when you arm the health sector with an array of new information and communication technologies (ICTS) that promise to revolutionise the delivery of care?
and so have been rapidly increasing investment in the new technologies. 1-3 The rhetoric of vendors
Stable investments are required that allow organisation-wide, flexible systems to be implemented in a relatively short time,
and processes by creating opportunities for health professionals to take on new roles and to provide care in different and innovative ways.
Such systems create opportunities for health professionals other than doctors to order certain tests and to make treatment decisions
and communication technology disrupt the health system and deliver on its promise? Johanna I Westbrook and Jeffrey Braithwaite ABSTRACT Investment in information and communication technology (ICT) in the health sector can bring important benefits.
To date, the focus has been on automating clinical work practices such as ordering tests and prescriptions, which significantly improves efficiency and safety.
and procedure manuals and assess how ICT can create opportunities for supporting new care delivery models rather than replicating existing practices.
Until we heed this lesson, we will continue to see ICT as a mere tool for automating existing activities further entrenching existing problems rather than as an opportunity for truly reforming health care delivery.
25: 147-148.17 Department of Broadband, Communications and the Digital economy. Australia's digital economy: future directions.
68: 104-112.23 Zuboff S. The emperor's new information economy. In: Orlikowski W, Walsham G, Jones M, et al, editors.
benchmark them with non-European poles, observe their dynamics and offer a thorough analysis of their characteristics.
and economic activity distributed and how is it evolving in Europe? What locations are attracting new investments in ICT R&d or manufacturing?
What is the position of individual locations in the global network of ICT activity? To date, the following additional publications have emerged from the research:
and opportunities worldwide (Bartlett and Ghoshal 1990, Dunning 1988, Dunning 1994). These"metanational"companies are increasingly building a new kind of competitive advantage by discovering,
Examples of such externalities may include increased competition for skilled labour or R&d spillovers available to other companies.
This way we illustrate the direction in which multinational enterprises (MNES) move to seek R&d assets around the world.
For example, until recently, R&d internationalisation has been limited to a small number of developing countries and economies in transition (UNCTAD 2005.
In developed countries, for example, it is feared that the competition for R&d resources has an impact on domestic R&d expenditures and on the domestic knowledge base.
These sectors are seen as essential to advanced economies. Thus, policy makers fear that the potential loss of local inventive capacity in high-tech industries to other regions could harm their competitiveness
and undermine the state and development of their knowledge-based economies. Taking into account the gap in our understanding of the dynamics of global R&d organisation
we graphically and analytically study the characteristics of international R&d centre networks 7 and the relationships between countries that import and export R&d services.
Nevertheless, the majority of sectors can be described as high-tech industries in which technological competition and, hence,
2, 25 12 Computer Services 4 2, 34 109 3, 36 13 General Industrials 4 2, 34 172 5, 30
14 Health care Equipment & Services 4 2, 34 57 1, 76 15 Household Goods & Home Construction 4 2, 34 109 3
Support Services 1 0, 58 3 0, 09 171 100 3247 100 Source: Own calculations.
This is a sign of the important position of China as an active actor seeking R&d opportunities abroad,
and not only a destination of R&d investment from other countries. Figure 1: The global network R&d a) Nodes weighted by the number a country's overseas R&d centres b) Nodes weighted by the number hosted R&d centres Source:
From the point of view of geographically dispersed economic activity, like in the case of international trade or international R&d activities, the issue of node clustering is very informative,
Interestingly, also China scores high on the in-degree ranking, casting some light on the increasingly more important role of Chinese companies in seeking R&d opportunities overseas.
but also as a source of foreign R&d investments. Regarding the level of out-degree, the number of linkages with other countries,
or the knowledge about customers and markets. Another reason to engage into international R&d activities is the access to the market and hence,
the potential size of the economy should be taken also as a predictor of link formation among countries.
'Journal of International Economics, 81:1, 1-14..For more information please refer to: http://www. cepii. fr/anglaisgraph/bdd/distances. htm 7 Data stems from the IMF.
which might attract R&d-related investments. On the other hand from the perspective of an R&d owning country,
or trade in R&d services can affect the existence or establishment of such linkages between a different pair of countries.
i e. distance, common language, the economy size, have expected the signs, though, in some cases are not significant.
that the relevant coefficients show strong and positive impact on foreign R&d investments. A straightforward interpretation is that the readiness of inventors to collaborate with their international colleagues is associated positively with the number of both offshore R&d centres of country
log of distance between two the capitals of each pair of countries; dummy variable controlling for common language;
i e. it has usually been shaped by a one-sided perspective defined by the notion of competition.
The emerging network structure of the R&d system is providing opportunities for countries and managers
so that they can spot opportunities and act on them. Thus, the results of this paper allow us to formulate the following implications with respect to the emergence of the global R&d network and innovation policy:
Rather than designing policies driven by the notion of competition for innovation recourses and the corresponding payoffs,
as compared to the number of countries procuring these services. A country's attractiveness as a location for R&d activities and hence its bargaining power will strongly depend on its technological uniqueness. 3. Third
like enterprises (Harrison 1997), by linking up with larger partners, smaller countries can reach global markets more quickly or at lower cost than through independent expansion.
This creates an opportunity for countries already established in the network to go out beyond the traditional groups
Foreign and Domestic R&d Investment. Kunitachi, Tokyo: Institute of Economic Research, Hitotsubashi University. Bonacich, P.,Oliver, A. & Snijders, T. A b. 1998.'
'Economics of Innovation and New Technology, 19:1, 71-86. De Benedictis, L. & Tajoli, L. 2011.'
'forthcoming in The World Economy. De Prato, G. & Nepelski, D. 2012.''Global technological collaboration network.
How Companies Win in the Knowledge Economy. Harvard Business Press. Dunning, J. 1988.''The Eclectic Paradigm of International Production:
'Multinational enterprises and the globalization of innovatory capacity.''Research Policy, 23:1, 67-88. Edler, J. & Polt, W. 2008.'
'Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy. Florida, R. 1997.'
'Market Dynamics and Quantitative Economics Selection of papers presented at the First Bonzenfreies Colloquiumon Market Dynamics and Quantitative Economics, 355:1, 138-44.44 Gibbons, D. E. 2004.'
'Journal of International Economics, 81:1, 1-14. Koschützki, D.,Lehmann, K. A.,Peeters, L.,Richter, S.,Tenfelde-Podehl, D. & Zlotowski, O. 2005.'
'The Drivers of Foreign Direct Investment into Research and development: An Empirical Investigation.''Journal of International Business studies, 30:1, 1-24.
'Structure and Dynamics of the Global economy: Network analysis of International Trade 1965-1980.''Social Forces, 70:4, 857-93.
'World Investment Report 2005. Transnational Corporations and Internationalization of R&d.''New york and Geneva: United nations. Watts, D. J. & Strogatz, S. H. 1998.'
environment and climate change; energy and transport; agriculture and food security; health and consumer protection; information society and digital agenda;
The objective of the study is to document the existence of innovation gaps between the EU and its main competitors in specific ICT sub-sectors namely web services,
industrial robotics and display technologies and to explore the role of government policies in Europe's future needs for innovation in information and communication technologies (ICTS) through a comparison with the USA and Asian countries.
