Translator: Alessio Politi Reviewer: Michele Gianella
Let's talk innovation.
And I'd like to start by reminding everyone
that innovation today is certainly a company's staple
to successfully compete in the marketplace.
And this is perhaps even truer
for those businesses, like many Italian ones,
that cannot deal on other productive factors
such as size, and consequently the economies of scale,
or access to productive factors - such as work or energy -
at competitive costs.
So innovation today, as we all know,
is a top priority in the agenda of every entrepreneur and every manager:
everyone talks about it.
But perhaps not everyone knows exactly what innovation specifically is.
I think it is very useful to see it, and define it, as a process:
it is nothing more than a series of actions, decisions
through which a company, an organization
or single persons like us,
generate an idea
for a new product, a new service, a new way of doing things -
and then they turn it into reality, develop it, make it practical
and bring it to the market.
Traditionally, I would say until about 20 years ago,
there was a consensus in business
that in order to innovate successfully it was essential to control,
to internalize, bring inside the company
all the resources, skills,
technologies, ideas and knowledge
that were needed to carry out this process.
The basic idea was very simple:
to innovate more, we must invest more internally,
hire the best talent, technicians, designers, engineers, scientists
and increase year after year
the investments in our research and development laboratories.
Eventually, they called this basic idea "closed innovation".
The concept that it is fundamental for a company,
in order to relentlessly innovate, and therefore compete in the market,
to continuously widen and deepen its know how,
its distinctive set of skills.
There are several studies
that show how this way of innovating in organizations
generates a syndrome,
that some have called the "not-invented-here syndrome".
How many times, before an idea, a stimulus that comes from outside the organization,
someone told us: "Well, we could do it better".
The "not-invented-here syndrome" is just that:
the tendency, often even unconscious,
to judge as of less value, of less potential
an idea, a contribution, a solution that comes from outside.
Indeed, someone called it the syndrome of the not invented here:
a cultural, often unconscious barrier
that we often encounter in organizations.
This "closed innovation" paradigm of innovating
has been the dominant paradigm, until about 20 years ago;
but can we still deem it today an effective approach to innovation?
Things underwent a profound change, over the last 20 years.
First of all, the innovation process has become much more complex,
and much more expensive.
In order to respond to customers' needs, which are changing faster and faster;
in order to face a more and more global and unpredictable competition,
organizations today have to innovate
by incorporating into their products or services,
many more technologies, often with a digital nature,
than a few years ago.
Let's take the example of the automotive world:
some people believe that in three years' time
the bulk of added value in the automotive supply chain
will be in the software component, and no longer to the hardware.
And this requires a thorough transformation
in the innovation strategies for companies in the field.
Willingly or not, and somehow they are already doing that,
they must become capable of developing - or at least integrating -
software and computer systems of various kinds.
And it is very hard, you will understand, to do so by leveraging,
relying only on their own skills, resources and technologies.
Then there is a second, very relevant phenomenon:
today, the lifecycle of a new product, of a new service,
after the launch,
has shortened considerably.
I remember the words of the Hewlett-Packard CEO,
who stated a few years ago:
"Today, our products remain on the market between six and 12 months.
Five years ago,
they stayed on the market between three and five years".
And this acceleration of the innovation cycle
is something that is common to many industries.
We also see it,
when we go to buy an appliance
at Media Markt.
So not only innovation is a tougher job today;
it has to be done much, much faster, also.
And so, what are the most innovative companies doing today,
what response are they giving to this challenge?
Are they investing more internally,
in their R&D labs, research department and innovation processes?
That's not really the case: take the example of Apple.
Last year, Apple invested 5.4 percent of its revenue
in research and development.
Which is a far cry from other companies like Microsoft or Google,
who invested 13, 14, 15 percent of their revenue
in research and innovation.
And this is consistent with Apple's history
over the last five to six years,
and still we can hardly say
it hasn't been - and still is -
a very, very innovative company.
What companies that really know how to innovate today
have proven to do, and have learned to do,
is to evolve their model, their approach to innovation
from a closed to an open attitude.
Today, the paradigm adopted by these companies
is called "open innovation".
And what's the difference between closed and open innovation?
The idea is very simple: first, acknowledging
that today it is no longer enough to rely on in-house resources,
to keep investing in one's own technologies,
in one's own know-how.
It is perhaps faster, more effective, cheaper, less risky,
knowing how to identify, search, use the ideas, skills and technologies
that already exist out of our organization.
