The innovation problem just won’t go away

Finding the magic ingredients that will generate innovation remains a major preoccupation across the public and private sectors. Here two leading protagonists from academe and industry shares their thoughts.

Innovation matters because it is the main driver of human progress and development, said Tony Meggs, Group Vice President of Technology at petroleum giant BP, at the Global Innovation Summit held in Tokyo earlier this month. Speaking on the subject of ‘Innovation through conviction, collaboration and commitment’, Meggs told delegates:

“As the Head of Technology for BP, one of my current pre-occupations – and indeed the pre-occupation of many of my colleagues in BP and other energy companies - is the enormous challenge of providing clean and secure energy supplies for future generations, and in particular the role of technology in helping to create options for addressing those challenges. So I’m going to talk about innovation in that context.

In this context innovation is much more than the development of new ideas. It is the transformation of new ideas into decisive and effective action at global scale –‘inventiveness put to use’.

Innovation of this kind and at this scale is vital to provide viable alternative energy sources - from wind, from sunlight; from biomass, but also to reduce the carbon content of conventional fossil fuels. Fossil fuels currently comprise the main ingredient in the global energy mix and are likely to do so for several decades to come.

In scoping this extraordinary challenge to human ingenuity and resourcefulness, two things are very clear:

We cannot sit and wait (like Archimedes in his bath) for inspiration to strike. We must act decisively and with conviction to spark innovation.

We cannot wait for a consensus about the ‘right way’ to address issues like climate change to emerge either. If we do, we will wait for a very long time indeed. Innovation happens in the real world; in a climate of political, social and technical uncertainty; consensus is not only unlikely, it is impossible

For BP, innovation is about turning ideas into decisive action – but, of course, you need good, original, inventive ideas to work with in the first place. For us, collaboration has proved a successful way to generate innovative ideas. By working in partnerships – across boundaries, sectors and industries, with academic and research institutions, industry partners, governments and others.

One of our partnerships is with Princeton University to explore options for reducing global levels of carbon emissions in order to stabilise climate change over the coming fifty years or more.

Collaboration with a university partner has provided more than just academic solutions to clearly defined problems. It has provided a crucible for debate, an opportunity to deepen mutual understanding of complex issues, a forum in which industry, government and academia – commerce, policy and science – can discuss issues of great significance. And through this dialogue, we built our own confidence in the possibility of taking action.

We began to examine the results of our collaboration with Princeton and to see whether we could find practical applications – ways of turning these ideas into action.

Thus was born – at least within BP – the idea of the hydrogen power station. So far, so good – but by itself, far from sufficient. Ideas are essential, but it is the translation of those ideas into solutions to real problems or needs that is the essence of innovation.

I think the next step was the most interesting and critical one; namely, BP’s commitment to create a hydrogen power business. It is a commitment based not on a traditional business model, but on the underlying belief in the need for innovation to create global scale solutions to global scale energy issues.

I should of course emphasize that no economically viable projects have yet been completed, but I do believe that we are in the early stages of the birth of a new industry based on the decarbonisation of fossil fuel to create low carbon power.

What is the moral of the story? What lessons have we learned? What lessons are will still learning?

On a practical level, we’ve obviously learned a lot about carbon capture and sequestration. We’ve also taken a crash course in hydrogen power generation technology. Alongside these specific gains, must also be placed some equally valuable and re-usable lessons.

We’ve learned more about how to make collaborative innovation work. A lot of it is to do with timing – about phasing our inputs to research projects very carefully, and also giving our academic partners time, space and an ‘open door’ to BP when they need it.

We now know more about how to create collaborative environments in which ‘innovative sparks’ are most likely to fly. In many ways, this is about ‘atmosphere’ and ‘informality’ – about bringing researchers and business people together in open dialogue: building confidence on both sides.

We’ve also realised that innovation is infectious - a benign bug that spreads fast. Bold action by one participant seems to inspire equally bold action in others.

Universities need to revise their thinking in order to develop more effective relationships with industry said Professor Tim Wilson, Vice Chancellor of the University of Hertfordshire in his annual lecture, delivered earlier this week.

“How many speeches have you listened to about the challenges posed by the rapid economic growth of China and India? How many television programmes have you watched about the emerging power of the Far East? How many times have you felt that the balance of economic power in the world is changing so fast, that our small nation will simply be overwhelmed by these huge developing economies?

These countries have access to low cost labour and are investing heavily in their skills base. They have huge potential domestic markets. A commercial agility that is the envy of many western countries.

We know we must adapt if we are to thrive in this challenging world. There are solutions; those put forward by economists are of course correct – we must build on our intellectual strength, we must promote our creativity; we must develop our skills base.