US companies have been the most innovative in web services. Meanwhile, Asia is much stronger than both the USA
which the start-up can profit. Thus a further role for public policy is to support the formation of clusters, typically a lengthy process,
Governments can also encourage innovation through appropriate intellectual property and competition laws and, more generally, through the development of a business environment conducive to innovation.
11 2. US-EU Innovation Performance in Web Services, Display Technologies and Robotics...13 2. 1 Web services...
15 Apple key lessons...16 Google key lessons...18 Amazon key lessons...19 Skype key lessons...
Case studies Web Services, Display Technologies and Robotics...57 A1. 1 Web Services...57 Apple Corporation...
57 Amazon...60 Google...62 Skype...66 XING AG...71 6 A1. 2 Display technologies...
105 7 Executive Summary Innovation in US and EU companies was analysed in three ICT subsectors (web services, display technologies,
US companies have been the most innovative in web services. Meanwhile, Asia is much stronger than both the USA
with web services estimated at about €70 billion, flat panel displays worth about €75 billion and robotics valued at about €19 billion.
early value chain innovation challenges major industry investments in the upstream value chain sections, which tend to be capital intensive due to their high volume investors
therefore hope that these investments will be long-term. For example, though OLEDS did not expand much in market share between 2009 and 2012,
and the industrial investments amortised. A key lesson from analysis of the three subsectors, particularly web applications, is the critical importance of higher education
which the start-up can profit. Thus a further 8 role for public policy is to support the formation of clusters, typically a lengthy process,
They require long-term investment in human capital often around a centre of technological excellence, such as a university
The role of government in relation to collaborative innovation is to encourage, through appropriate competition laws, which permit shared patent pools for potential innovators under certain conditions,
due to the advantages for innovating enterprises of a solid IP base at minimal cost, with the additional major benefits of the avoidance of litigation threats.
and design libraries to encourage common shared intellectual capital as a general basis for innovation in Europe has advantages for innovators and governments.
processes and services must extend, in education especially, into the industrial and graphic design industries.
where long-term innovation has worked well with an effective‘triple helix'of private sector entrepreneurship, various forms of public sector backing and academic support.
it is necessary to create an innovation friendly environment: low administrative costs, tolerance towards business failure, a friendly business climate,
and a large and integrated market (including venture capital). The Amazon case shows the importance of the business environment, the existence of a single market and the efficiency of services.
Finally, the public sector can provide important financial (e g. SBIR type instruments, which was crucial in the case of irobot) and nonfinancial support.
As for the latter, cluster-generating policies have been shown in several case studies to be important. 11 1. Introduction This study is part of a larger initiative investigating differences in innovation performance between the EU and the USA.
Using a case study approach in three ICT sub-sectors (web services robotics and display technologies) the study examined the following questions:
XING in web services; Novaled, E Ink, CDT and Plastic Logic in displays; and in robotics, Shadow Robot, R. U. Robots;
They are often the motor of innovation as they are prepared to follow new business models, pursue new product areas and upset the established competitive balance, without the inhibition of an already successful revenue stream and established market position.
Thus SMES benefit from special conditions, such as clusters, incubators and early support from venture capitalists. In consequence SMES deserve particular attention
Chapter 3 ends with the policy suggestions that emerge from our analysis. 13 2. US-EU Innovation Performance in Web Services,
Web services, Display technologies, Robotics. Annual global revenues for the three sub-sectors show their relative significance,
with web services estimated at about $92 billion (about €70 billion), 3 flat panel displays worth about $99 billion (about €75 billion) 4 and robotics valued at about $25 billion
Clearly US companies have acquired a dominant position in web services, quickly building on innovative breakthroughs in software, design and new business models (e g.
and other services yields an industry total of $ 92 billion. However this is open to question as all Apple's products are driven by online services,
See the web services value chain in Appendix 3 for the verticalization strategy used by Apple, Google, etc.
4 UK Trade and Investments, 2010, Flat Panel Displays, quotes Displaysearch, 2009 figures. 5 SCF Associates Ltd, 2010.6 Unfortunately the United states lags behind other countries
While the European union, Japan, Korea and the rest of the world have made significant R&d investments in robotics technology, the US investment,
and supporting the customer (especially SMES) it might be necessary to stimulate the demand side for new"soft robots"with a high safety function, for the promising care and SME markets.
and real demand is important for early sales and then sustained operations. Hence demand from the automotive sector, for example in Germany
In web services, however, the USA does lead, owing to combinations of successful first mover advantages, network effects and increasing returns.
and eventually acquired by leading USA web services players, first ebay and now Microsoft. In the following sections we analyse in more detail the development of companies in the three sub-sectors,
and we discuss the lessons that can be learnt from the case studies. 2. 1 Web services For this sub-sector,
First, the capital investment required to start an internet-based operation is relatively low. Start-up costs can be minimal
but overall the finance needed for a web services business will typically be millions or tens of millions of dollars,
Most capital demands are restricted to web server farms (see the web services value chain in Appendix 2) and even these can be hosted by third party data centres who offer website services for start-ups.
Second, in the web services sub-sector, a successful venture will reach break even and commercial viability relatively quickly, usually less than five years.
if a web services start-up is not profitable within five years the founders and investors will probably have moved on.
As a consequence there is little opportunity and no real need for public sector involvement. Nevertheless, some of the successful examples we see in the USA have benefited certainly from existing cluster effects for
These US clusters have drawn on government local investments for R&d especially in military projects the early founding of the semiconductor industry in Silicon valley and the 1950s military industrial complex in cities such as Seattle with Boeing.
But these clusters are the legacy of investments made from two to five decades before in electronics and avionics,
and leading on to the West Coast around Stanford and UCLA. In contrast, the EU initiatives in web services that are successful tend to occupy specialized niches in the market.
Both niche players and globally successful European ventures are attractive targets for acquisition. Skype, for instance, is an example of a successful European web start-up that achieved global pre-eminence
(and accompanying business models) with global appeal in which the EU can develop major players. However the low cost of entry, availability of VC investment and speed of innovation seems likely to cement US advantage.
Apple key lessons The Apple story is informative both from the point of view of its initial start up
and growth as a hardware manufacturer but also because of its later reinvention and move into web services.
and third, novel, even revolutionary, business models. Throughout its history Apple has dared to be different, choosing to pursue new paths rather than follow market trends,
and so moving to integrate web services into that experience was a natural course and part of its emphasis on design for ease of use.
because Apple had noted the enormous difficulty of using MP3 players, particularly with web services and PCS, at the time.
Apple thus moved into web services coupled to its Macintosh range, creating proprietary protocols for access
The key lesson here is to create verticalization using web services as one component (see Appendix 2 on value chains.
second, early value chain innovation challenges the major industry investments in the upstream value chain sections,
and so hopefully will be long-term investments. For example, OLEDS did not expand much in market share between 2009 and 2012, then in early 2012,
and the industrial investments amortised. Innovations early in the value chain must be accepted by the many other players who come later
each of which may influence our customers in the market, and the product manufacturer's supply chain,
and nurturing environment with mentors who were able to protect them and indulge their activities.
