EMERGING TRENDS IN OPEN INNOVATION ISPIM Budapest

Andy Zynga, CEO, NineSigma Copyright 2015, NineSigma

06.15.2015 1

TO SET THE SCENE…

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OPEN & COLLABORATIVE INNOVATION IS:

» A Management System: Its introduction requires thoughtful Change Management. » A great way to manage risk and get to market faster, but NOT a good way to reduce R&D expenses. » NOT about being always open, but about opening up when needed to accelerate development of IP, or to solve problems.

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JUST FOR CLARITY… » The view expressed is based on NineSigma’s experience & perspective, an Intermediary practicing Broadcast Search. SOLUTION PROVIDERS

NINESIGMA PH.D. TEAM

Universities

CLIENT

30% Proposed IP Solution NON-CONFIDENTIAL

“Technology Brief” summarizing the need (RFP) NON-CONFIDENTIAL

Industry

Proposed IP Solution

60%

NON-CONFIDENTIAL

Proposed IP Solution

10%

Labs

NON-CONFIDENTIAL

NineSigma Proprietary Search Methodology & Database Copyright 2015, NineSigma

BROADCAST SEARCH

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WHO WE ARE

OUR EXPERIENCE

DIVERSE CLIENTS

Innovation Challenges

OVER 700 CLIENTS

3,500+

Multinationals Middle Market

FROM 32 Industries

2+ MILLION SOLUTION PROVIDERS

Non-Profit Government

HEADQUARTERS & PARTNER OFFICES U.S. Belgium

Japan Korea

Australia South Africa

Brazil Canada

Netherlands

NINESIGMA NETWORK

52% Business

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34% Universities

14% Government

Consultants

Inventors

Non-profit 5

A SAMPLE OF OUR GLOBAL CLIENTS REPRESENTING ALMOST EVERY SECTOR The Coca-Cola Company

DENSO

OLYMPUS

NEC SHISEIDO

OSAKA GAS

TOSHIBA

IDEMITSU

suntory

MITSUBISHI MATERIALS

ISUZU MOTORS

SUMITOMO HITACHI CONSTRUCTION

SHOWA DENKO

SUMCO

OMRON

DENKA

KIRIN HOLDINGS

TEIJIN KOMATSU

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ASAHI BREWERIES

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EMERGING TRENDS

1) Increasingly organizations want to be very public about engaging with the Global Innovation Community. 2) Governments getting into open innovation in a BIG way. 3) Mid-sized companies discovering benefits of going beyond their “existing networks”.

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ORGANIZATIONS BEING MORE PUBLIC

20%

- Grand Challenges, - Innovation Contests, - Managed Innovation Galleries

RFP

Still 80% Anonymous

100

RFP

2009

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80% Anonymous

2014

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INNOVATION CONTESTS & GRAND CHALLENGES

Seeking Technology Solution

Innovation Contests Grand Challenges

Marketing Messages

Societal Impact

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CASE STUDY: INNOVATION CONTEST

GE 3D PRINTING PRODUCTION QUEST OVERVIEW • The 3D Printing Production Quest was a public Innovation Contest hosted on NineSights to identify cutting edge technology that can produce complex parts with high precision by additive manufacturing processes, using high density, refractory metals.

PHASES • Phase 1: Mapping the Ecosystem: 22 proposals were received. The top 10 respondents each received a $5K cash prize and advanced to participate in Phase 2 of the Quest. • Phase 2: Producing Test Coupons: Groups had 90 days to manufacture test coupons from GE supplied materials that were then evaluated for geometric precision, overall mass, and overall volume.

• GE selected three fabricators with capabilities to produce complex medical imaging device parts with high precisions based on statistical analysis as well as several qualitative aspects.

KEY TAKEAWAYS • The Quest pushed the limits of additive technologies, and identify production leaders that are operating at the forefront of 3D printing. • Identified technologies will drive greater product performance, quality and cost savings for healthcare customers.

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CASE STUDY: GRAND CHALLENGE

HEAD HEALTH CHALLENGE OVERVIEW & CHALLENGES • The GE NFL Head Health Grand Challenge is a $60 million program that includes research and challenges to develop new solutions to help advance understanding of mild traumatic brain injury. • The first $10 million Challenge invites proposals for scanning technologies and biomarkers. • A second $10 million Challenge with Under Armour launched Fall 2013 to find, fund, and develop new solutions to diagnose and protect against traumatic brain injury.

