Archivo del January, 2012

Henry Chesbrough at the European Innovation Convention

ESADE Professor Henry Chesbrough, a leading global expert on innovation, discusses the importance of open innovation and public policy in Europe at the Innovation Convention 2011, an event organised by the European Commission.

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The European Paradox

The European Paradox refers to the difficulties that European economies have had in transforming their success in basic research into commercial success. One major obstacle is a highly fragmented European patent system – one that policymakers have been trying to harmonise for years. Given recent trends in open innovation, the challenge is taking on new dimensions, and ESADE is proud to be offering guidance to the European Commission about this important challenge.

One of the largest challenges facing the European economy is what has been called the “European Paradox”. Simply put, Europe has long been a leader in basic research, attested to by the numerous Nobel Prizes awarded to the faculties of such famous institutions as Oxford University, Cambridge University and the Swiss Federal Institute of Technology. Yet the ability to take this basic research and commercialise it – to bring it to the market in the form of products and services that people are willing to pay money for – has been elusive to many European economies compared to their competitors in North America, India and Asia.

So what are the best policy tools public officials have to address this? One important mechanism is patenting. Patents are a set of rights granted by a government to an inventor for a limited period of time in exchange for the public disclosure of an invention. The general economic rationale is to facilitate and encourage the disclosure of innovations into the public domain for social value. If inventors did not have the legal protection of patents, in many cases they would prefer to keep their inventions secret. It is best to allow inventors some reasonable economic gain in order to push research discoveries out of minds and laboratories to where they can better serve society. But how much is a “reasonable” return? This varies tremendously from country to country and across products and sectors. Initially, one would think that patents awarding the greatest protection are optimal. But this is not necessarily the case. At some point, it becomes desirable that the invention, once well established, should enter the public domain as common social knowledge. Moreover, society benefits from extending, not constraining, its usage.

However, no real agreement exists on how patents should be structured across countries or industrial sectors. Within Europe, there is tremendous fragmentation across countries concerning patent laws, and this presents a considerable barrier to the commercialisation of research in the EU. Consider that anyone seeking patent protection must file it in each country they are seeking to sell to, and that nearby regions with relaxed enforcement poise a constant threat of dilution of such rights. Consequently, gaining a common EU patent regime has long been a public goal of the European Commission – one that, thus far, has been elusive. A universal patent regime implies increased transparency and competition across national markets, and has not been well received by all member nations.

ESADE is privileged to be providing the European Commission guidance about the formulation of such a Europe-wide patent regime, primarily under the premise of open innovation. An open innovation paradigm may imply little or no patent protection. Paradoxically, in such a paradigm, patents are used to encourage the sharing and recombination of innovations, rather than their concealment. But it is a question of finding balance, and if history offers any guidance, the task is no easier today than it ever has been. We look forward to supporting the European Commission in this difficult endeavour.

Jonathan Wareham

Vice-Dean of Research at the Business School

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The five-step guide to a new innovation policy

Government databases could be a powerful new spur for innovation, according to a leading global expert on innovation, Prof. Henry Chesbrough of ESADE Business School and the University of California, Berkeley. “Governments are the owners of the largest databases in the world with unprecedented possibilities for new and functional technologies, and information for commercial and other uses,” writes Chesbrough and colleagues in a new study of ‘open innovation’ policy.

Chesbrough presented his report during the European Commission’s Innovation Convention 2011 held yesterday in Brussels and opened by José Manuel Durão Barroso, President of the Commission. The report was commissioned by the Science|Business Innovation Board, a Belgium-based non-profit scientific association founded by the business schools ESADE and INSEAD. Chesbrough co-authored this report with Wim Vanhaverbeke, professor at ESADE, the Vlerick Leuven Gent Management School and Universiteit Hasselt (Belgium).

Open and innovative governments

One of the report’s main lines of thought is a firm belief in open and transparent governments. Policies of open governments allow greater politician-citizen interaction and improved efficiency and co-responsibility between the government and the general public. Open government policies in many countries are permitting citizens to interact directly with agencies and manage information about themselves – and in the process produce a more efficient government administration, argues Prof. Chesbrough. At the same time, databases of patents, land deeds and other publicly available data are growing – and could become a vital new tool for jobs and growth. But, he cautioned, it will be a difficult job for policymakers to strike the right balance between openness and privacy with the data.

However, the report written by the ESADE professors goes further and notes that governments have the world’s largest databases, with enormous possibilities to create new applications in technology, information, commercial purposes and other uses. Government databases can give a major push to innovation, and innovation could be one of the best tools to aid job creation and economic growth. What’s more, technical and scientific studies, public information or patent registers can be of great use for research if they are shared and made public simply and openly. On this note, the report mentions government-promoted scientific research in areas such as aerospace engineering, railway systems and major infrastructures, from which useful commercial applications for society can be drawn, as has happened in the US with NASA studies, for example.

The five-step guide to a new innovation policy
The report also outlines a five-step guide to break away from current innovation-related public policies implemented in Europe, which have focussed on local markets, protectionism for domestic companies, limits on foreign students and workers or on giving grants mainly to large European and domestic companies. Therefore, the report calls on Europe’s governments to:

– Boost university student mobility, not just within the EU, but around the world.

– Increase meritocracy in research funding, taking into account excellence and not merely territorial criteria, thus raising competition and competitiveness between universities or research centres and agencies.
– Cut intellectual property transaction costs and create a single European patent.

– Promote cooperation and competition. Abandon policies supporting large national companies and start backing SMEs so that they can innovate, grow and expand to compete with the major players. Encourage cooperation between companies and universities, research centres and start-ups.
– Encourage open and transparent governments. Make databases, public information and patents public and accessible to all citizens, which would foster innovation and, in turn, boost the economy.

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