The idea is very fascinating in principle, but then you have to put it into practice.
And today there are many practical tools
to do just that.
Some of them are also very well known, and have been implemented for a long time:
let's take for example the case of Alessi, that we all know,
a manufacturer of home accessories.
During the 1990s,
it saw its turnover spike from 20 to 100 million euros,
by upholstering its innovation process.
Alessi began working systematically
with a network of over 200 third-party designers and architects,
helping them to thoroughly rethink the products
Alessi was developing and bringing to the market,
intercepting and interpreting some of the cultural changes
that in the meanwhile our society was going through.
You can easily imagine
how richer the contribution of creativity and knowledge
that this network of architects and designers
was able to share with the company,
compared to what Alessi designers could have done by themselves.
A second strategies is setting up collaborations
with universities, research centres
or companies in sectors that are completely different from ours,
in order to create long-term, wide-ranging development projects.
An example of this is Dompé pharmaceuticals,
which recently created in its research and development lab,
where it invests 15% of its turnover each year.
an "open innovation" department
And what does it do?
It's job is to develop, measure, grow and nurture
a network of relationships
with over 200 universities and research centres around the world,
with which Dompé innovates on a daily basis.
Same thing with Cosberg,
the well-known Italian automation brand
that cooperates with dozens of universities and research centres
in Europe and beyond.
Cosberg, however, does something more:
it is a partner of Intellimech,
one of the world's largest pre-competitive research consortia
in the field of mechatronics,
which brings together
over 30 companies, research centers and universities,
that continuously share ideas, solutions and technologies
to accelerate and improve the ability to innovate
of each consortium's partners.
Mind you, Cosberg has recently developed
16 innovative patents in the field of automation,
taking advantage of the expertise and stimuli
that came from this consortium.
But today there are many other tools, even more innovative,
that companies only recently started to implement
to make open innovation.
For example, there is a clear growth in the number of companies
that systematically collaborate, and often also invest in capital,
of startups or very innovative small companies.
In doing so, they are also helped
by the bridging, incubator role played by business accelerators
of companies such as PoliHub,
which is the start-up incubator of the Politecnico di Milano,
which hosts more than 130 innovative startups.
There are also online platforms, today.
I don't know if you have ever heard of Innocentive, or Nine Sigma,
which connect innovation-hungry companies
with communities of technicians, engineers, university professors.
In some cases, there are hundreds of thousands, if not millions,
of the so called solvers.
When a company want to innovate,
solvers help them find innovative solutions
to their most complex technical problems.
Another tool that in recent years has been increasingly used
is innovation contests and hackatons.
They are tools through which companies
can involve suppliers, customers, partners, students, teachers
in generating new concepts
for products and services that are then brought to market.
An interesting example, in this sense,
is the "Global Packaging Challenge" launched in 2019 by Amadori,
a prominent agrofood company
which involved a number of company's current and prospective suppliers
in developing sustainable solutions
for Amadori's packaging systems.
And it was a very successful project.
The message I wanted to convey to you
is that today there are so many tools at hand
to implement the idea of open innovation.
And these tools are not only available to big companies
and multinationals.
On the contrary, perhaps using and exploiting these tools
is even more important, critical
for small companies,
like many companies in Italy and especially in this territory.
Clearly, in order to do this,
one has to be aware of this important paradigm shift.
We have always believed
that it was fundamental, in order to innovate successfully,
to have a solid know how,
a set of skills and distinctive technologies
that the company was investing in
and building upon over time.
Today, the companies that we have seen,
and all the others that have taken the road towards open innovation,
understood that internal know-how is no longer enough,
and begun to develop what I call "know-where",
that is the interconnection with the outside world
and the ability to find quickly and effectively,
before my competitors,
where to find the ideas, solutions and technologies
that are most needed to accelerate
and make my innovation process more effective.
Clearly, in order to do this we need to overcome
that cultural resistance we talked about before,
the "not invented here" syndrome.
It is fundamental that companies understand,
on one hand, the intrinsic value of ideas and solutions
that come from outside their Research and Development labs;
and secondly, it is essential for them to know these tools,
what they consist of and how to implement them.
Well, I believe this is the main challenge for every company today:
"rooting" the concept of open innovation
and let their philosophy and approach to innovation evolve
from a closed, I would say self-referential, model
towards this expansive and interconnected model
that we came to call "open innovation".
(Applause)