Amazon key lessons The more advantageous business environment in the USA was a key factor for Amazon's successful start up and growth in its first few years.
A large, single market assisted Amazon to bring economies of scale to bear on its low margin business model to establish its competitive advantage.
which brought high-level personnel for technical positions, for building and then running web services in vast data centres with fast transaction processing, large customer databases and data mining for refined data analysis,
Strong network effects are important in web services for both viral marketing for retail but also networks of business angels,
VCS and others who can support nascent ventures in a variety of ways, for instance, identifying specialist staff to manage large data centres
The trust of customers is paramount and is higher in the USA than in the EU
Amazon's customer databases hold names, addresses, telephone numbers, email addresses, profiled preferences and, most important, credit card details of its 137 million customers.
The USA therefore proved to be a more conducive environment to launch a business that depended on holding such information with less need to reassure customers over privacy and security.
first the entrepreneurial and creative impetus came from two individuals who identified the opportunity for voice over the internet.
They combined this with the Estonian engineering talent that they had identified already in a previous venture to start Skype.
whether you can teach entrepreneurship or are born you with it. How can an entrepreneurial spirit best be nurtured
and financial capital were to be found. Besides Luxembourg, tax credits are available in most other Member States for investment in R&d (European commission,
2009) or for capital gains on shares in start-up companies. 7 VC funding was not readily available in Europe
The availability of venture capital and experienced venture capitalists continues to be a problem in the EU. Moreover
(i e. national state municipality/regional) as some Member States in Europe or Asia would attempt to bring together. 21 XING-key lessons Xing is an example of a relative European success in Web services,
Success has come from high quality management, a well-focused strategy and execution of a viable business model.
and capital investment as it is needed through their various board representatives. High access to funding and to its guiding VCS has been due to XING's reputation for good execution.
So if there is to be government support for new ventures in the web services sub-sector (with support for clusters, tax-breaks,
These niches may hold the best chances to thrive against heavy competition from the USA and elsewhere in mainstream web services.
are a source of unequal opportunity between US and EU web applications. This is an important issue
and e-paper offered a brief opportunity for European firms to re-enter the displays market.
Recent developments suggest that the opportunity has been missed. The EU has been largely absent from the displays market for the past two decades.
Characterized as a high volume production commodity market, production has moved mainly to Asia, especially Japan, Korea and Taiwan.
The current generation of flat panel displays 22 (LCDS) has required tight cost controls and large amounts of capital investment.
CDT, Plastic Logic and Bayer), it lacks the capabilities of Asian industrial product development and investment especially for complex technologies such as OLEDS.
Now that massive investment in LCDS has paid back, Asian manufacturers are starting mass production in the next generation display screens.
since investments in plant (about $4 billion/€3 billion per factory) have to be written off.
the Japanese government, through the Ministry of Economy, Trade and Industry (METI), persuaded Sony, Hitachi and Toshiba to merge their advanced display businesses for small/medium screens to form Japan Display,
http://www. talkoled. com/tag/oled-production/23 production in a $2. 7 billion (€2 billion) investment for both R&d and production.
with large amounts of capital (in the hundreds of millions of Euros) becoming available for medium high-risk ventures from the sovereign wealth funds typically from the Middle east,
and who bring the capital investment and large-scale manufacturing know-how together, supported by government. Cambridge Display Technologies (CDT) key lessons The role of higher education hosting leading edge research is highlighted once again by the case of CDT.
The time frame for commercialization of web services is typically short only a few years; for complex technologies and where the market has yet to develop,
business model and finance to overcome technological barriers and scale up the technology for mass manufacturing takes time,
which there has been enormous investment, as in the case of LCD. Faith that success will eventually come is needed to ensure provision of long-term stable investment.
In CDT's case in 2007 its US venture capital investors became aware that considerably more capital investment was likely to be needed,
beyond the estimated $250 m (€190 m) CDT had received already. When an attractive offer was received from long-term Japanese partner, Sumitomo Chemical,
While angel investors can seed start-ups, innovative companies of this type in need of sustained capital investment over many years.
while VCS who can offer more money are under pressure to exit their investments in a relatively short timeframe,
and business model and we may only speculate whether long-term capital investment would have led to pursuit of a different strategy.
Plastic Logic may now have found its long-term investor among the sovereign wealth funds. Perhaps they may become increasingly important investors in long-term basic technologies
Such funds are expanding rapidly in high-risk investments; they are based in countries such as Russia, China, the Middle east and Asia.
when released on a mass scale in the market but may be much harder to make profits from early on.
Although the Apple Macintosh did break new ground (with its injection of intellectual capital from Xerox PARC) it still relied on supply of the latest technologies from outside Apple (for its bit-mapped screen
In large part, this resulted from its general inability to relinquish a successful business model based on technologies that were being superseded in a classic case of creative destruction.
Kodak lacked funds for that scale of investment. Rather than develop and exit the business in a planned way,
which does not synchronize with the returns on investment which tend to be shorter term.
Japanese future robotics research is fixated on android services robots for a potential future in care and domestic service, for its aging population,
EU accomplishments result from well organized, long-term robotics investment programmes (such as Robotdalen) which has emphasized the security that comes from its 10-year investment from VINNOVA as being a major part of its success,
as well as local markets in the car industry across the EU which have featured long term R&d investments since 1970s in robotics for production lines.
(S i) services across the USA. These suppliers have sophisticated networks for channel partners for value added resellers 29 (VARS)
and provide S i services. For instance, the robotics headquarters for ABB (a Swiss conglomerate with many machinery product and service lines) is in Beijing,
The US Small Business Innovation Research (SBIR) programme provided significant funds for the company in its early stages rather than business angel or venture capital.
This was because the venture was considered too risky for venture capital investors. What we were trying to do was so risky that no rational investor would give us money, recalls Colin Angle
and business plan to achieve their objectives. Second, they found the funds to see it through the valley of death, initially from the US government's SBIR scheme.
Thus private venture capital is not suitable for funding because of its demand for rapid returns from medium/low risk ventures.
Thus clusters should include the customers for robotics as well as suppliers. Most useful would be a form of government insurance for smaller user companies,
Robotdalen has focused just as much on the demand side as in pushing innovation on the supply side.
and even students to introduce robotics through business cases and technical integration services, at reduced costs to new users.
Financial capital, Intellectual capital, Human capital, Cultural capital. In Figure 1, we present six phases marking the development path of a start-up company.
This also shows the four key innovation inputs financial capital, intellectual capital, human capital and cultural capital as a table, below the phases of development.
For example, financial capital at the critical"Valley of Death"could be funded by a VC a corporate VC (CVC), a state-owned or partially owned VC and an institution providing grants such as the US, UK or Dutch SBIR.
Inputs to the innovation process 34 At the Valley of Death stage, intellectual capital which has been created in the two previous phases now forms the basis of production,
Thus in the human capital required in this phase, two teams are now often necessary an R&d team that can take a prototype and turn it into a marketable offering and a team for industrial operations.
