US and India Co-Innovate

US and India Co-Innovate


Leaders from all around the world gathered on July 8th at the Haas School of Business to attend the inaugural US-India Conference, an event organized by the Garwood Center for Corporate Innovation and AIMA (All India Management Association). The conference, which followed Indian Prime Minister, Narendra Modi, and President Obama’s 7th meeting since 2014, reinforced how important the Indo-US partnership has become.1 The conference attracted more than 300 attendees.

The United States and India are joining forces on multiple initiatives including advancing global leadership on climate and clean energy, enhancing the strategic defense partnership, expanding commercial ties by breaking down barriers to trade and investment, and heightening cooperation in science, technology, and health.

India’s growth plays a significant role in the global economy and its economic indicators are looking strong.

India has undergone numerous changes over the past several years and made tremendous progress. For several decades India has been perceived as a developing nation, however it has now risen above this status.2

While many of its scientist and engineers have immigrated to western nations over the years, India has consistently been focused on building its human capital. With a rapidly changing technological landscape, India’s youth is being pushed to new standards and it needs to adapt quickly in order to develop fundamental skill sets. It has become crucial for students to undertake entrepreneurial activities in universities to accelerate their learning.

 

Chancellor Nicholas Driks

Chancellor Nicholas Dirks, UC Berkeley

Chancellor Nicholas Dirks (UC Berkeley) opened the event by acknowledging the timeliness of the conference. India is now the fastest growing economy in the world while the American technology sector continues to expand with rising demand for talent and innovative research. “It is a wonderful moment, not only to acknowledge the extra dynamism of the Indian economy, but also to partner with colleagues in India around both mutual interest, shared concerns, and our efforts.”

Dean Lyons, Berkeley-Haas

Richard Lyons, Dean of the Haas School of Business, highlighted the significance of innovation and commented on India’s immense growth and vitality by claiming, “all eyes are on India.” Dean Lyons explained that enterprises survive by being usefully different, being innovative, solving problems, and producing faster than other market players. Measuring the progress of a company’s innovation processes is important when attempting to accelerate markets.

Rekha Sethi, AIMA

Rekha Sethi, AIMA

 Rekha Sethi, Director General of AIMA, discussed the organization’s objective to promote global management and innovative thinking among Indian enterprises. As an organizer, she noted the significance of holding the conference to energize collaboration and develop a platform for dialogue between thought leaders from the US and India. The conference created an opportunity for academia, business, and media to come together.

Preetha Reddy, Apollo Hospitals

Preetha Reddy, Apollo Hospitals

“India, as a country, is poised for success”, said Preetha Reddy, Conference Chairperson and Executive Vice Chairperson of Apollo Hospitals. While speaking on a global front, Reddy praised India for developing a large English speaking and English educated workforce, and reducing barriers to advance and bring about innovation. After acknowledging the challenges that India faces, Reddy claimed that “innovation is a part of Indians’ DNA”.

 

Diane Farrell

Diane Farrell, USTDA

Diane Farrell, Deputy Assistant Secretary for Asia, US Department of Commerce, International Trade Administration, discussed the progress that the US and India have made, as well as plans for future development. There are opportunities for collaboration in multiple sectors, including defense, aerospace, and clean energy, which represent the vast potential for US companies to explore.

Ashok

Ambassador Ashok

The convergence in economic interests between India and the US fortifies the relationship between the nations. With Prime Minister Modi pushing for development and economic growth, Ambassador Ashok claimed “India’s target of double digit growth and the creation of 12M jobs needs a huge investment from outside.” He continued by saying that for growth to occur, there needs to be a greater share of manufacturing in the GDP.

From an education perspective, Ambassador Ashok said that he hopes the relationship between American and Indian universities improves. To develop a skilled workforce the Indian government launched Skill India. In addition to providing entrepreneurial education in nearly 2200 colleges and 300 schools, India has been training individuals through massive open online courses (MOOCs). Furthermore, adopting the US community college system could prove to be of great value to India.

