Collaborative Research is New Approach of Innovating in the Fast Evolving World

Munish Sudan, Head-IP & External Research Collaboration, Tata Steel A subsidiary of the TATA Group, TATA Steel is a multinational steel manufacturing company boasting of having a crude steel production capacity of nearly 30 million tons perannum. It is headquartered in Mumbai and employs over 80,000 people across five continents in nearly 50 countries.

Among the many changes that businesses have seen in last decade are so, one change is the way organizations are approaching towards technological problems. The new product development and innovation management practices have evolved significantly and industries are embracing best practices from outside their boundary walls. Open Innovation practice has become an integral part of R&D ecosystem across the world. Chesbrough had defined Open innovation as “the use of purposive inflows & outflows of knowledge to accelerate internal innovation and expand the market for external use of innovation”. This approach of looking beyond the boundary walls of own organization and tapping the best minds to work together has been very effective.

It is not like that industry has not innovated with closed model of innovation in past, however, the business dynamics have changed over a period of time. The globalization has resulted in wide spread of technology clusters and Asian jurisdictions have made their presence felt in terms of innovation capabilities. This has been further augmented by the fact that innovation cycle across industries has shortened, cost of NPD has increased considerably and technologies have become highly inter disciplined. More importantly, academia has come forward strongly to work on industry-related problems. Indian Government has also pushed Industry academia partnership strongly and a number of government funded research programs (such as Uchhatar Avishkar Yojana(UAY), Global Innovation & Technology Alliance(GITA), IMPacting Research Innovation and Technology (IMPRINT)) have mandatory requirements of having established industry linkage and industry participation. All these factors have led industries to think about new, efficient and cost-effective business models of innovating and have resulted in growth of collaboration opportunities. Organizations no longer believe that ‘Doing It Yourself’ is the best approach for every technological problem. It is not critical that technology solutions to originate from you to make profit out of it.

Type of Research Collaborations
The figure below briefly describes the types of research col laborations which are prevalent among the industries. The collaborations become more and more strategic in nature as we move-up in the pyramid and number may also be less. Similarly, the number of tactical and transactional based (mostly project oriented) will be more at the bottom.

Project Basis: Advantages
• Best in the field can be tapped
• No long term commitment if results not encouraging

Project Basis:Disadvantages
• Transactional in nature
• Efficiency
Institutional Tie-ups: Advantages
• Works like an extended lab/dedicated center for research
• Instruments facilities get widened
• Intellectual Property Issues, licensing negotiations can be sorted-out on one time basis at institute/partner level
• One source of funding may enable different divisions/groups to engage with institute

Institutional Tie-ups: Disadvantages
• Specific domain based expertise may not be with institute
• Funding volume needs to be substantial
• Conflict of Interest since research institute /university/partner will work parallel with competitors

Theme: Advantages
• Best in the field can be tapped-in
• Cost effective and chances of success become more

Theme: Disadvantages
• Engagement needs to be setup afresh every time
• Geography may be a barrier

Consortia: Advantages
• Helps to take big initiatives and risky projects because risk is distributed
• Government funding

Consortia: Disadvantages
• IP is shared with the multiple partners
• Project/Program Management ownership competitors are involved

Customer: Advantages
• No need for customers’ scouting for developed technology
• Expertise and facilities of both the parties are utilized
• Deep insights about the market
• Strengthens relationships with customers and build-in confidence
• R&D investments can be distributed

Customer: Disadvantages
• Exclusive commercialization may be an issue
• Confidentiality

Chair Professors:Advantages
• Build company branding and relationship with respective institutes and act as an interface between institute and company to foster a research area of company’s and industry’s long term interests.

Chair Professors: Disadvantages
• Formal R&D programme may be missing
• Technology transfer is seen on lesser side

"Open innovation in R&D should not be seen as R&D outsourcing; rather it is strategic in nature and value creation is much more than just cost and time savings"

There is little doubt that technological world would embrace open innovation more & more, however, at the same time, it calls for systematic approach at organization level to increase the success rate. Each partner involved in research collaboration (be it a company or a research institute) has their own set of organizational values and objectives and hence, alignment of the overall objective for a particular activity is very crucial. Intellectual property management, cultural differences and varying objectives of the collaborative partners are some of the challenging issues which need to be looked into and managed diligently to create value proposition for each partner effectively. It is of paramount importance to understand why we are going for collaborative research (collaboration vs. doing on your own), what are drivers (is it cost, expertise or a different context) so that organizational strategy can be aligned accordingly. There would be always core areas, which each organization would want to enrich and keep closer to their chest to have exclusivity.

Long terms research projects inherently would involve greater amount of know-how, uncertainty in terms of output and hence, it becomes imperative to develop mutual trust among partners for sustainable long term relationship. Also, a successful open innovation program in R&D call for evaluating external capabilities and conducting due diligence of collaborators exhaustively and hence, technology scouting capability needs to be built within organization. Open innovation in R&D should not be seen as R&D outsourcing; rather it is strategic in nature and value creation is much more than just cost and time savings. Given the interplay of diverse technologies such 3D printing, deep learning, AI, Blockchain, the collaborative research approach among different layers will be key to succeed and win the game.

The capability to identify, absorb and integrate external strategic technical knowledge is new essential in organizational innovation ecosystem. The days of innovating and researching in isolation are largely over in most of the industries.