There’s been plenty of activity in search in the recent years so entrepreneurs are apparently not afraid of Google. Today, a new one appeared, with a lot of Venture Capital: cuil. What is most remarkable is that the founders left Google… good luck!
Not related is the release of Ilog being acquired by IBM for $340M. Ilog was one of the European success stories. After the acquisition earlier this year of mysql by Sun, another European company is acquired by an American giant…
An interesting article about the origins of innovations was recently published. It looks at the R&D 100 Awards as a way to analyze where innovations come from. There is an interesting analysis about the evolution of economy in general such as:
– Changes in the Place of Scientific Knowledge:
– the old distinction between “basic science” and “applied science” is becoming obsolete,
– a high degree of consensus that successful technological innovation now requires the assembly and management of multidisciplinary teams,
– IBM, Xerox and others may have been the locus of great innovations, but these firms sometimes failed to exploit radical innovations.
– Dramatic shifts in oligopoly capitalism due to new challenges:
– mounting competition from foreign firms,
– shifts in government regulatory policies,
– impact of computerization,
– shifts in consumer taste away from standardized products,
– shifts within the financial markets.
– The 80’s efforts to:
– increase the commercial impact of research such as the Bay Dohle Act,
– finance precompetitive R&D (SBIR),
– provide technical support to business firms,
– support consortia (SEMATECH).
As a result, there has been a shift in the origins of major innovations as illustrated below.
I would have thought that the shift was in favour of universities and start-ups. The study shows that interdisciplinary collaborations as well as the Federal Laboratories have become the major source of innovations. “Research efforts that involve cooperation between two or more different organizations similarly weaken this hierarchical constraint on thinking outside the box.”
The end of the article is a discussion of the reasons why Fortune 500 companies have been less effective at innovating. Factors seem to be:
– big corporations facing relentless pressures from the financial markets have been forced to cut back on expenditures that do not immediately strengthen the bottom line,
– the rise of computers and the Internet, have made it much easier for small firms to enter markets previously dominated by large firms,
– a change in the employment preferences of scientists and engineers… “it seems quite possible that many talented scientists and engineers have voted with their feet and have left work in corporate labs in favor of work at government labs, university labs, or smaller firms,”
And the authors are quite convinced the
As a conclusion, “In the United States, there is no central plan for innovation, and different federal agencies engage in support for new technologies often in direct competition with other agencies. The federal government has created a decentralized network of publicly funded laboratories where technologists will have incentives to work with private firms and find ways to turn their discoveries into commercial products.” There is thus a combination of decentralized networks and targeted federal programs, similar to the venture capital model where many ideas will fail but a small number will succeed. “The enormous gains from the small percentage of winners are more than enough to cover the losses from the others.”
I just played with Wordle, a nice tool which randomly creates a cloud of words representing a blog. I did it with mine as you may see below. Another picture is on the French page. Have fun too with yours!
Clearly the topic is hot. Two recent articles address the issue of helping Europe in its efforts. One is in English and was published by the Science-Business Innovation Board. The full text follows. Even if I have some doubts, I agree overall. The other one is in French, was published in Le Monde and can be found on the French version of my blog.
What is interesting is these are both letters signed by credible people. Worth reading.
Europe needs to focus.
Too many initiatives in the European Union are blunted by lack of clarity – trying to please too many constituencies at once, and in the end pleasing none. Now the EU is about to embark on another policy initiative where clarity and focus are needed. This letter, based on our collective experience in academia, industry and policy, is a plea for single-minded efficiency.
The issue is “cluster” policy – in short: How do you make a Silicon Valley in Europe? After several months of study, the European Commission is due to issue its first formal answer to that question, with a policy statement recommending action to the EU members.
There’s no dispute that clusters of dynamic companies around top-rated universities are vital to economic success. Cambridge, Oxford, Münich, Grenoble, Leuven and Stockholm are all vibrant zones for scientific discovery, technological innovation, and jobs. But large, they are not. Just one US research institution, the University of California–San Francisco in the Silicon Valley cluster, has spawned publicly traded companies with a combined market value of $90 billion – three times the value of Europe’s entire bio sector. China has concentrated resources and tax breaks on three mega-hubs for technology development. Whether by market rule or government fiat, these are clusters big, bold, and concentrated.
By contrast, Europe’s approach is small, timid and diffuse. The EU counts some 2,000 clusters, 70 different national cluster policies, and hundreds of regional programmes. Now it has the opportunity for change. Between 2007 and 2013 the European Union has budgeted €308 billion for structural funds, a type of regional-development “catch-up” funding that can be applied to knowledge networks as easily as to road networks. The EU’s upcoming cluster policy statement, led by Vice President Günter Verheugen, could direct that spending wisely. We urge that it incorporate the following principles:
A CHARTER FOR CLUSTERS
These are broad principles. One practical idea for implementation is to create Special Innovation Zones in Europe (SIZE).
We urge the EU to designate a few – and we mean just a few – existing clusters to benefit from a new legal status as special innovation zones. It would give them extra cash from that €308 billion structural-funding budget to invest in schools, infrastructure and cultural amenities that attract the world’s top knowledge workers (reversing the “brain drain”) and to stimulate university research, teaching and spin-out company formation. They would get special, temporary dispensation from rules that hamper free movement of people and ideas, such as immigration and labour policies that make it hard for small companies to hire or fire. They could tap seed funding, supported by the EU and managed by investment professionals. They could earn a new, low-tax status reserved for young, innovative companies, and access low-cost, high-quality office space and support services
How would the EU pick these centres of excellence? Through transparent, international, data-based competition, rather than through closed-door, regional politics. Create a council, dominated by non-EU experts on technology, development and education, that weighs competing applications from the regions based on their performance – in hard numbers, per euro spent, of significant inventions, publications, spin-outs, licenses, stock-market flotations, post-doctoral fellows and jobs, and soft analysis of governance, infrastructure, quality of life, and visionary planning. There are already models for this. The newly created European Research Council last year achieved a first: handing out €300 million in research grants based solely on the judgment of international experts. The “cull rate” was ferocious: 97% of applicants were rejected. But the winning 3% were, beyond any doubt, scientifically worthy of funding. If this no-nonsense, expert approach can work in the university sector – interbred and politicized as it is in many EU nations – it can surely work in regional policy.
Time is running out for Europe. The American capital markets, treacherous as they may be, are pouring vast sums into the nation’s technology centres. In South Korea, government investment of $11 billion in the Incheon Free Economic Zone has drawn $49 billion in foreign investment. At the same time, we are all confronted by the urgent problems of global warming and rising energy costs; solutions must be found through research, innovation and entrepreneurship. Unless Europe improves its capacity to innovate, it will miss these opportunities to lead and prosper.
Europe’s politicians cannot afford any longer the luxury of playing big spender to all regions great and small. They need to be bold, brave and selective. They can start with the Commission’s upcoming cluster policy statement.
Signed:
Esko Aho, President, Finnish innovation fund SITRA, and former Prime Minister, Finland
J. Frank Brown, Dean, INSEAD
Jean-Philippe Courtois, President, Microsoft International
Pat Cox, President, European Movement, and former President, European Parliament
Roch Doliveux, CEO and Chairman, UCB
Denis Payre, CEO, Kiala and Co-Founder, Business Objects
Philippe Pouletty, General Partner, Truffle Capital
Alfons Sauquet, Dean, ESADE Business School
Helmut M. Schühsler, Managing Partner, TVM Capital
Harriet Wallberg-Henriksson, President, Karolinska Institutet
Members of the Science|Business Innovation Board