Solomon Darwin, Berkeley-Haas

Solomon Darwin, Berkeley-Haas

 Smart villages are the next emerging platform, as they will urge companies to co-innovate with villagers to find technology solutions. Professor Solomon Darwin is spearheading the smart village initiative to prototype a scalable smart village in India. Smart villages will empower people at the bottom of the pyramid. Large firms have been producing products and services for the 1.5 billion rich people, while neglecting the 5.5 billion poor people, essentially causing them to miss out on an opportunity of $1.5 trillion. Co-innovating with villagers allows companies to build viable products and services that the villagers need in order to prosper; resources, technology, information, and entrepreneurial education enable villagers to develop their villages themselves. By providing access, value is created, and business models are designed.

Paul E. Jacobs, Qualcom

Paul E. Jacobs, Qualcomm

Qualcomm’s Dr. Paul E. Jacobs, Executive Chairman of Qualcomm Inc., also spoke about empowering people with knowledge and technology by introducing how mobile is catalyzing the Internet of Things (IoT). Qualcomm has been trying to drive costs down while attempting to increase production numbers. This prospective shift in production would benefit the many regions in which smartphones are the primary method of internet connectivity. “We are expecting that in emerging regions the smartphones installed base would go from 2.4 billion in 2016 to 3.6 billion in 2020.” Dr. Paul E. Jacobs also spoke about Qualcomm’s involvement in producing smart cities with a project in Jaipur, India to create an innovation hub with a focus in energy management, transportation management, and other areas of opportunity.

 

Vishal Sikka, Infosys

Dr. Vishal Sikka, CEO of Infosys, who was awarded the AIMA Managing India Award 2015 for Emerging Business Leader, continued the segment by speaking of the progress that can be made by focusing on key areas of technology. He claimed that artificial intelligence (AI) and automation technology are enabling us to do more with less. We have to embrace automation and AI because they create more opportunities through the ongoing revolution of displacing old jobs and creating new ones.

There are three enabling pieces when it comes to transforming nations and empowering people: democracy, technology, and education. Tolerance and diversity make a system stronger as we reshape the world around us with the use of technology.

 

Sam Pitroda, Policymaker

Sam Pitroda, Policymaker

Policymaker Sam Pitroda addressed the urgency of questioning the status quo and creating opportunities for individuals of every socioeconomic background. India has 500 million people living below the poverty line; Pitroda said, “India needs to invest in solving problems of the poor because everybody is busy solving problems of the rich. We need to democratize information effectively to benefit the people at the bottom of the economic growth.”

Technology is just one piece of the puzzle; entrepreneurs and government support are also crucial factors for growth. “India offers great hope not only in IT and telecom and software but also in energy, housing, and food.” According to Pitroda, bringing India to an ideal state would require a $100 billion investment, in addition to better technology, air quality, roads, and power plants.

 

Sachin Pilot, Rajasthan Pradesh Congress Committee

Sachin Pilot, Rajasthan Pradesh Congress Committee

Furthermore, in an interview with TiE Silicon Valley following the conference panel, Sachin Pilot, President of the Rajasthan Pradesh Congress Committee and Former Union Minister for Corporate Affairs, Government of India, reinforced the importance of India’s youth for the future of the nation. While informing the audience that India’s population of 1.2 billion has a median age of 26, Pilot expressed how crucial it is to ensure that the young population stays educated in order to bring about necessary changes. Moreover, Pilot claimed, “The young population of India is far more daring, creative, talented, and more skilled to take on the challenges of a global world.” 4 Also urging a focus on manufacturing, Pilot said, “No country the size of India has gone through and become a developed country without having gone through the cycle of manufacturing.”

Satish Reddy, Dr. Reddy Laboratories

Satish Reddy, Dr. Reddy Laboratories

Satish Reddy, Chairman of Dr. Reddy’s Laboratories, spoke about India’s flourishing pharmaceutical industry as part of the “Smart Medicine: Healthcare Solutions for All” segment. Reddy stressed that innovation takes place through collaboration; the US and India can leverage each other’s strengths to advance. The US, he said, is the “hub of innovation” which could benefit from reducing costs, while India can profit in gaining more scientific expertise. Together, the two nations can expedite the process to new discoveries.