At this stage, the latter becomes the primary focus for acquisition of human capital. This team handles industrial scale operations
The cultural capital, of risk acceptance, becomes even more important at this stage, as the growth in human capital expands the workforce, perhaps many times, yet the level of risk due to the need for more funding capital,
and the uncertainty of market success, is perhaps greater than during the two earlier stages,
Financial capital Venture capital The traditional sources for company financing of long term innovative investment are: Retained earnings;
this source is relevant for capital investment for both conventional non-innovative projects and also for innovative projects;
Venture capital. Government subsidies: grants, loans, guarantees, tax concessions, VC ownership, 100%or less. In this section we mostly discuss the role of venture capital in funding web applications in the USA
and in EU. As we see in our case study, Apple computer was seeded by Mike Markkula, an ex-marketing manager for Intel,
as the XING case study, for instance, shows. 35 Such business angel investment has become more organized as a recognized source of finance for entrepreneurs over the past twenty years, especially for the earlier stage investments (Mason and Harrison, 2010).
if the venture is lucky, across the valley of death into first commercial sales. Yet, as Hall and Lerner (2010) point out,
small and new innovative firms experience high costs of capital that are mitigated only partly by the presence of venture capital;
evidence for high costs of R&d capital for large firms is mixed, although these firms do prefer internal funds for financing these investments;
there are limits to venture capital as a solution to the funding gap, especially in countries where public equity markets are developed not highly.
Internet start-ups are ideal VC investments, as our case studies of Google, Skype and XING show especially for US VCS,
characterized by rapid payback with low entry costs and are not capital intensive. Thus web services such as Facebook, ebay, Twitter, etc have been favoured strongly by the VC community.
Yet, the US VC industry has been investing in diverse sectors, and not only ICT or web applications and in large companies as well;
those public firms supported by venture funding employed 6%of the total public-company workforce most of these jobs high-salaried, skilled positions in the technology sector.
Clearly, venture investing fuels a substantial portion of the US economy. However, the USA has been much less successful in those technologies that require longer term investment and support such as robotics and displays.
One reason why web applications companies have been founded and grown in the USA is because VC funds have been more readily available in the USA,
VC funds could flourish thanks to the better investment opportunities in the USA (see below in Lerner 2011.
Why Public Efforts to Boost Entrepreneurship and Venture capital Have failed--and What To do About It (pp. 59-60.
US venture funds enjoyed average internal rates of return (IRRS) that were higher than those of the EU,
This suggests that an important cause of the performance gap was the existence of better investment opportunities in the USA.
A total of some $20 trillion of investments is available to governments having SWFS. The capital comes from various financial assets stocks
bonds, or other financial instruments, property, often from traded commodities, especially oil. Most SWFS use foreign exchange assets, 18 usually for investing in large infrastructure ventures or to take equity in major, stable corporations.
However the latter have sometimes proved illusory in their stability19 and so VC-style investment, in small quantities, is considered more.
The largest SWFS are those of the Middle east and Asia such as Abu dhabi's ADIA with $627 billion and China's SAFE, estimated at $580 billion as well as Singapore's'GIC and Temasek Holdings,
or Norway's Government Pension fund, GPF with $560 billion in assets. In 2011, SWF assets totalled $4. 8 trillion, 20 a record, following increases since 2008.
But in addition, some $7. 2 trillion was held in other sovereign investment financial entities, such as pension reserves, development funds and state-owned corporations'funds.
A further $8. 1 trillion is held in other official foreign exchange reserves. 17 The first SWF was the Kuwait Investment Authority,
created in 1953 from oil revenue commodities. 18 Sovereign Wealth Funds: Generally Accepted Principles and Practices (the Santiago Principles), International Working group of Sovereign Wealth Funds, October 2008, http://www. swfinstitute. org/what-is-a-swf/19 SWFS had poor
http://www. thecityuk. com/research/our-work/reports-list/sovereign-wealth-funds-2012/37 Sovereign funds can spur entrepreneurial activity owing to their abundant capital resources and long-term outlook
via its RUSNANO arm, has invested some $700 million to produce a second production line for plastic transistor film in Russia (see Appendix 1). As more developing countries seek to move from being commodity sources
especially for commercialization of innovation with high capital demands over the long term such investments may expand greatly,
Note that support may be offered either in finance or in intellectual capital by transfer of IPR.
the irobot Corporation (see case study in Appendix 1) was a significant recipient of support from the Small Business Investment in Research (SBIR) programme administered by the Dod, Doe, NIH, NSF and other agencies.
Under the SBIR companies can receive grants for feasibility assessment (Phase I) and for Phase II (prototype.
Intellectual capital In many of the companies studied, intellectual property issues were important in different ways and to different degrees for each sub-sector.
but so has open intellectual 38 capital. It is only over the past decade that IPR questions have become a paramount factor in the ICT industry generally, for Apple, for instance,
and far more recently in web services, e g. for Google. Here the protection of IPR through patents has allowed Apple to defend its position against newcomers attempting to enter some of its markets (e g. smart phones and tablets.
VCS will tend to view any new venture through the lens of potential litigation from patent holders
and avoid investment in such cases (see Anton et al, 2006; and Kaplan, 1994. Such threats are unlimited effectively
which investment will be frozen effectively and further work in jeopardy of being found in infringement of a patent,
and business models) and their permitted generality combined with ease of filing make the threat of overlap litigation more probable.
This rationale holds that without a clear path to enable entrepreneurs to profit from invention,
Also with the inadmissibility of patents on software, business models or processes, the field for innovators appears more open
One model for generating intellectual capital in ICTS has been around for the past 25 years in collective development of intellectual capital.
It substitutes trust and co-operation for competition over every morsel of IPR. The traditional route to innovation and its intellectual capital implies that a company innovates on its own.
In contrast is the‘open innovation'concept of employing the collection and use of external knowledge.
as seen in the robotics cases and in web services. Moreover they have increasing returns with volume across a whole sector
if many enterprises can benefit from them, since a basic cost is removed. So there are leverage effects,
or designs or other IPR) realized across the many enterprises who exploit that asset (and again leverage) for their own production.
Note that the whole web services 40 subsector came into being and is still based on open source software for the World wide web, the internet communications and management protocols and the majority of web server operating systems (Forge, 2004).
There are also many examples of how open innovation principles are applied in the ICT industries, such as consumer electronics (Christensen et al, 2005.
Mach 3. 0. Note that where there are grey areas in the uses of IPR for web services
and their related devices (as in the web service provider verticalization model-see Appendix on business models) then major disputes are increasingly common between the dominant players,
so returns on investment in patent pools may be fairly certain. It should be noted that patent pools are not a panacea,
and its is a way of colluding to control a market by restricting competition. For the start-up SME
or services sold which incorporate IP from the patent pool, then it may be viewed as affordable.
in terms of competition law for patent pools. However if a small company can participate, the increased appropriability or absorptive capacity,
i e. ability to profit from innovation (Pavitt, 1984) brought by a patent pool may be more advantageous for small companies than for large ones,
and its future here is still unclear. 22 The European commission's Interchange of Data between Public Administrations Programme (IDA) in 2002 financed an independent study on the opportunity of making software specific to the public administrations
after OSS was perceived by the EC as both a great opportunity and an important resource for the EU development,
as mentioned by Erkki Liikanen, Commissioner for Enterprise and Information Society, in 1999, when the EC opinion was that by focusing on open software standards(.)
