2 About RWTH TIM RWTH-TIM's new (shared) building in Kackertstraße 7, Aachen
RWTH TIM is a proud part of RWTH Aachen, Germany s leading university of technology Facts & Figures 3 RWTH = Rheinisch-Westfälische Technische Hochschule" (Institute of Technology of the North-Rhine Westphalia, i.e. a State of Germany) RWTH Aachen is one of Europe s leading institutions for science and research. Ranked frequently as the Top German University by HR Managers (e.g. German BusinessWeek Ranking 2007-2014). Established in 1870 as a "Technische Hochschule". Quickly became leading place for mining technology, electrical and mechanical engineering, and later also medicine and medical technology. Today, RWTH is also leading in the sciences and has been awarded the title of a Exzellenzuniversität as one of the very few top German institutions. One out of every five board members in a German corporation is a RWTH Aachen alumni, and about every second engineering manager in the German automotive industry has graduated at RWTH. Out of annual budget of about US$1billion, 50 percent is funded by competitive research grants and direct support from industry. 42,000 students are enrolled in 100+ academic programs, more than 25% of them are international students coming from 120 different countries.
A New Open Innovation Model at RWTH Aachen: Towards a new generation of firm-firm-research collaboration 4 The RWTH Campus Project: A 2bn investment into... a new form of open innovation for university-industry collaboration: 20 topical clusters of 10-20 companies, around a group of leading research institutes Requirement of full-time allocation of R&D staff by companies Membership fee (in form of 5-10 year lease) includes projects, access to equipment, executive education, informal networking opportunities 6 clusters starting now
RWTH-TIM: The RWTH Technology & Innovation Group is part of the TIME Research Area at RWTH s School of Business & Economics RWTH-TIM: RWTH Technology & Innovation Management Group Head: Prof. Frank Piller tim.rwth-aachen.de tim.rwth-aachen.de 5
At RWTH TIM, we are dedicated to innovative research and teaching, but grounded in the real world of management practice Established in 1990 as one of the first dedicated chairs in technology & innovation management in Europe Part of RWTH's School of Business & Economics, with strong links to the RWTH Engineering Schools, but also Information Systems, Psychology, Dedicated to research, but excellent in participant-centered learning on graduate student and executive education level. Ranked in top3 in school's ranking w/r to research output (publications), and #1 w/r to external funding. Awarded "RWTH Price for Teaching Excellence 2009/2010". Interdisciplinary team of about 20 full time positions for researchers plus about many support positions and student researchers 70% of annual research budget funded by competitive, peer-reviewed research contracts and grants ("forschungsorient. Drittmittel") from DFG, EU, BMBF, BMWI, AIF Strong industry partnerships, strong believe in engaged scholarship with both rigor and relevance for management practice (via direct, research-focused cooperation, contract research, and the RWTH-TIM Expert Circle of Innovation Professionals) Several spin-off and affiliated companies in both high-tech and professional services tim.rwth-aachen.de 6
At RWTH TIM, our research focuses on innovation interfaces, disruptive business model innovation, and internal structures for successful innovation Customer Co-Creation: Integration of customers and users in innovation process. Focus on ideation contests (Crowdsourcing), innovation communities, lead user method Open Innovation: Approaches like tournament-based crowdsourcing or broadcast search to increase the productivity of R&D by external search Personalization and Mass Customization: Business models to profit from heterogeneities in the customer domain by offering personalized products and services Economics of Additive Manufacturing & Open Hardware: Creating economic value through 3D-Printing, Distributed Digital Manufacturing, Open Hardware, and open design infrastructures Business Model Innovation and Disruptive Innovation: Structures, processes, and organizational implementation of a process for corporate business model innovation Technology & knowledge transfer : Absorptive capacity, managing ambidexterity, and preventing not invented here (NIH) Modeling the contingencies of the innovation process: Database of 300 methods for the innovation process and matching tool to corporate challenges of managing innovation Managing the R&D-production interface (ramp-up): Connecting the new product development process with scaling up the manufacturing system tim.rwth-aachen.de 7
Recent Awards and Recognitions for RWTH TIM Alexandra Gatzweiler, Vera Blazevic and Frank Piller have been the joint winners of the 2012 PDMA research competition and the DL Wilemon Research Award for their work on deviant user behavior in ideation contests. PDMA is the largest global association for product/ service development and management professionals. RWTH TIM has been nominated as a finalist for the Innovating innovation challenge 2013 by Harvard Business Review and McKinsey for our work on open innovation readiness and internal structures supporting crowdsourcing. The ideation contest Stilsicher:unterwegs, a co-creation initiative targeting senior citizens to develop better mobility solutions for seniors via a web-based ideation contest, was the only winner in the non-profit innovation category of the 2012 Co-Creation Awards. This ideation contest was part of our project OpenISA, funded by the ESF within the NRW Ziel.2 program. tim.rwth-aachen.de
9 scg.mit.edu 9