 

Omar Ishrak, Medtronic

Omar Ishrak, Medtronic Inc.

To redefine healthcare and increase access we need to optimize efficiency, clinical results, and costs. Omar Ishrak, Chairman and CEO of Medtronic Inc., presented models for collaboration that could help both countries in striking the right balance in the healthcare industry. Emerging technologies will transform healthcare access. To strengthen their value propositions, Ishrak encourages startups to examine the problem they are attempting to solve and focus in areas that already have the other pieces of infrastructure developed.

 

Duncan Logan, Rocketspace

Duncan Logan, Rocketspace

The conference concluded with Duncan Logan, CEO and Founder of RocketSpace, who spoke about creating innovation ecosystems. Logan emphasized the importance of a supportive environment to promote innovation regardless of geographic location. Logan believes that freeing up IP and encouraging students to think entrepreneurial is the future of India, as small businesses are already becoming the job driver in several nations around the world. Healthy entrepreneurial ecosystems boost efficiency and produce jobs for the future.

As India’s engagement with US is set to grow exponentially, the conference provided great insight into technological trends and opportunities to accelerate markets to India. Many speakers spoke about the importance of questioning the status quo, empowering the leaders of tomorrow, and alleviating poverty in India. The thought-provoking discussions that followed emphasized the need for simple, sustainable, and scalable solutions. By strengthening their relationship, the United States and India can help each other invest in building a brighter future. UC Berkeley and AIMA are proud to have developed a strategic alliance and look forward to partnering again to organize the next US-India conference.

_____

 

The US-India conference took place on July 8, 2016 at the Andersen Auditorium at the Haas School of Business, UC Berkeley. The conference featured prominent speakers including Nicholas Dirks, UC Berkeley Chancellor; Richard Lyons, Dean of the Haas School of Business; Rekha Sethi, Director General, AIMA; Preetha Reddy, Executive Vice Chairperson of Apollo Hospitals Enterprise Ltd.; Diane Farrell, Deputy Assistant Secretary for Asia, US Department of Commerce, International Trade Administration; Venkatesan Ashok, Ambassador of Consul General of India, San Francisco; Dr. Vishal Sikka, CEO of Infosys Ltd.; Solomon Darwin, Executive Director, Haas School of Business; Dr. Paul E. Jacobs, Executive Chairman of Qualcomm Incorporated; Ram K. Reddy, President-Elect, TiE Silicon Valley and Chairman, Global Industry Analysts, Inc.; Sam Pitroda, Telecom Inventor, Entrepreneur, and Policymaker; Sachin Pilot, President of the Rajasthan Pradesh Congress Committee and Former Union Minister for Corporate Affairs, Government of India; Satish Reddy, Chairman of Dr. Reddy’s Laboratories; Omar Ishrak, Chairman and CEO of Medtronic Inc.; and Duncan Logan, Founder and CEO of RocketSpace.

 

article written by
Anaïs SidhuAnaïs Sidhu

B.A. Economics, UC Berkeley Class of 2016

Concentration in Entrepreneurship and Technology

https://www.linkedin.com/in/anaissidhu

 

 

1  “PM Modi’s 7th Meeting With Obama Next Week. Here’s The Agenda.”NDTV.com. NDTV, 3 June 2016. Web. 2016. <http://www.ndtv.com/india-news/pm-modis-7th-meeting-with-obama-next-week-heres-the-agenda-1415051>.

2  Dawood, Ayub. “World Bank Lists India As ‘Lower Middle Income Economy’, Same Category As Pakistan.” ScoopWhoop. N.p., 2 June 2016. Web. 2016. <https://www.scoopwhoop.com/New-Nomenclature-Brought-By-World-Bank-Lists-India-As-Lower-Middle-Income-Economy/>.

