Paul Dorfman is a Managing Director in the NYSE Euronext's Global Corporate Client Group. In this capacity he...
Innovation (Photo credit: Vermin Inc)
Every day we hear about companies breaking through to the next level of the business world with new products and services. But how do companies access the technologies and discoveries to bring the world revolutionary products - from Gatorade to Google - and be recognized as leaders in their field? One way of course is through their own research and development departments. But for all companies (Merck, J&J, Microsoft and other big spenders included) the vast majority of ideas originate outside of an organization’s R&D departments; there are simply more inventive people laboring in all the other places than within a given company.
A.G. Lafley, Proctor & Gamble’s former CEO & Chairman said it well: “for every smart scientist we have in-house, there are approximately 200 equally smart scientists worldwide, toiling in the same exact discipline." Check out P&G’s former Chairman & CEO, discussing how the company took advantage of this reality.
A similar view is held by Dr. Cliff Gross, CEO and Founder of tech-transfer company, Tekcapital, “The myth of the garage entrepreneur has since David Packard and a few other outliers, given way to long-term, significant research infrastructure of university laboratories staffed with scientists, physicians and engineers envisioning generation 2.0 of the current state of the art.”
But to make these discoveries useful to the public (and for the economic benefits to accrue to companies providing them), they cannot remain in the lab; they need to be transferred to companies to be exploited and commercialized. The answer: Open Innovation.
Open Innovation (Professor Henry Chesbrough coined the term in 2003) includes the transfer or relocation of technology from the research institution to the commercial enterprise. Companies embracing Open Innovation realize that to be fully innovative (and thrive in the long term) they need to be open – open to acquiring the inventions and breakthroughs occurring beyond their research capacity. This transfer and acquisition is so important to a company’s durable success because “in one form or another companies are selling solutions to customers, and these solutions are in constant need of technological advancement to increase their value in solving customer problems”, according to Dr. Gross. In short, these acquisitions make the companies more competitive.
This is where tech-transfer companies like Tekcapital come into play so perfectly. Tekcapital, for example, dramatically improves the ability and efficiency of companies to access these innovations. Without the sourcing, evaluating, matching and transferring know-how of a Tekcapital, the big ideas of far-flung research institutions are not easily noticed or tapped by business. Tekcapital offers a network of nearly all the research institutions worldwide, and the insight to deliver targeted discoveries to business enterprises. Lafley’s program at P&G to identify and acquire externally developed innovations was called “Connect and Develop”. It worked. The market capitalization of P&G roughly doubled between 2000 and 2010.
We here at NYSE Euronext are excited to offer new ideas to explore that can enhance and drive your business strategy. See how Tekcapital’s technology sourcing services help growing companies find and acquire new intellectual properties developed at universities around the world. If you would like an introduction to Dr. Gross, please let me know, I would be glad to connect you.