Industries explore new innovation-exchange model to accelerate development

22nd March 2013

By: Schalk Burger

Creamer Media Senior Deputy Editor

  

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A formalised innovation- and solution- exchange platform enables inventors, innovators, entrepreneurs, governments and companies to exchange ideas and solutions relating to a variety of challenges securely, accelerating the development of new or enhanced products, services, economic development and competitiveness, says science and technology park The Innovation Hub CEO McLean Sibanda.

“The Open Innovation Solution Exchange platform, which was launched in November, is an electronic platform aimed at improving the efficiency of government and service delivery, as well as increasing the competitiveness of the private sector.

“The platform is based on an open inno- vation principle and has the potential to accelerate the development of entrepreneurs and small businesses by providing access to markets, as challenges posted on the platform are based on real problems requiring solutions.”

The exchange platform’s aim is to connect all experts in related and unrelated industries to establish a marketplace for ideas, enabling participants from any industry to provide solutions to identified problems.

The open nature of the solution exchange is the core of open innovation, he explains.

“The system is designed to function differently from the predominant way companies develop solutions through internal research and development capabilities, where the speed of innovation and solution development is often restricted, not only by the amount of money invested, but also by the paucity of ideas.”

By sharing specific business challenges with innovators and the wider business, scientific and academic communities, a business can get in touch with many potential, viable solutions, which would have otherwise taken longer and at a higher cost to develop internally. The mediation role played by the solution exchange helps users to identify the most relevant solutions to the challenge, and also enables deal making, he notes.

“For example, Proctor and Gamble’s Connect-and-Develop programme demon-strated that, using open innovation, they could access well over two-million minds outside their core business that could enhance their offerings to the market.

“This enabled the company to use these people’s ideas for certain aspects of their business and integrate these external ideas with their internal research and development, enhancing their market offering, while strengthening their intellectual property position,” says Sibanda.

Every challenge has an owner and it is a narrowly defined problem, which can include the preferred technologies or processes that the challenge owner wants to use, says RIIS director Dr Audrey Verhaeghe.

“The challenge description must be succinct and narrow to enable the quick provision of innovative and effective solutions for specific problems.”

Platform Rules
The Innovation Hub acts as a neutral facili- tator for solution providers and challenge owners, says The Innovation Hub innovation strategy projects senior manager Tsietsi Maleho.

Collaboration between solution provider and challenge owner companies is allowed on the platform, but all interactions are regulated by the rules of the site.

As the platform is a nonconfidential site, it is essential that participating companies frame their challenges and solutions in ways that stipulate their needs or capabilities without compromising their intellectual property position, explains Verhaeghe.

“Open innovation is standard practice for innovation exchanges and is necessary to attract the range of responses from individuals to companies to provide challenge owners with a range of solutions, from which owners can select the most effective solutions to their problems,” she says.

These rules only govern the open phase of the solution exchange and once the initial evaluation of solutions has been conducted, the challenge owner and selected solution providers set up nondisclosure agreements to discuss technical issues and capabilities in more detail.

C

hallenge owners use their discretion to select the solution providers they would contact to continue with closer discussions.

“However, a challenge owner does not have the right to disclose the solutions that have been submitted to it and The Innovation Hub plays a facilitation role to ensure the integrity of the process,” she emphasises.

Public and private organisations from several sectors have posted challenges on the Open Innovation Solution Exchange to learn about the requirements, processes and opportunities to increase the speed of innovation in their organisations.

The first six companies that posted challenges on the platform included private businesses, municipal organisations and State-owned enterprises.

For example, paper, pulp and chemical cellulose giant Sappi posted a challenge on the platform requesting innovators to propose ways to generate value from fine chemicals produced during the pulping process.

The application of these fine chemicals did not have to be large scale, but solutions had to describe how the company could use its existing raw materials and waste from other processes to produce more products and, hence, revenue from its available raw materials, says Sappi research and development GM Charlie Clarke.

“We must become more efficient in our revenue generation from our existing raw materials. We are not looking for large volumes, but any solutions and proposals must be renewable and sustainable,” he explains.

There are many chemicals, including aromatics, fine chemicals and phenols, in the company’s trees, which must be extracted and purified for use.

Separation of these different chemicals is not cheap and Sappi wants to use the Open Innovation Solution Exchange to get in contact with small businesses interested in extracting and purifying these chemicals, or companies interested in using high-value, small-volume fine chemicals.

Clarke adds that Sappi does not want to simply procure complete solutions, but wants to improve its research and development instead by disclosing parts of its challenges to solution providers.

Meanwhile, the electricity department of the City of Tshwane requested a system to help prevent nontechnical losses or theft of electricity through meter bypass. The department has used several protection systems, but has, thus far, been unable to prevent the bypassing of meters.

“Meter bypass is a challenge for the city as illegal connections affect our ability to provide a reliable service to all residents; it is unsafe and it comes at a cost. We regard this platform as a key mechanism for us to engage with innovators in solving this challenge, but also for improving efficiencies in service delivery in a variety of other areas,” says City of Tshwane research and innovation strategic executive director Zukiswa Ncunyana.

The city is exploring tamperproof solutions, but notes that any solution must be flexible and scalable and not endanger residents.

Maintenance and operation should be cost effective and must be sustainable, the city stipulates.

Further, the Department of Public Service and Administration’s Centre for Public Service Innovation (CPSI) posted a challenge to innovators to help find simple solutions to prevent the duplication of chronic medication prescriptions. Criminal syndicates buy the extra medication to trade illegally, says CPSI research and development chief director Pierre Schoonraad.

Currently, the systems that monitor duplication across sites are not integrated and the CPSI seeks solutions that must cover all types of dispensing facilities, including clinics and hospitals, on a regional basis. It seeks a solution that can be deployed in a short space of time to identify when a person collects medication a second time.

The CPSI may consider solutions that have broader applications in the health sector, but is mainly focused on simple solutions that can be deployed quickly and easily without its existing systems needing to communicate in real time, he says.

The CPSI notes that procurement regulations cannot be bypassed through this open innovation programme, but will be used to supplement existing supply chain processes by creating a space for the emergence of innovative solutions.

Solution Considerations
An important consideration for companies and solution providers is how much time, effort and money to invest in each solution, says Verhaeghe.

“A good practice for solution providers is to indicate the amount of money that will be spent for each phase, which will also be informed by the requirements of the challenge. The amount of money will depend on the level of engagement required by the seeker and how well the solution fits the challenge description given by the challenge owner. This is also why we request that challenges be described as concisely as possible, to eliminate solutions that are not relevant to those sought by the challenge owner,” she says.

Each solution to a challenge is graded according to how well it meets the specifications of the challenge. Solutions that do not meet the basic criteria are usually discarded. The challenge owner then chooses which solution providers to engage in further discussion.

Small and medium-sized enterprises are important for economic growth and job creation. Entrepreneurship is, therefore, a critical part of the Open Innovation Solution Exchange’s functions, including how to stimulate entrepreneurs and how to grow small businesses and bring them into the formal sector of the economy, says Sibanda.

“This, inevitably, means boosting the competitiveness of the private sector and the effectiveness of municipalities and government departments, which we aim to achieve by fostering connections between all industries and experts,” he concludes.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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