Somvanshi, Kiran Kabtta. “World Bank to Change Classification of Countries; India Will Now Be Called ‘lower-middle Income'” The Economic Times, 31 May 2016. Web. 2016. <http://economictimes.indiatimes.com/news/economy/indicators/world-bank-to-change-classification-of-countries-india-will-now-be-called-lower-middle-income/articleshow/52512636.cms>.

4 Pilot, Sachin. “Sachin Pilot Latest Interview at Berkeley Haas – AIMA, US – India Conference.” Interview by Mateen Syed. YouTube. YouTube, TiE Silicon Valley, 11 July 2016. Web.

 

Shifting to the Power of Pull

Shifting to the Power of Pull

John Hagel
co-chairman Deloitte’s Center for the Edge
Chenyang Xu
General Manager , Siemens Technology to Business
Solomon Darwin
Executive Director, Garwood Center for Corporate Innovation
Erik Pena
Managing Director-Corporate Relationship Management, Silicon Valley Bank
Olga Patel
Sr. Manager/Principal Scientist, J.M. Smucker
Ayan Mukerji
President & Board Member, Zinnov
Kevin Kuhn
VP, General Manager, Mitsubishi

 

“If we’re going to make it through the Big Shift, we have to re-frame what we mean by innovation” said John Hagel at the joint roundtable with Berkeley-Haas and Siemens.  Innovation has become a loosely used term — Hagel suggests that innovation can be driven by the Big Shift and the Power of Pull.

What is the Big Shift?

The Big Shift transforms an organization from one stable state to another. It is moving from a world of push to a world of pull. Small moves, smartly made can set big things in motion. Organizations can make large scale transformations by taking action through a series of smaller steps. A push-base model becomes inefficient, because the company scrambles to find the right people at the right time. The goal is to move away from the power of push.  A pull-base model allows the organization to scale by successfully drawing out people and resources when and where they are needed. The objective is to establish a direction for long term and short term initiatives to strategize movement. People then learn to respond to long-term initiatives, and not just sense and respond to random activity.

How does an organization accelerate growth?

Re-think the business strategy! Hagel best explains it as the Zoom-In & Zoom-Out approach. Most companies focus on a 6 month trajectory (Zoom-In) or a 10-20 year trajectory (Zoom-Out).  What if companies began looking at the 5-year plan to find a core component within their organization to “Scale the Edge”? Companies can find a core edge to their current business that have the potential to scale.  Influenced by the Art of War, Hagel mentions that every company has an “enemy of change” (often competitors, etc.).  Therefore, large scale organizational transformation is not a rational process, but ­a rather lucid process that succeeds by identifying 3 objectives:

  1. Identify the enemies of change
  2. Strengthen the champions of change
  3. Don’t engage the enemy in battle

With the following objectives in mind, companies must think about resisting top-down approaches to transformation. The shift also occurs when an organization moves from Scalable Efficiency to Scalable Learning. Knowledge must be scalable to work within the organization. In a scalable efficient environment, movement is predictable, and there is little room for risk taking. In a scalable learning environment, people are driven by passion which leads to experimentation and possible scalable results. The driving force behind any successful company are its people. It’s about leveraging and re-structuring the individual and not just the work environment.

Seek out passionate employees, pull people from the core of the institution, don’t be threatened by the enemies of change, and shift to the power of pull!

Special thanks to all who attended the roundtable event hosted by Berkeley-Haas and Siemens. Thank you to John Hagel, our guest speaker for a stimulating discussion.  For an overview of the attendees, please visit our website, here:http://corporateinnovation.berkeley.edu/john-hagel/

A World Wide Network of Open Innovation Experts

A World Wide Network of Open Innovation Experts

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Renowned business leaders from across the globe traveled to start-up haven, Silicon Valley, for the 2nd Annual World Open Innovation Conference on November 18-20, 2015. This sold out three-day event hosted over 170 dynamic industry and academic leaders for an opportunity to dialogue about Open Innovation.