1999). 23 Recent work shows how"econometric estimates indicate that entrepreneurial ventures collaborating with the OSS community exhibit superior innovation performance compared with their non-collaborating peer"(Piva, Rentocchini and Rossi-Lamastra, 2012),
therefore indicating that collaborations with the OSS community should exert a positive effect on entrepreneurial ventures'innovation performance. 24 Berkeley Software Distribution a free open source licensed version of the Unix operating system from the Regents of the University
Second, the legislature did not intervene as software was seen as a peripheral product, not central to an economy,
Today this is no longer the case as it is increasingly recognized that software is at the heart of the modern economy based on high technology and knowledge work.
not only through appropriate competition laws which permit shared patent pools at‘reasonable'costs26 to potential innovators
and commercial practices of a decade ago are revisited in the May 2012 letter from the Competition Commissioner,
22may 2012) prior to a potential charge sheet. 26 What is reasonable requires competition authorities to become involved to ensure patents are used not‘to hold industry to ransom'by extortionate royalties as has happened in various ICT sub-sectors using patent IPR
and services having open source licences. This can reduces costs and increase security, especially for software for common utilities and applications
health and demographic change, food security and the bio-economy with sustainable agriculture, the environment with clean energy and transport.
Human capital Many of our case studies highlight the critical importance of human capital in innovation.
While an innovative business needs human capital of these different kinds during its growth, our case studies strongly suggest that it is the most highly skilled individuals who are fundamental to innovation.
Google's founders benefited from a very supportive, nurturing environment, with mentors who were able to protect them
and thus to human capital, is intensified further by the cluster effect of networks of related skills around key academic and research institutions (Bercovitz, et al, 2006).
which the start-up can profit. But there has to be a critical mass of human capital for this process of interchange of people between companies to work.
Thus the difference between the USA and the EU is one of time and long-term investment in human capital people and their networks the USA began such clustering over 70 years ago for military purposes and so accumulated rich banks of human capital.
In contrast the EU began with government intervention 30 years ago with its‘techno-poles'of Sophia Antipolis, Grenoble, Karlsruhe, Munich, etc.
and also the key funding for the various stages of start-up, perhaps with the formation of venture capital firms.
and create anew the intellectual capital that the cluster embodies. Moreover the cluster stays alive through encouraging
This multiplies the supply of human capital as confidence is gained in this system for work and new funding
Cultural capital Mobility Most typically in Silicon valley, there is a predominant attitude among the highly skilled
if eventually the result is ownership or part ownership in a successful venture. Employment is seen as a transient state,
something that may be necessary between entrepreneurial ventures. Thus there is a tradition of workers moving between start-ups, a mechanism
Risk and entrepreneurship Government policy could help in shaping the culture, specifically the attitudes to failure,
in terms of the laws around bankruptcy but also in terms of not denying support for a new venture when a previous one has failed.
First, the company must be open to new concepts of where profits will be derived from, which will not be the products
and services of today if innovation is to occur. Apple is the clearest example of this in our case studies. Note that start-ups have none of this legacy profit stratagems to fight.
Third, exchanging the safety of today's profits for the risk of innovative development of tomorrow with its unknown profit stream seems to be higher risk than staying still
A willingness to abandon the profit stream from today's offerings means being capable of holding an enduring vision of the future,
the cultural capital consists of the inherited cultures of the environment and the team. This is why a past failure is considered valuable in Silicon valley.
Regulatory interventions to improve the policy environment for innovation (e g. in our cases we observed the stigma of bankruptcy, restrictions on mobility by labour laws,
venture capital may be less likely to have the scale in time and magnitude of investment for complex technological innovation
On the basis of traditional economic theory, it is not always possible to justify subsidizing such companies on the basis of externalities or spillovers.
Yet, the theory of increasing returns, espoused by economists such as Arthur, explains why there may be other valid economic reasons for doing so (Arthur,
Mainstream economics is gradually evolving to incorporate theories from behavioural economics, complexity theory and other strands of economic thought (e g. see Foldvary, 1996;
Public funding of such high risk-long term investments makes sense if the expected social return is higher than the expected social cost,
However, there has undoubtedly been an indirect role of government via the spillovers of past government investments since the late 1950s the first customer for Fairchild,
Thus, due to knowledge spillovers, Silicon valley was subsidized indirectly"by US government investments in the electronics of war.
From the case studies it was noted that the small innovative enterprise needs support in moving from an engineering prototype to full production,
31 Edward Benthall, chair of Cambridge Enterprise, notes‘there is no active investor community to take care of a certain kind of company,
The lessons of VINNOVA's funding instruments and the Robotdalen case study shows that the use of‘smart capital,
'i e. borrowing the idea of using experienced investment managers from the private sector who have managed start-ups,
professional venture managers and (patient) long-term funding for a much longer term than typical for VC funding or government programmes, may offer a useful way forward.
Its first manufacturing plant in Europe, in the capital of the federal state of Saxony, Dresden, was sited at the heart of the German electronics industry sometimes called"Silicon Saxony".
Clusters typically require long-term investment in human capital often around a centre of technological excellence
At Stanford, Google's founders benefited from a very supportive, nurturing environment, with mentors who were able to protect them
which the start-up can profit. But there has to be a critical mass of human capital for this process of interchange of people between companies to work.
In those particular ICT sectors 51 where US companies seem to excel over the EU
backed by its pools of human capital. The recommendation that Europe needs greater support for academic and public sector centres of excellence for R&d with commercial applications is supported by the literature.
not only through appropriate competition laws which permit shared patent pools to potential innovators but also in endorsing open source IPR,
Internet start-ups are ideal VC investments, as our case studies of Google, Skype and XING show having relatively low entry costs and low capital intensity.
Thus web services such as Facebook, Google, ebay, Twitter, etc are favoured strongly by the VC community.
however, venture capital may be less likely to have the scale in time and magnitude for complex technologies that require longer-term investment.
When VC funding is inappropriate, public funding instruments (such as the US SBIR, now envisaged in the EC's Horizon 2020) can be suited better,
but also in terms of not denying support for a new venture simply because a previous one failed.
but rather the combination of a rewarding user experience and simple but highly effective design with novel business models. 32 The Development of U s. Policies Directed at Stimulating Innovation and Entrepreneurship David Audretsch and Taylor Aldridge, 2013,
it is necessary to create a proper innovation friendly environment: low administrative costs, tolerance towards business failure, a friendly business climate,
and a large and integrated market (including for venture capital). The Amazon case shows the importance of the business environment, the existence of a single market and efficiency of services.
While on some of these aspects it is possible to have some improvements in the short run for most of them such improvements are likely to come only in the medium to long run.
Finally, the public sector can provide important financial (e g. SBIR type instruments, 33 which was crucial in the case of irobot) and nonfinancial support.