APPROACH • Because GE and the NFL bring distinct resources to their partnership, NineSigma worked closely with GE and the NFL to align their goals and design a challenge program that would achieve each of their objectives. • With two challenge topics, and a diverse judging panel, the prize strategy was a critical component that had to be defined and clearly communicated to a broad technical and consumer audience.

KEY TAKEAWAYS • Translating each Sponsor’s objective into an integrated topic and prize strategy is a critical first step which determines the success of the program. • Even a large scale, multi-year Challenge such as this can be defined, scoped and launched in a short period of time when there is executive buy-in and support .

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CASE STUDY: GRAND CHALLENGE

THE BASF ENERGY CONTEST

OVERVIEW • Efficient energy storage is one of the key factors that will determine our future quality of life. BASF is looking to find low-cost grid-scale energy storage technologies that will provide reliable global energy reserves and create a strong economic framework for energy production and distribution.

PROGRAM AND AWARDS • Objective: The BASF Energy Contest seeks novel approaches to provide stationary storage of energy that could bring power to isolated regions. • Awards: Up to 5 winners will each win a 100,000€ prize; and all participants may also have the potential opportunity for further discussions with BASF.

GOALS OF THE CHALLENGE

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Identify new ways to store and release electricity.

•

Develop and deploy innovative, technical solutions that will provide robust economic opportunities.

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CASE STUDY: INNOVATION CONTEST

AUTOMATED BAGGAGE HANDLING CHALLENGE

OVERVIEW • Baggage Handling is currently manual heavy labor and is time consuming. KLM Royal Dutch Airlines and Schiphol Amsterdam Airport are constantly striving to improve both the human factor as well as efficiency, and believe that new technologies can be a breakthrough in Baggage Handling.

PROGRAM AND AWARDS • Objective: To identify Automated Baggage Handling Systems to transport Baggage between airport facilities and the airplanes that improve upon current approaches by avoiding manual interference and improve Baggage throughput. • Awards: Cash prizes of €10,000 each were awarded to four winning respondents and will be invited to execute pilot projects with KLM and Schiphol. In addition, successful participants may have the opportunity to become a supplier to KLM for up to 30 Automated Baggage Handling Systems.

KEY TAKEAWAYS • Upside opportunity for winners to market and demonstrate successful solutions (together with KLM and Schiphol) to other airports.

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NINESIGHTS EXAMPLE CLIENT GALLERY – SAMSUNG DISPLAY

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NINESIGHTS EXAMPLE TECHNOLOGY OFFER GALLERY - XEROX

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TATA STEEL MANAGED INNOVATION GALLERY

OVERVIEW Tata Steel’s European operations recognized that it was essential to collaborate with innovative people globally in order to maintain their competitive edge and decided to explore new ways to improve their organization, work with others and create future opportunities.

QUICK FACTS

MAKING CONNECTIONS

GALLERY LAUNCHED:

April 2014

INDUSTRY:

Building & Construction

NEEDS CATEGORIES:

Steel production Steel uses By-product management Product characterization

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Since launching their Gallery, Tata Steel has executed several non-disclosure agreements with potential Solution Providers and partners in order to engage in further conversation on the following projects: NOVEL WASTE HEAT RECOVERY TECHNOLOGY COATING FOR REFLECTIVE MIRRORED SURFACES CHEMICAL SHIFT BY-PRODUCT GASES

VIEW GALLERY HERE: ninesights.com/web/tata-steel-gallery

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JOHNSON CONTROLS MANAGED INNOVATION GALLERY

OVERVIEW The Automotive team at Johnson Controls has launched this NineSights Gallery to enable outside inventors, researchers, and innovators to more easily share their technology ideas with them. They believe that by partnering with external technology providers, we can accelerate product development and innovation.

QUICK FACTS

MAKING CONNECTIONS

GALLERY LAUNCHED:

August 2012

INDUSTRY:

Automotive Interiors

NEEDS CATEGORIES:

Plastic Composites Smart Textiles Metal Technologies Polyurethane Foam

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Since launching their Gallery, JCI has funded three co-development projects with those who made submissions on NineSights. Numerous other collaborations are ongoing. Examples of posted needs: IMPROVED POLYURETHANE FOAM DAMPING PERFORMANCE HIGH-FLOW POLYPROPYLENE WITH ZERO POSTMOLD SHRINK

VIEW GALLERY HERE: ninesights.com/web/jci-automotive-gallery

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XEROX TECHNOLOGY OFFERS GALLERY

OVERVIEW Xerox’s research and engineering team in NY turns great ideas into real business value by providing companies and organizations custom R&D, engineering services and 50+ years of innovation expertise. They help clients differentiate their offerings, finding new revenue streams and simplifying the way work gets done in many different industries including education, transportation, retail, print and healthcare.

