The Innovation Union and the Innovation Manager

By: Haydn Shaughnessy

The European Union’s ‘Innovation Union’ initiative signals a change in how we think about innovation and the relationship between innovation, research and product or service development. In this four part series exploring the implications of the EU initiative, Haydn Shaughnessy begins by asking one of its architects, EU head of Innovation Policy, Reinhard Buescher what it means for innovation managers.

The European Union’s new innovation initiative, The Innovation Union, is a radical departure in its intervention mechanisms.

Since the early 1980s EU innovation strategy has focused on growing a European Research Area and, within that are, prioritising R&D in strategic areas like Information and Communications Technology (ICT) and Energy,  and trying to stimulate member state research investments.

With the Lisbon Strategy the emphasis changed from a single research area and innovation, as distinct from research was incorporated as a key goal of policy. However the fundamental drift of policy remained the same, and rested on a belief that pre-competitive research, organized in a succession of ‘Framework Programmes’ was the key to competitiveness in the market.

The EUs R&D framework programmes however were conceived when the big competitive challenges came from the USA and Japan. Back then (the early 1980s) the EU faced challenges like the USA’s 275 million people (now over 300 million) speaking one language in one single market, and something of the order of half that amount in Japan, similarly comprising a single market.

A single European market and research area at that time could boast of over 300 million people (now near to 475 million), if only the EU could create unity across language and culture.

The framework programmes were designed to equalise this imbalanced competitive environment where the USA and Japan has advantages of culture and language unity.

In an age of open innovation, how can a policy driven initiative like this work and what does it mean to innovation practitioners?

 

Over the past decade the nature of competition has changed as well as its geography. The big challenges of today arise from demographic inequalities and climate change. The sources of competitive pressure are China and India, and, looking forward, Brazil and Russia. These are fast developing regions with unprecedented economies of scale in their home markets. Suddenly ‘scale’ and a single market in Europe have lost their singular relevance now that two single markets have emerged in Asia both with populations of over 1 billion people and considerable scientific, technological and innovative expertise.

The question is no longer how to consolidate one European market through common R&D objectives and cross border cooperation. It is how to innovate practically in the market, quickly enough to maintain competitiveness and living standards under historically unique pressures.

Against that backdrop the EU is launching the Innovation Union initiative, an attempt to address societal challenges through public private partnerships that go beyond R&D to innovative market-based solutions. One major plank of the policy, according to the European Commission, is to revolutionise cooperation between the public and private sectors.

In an age of open innovation, how can a policy driven initiative like this work and what does it mean to innovation practitioners?

I spoke to Reinhard Büscher, Head of Innovation Policy at the European Commission, and asked him first why it was important to “revolutionise” how the public and private sector work together?

 

— First of all, said Büscher, let’s clarify where we are coming from. The main challenge is to have higher impact. It is no longer enough to support innovation through research. Innovation has to be user-driven and it has to solve societal challenges. It needs to involve both the owner of the problem and those who might help them. And the most societal problems are very complex and require different types of innovation. It’s important to bring together all relevant actors, the owner of the problem and the solution provider. The question is: What is the right level of intervention and how to ensure consistency between different solutions?

— The EU’s programme involves identifying a range of super-challenges – the ageing population,  the smart city, water resources, sustainable economics – where there will be substantial future markets. In the immediate future however these need  pragmatic policies that create partnerships and remove bottlenecks. This concern defines the new Innovation Union approach.

Why is this different from product or services research? Büscher sees it, in part, as a new governance model.

 

— The old governance structures of research are at stake. In a typical research project the parties are well defined. It’s then just about proper project management. If you want however address more complex issues, it requires coordination at different level and between more actors in order to maximise impact. The question is how to align the problem owners and the solution providers? That requires much more than sound contract management.

— If you take the combination of new public-private partnerships, addressing large societal challenges and moving beyond projects that have a simple contractual management model, it suggests a need for management skills that are likely to be thin on the ground. Does this mean a new role for innovation managers? Büscher believes so but asks first that we take a closer look at what we mean by innovation management.

 

— The first question is who can be considered an innovation manager?  For the time being we tend to refer to those involved in monitoring innovation processes inside companies. But following the broad concept of innovation I’ve outlined above one would have to involve also those who control funds or those who are responsible for public procurement. So it is not only managers inside companies. Innovation has to be properly managed in many different institutions, not just in companies.

Innovation has to be properly managed in many different institutions, not just in companies.

 

 

— The role of the innovation manager in companies is anyway these days much more complex than it was. It encompasses a wider range of activities, from sourcing knowledge and ensuring a constant flow of ideas over designing and testing new products and services to facilitating access to finance, nurturing intellectual property to bringing innovations finally to the market. It is hard to imagine that all these functions can be provided by a single person. What is needed is an innovation system that integrates all these functions, in accordance with the strategic objectives of the company.

It’s an important point to make. The role of innovation manager is often self-taught. There are few courses available that encompass all the skills Büscher is referring to. And then there are new initiatives like the Innovation Union that pose new challenges. Do we need universities and business schools to do more?

 

— The EU some years ago began to invest in innovation management, especially in tools, notably IMPROVE, which recognises that innovation management cuts across many areas that need to be aligned. Clearly business schools need to look more at this, in particular for better managing non-technological and service innovation. I’m not convinced yet that the user driven dimension is fully incorporated into innovation management. There is still a lot to be done to embrace the concept of open innovation. At the end of the day the profession needs some agreed definitions and standards to be recognised as an own profession.

…at the end innovation management is more about management of processes and human resources than about innovation itself.

 

— I am convinced that innovation management should be further developed to a true profession that can be taught at universities, and that offers an interesting career path for business managers. But I am not sure that we are sufficiently clear about the profile. In the past, researchers claimed to be the experts for innovation and today designers claim the same. But at the end innovation management is more about management of processes and human resources than about innovation itself.

But perhaps the EU’s new policy with its emphasis on public private partnerships introduces yet another new role for the innovation manager?

 

— Yes, this is true for publicly sponsored research. Innovation systems are moving towards openness and this implies more contacts between partners and more networking and knowledge sharing. Innovation is all about collaboration and sharing. This process needs to be managed and this requires new skills and talents.

One of the objectives of the Innovation Union is to produce world class science performance in Europe. I wondered why we are back to science when innovation seemed to direct our view ahead to the implementation of solutions?

 

— Only half of all innovations are research-driven, the other half is not. World-class science is a key for innovation but not the only one. We need to promote excellence at all levels, not just for science. For example we also need more world class clusters in Europe that are globally competitive. These clusters must work with other centres of excellence and this requires excellent cluster managers.

Innovation management should be driven by a search for solutions and customer needs. Technology is not the solution.

 

Finally what advice does he have for the innovation manager?

 

— I don’t think I need to give any advice to professionals who know much more about innovation than I do. But there are two issues that in my opinion should be taken more into account.

— The first is to better explore all forms of creativity. Research is important but the non-technical part should not be underestimated. There is much creativity in a company that is often not exploited and we cannot afford to let that happen in future, it is a human resource problem and my regret is it is not being addressed as it should. In the future, we can rely less and less on a stream of young people revitalising companies.

— The second is that innovation management should be driven by a search for solutions and customer needs. Technology is not the solution. And nor is legal protection.

By Haydn Shaughnessy