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Case studies Web Services, Display Technologies and Robotics A1. 1 Web Services Apple Corporation Apple computer was founded in April 1976 in a garage in Los Altos near Cupertino
Start-up capital was US$1300. Its thirst for innovation and with it, the discarding of conventional market and technical wisdom, was apparent from start-up,
Today such innovative design is the key competitive edge in the consumer electronics sub-sector and web services.
Apple has changed radically, turning away from pure hardware and software for computing to combining bundles of web services.
This is a most significant change in its own business model. The plunge into Web-based services was been designed carefully to complement the simultaneous move into pure consumer products
with the ipod, and away from pure computing. Thus Apple's major business segments have advanced out of hardware and software products for personal computing and graphics into global retail services, with chains, of both online and physical shops.
Its websites for interactive and download services are aimed at a higher-end mass market. The net result is verticalization:
58 consumer device tied to device content and services that in tandem lock in the end-user (see the web value chain in Appendix 2). It provides Apple control of every stage of the‘user experience'.
'Apple has engineered the success of its Apps Store by not only platforming an ecosystem of third party apps developers to produce creative content and applications for consumers,
In early 2012 it is the largest technology company in the world by revenue and profit
In completely revising its business model, it has shown its abnormal innovative prowess and virtually has leadership in new business models for the web platform and for its hardware and software products.
The product range and development history in product terms is shown from 1976 to 2011: -Simon Forge SCF Associates Ltd All rights reserved 2012 30 Source:
Apple. 59 Apple grew at the very first on its own capital, possible at that time when the cost of entry was so small.
It has been excellent at understanding popular demand from the user's viewpoint, not the industry's. So its innovations are centred far more user than its competition, building a fierce customer loyalty and brand power.
This is implemented at a product concept level, not at a feature level as others do.
and make decisions and products/services based on their inner vision. This controls the very perception of the limits and extents of an innovation.
was crucial to its formation, its business model, early survival, financing and massive success. In 1994 Jeff Bezos realized that he could create a retail website that would not have the limitations physical businesses encounter:
and customers value selection. Amazon grew up in world of book delivery dominated by the publishers and dominant physical distributors,
Since 2007 it has had a successful and logical expansion into e-books with its own into e-readers (the Kindle family) combined with an e-library for charged-for titles for download as in the verticalized business mode for the web services
sub-sector (see Appendix 2 for the value chain of this business model. Now it has launched cloud computing services, based on its own business infrastructure to sell to others.
The company first started in Seattle as it was low-cost, with communications giving access to the whole US continent,
as well as being a hi-tech cluster. It then expanded overseas in the first five years via acquisition of web-based bookstores in the UK
2. 8 BNUS$1. 5bn 61 the lack of single market, both in customers, and in homogeneity of business services across the EU, compared to a single set of business services in the USA-e g. availability of low cost parcel carriers in competition with the incumbent post office, at the level of the USA.
Amazon's mantra is detail is delightful-ever-improving metrics and optimization are its competitive weapons.
Amazon has shaped a quite classical business model with the Internet's specific advantages. It is not that disruptive just:
sell and deliver stuff to customers. Amazon perfectly understands the conventional cocktail of low prices, large selection, convenience and satisfaction from the customer experience.
and thirdly that web services enable high margin, lowest prices-again quite challengeable. Amazon's major advantage was its original innovation,
Looking under the covers of the business model (see the value chain Appendix 2) shows that Amazon,
needing heavy amounts of capital investment for the two key business processes: Its sales interfaces,
Logistics chains of dispatch centres for warehousing and ground transport with a host of delivery services partners.
pursuing customers progressively into new areas, preferring to innovate incrementally while keeping a close eye on the innovations of competitors.
and then 62 translates those trends and needs into new products and services. Management pays careful attention at the idea/creation stage to what customers are looking for in the products they choose.
The goal is to ensure the company is delivering well-differentiated services in line with what the consumer wants.
One long-term feature that has helped Amazon to understand its customers and so become the largest Internet retailer in the world,
is the customer review section. It occupies the bottom of most product pages it was introduced as an early way to harness personal opinions on products, free.
and then sometimes withdrawn as it could manage the processes that inevitably come with a new business model.
In 1999 it tried to set up it own auction website, directly in competition with ebay.
For its next attack on other web services, it is hiring social media directors and launching into social media and games with software development.
and advertising services, as well as a plethora of online tools and platforms including: Gmail, Maps and Youtube.
initially they had no business plan that would monetize their innovation. Indeed, they were so uncertain about
what they thought was right rather than the pursuit of commercial success. Initially there was no business plan
-and-the-challenge-of-1000-blooming-flowers/65 Capital investment Google received about $1miilion in angel investment around the time it incorporated in September 1998, from Andy Bechtolsheim (cofounder of Sun microsystems) Ram Shiram
with major investors including the venture capital firms Kleiner Perkins Caufield & Byers and Sequoia Capital.
and not in the business plan There was no business plan but rather in Page and Brin I just fell in love with Larry and Sergey (Auletta, p 44). 42 From 2001-2011,
Page and Brin agreed so they could get the investment but really didn't want a business executive to run Google they thought of them as bureaucrats rather than engineers and entrepreneurs.
The environment: Stanford university and research funding and the support of the university and the access to Silicon valley high tech/angel investor/VC network.
Exploring the Economics of Search in the Information Society, the Initiative for a Competitive Online Marketplace (ICOMP), March 2011, http://www. i-comp. org/resources/view/1043/file/The%20perils
A 70%stake was acquired by an investment group led by Silver lake (including the original founders) in November 2009,
Zennström and Friis identified the opportunity and created a business model in which the basic service is free.
Skype users can use their computer to call other Skype users for free anywhere in the world,
since the marginal cost of a call on the internet is negligible. In contrast, traditionally a call over the public switched telephony network was determined by the distance of a call.
Unlike other Voip services, Skype is a peer-to-peer system rather than a client server system, and makes use of background processing on computers running Skype software;
Skype became the global leader in internet voice communications, with more than 309 million registered users within five years of launch.
they are by far the largest provider of cross-border voice communications, 'says Telegeography analyst Stephan Beckert.
It has yet to make a profit. This undoubtedly led to ebay becoming disenchanted with Skype's performance
In 2003, Bessemer Venture Partners led the A round financing at Skype. Bessemer, the oldest venture capital practice in the United states invested $1 to $2 million in August 2003.
A second investment round in March 2004, led by venture capital firms Draper Fisher Jurvetson and Index Ventures, resulted in $18. 8 million in new funding to expand global operations
and enhance its consumer offering. 47 So even though Skype was located in Europe and the entrepreneurial impetus and the engineering innovation were found there,
the early stage funding came from Silicon valley. Looking back on the start up of Skype Zennström said he started his new venture capital business Atomico
because the venture capital market outside of Silicon valley lags when it comes to funding innovative technologies.
As he saw from his own days as an entrepreneur,"In Europe, none of the venture capitalists had entrepreneurial backgrounds.
and consumer-electronic devices), building tailored offerings for enterprise customers, and diversifying revenue through subscriptions, premium accounts and advertising.