Now in its second year, the World Open Innovation Conference serves as a unique space where both industry leaders and academic scholars meet to network, collaborate, and learn about the latest Open Innovation research and practices. This year, the event honored transformational leaders, start-ups, and researchers. The Garwood Center for Corporate Innovation honored winners of the Best Emerging Scholar Paper and Best Student Paper (sponsored by the Garwood Center); and Berkeley-Haas Open Innovation Awards in the following categories: Start-Up Disruption, Business Model Transformation and Distinguished Leadership in Open Innovation (sponsored by NineSigma, Inc.).

Mahesh Krishnaswamy

Mahesh Krishnaswamy

The conference hosted sought after industry professionals from world-renowned companies. The pre-conference event began with a tour of the Google Headquarters, followed by an invigorating talk from Mahesh Krishnaswamy, Head of Manufacturing for Google (X) Project Loon. Attendees learned about Google’s innovative project to provide hot air balloons for consumer internet coverage in rural areas. The connection between google’s current innovation projects and Open Innovation was highly noted, and led to thought provoking questions from the audience. This event began the 2nd Annual World Open Innovation Conference, and set the tone for the remainder of the event.

 

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The first day of the conference began with a warm opening speech from Professor Henry Chesbrough. He shared his vision for why the World Open Innovation Conference is in existence, and attributed much of the success to the attendees who have themselves become forerunnuers in Open Innovation, students of Open Innovation, and practitioners in Open Innovation.

On the first and second day of the conference attendees heard from many of these Open Innovation leaders, such as: John Stewart, Head of Silicon Valley Solutions at The Royal Bank of Scotland; Leaders from Deloitte, General Electric, IBM, Siemens, Baker Hughes, HCL, Pfizer, Xerox, Apollo Hospitals, Oration, UnitedHealthcare, Optum, and SAP. Their Open Innovation experiences described how Open Innovation has helped steward their company’s success.  Dr.Piyush Modi, Head of Mobile Labs at GE, talked about the impact and need for Open Innovation in intelligent infrastructures in order to efficiently support consumers. Likewise, SAP shared their Open Innovation business models and how it has helped train and retrain new and existing employees.

Chief Executives Officers from multinational companies shared how Open Innovation has directly attributed to their company growth and achievements. In an intimate networking environment, the exchange of ideas combined theory and practice by unifying academics with industry leaders. Researchers and multinational companies comfortably shared their failures, problems, and solutions. The World Open Innovation conference is a true testament of the power of Open Innovation across industries and within the academic world.

“The energy, participation, and dialogue on the topic of Open Innovation is a result of all of your actions” said Professor Chesbrough. Thank you to all who attended the 2nd Annual World Open Innovation Conference, and for making it another successful event. We look forward to seeing you at the 3rd Annual WOIC in 2016!

A Closer Look at Transformational Innovation

A Closer Look at Transformational Innovation

CIO Roundtable guests
Solomon Darwin Introduces Dr. Brandon Barnett
Dr. Brandon Barnett
Director of Coporate Strategy, Intel
Kenneth Goldman
CFO, Yahoo
Bob Miller & Christine Deakin
Miller: Director of Innovation & Partnerships, Nestle Purina; Deakin: Chief Strategy Officer, Wells Fargo
Bob Swan & Jeff Rosenthal
Swan: Chief Financial Officer, eBay ; Rosenthal: CEO , Center for Executive Education, Berkeley-Haas
Mohi Ahmed
Director of Open Innovation, Fujitsu
L-R: Russell Pyle, Swati Dasgupta, and Duncan Logan
Pyle: Co-founder and CEO, EMG Digital Media; Dasgupta: Director of Venture Technology, Siemens Technology-to-Business; Logan: CEO & Founder, Rocketspace
L-R: Barbara Holzapfel, Vivek Wadhwa, Marion Pyle, and Russell Pyle
Holzapfel: Chief Marketing Office, Addepar; Wadhwa: Vice President of Innovation, Singularity University; Pyle: Co-founder and Chief Creative Officer, EMG Digital Media
L-R: Amit Varma, Pradeep Kathail, Shinji Asakura, and Todd Schofield
Varma: Chief Strategy Officer, HCL America; Kathail: Chief Technology Officer, Cisco; Asakura: General Manager Global Research, GE; Schofield, Managing Director, SC Studios Tech
L-R: Jayashree Subrahmonia, Maria Carkovic, and Robert Miller
Subrahmonia: VP Development and Delivery, IBM Watson; Carkovic: Executive Director, Institute for Business Innovation, Berkeley-Haas