We, in the UK, need to update our thinking on innovation; we need new thinking on competitiveness. We need to bridge the gap between rhetoric and reality. I will demonstrate how new thinking about our universities is needed if our country is to compete effectively in this challenging new world.

So how are we responding to this new global competition?

In 2003 the DTI published ‘UK competitiveness: a way forward’, a short, but highly significant, piece of work was inspired and co-authored by Michael Porter.

Since its publication the Chinese economy has grown by 32%, the Indian economy by 22%. China has opened several new universities, doubling its number of students; India has produced tens of thousands of new IT graduates.

So what have we achieved since this milestone report in 2003? Well, there has been real progress in some important areas, especially in the support of publicly funded research.

At European level there is increased investment in research – albeit progressing at a frustratingly slow pace through the political process.

In applied research we have seen the foundation of the Technology Strategy Board - a business-led body free from political influence, guiding our national research investments in science and technology. We are seeing regional development agencies extending their applied research capacity through selective investments. Also at regional level we have new money to support business-led research, especially in prototyping and in early-stage product development.

As our country spends more and more public money on academic research, why is it that research investment by business in the UK is below the average for comparative countries?

Perhaps, the answer lies in the link between research and innovation. Research clearly has a role to play in innovation – but it not the whole story. We can have the best researchers in the world, but if we do not have an innovation culture, then we will fail to reap the economic benefits from our ideas.

To be fair, the government is tackling the problem. Universities are being funded to employ specialists to co-ordinate the transfer of academic research to commercial use. There is a breed of experts that already exist within universities – people who can translate between academic research and business needs – people who can negotiate intellectual property; people who have experience in creating spin-out companies from university research laboratories.

But the answer to this problem is far wider than simply ploughing more money into technology transfer offices in our research universities; research and invention may be inextricably linked, but the link between research and innovation is far more tenuous.

Let’s examine what innovation means. Innovation is the successful exploitation of new ideas. Does innovation really depend upon research and invention or is there a wider perspective on the source of innovation? Let’s look at what the business community says about innovation.

What does business consider are the most important factor in innovation? The answer is not access to research, or even access to funding. The two most important factors in innovation are market intelligence and an innovation culture.

Yet the present government’s emphasis is upon academic research and its transfer into the business world through teams of technology transfer specialists. There is a clear dislocation between these two positions. The technology transfer approach is tried and tested – it can be measured in patents, licences and revenues. But we must move beyond this 1990’s model of technology transfer.

The real issue is about using investment to create an innovative culture. Effective innovation starts with the behaviour of people. It is people that are the drivers of change. We need investment to create cultural change - and that means new thinking about innovation.

So what is this new thinking on innovation, this radical proposal for cultural change?

We need to challenge some principles. Business survival depends upon innovation. Universities are, by their nature, centres of enquiry, centres of creativity and new thinking. But they no longer have the monopoly on intellectual excellence, and they haven’t had for decades. There is no reason why universities and businesses cannot collaborate as equal intellectual partners.

Universities need to create a new model that facilitates businesses working with their academics and with their students.

So what is the new model of a business-facing university? How do we bridge the gap between academe and business? In a system that seeks to commercialise academic research we have created a gateway between a university and business, a gateway controlled by the guardians of technology transfer.

In a business-facing university we create a revolving door – business, academics and students constantly exchanging ideas, constantly moving between the business workplace and the university. A revolving door that operates 24 hours a day 7 days a week.

I stood here last year announcing a merger between the University and Exemplas, Hertfordshire’s Business Link. A merger that created new connections between thousands of businesses and your university. No university in the UK, and I believe no university anywhere, has such connectivity.

Not only do survey results show an increase in satisfaction from business clients, many clients now benefit from access to university expertise. An increase in applied research; a growth in professional development programmes; more students working in business as part of their studies; an increase in graduate employment skills. A business-facing university supporting business and improving competitiveness.

Last year we acquired the former Roche research facilities in Welwyn Garden City - 80,000 sq ft of state of the art laboratories and offices. This facility is dedicated to small companies working in the bioscience and health-related industries, it’s branded BioPark Hertfordshire. Some of the tenants will be leading edge researchers from the Biotech industry. There will be spin-out companies from our university, and spin-in companies, taking advantage of this new cluster of Biotech expertise.

Let me share with you another example of innovation in increasing competitiveness. Our Business School has piloted an innovative project in which companies, academics and students work together analysing the company’s markets and developing strategic marketing plans. More than 20 companies have benefited from the project this year.

This is what is a business-facing university is about. A new type of university, one that not only preaches the importance of innovation, but demonstrates it and practices innovation itself.