Microsoft Corporation agreed to acquire Skype Communications for $8. 5 billion. The deal was completed officially in October 2011 with Skype incorporated as a division of Microsoft,
Former Skype personnel have founded tens of companies, primarily related to Internet services, some of which been successful.
Eighty percent of the business ideas that reach our incubator or the general community of start-up companies are from Skype,
52 mainly because it offered a range of public aids for business and investment such as:
Investment tax credits of 10%of the acquisition value of investments New business tax credits-a 25%exemption on corporate income tax and municipal business tax for 8 years Venture capital certificates
, up to 30%exemption on profits SME incentives up to 10%of costs incurred on investments and reorganization operations Regional and national incentives,
the tax and legal environment is clear and consistent and the government has a very pragmatic approach to business.
The company founders, Niklas Zennström and Janus Friis, bid adieu to salaried work and dove headlong into enterprise.
Its revenues from its services announced 29 february 2012 rose by 22%over the 2010 results, to €66. 2 million.
The company provides its members with a range of networking services such as making new contacts,
Its main innovation factor is a business model closely matched to its specific target market segment.
It has enabled XING to evolve from a business networking platform into the web interface for a widening range of services, for business professionals around the world,
The company's business model is not to be mainstream but to cater 72 for local languages for middle management professionals who network in that language.
enabling members to discover professional people, opportunities and privileges through its discovery capability and contact management tools.
We consolidated our position as German market leader for social recruiting where we acquired more than 800 new customers.
Compared say to other websites, 73 or to other services industries (utilities, mobile operators, this appears to be comparatively high).
compared to those European national pure social networking sites in competition with Facebook. For example, the Studivz group of three websites were collectively the German market leader with 13. 8m users,
XING has used all forms of VC funding, from a business angel in May 2004, to a leading European Venture capitalist with offices in Switzerland, Germany and the UK, for a net total investment of €11. 4m.
The first investment was from Brainstoventures, an Angel investor, in May 2004, of €5. 7m and in November 2005,
a further €5. 7m investment for Series A shares came from the VC Wellington Partners.
This made Burda the largest shareholder in XING. The 1. 3 million shares were sold to Burda by Cinco Capital,
the investment vehicle owned by Lars Hinrichs, at €36. 50 per share in a €48. 3m deal.
Overall, the company may be considered a reasonable success, for two reasons firstly its business model which has ensured survival in a highly competitive market-and thus its growth in members, revenues and profitability,
with a sustaining move into adjacent sectors through acquisitions. Secondly despite some acquisition write downs for its foreign operations,
XING has continued to grow in revenues during 2011 with rising profits, and a first time dividend.
Xing website, www. xing. com Economist (2009) A spat among professional networks-Class war-Does local beat global in the professional-networking business?
Formation and investment Despite the interest in P-OLEDS Friend was unable to reach agreement with a British electronics company to license
Nevertheless, it was difficult to attract the 75 necessary initial investment, largely because the business model at that time was far from clear.
In 1992, Friend founded CDT Ltd, with support from the university and funding from local seed venture capital fund
Cambridge Research and Innovation Ltd. The ownership of the OLED IPR was transferred from the university to the new company,
while the university remained as one of the company's largest shareholders. Other early investors included the rock group, Genesis;
and Esther Dyson, president of Edventure Holdings, of New york. In September 1997, further investment of about $10 million came from a financial group headed by Lord Young of Graffham, former Secretary of state for Trade
In July 1999, the company secured new equity funding of $16 million from Kelso Investment Associates and Hillman Capital, both based in New york. This transaction transferred the ultimate parent
In March 2001, a further $28m was raised from shareholders. These funds were raised partly to finance construction of a new $25m facility dedicated to developing commercial scale production techniques and know-how for LEP technology,
and sustained investment is required over a considerable time period. Note that Polypropylene, Teflon, and carbon fibre all took decades to fully realize their commercial potential.
The case of advanced materials ventures, Research Policy, 2006 Plastic Logic: from innovation to impact, http://www. cam. ac. uk/research/features/plastic-logic-from-innovation-to-impact/77 CDT CEO talks to Electronics Weekly after Sumitomo sale,
The manufacturing plant in Europe, in the capital of the federal state of Saxony, Dresden, is at the heart of the German electronics industry-sometimes called"Silicon Saxony".
But the next step in development of organic transistors required engineering a practical product, with a well-focused industrial environment,
and was a cofounder of the VC company Amadeus Capital Partners in Cambridge. Even without a clear business plan
he and Amadeus agreed to invest in the commercial development of organic polymer transistors. Over the next few years, Plastic Logic went through several funding rounds
This was one of the biggest venture capital rounds ever in Europe. Led by Oak Investment Partners and Tudor Investment, the existing investors Amadeus (seed funding) Intel Capital, Bank of america,
BASF Venture capital, Quest for Growth and Merifin Capital also participated. While R&d remained in Cambridge, product development moved to Mountain view, CA, with the corporate headquarters.
Exploiting its Dresden production line, Plastic Logic launched a prototype monochrome e-reader, the Que Pro-Reader in mid-2009 in the USA.
It delivered perfectly rendered PDFS-unlike Amazon's devices of the time-with a strong potential appeal for business users as a featherlite document reader
being ultra-thin and more attractive than Amazon's Kindle. Plastic Logic then signed deals with AT&T to sell its 3g model and with Barnes & noble as retailer for the USA.
and finally abandoned in August 2010 amidst rising competition for portable electronic displays and e-readers.
-so the basic technology was still valuable enough to merit persisting with the venture. Plastic electronics promise economic,
This round of financing also gathered an additional US$50 million from Oak Investment Partners which remained the largest shareholder,
with 52%and a handful of others. The financing from both was to be dedicated to building a new production facility,
We are making an unprecedented investment of close to a billion dollars in the future of plastic electronics to help create one of the largest commercial centres for it in Russia.
This investment signifies the potential that we see in the future of plastic electronics across a variety of commercial and consumer products.
2011, Russia Leads $700m Investment In Plastic Logic, Wall st Journal, 18 jan 2011.80 RUSNANO is a long-term investor
Paid Content, Apr 6, 2010, http://paidcontent. org/article/419-plastic-logic-says-its-in-negotiations-possibly-to-sell-itself/James Mawson, 2011, Russia Leads $700m Investment In Plastic
Logic, Wall st Journal, 18 jan 2011, http://blogs. wsj. com/tech-europe/2011/01/18/russia-leads-700m-investment-in-plastic-logic/Plastic Logic:
but particularly for its proprietary OLED materials and its customized OLED products and services. Novaled also specializes in OLEDS on metal.
through the venture capital arm of the Samsung Group, Samsung Venture Investment Corporation (SVIC). Previously, in a second round of funding, Novaled Gmbh had secured €15 Million, on 01 december 2005,
On 14 may 2003, Novaled Gmbh secured €5. 75 million in first round financing from a consortium of international investors led by venture capital firms Technostart and Techfund 83 Capital Europe.
and Thomson, the media services and equipment group. For its supply side, there are long-term contractual agreements in Germany with Ciba Specialty Chemicals and BASF, who produce the organic dopant and transport materials
Its business model is thus to sell proprietary materials, dopants and transport materials (produced by it supply chain of CIBA and BASF) with its IP licences,
The IPMS in Dresden enables the IAPP of the Technical University of Dresden to scale up its technology in a well-controlled environment (NSF WTEC 2010.