 

On May 22nd, the largest Chief Innovation Officer’s roundtable was hosted at the Yahoo Headquarters in Silicon Valley. Over 20 C-Suite level executives from the surrounding area contributed to a lively discussion and participated in the most thought-provoking roundtable (view attendee list here).

Dr. Brandon Barnett, Director of Corporate Strategy at Intel spoke about Transformational Innovation, and highlighted key concepts that have caused a shift across different markets. “Digitalization is happening all around us” he says, “70% of growth comes from transformational innovation, and yet we only invest 10%”. Today, transformation can be easily seen in the growing data, the internet, and in the realm of technology.

In this digital world everything is constantly changing, and as a result, there needs to be a shift in how we think about developing strategy. Markets emerge from a stable market to an ecosystem of constant change. Barnett explained that markets are relatively stable networks punctuated by moments of change, while ecosystems are relatively dynamic systems punctuated by moments of stability. The internet and its accessible data has become a platform for accelerated growth that has also facilitated a cultural shift.

How has this shift in technology and the overall structure of the business ecosystem changed? What can be done to prepare for transformation? And more importantly, how can the available data determine stability within our markets?

Barnett suggested action items to better understand the transformational shift. We-The-Data (WTD), an open source platform, and the world’s first crowd-sourced complex network helps identify the levers to catalyze an entire system. He also visualized the evolution of the computing ecosystem, as it allows us to look at start-ups to understand where new value exists. Transformations become apparent when we can utilize emerging tools like network visualizations of the computing ecosystem and complexity tools like WTD, which identifies key levers, such as: Platform Openness, Data Literacy, Digital Infrastructure, and Digital Trust. The value of personal data reveals emerging shifts and new trends become apparent. (see more here)

So how do you decide which method is sustainable for your company? Barnett suggests the MVE (minimum viable ecosystem), a low-cost and a rapid way to test the sustainability of a configuration (i.e. network) of resources and stakeholders, it is a shift from the current MVP (Minimum Viable Product) approach, which only tests a product. In his MVE example, investments were made in small companies to test if they could thrive with a non-advertising business model, where the provided technologies allows them to create value that people are willing to pay for.

Innovation is imperative in any transformation, but you have to know your competitor. “As drivers of Innovation, we don’t need to be focused on the highway ahead, but instead look to the right and to the left” (Philipp Skogstad, Senior Director, SAP). The next innovative idea is not in the future, but in the “Start-Ups of the Silicon Valley—we can’t predict who is coming towards us, but we can identify the competitor” says Vivek Wadhwa (Vice President of Innovation and Research Singularity University). However with the ever-changing market, when do you kill an innovation project and when do you keep the product alive? Bob Swan, CFO at eBay suggests: Innovation to define an idea and determine its value. Overall, Open Innovation is needed to improve the business model, improve its capabilities, and to understand the transformation and innovation within the changing business landscape.

 

 

 

President of India Hosts Global Innovation Round Table

President of India Hosts Global Innovation Round Table

President Shri Pranab Mukherjee & Professor Solomon Darwin
Professor Darwin meets with the President.
President Shri Pranab Mukherjee & Professor Solomon Darwin
President's Roundtable
President presiding over the meeting
Ms. Omita Paul, Secretary to the President & Solomon Darwin
Muhammad Yunus, Nobel Laureate and Professor Solomon Darwin
Dr. Anil Gupta & Professor Solomon Darwin
Dinner at Rashtrapati Bhavan, New Delhi, India

 

