New Insights into Technology, Innovation and Entrepreneurship

moderator: Edward B. Roberts, Sloan School of Management, Massachusetts Institute of Technology, MIT
author: Frank L. Douglas, Austen BioInnovation Institute
author: Gerard M. Mooney, IBM
published: Aug. 1, 2013,   recorded: October 2005,   views: 3105

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Are there any formulas for simultaneously achieving technological innovation and steady growth on a global basis? Ed Roberts believes companies must continuously access and leverage technical resources, which means they must not “just think globally but locate globally.” This strategy also involves allying with R&D partners, including licensing to and from them; outsourcing when appropriate; and investing early in energetic, capable entrepreneurial firms. Roberts’ research suggests that American and European companies are beginning to pursue these goals, with 35% of them reporting R&D activities outside of their home countries. He notes as well the increasing return of U.S.-educated foreign entrepreneurs to their home countries, which will “dramatically over time lessen the problem of overseas alliances and investment relationships.”

Frank Douglas describes the transformation over time of the pharmaceutical company, Aventis, with which he had a long tenure. In 1992, he joined what was then Marion Merrell Dow, whose three major products constituted 80% of sales. Douglas saw this as “a company in survival mode,” and came up with a plan for getting new products in the pipeline. His method involved a “fast-cycle concept, to make multidisciplinary teams the unit of innovation,” and to locate these units in different locations globally. Employees who did not contribute “to building a matrix organization” did not last long, says Douglas. In a matter of years, 54 projects emerged, with 300 scientists working on them. With the help of the decoded human genome, there emerged “a community of practice,” and common platforms that led to sharing of information and a swifter path to clinical trials.

Gerry Mooney views innovation not as a choice but “as a matter of survival.” His company, IBM, learned to make growth and innovation a “natural act.” His suggestion for other companies seeking to follow the same path: Don’t get preoccupied with current markets, or even with projects that promise revenue and profit in the early years, “but focus on what’s over the horizon.” IBM found that big opportunities lay in where new technologies were emerging, where industries collided. Since 2000, the corporation’s early business opportunity program has generated five ventures with more than $1 billion in revenue. IBM sought its customers’ insights, and tried to understand how to be a “catalyst, enabler in their growth.” It held roundtables to learn of innovations in new technologies, and then figured out if large and sustainable markets could be created for products taking advantage of these technologies. Mooney says it’s about “putting the right solution set together, and getting the right industry focus for that opportunity.”

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