About me: Frank Piller Head of the RWTH Technology & Innovation Management Group, and full (tenured) professor of management at RWTH Aachen University (2007-) Academic Director of the RWTH Executive MBA, joint program of RWTH Aachen & Fraunhofer Academy (2012-) Co-Director of the MIT Smart Customization Group, MIT Media Lab, Massachusetts Institute of Technology, Cambridge, MA (2007-) Research Fellowship at the MIT Sloan School of Management, Innovation Management Group, Massachusetts Institute of Technology, Cambridge, MA (2004-2007) Assistant / Associate Professor in Management and Habilitation on Customer Co-Creation at TUM Business School, Munich (1999-2004) Ph.D. in Operations Management with focus on Mass Customization, University of Wuerzburg (1995-1999) Co-Founder, Investor, or Member of Board of Directors of several companies, including Competivation (innovation consultancy) ThinkConsult (process management and concept testing), MVM.com (personalization and virtual models), Hyve AG (customer co-creation), Dialego AG (innovative online market research), Corpus-e AG (low-cost high-quality body scanning devices), Doob AG (3D Printing & Modelling) Real life achievements: Only German professor on Top50 Profs on Twitter 2013, 2014 ; Kloutscore >60; Google Scholar Citations >7000 tim.rwth-aachen.de 10
Another very typical field for lead user innovation: home equipment
Users have the advantage of problem-solving in their own use environments as they do a desired activity The Lead User Paradigm 19 Lead users innovate here (they are NO pilot customers, beta users!!) # of users perceiving need First manufacturer product appears here Voice of the customer methods start here Time based on von Hippel 1978, 1988, 2005
85% of all functional-novel banking services have been developed by an innovative user and are not the result of a planned development effort in a bank 22 Study of 47 innovations in business and retail banking at Bank of America, JP Morgan Chase, Citigroup, Wells Fargo and PNC Financial Services (5 largest US banks) Example of innovations in the sample (retail): Relationship statements aggregating information on accounts within the same bank; Consumer forums and communities; Alerts, notifications or reminders via email/text message; Online banking budget planner; Auto bill paying; Cash Management Account (CMA); Microcredit and microfinance; Bank-to-bank wire transfers; Debit or check cards; Telephone banking; Mobile banking etc.. Result: 85% of these innovations have been developed and used before by customers long before their formal introduction in a bank "However, different to other industries, most banks still do not have a systematical approach to identify these lead user innovations" Source: Oliveria & von Hippel 2010. MIT Sloan School of Management Working Paper. 22
User entrepreneurs have founded more than 46 percent of innovative startups that have lasted five years or more, even though this group creates only 10.7 percent of U.S. startups overall.
There is HUGE potential 24
von Hippel et al. 2011
26 We need a new perspective on innovation: From policies fostering creation to policies facilitating absorption ( absorptive capacity )
27 Open innovation / Co-creation = manufacturer hosts platform to capture and transfer external ideas and concepts into products & services
28 tim.rwth-aachen.de
29 tim.rwth-aachen.de
stil:sicher unterwegs"
31 An entire innovation service industry is supporting this trend
Birth of a new industry: We find more than 250 (2010: 65) platforms and brokers active to connect companies and organizations with input from their periphery (in co-creation, European firms dominate, for technology transfer, US platforms rule) (Diener & Piller, 2010, 2013, 2014)
34 Perhaps users don't need a "manufacturer" any longer
37 37
http://www.ronen-kadushin.com/
49 And of course this also works for the entire IKEA assortment
53 From lead users towards user manufacturers (makers)
54 Maker enabler #1: Access to distributed digital production capacity
Recent research by Joel West et al. (2014) identified more than 100 commercial(!) iterations of the RepRap design
58 Maker enabler #2: Easy to operate design software
AutoCAD 123 60
61 Maker enabler #3: An infrastructure for sharing
public good, by private agreement. some rights reserved
65 Arduino started in 2005 as a project for students at the Interaction Design Institute in Ivrea, Italy. Objective was to generate a platform for electronic design for $10 or less. 65
66 Maker enabler #4: M2C Platforms (maker-to-consumer)
An anouncement for the Nokia Lumia 820 Fri 18 Jan 2013 67
Fr 25 Jan 2013 6 days from file (product) to product ecosystem
User Innovators User Entrepreneurs User Manufacturers
In an economic model evaluating these effects, we find rather strong dynamics towards user manufacturing 78
tim.rwth-aachen.de 79
New infrastructures are coming up: + digital, open manufacturing (3Dprinting) [ + an open internet of things & data ] + design tools + design repositories + open (hardware) licenses + open market places + open IP policies (?)
Why should policy makers care? MANY open questions: A new (complementary) perspective on priorities to foster innovation: absorption, not creation Measure and account for this phenomenon in official statistics Help European companies to utilize this resource IP and a new debate of copyright (why do we have almost no debate on open hardware in the EU, compared to the US?) Support for innovating users we start with SMEs, how about innovating users or user communities? Funding instruments, consultancy, support infrastructures Still no large scale European open innovation platform Consumer protection (fair payment, minimum wage for contributing users?), regulation, testing, product liability
Contact 83 Frank T. Piller, Prof. Dr. Head of the RWTH Technology & Innovation Management (TIM) Group School of Business & Economics. RWTH Aachen University Research Area Technology, Innovation, Marketing & Entrepreneurship Kackertstrasse 7 52072 Aachen Germany Tel. +49 (0)241 809-3523 (office) piller@time.rwth-aachen.de @masscustom (Skype, Twitter, Facebook) time.rwth-aachen.de/tim open-innovation.com Expertly assisted by Monika Heer, +49 (0)241 809-3577 heer@time.rwth-aachen.de 83