Hosted by the President of India, Shri Pranab Mukherjee

Rashtrapati Bhavan, New Delhi, India


Opening Remarks by Solomon Darwin, Berkeley-Haas, School of Business,

March 8th, 2015

Dear Honorable Chairman,

I would like thank you and his Excellency, the President of India for inviting the Haas School of Business, University of California at Berkeley, to this historic first Global Innovation Round Table at Rashtrapati Bhavan. I would also like to thank my friend and colleague, Dr. Anil Gupta of IIM, Ahmedabad and the Executive Chair of the National Innovation Foundation who is the spirit behind this most needed event. Berkeley-Haas School of Business and the Garwood Center for Corporate Innovation applauds this effort and is happy to participate in this event.

Our center collaboratively works with many universities, knowledge creators, government entities and multinationals across the world to promote relevant and sustainable solutions in this ever changing economic and business landscape. We are excited to participate and explore the value we could bring to this table in years to come.

Our center engages with many fortune 100 firms across key industries, three times a year. These firms have been the backbone of our US economy for many years but due to their size, legacy, culture, and infrastructure, many of them have become dinosaurs and lost the agility to move fast; they change direction and keep adapting to exponential changes, as innovation comes to us at a much faster rate than we realize. We lead this effort by engaging with Chief Innovation Officers of these firms as well as various government agencies around the world.

We are firm believers in “Open Innovation” a concept that goes against base human nature to adapt, change, embrace and share. UC Berkeley is the home of “Open Innovation” the word was first coined by Professor Henry Chesbrough, the faculty director of our center, whose research and work has been internationally recognized and applied. Open Innovation has a broad application in Technology Development, Business Models, Services, and Marketing. Open Innovation needs to be applied across the entire supply chain to capture its full value. We are seeing its increasing value in development of public policy, creation of smart cities and efficient operation of cities and governments at large.

Unfortunately, most often, Open Innovation is incorrectly defined and applied by most entities. Open Innovation is not merely soliciting and incorporating external ideas and knowledge into one’s business model, it is a two way street. It also seeks and explores internal ideas and knowledge; it helps incorporate it into someone else’s business model for a strategic advantage. The flow of knowledge creates a strategic advantage and a more sustainable ecosystem, for the firm and society at large. This calls for disruptive models for which the landscape is not accustomed to. Open Innovation is not free – it is not open source.

Increasingly, companies that have embraced Open Innovation have been doing better and flourishing in this current landscape. Not many embrace Open Innovation as I defined it.

quoteWhat made America great is not “Open Innovation” – it was “Closed Innovation. In the past and even today, knowledge useful to society is protected in fortresses like R&D centers, AT&T Bell Labs, Phillips, IBM research. Those who have the knowledge, benefit by protecting it and hoarding it as stock on the balance sheet. Closed Innovation only makes some great––Open Innovation makes everyone great!

In 1945, a great British economist, Fredrich Hayak said “Knowledge is unevenly distributed in society.” This helped those who acquired it, hoarded it and protected it, but only few in society benefited from it – this was closed innovation. In 2003, William Gibson said: “The future is already here – it’s just not evenly distributed”

The web has changed everything – knowledge wants to be free and now it flows from high to low, providing access for everyone to innovate. The barriers of distance, time, communication and knowledge have decreased by creating new challenges for the legacy companies that we work with. Now, there seems to be no other way for organizations other than to open up and benefit from strategic exchange of knowledge sharing in order to create better value propositions for the society at large.

During World War I, II, and until the Cold War, most knowledge created at Berkeley and Stanford and other prominent US institutions was classified as top secret. About 70% of the PhD thesis of engineering and physical sciences at Berkeley and Stanford were classified during that era. We held knowledge and leveraged it to become powerful.

The knowledge that was created at these universities gave birth to many Silicon Valley industries. After the wars ended, the US government gave tax incentives to these firms to commercialize their knowledge into electronic consumer goods and mobile technologies that we now enjoy. Empowered by the internet as knowledge flows from high to low, it creates more disruptive business models that present a challenge to the large legacy companies that were once the backbone of the economic engine.