Novaled's business model has evolved since 2001 towards materials and process technology IP for lighting, organic thin film transistors and solar cells, as well as displays.
E Ink envisioned a new Radiopaper to be coupled with broadband communications for anytime, anywhere information.
E Ink's customers are those making display devices of any kind and include Amazon (the Kindle series), Samsung, Sony, Casio, Citizen, Hanwan, Hitachi, irex, Lexar,
E Ink then pursued a third round of financing in February 2001, with a $7. 5 million investment from Philips Components,
TOPPAN, a Japanese printing technology company, added to its initial $5 million investment in 2001, with a further $25 million,
E Ink Corporation Announces $37 Million in Second Round of Venture Financing; New Investment from Domestic and International Media Companies, Leading Funds and Existing Investors, Business/Technology Editors CAMBRIDGE, Mass.
Techcrunch, Devin Coldewey, 9 november 2010, E Ink's Color"Triton"E-Paper Screens Make Their Debut,
commonly known as Kodak, is an American multinational imaging and photographic equipment, materials and services company. Founded in 1880 by George Eastman,
but ultimately Kodak was unable to 89 move fast enough to stave off the Japanese competition. Throughout the last decades of the twentieth century
Moreover, a completely different business model was called for in the analogue world, cheap hardware and expensive consumables laid the golden e g
In 2010, its sales revenue was about $400 million, with gross profit of $145 million. It has a market cap of over $700 million.
Its early business plan was built around space exploration by robots. irobot worked with NASA and other organizations to develop a robot for lunar exploration,
It took five years from prototype to product for the Roomba, the world's first affordable home vacuum cleaning robot,
The irobot business plan was built on the premise that there could be offered practical applications that value beyond their cost.
Funding for their vision didn't come from venture capital but rather from the SBIR Program
) Later, the company adopted Google-like practices with employees encouraged to use"free time"to work on their own ideas to develop prototypes.
It is interesting to note that two of the three founders of irobot have recently left to start new ventures, currently in‘stealth'mode Heartland Robotics,
For example, it has developed a jamming gripper (developed in collaboration with Cornell and the University of chicago) which allows a robot to gently pick up an irregularly shaped object that traditional grippers might not be able to grasp,
In 2011, irobot announced a $6 million investment and expanded partnership with Intouch Health, a leading remote presence telemedicine solution provider.
The aim is to explore opportunities for healthcare applications on irobot platforms. Intouch Health will provide access to FDA regulated healthcare facilities,
and were actively seeking further investment. Increased demand meant the company needed to increase its capacity with more capital investment to develop the manufacturing end of the business.
However, the BBC's Dragons were reluctant to invest in a company focused on research and development
Despite the potential, the company has attracted not yet significant investment, aside from sales of its products,
and support services as over 50%of the robotics value chain is in systems integration and service.
The DLR-KUKA collaboration state research institute supports private enterprise The German Aerospace Center (DLR) Institute of Robotics
and founded by the Bavarian Ministry for the Economy. KUKA and DLR have also been sponsored by the German Ministry of Education
This also demands multidisciplinary skills for a large range of different robot types. R. U. Robots delivers
Thus effectively the company has to be somewhat more than a systems integrator as it must build certain specialized sub-systems on demand.
It offers integration services for advanced robotics control systems, flexible automation, human-robot Interaction (HRI) and operator performance.
for robots working safely with people either in factories or in care services, e g. for the aged.
To succeed in robotics demands a long-term investment view with development over 20 to 30 years.
The UK needs clusters, of customers as well as suppliers; R. U. Robots sees this as most useful to increase their business.
Some form of support for those customers taking robotics technology for the first time would allay the fears they often see in small companies over investments in robotics. UK universities are not fully supportive they do not seem to be able to partner well with industry.
In the USA, the Dod and DARPA provide 100%funding for R&d up to the prototype stage,
Having a prototype makes it a much smaller step to go to market. In contrast in the UK, the Mod may on give limited grants of the order of up to €60k under the SBRI (Small business research initiative) scheme for a proof of concept.
and organic with no external funding the original seed capital came from the founder Geoff Pegman.
which is a long term investment. R. U. Robots has concentrated always on the B2b market (i e. for professional/industrial applications and defence) as it is the largest robotics segment.
and 25%allowance for R&d for work delivered to external customers. Each year it is necessary to negotiate again with the tax authorities to receive this
in order to become known to potential customers. One such EU project is for stroke rehabilitation robots (SCRIPT-Supervised Care
Thus it is a successful incubator organization, not just nurturing robotics start-ups but introducing robots into the sector of the economy that uses them least today, SMES.
Effectively, Robotdalen has created a regional cluster of robotics development for industrial field robotics, and health care applications,
with a remit to integrate resources for knowledge, skills, infrastructure and innovation expertise, among universities, science parks, incubators,
The incubator provides innovation support to disseminate its techniques and competence across the region. Robotdalen builds up flexible teams for each innovation or integration problem,
In addition, this provides opportunities for students who are conducting the pilot studies to learn about specific obstacles in implementing new technologies.
and robot suppliers in innovation projects, reasoning that its support for ideas will lead to the commercialization of products and services.
economic growth in the region is already being driven by a robotics industry supplying industrial and surveillance robots usable by small-and medium-sized businesses.
and healthcare services will also be common soon. To implement this strategy Robotdalen has concentrated on three main areas:
Research and development is focused on creating new business opportunities, especially for industrial robots for small and medium-sized companies,
it characterizes the flows outside one enterprise, from the start of the supply chain through the company and on into the distribution chain
what business model is likely to be most successful for instance the trend to verticalization in the web services sector from device to operating system to service as a lock in mechanism in a web market. 106 1 The Web Services value chain:
web farms requires the largest capital investment Simon Forge SCF Associates Ltd All rights reserved 2012 1 Deploy,
Sales & After sales Generic Web Services Value Chain for a large operation (Google, Apple, Amazon,
Integration into target application environment After sales Test and correct Generic Robotics Value Chain For each extra system Auxiliary systems for systems integration Systems Integration Bought-in components for manufacture Control,
communications and coordination systems Sensors Actuators/End effectors Power/utility systems R&d Manufacture Marketing After IPR sales R&d Manufacture Marketing After IPR sales
-electric, pneumatic, hydraulic, coherent light, coolants, etc Control, communications and coordination systems Simulation packages Software development tools 107 3a:
10.2791/13458 Abstract The objective of the study is to document the existence of innovation gaps between the EU and its main competitors in specific ICT sub-sectors namely web services,
industrial robotics and display technologies and to explore the role of government policies in Europe's future needs for innovation in information and communication technologies (ICT) through a comparison with the USA and Asian countries.
Governments can also encourage innovation through appropriate intellectual property and competition laws and, more generally, through the development of a business environment conducive to innovation.
environment and climate change; energy and transport; agriculture and food security; health and consumer protection; information society and digital agenda;
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