QUICK FACTS

MAKING CONNECTIONS

GALLERY LAUNCHED:

January 2014

INDUSTRY:

High Tech

TECHNOLOGY OFFER CATEGORIES:

Image Sensing Predictive Analytics Computer Vision Ethnography

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Launching a Technology Offers Gallery has increased the knowledge of Xerox’s capabilities both globally and within NineSigma. Xerox and Haier are in discussions now as a result the Gallery program.

VIEW GALLERY HERE: ninesights.com/web/xerox-gallery

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GOVERNMENTS GETTING INTO OPEN INNOVATION: MOTIVATIONS

» Solving Challenges by involving the “citizen solver”

» Economic Development » Improving Government itself through citizen engagement (e.g. ideation)

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SOLVING CHALLENGES BY INVOLVING THE CITIZEN SOLVER U.S. Federal Agencies Challenges Conducted 100 80 60 40 20 0 2012

2013 Agencies

Competitions2

SOURCE: White House 2013 Federal Prize Authority Report

TRENDS IN THE U.S. PUBLIC SECTOR: » Growth in number of competitions and size of prizes » Increased focus on using prizes to identify novel solutions » Emphasis on creating a post-competition path to success for new solutions » More prizes for effective and low-cost software and IT solutions » New models for engaging in the public and building communities during competitions Copyright 2015, NineSigma

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OI AS A MEANS OF ECONOMIC DEVELOPMENT

» Piedmont Region / Italy » Country of Colombia » State of Ohio » Metro Atlanta Chamber of Commerce » EU Horizon 2020

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HOW OHIO PROGRAM IS STRUCTURED

OHIO DEVELOPMENT SERVICES AGENCY (ODSA)

NINESIGMA

Tech Search XYZ INVOICE

• Approves Client eligibility • Matches Company fee for technology search

Tech Search XYZ INVOICE

• Finds and educates potential Clients

• Provides funding to NineSigma for educating, selling, marketing

• Validates economic impact (jobs created etc.) with Client Support Services INVOICE

OHIO BASED MIDMARKET COMPANY (=CLIENT)

• Performs technology searches

• Reports results to ODSA

• Gets access to world’s best technology solutions to accelerate innovation, get to market faster • Pays fee for technology searches

SALES MARKETING • EDUCATION •

•

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MID-SIZED COMPANIES DISCOVERING OI

» Significant uptick in demand partially triggered through successful Ohio program (PR / Case Studies) » “Traditional” clients > €1B Revenue, Mid-size €10M - €1B Revenue. » Price-sensitive but “C”-level VERY receptive & driven to try new ways to accelerate Innovation.

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CASE STUDY

MAKING WOOD HYDROPHOBIC

CLIENT TimberTech

CHALLENGE Find a technology that will treat wood particles to reduce water absorption

RESULTS Over 30 proposals were evaluated and the Client identified two alternative approaches that they hadn’t previously considered

KEY TAKEAWAY The technology solution will lead to an increase in sales and new jobs within 6 months.

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CASE STUDY

HEATING THE INTERIOR OF ORGANIC OBJECTS

CLIENT Global Supplier of Heating Equipment

CHALLENGE Looking for a technology to accelerate cooking time when frying food

RESULTS Identified 2 companies of interest and are currently moving forward with building a prototype

KEY TAKEAWAY Need articulation was so targeted that 70% of the responses were on target to address Client needs

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CASE STUDY

LIQUID SOAP DISPENSING: COMPLETE SYSTEMS

CLIENT National Supplier of Industrial Formulations

CHALLENGE Creation of pre-filled soap dispensing cartridges to improve hygiene and reduce time lost from spills and restocking

RESULTS Currently engaging local mold builders and injection molders

KEY TAKEAWAY Results offered a business scope larger than Client expectations and will impact the entire local community

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CASE STUDY

PROTECTIVE THERMAL INSULATING COATINGS FOR TOUCHABLE SURFACES

CLIENT Leading Supplier of Consumer and Industrial Fixtures

CHALLENGE Find a coating that will protect exposed skin from getting burned when in contact with low-grade heat

RESULTS Identified 2 coating companies to move forward with, have completed formal testing and are qualifying product for production

KEY TAKEAWAY Looking outside of their typical network provided new opportunities for engagement

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THANK YOU CONTACT INFORMATION Andy Zynga | CEO, NineSigma Email: [email protected]

STAY STAYCONNECTED CONNECTED Copyright 2015, NineSigma

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