Most companies that we work with at the Garwood Center are plagued with the following issues as basis for change in competition:

1. Short product life cycles: this means an increase in innovation cost.

2. Speed to market: requires firms to work in collaboration with others to gain speed.

3. Unpredictable value of Knowledge Assets: they evaporate quickly – now dominate 80% of our balance sheets, vs only 20% in 1975.

4. Facing the Unknown: competition shifting from “known” to “unknown” – it is easier to fight goliaths whose strategy is known.

5. Nature of competition: the focus is shifting from completion among firms to fight an entire ecosystem.

6. New Product success: shifting from “Minimum Viable Product” to “Minimum Viable Ecosystem.”

7. Achieving scale: shifting from “supply chains” to “networks” that are independent and cost effective.

8. Business Models: shifting to “outcome based” as “supplier based” models diminish.

9. Context exceeds Content (big data): delivering value in real time as and when needed by consumers.

10. Open Innovation challenges: developing processes to capture the global brain, timely and efficiently.

11. Balance Sheet Power is declining: Asset Ownership loosing way to Asset Access, i.e. Airbnb and Uber.

According to Professor David Teece of Berkeley-Haas, whatever is essential is no longer found on the balance sheet – it has migrated to the Dynamic Capability of talent required within the organization. Dynamic Capabilities can sense, seize the opportunity and transform the business landscape through rapid deployment – for immediate impact – it is in the orchestration of assets rather than in the assets themselves from which value is now derived.

The days of high margin products are long gone! The large legacy companies that have long been the economic backbone of many western countries now seek new and more disruptive models. These models demand low margin products at high value to be relevant to the emerging world’s largest consumer base in India and China.

Yesterday, we spoke about engaging and exchanging students among our countries to foster inclusive innovation. At Berkeley-Haas, we have already started this process – I brought my students to India during the past two years to learn and study how the GEs and the IBM’s of the world can be relevant low margin businesses. Students of this digital generation came up with good models.

Last semester, I taught a class called “IBM Watson Leveraging Open Innovation”. The smartest computer on the planet, available via the cloud, and with 24/7 access around the world. Watson understands and communicates in natural language and processes over a million records per second. The question is “how relevant is this asset to the poor person in India?” My students worked with Apollo Hospital group in India to create business models that would create value to the Indian population that cannot afford this computer.

Our models with Apollo revolved around making Watson accessible at no cost to the poor person in remote villages via the smart phone. How does the poor person get advice and diagnosis at no cost and only pay outcome based services? How can IBM make money and how can Apollo Hospital Group make money? This was the challenge and many great solutions were offered by the students.

The course I am teaching this semester is called “Building Smart Cities Leveraging Open Innovation.” My students and I found it valuable to visit India, to learn from your models. In the spirit of Open Innovation we’d like to learn as you learn to build smart cities, and exchange ideas with you. We spent a couple of weeks this past December and January and visited the Gift City and other cities in India. We met with builders, academics, citizens and policy makers to touch, feel, and smell the landscape, to innovate and propose frameworks for the next several years. Smart cities are supposed to produce triple bottom line, while saving time and costs through technology and open business models that benefit the entire citizenry and the ecosystem surrounding it.

As of today, our students have completed preliminary frameworks for the cities selected by Prime Minister Modi and President Obama: Ajmer, Vizag, Ahmedabad, and the Gift City.

This fall, to further this effort knowledge exchange among executives between both our countries, I am leading a group of senior US executives to India to learn about your business and regulatory landscape. I believe that this will create value for all parties that will be involved.

We like to continue this collaboration in the spirit of Open Innovation as your great nation forges and leapfrogs ahead in the new emerging economy.

Berkeley-Haas & Garwood Center for Corporate Innovation will be most happy to collaborate with entities that surround this table in the spirit of Open Innovation. We would be happy to share our research, experiences and network and equally benefit from knowledge that is disseminated by each organization represented here to benefit the global society as a whole.

Solomon Darwin
Executive Director
Center for Corporate Innovation
UC Berkeley-Haas School of Business