that is a new drug or the latest gadget. While it is understandable some people may struggle to adapt from the old approach of fierce competition behind closed doors, the next generation of workers, and customers, will increasingly see bustling incubators or corporate consortiums as the only way for a successful organisation to operate, be that in pharma, tech or any other industry.
Co-innovation is not a failsafe solution to the many pitfalls one encounters in research and development, but it does lessen the risks and allows the potential losses to be shared. It is our responsibility to do all we can to foster this mindset wherever and however we can in order to continually improve co-innovation environments, allowing for the sharing of ideas that will help improve the world around us.
Phil Kemp is attending this year’s UKSPA and S-Lab Conference on April 2nd and 3rd. To connect with him and meet the Bruntwood SciTech team click below