IP theft or loss issues continue to rise as global fraud increases

82% of companies have suffered a fraud incident in 2016, a seven percentage point increase in comparison to 2015 according to the recently published Global Fraud and Risk Report (Kroll, 2016). The economic impact of losses resulting from this fraud has been estimated in 1-3% of total revenues for most (59%) of the companies surveyed.

The following figure summarises some key findings from the mentioned report:

Graphic representing the fraud incidents and security incidents resulting in theft or loss of IP, prepared by Francisco Velasco (www.fvelasco.com)

Regarding the Intellectual Property (IP) business, the figure shows that 16% of enterprises has experienced Intellectual Property (IP) theft, piracy or counterfeiting fraud in 2016, which means an alarming rise in comparison to a 4% in 2015. Furthermore, 38% of companies suffered a security incident resulting in theft or loss of IP in 2016, being the manufacturing sector the most affected with 56% of the reviewed companies being subject to such incidents in the same year.

These data suggest that there is a growing challenge for enterprises on managing and protecting their intellectual property and confidential information, in order to gain (or not loose) competitive advantage. This challenge that is particularly pronounced due to the effects of global competition (the companies that lead the market are more familiar with intangible management), increased supply chains (longer supply chains make more difficult to trace the flow and use of confidential and protected information), growing hire of external consultants (external experts are more often required and and, and this represents a potential leak of information) is a common, use of open ICT systems (vulnerability toand increased job mobility.

To address this great global challenge, it is highly recommended that companies take urgent measures on conducting IP and trade secrets audits by qualified experts, to identify all intangible assets and determine which ones shall be protected and how. Such processes shall be followed by the implementation of a risk mitigation plan that enables: reconfiguring clauses in contracts with employees, customers and suppliers, defining an information access structures and protocols, prioritising and qualifying intangible assets, making an economic valuation of critical IP, implementing cyber security measures to protect computer and online systems from theft or damage, and other contingency actions to be determined depending on the type and situation of the company.

 

REFERENCES

Kroll. (2016). Global Fraud & Risk Report: Building Resilience in a Volatile World. New York, USA. Retrieved from http://www.kroll.com/en-us/global-fraud-report

R&D Public Policy Strategies: A simplified model

Public policies on R&D and innovation have proved to make a considerable impact on economy in most countries. The range of strategies adopted by governments is so wide and complex that it is difficult to establish a comparison among them, or to make a forecast on the potential outcomes from adopting one or other strategies. Thus, to ease the policy design process there is a need to outline a model that allows visualising the possible strategies and instruments available.

The model presented here (see figure below) provides a generic overview of strategies that may be adopted when making R&D policy, attending to two key parameters: the degree of interventionism, and the level of risk assumed by the managing government. As a results, there are four type of strategies that may be adopted:

Figure showing a model to define R&D and Innovation Public Policy Strategies, prepared by Francisco Velasco and licensed under CC BY-NCSA 4.0. Blog de Francisco Velasco: www.fvelasco.com

An attempt has been made to map some of the most common instruments (Di Comite & Kancs, 2015) in the proposed matrix as shown below. This mapped model is yet to be developed further and there is a likely misreading of some of the instruments. I will be happy to listen your views!

Figure showing a model mapping instruments of R&D Public Innovation Policies, prepared by Francisco Velasco and licensed under CC BY-NCSA 4.0. Blog de Francisco Velasco: www.fvelasco.com

An explanation both figures above is provided:

  • Enabling Strategy. Is characterised by low government interventionism and high-risk aversion (understood primarily as financial risk). This strategy is characteristic from economies based on primary industry and with a reduced and unsophisticated innovation ecosystem. Some typical instruments implemented under this strategy are: training programmes to raise the innovation profile of professional staff, promotion and marketing actions to raise public awareness on innovation, or the launch “innovation voucher” programmes that provide a small financial contribution for SMEs to hire external consultants to develop new products, conducting market research, or improving internal processes.
  • Dynamic Strategy. This strategy requires governments to take an innovation facilitator roll and take actions towards fostering R&D collaboration; the most typical instrument in this case is the implementation of funding programmes to R&D projects. The level of risk taken is variable and depends on the level of funding committed to such purposes; and the degree of government interventionism is relatively low, because policies focus on rewarding R&D activity, and not on influencing how such activity shall be conducted.
  • Regulated Strategy is characterised by a high interventionism to define the “game rules”, that is, regulation and legislation that obliges meeting certain standards concerning R&D directly or indirectly. Public Administrations taking this approach assumes relatively low risks, since no great sophistication is required on the design of specific instruments; however, a relatively high investment is required in the preparation of regulatory and tax-related measures. Some common instruments adopted with the regulated strategy are the introduction of corporate tax discounts on R&D, the implementation of ISO standards related to R&D management practice, or the application of green-related normative (such as CO2 emissions requirements, which pushes companies developing novel technological solutions)
  • Open Systemic Strategy. This strategy assumes innovation as an intrinsic part in the way government manages office (the government innovates itself). Such approach implies a high interventionism under the premise of having a good understanding on innovation and R&D strategy, and places the government as a key stakeholder in the country´s innovation agenda. Government thus assumes a high level of risk in the design of new instruments that usually involve participative and co-creative processes with the private sector. This model requires highly qualified personnel with world-class knowledge on innovation and R&D processes, and takes place in the most advanced economies in the world. Some of the usual instruments adopted with this strategy are the public procurement of innovation, technology foresights, or the long-term transformation of the educational system itself to ensure the creation of an innovative culture.

The proposed model is subject to discussion and has no scientific grounds. However, it is based on fieldwork observation and provides the advantage of being simple and building on two solid parameters (interventionism and risk). The model may aid the strategy design process because allows understanding some underlying implications of adopting specific strategies, and designing the appropriate instrument policy mix for each country. I am intending to refine and improve some of the assumptions, and I will be happy to hear your comments!

 

REFERENCES

Di Comite, F., & Kancs, D. (2015). Macro-Economic Models for R&D and Innovation Policies.

 

The Chilean Minister of Economy appeals to the democratisation of innovation at VI Innovation Meet

Picture of speakers at VI Innovation Meet, 29 June 2017, Casamerica, Madrid

Speakers at VI Innovation Meet, 29 June 2017, Casamerica, Madrid

Last 29th June, during the opening of the VI Innovation Meet organised by MRI-International and KIM, the Chilean Minister of Economy, Development and Tourism, Mr. Luis Felipe Céspedes, appealed at the democratisation of innovation and entrepreneurship as a key to address inequality and progress. The Minister´s encouraging speech was followed by an explanation on several programmes implemented by the Chilean government to diversify and sophisticate their economy.

This interesting event took place at Casamerica of Madrid, and aimed at sharing initiatives to foster cooperation on innovation between Latam and Europe. Following the Minister´s intervention, there where three round table discussion:

  • The first roundtable discussed public policy measures across both continents, moderated by Carles Ramió (Pompeu Fabra University) and with the participation of the embassies of Peru, Ecuador, Argentina and Colombian embassies, as well as the Spanish CDTI.
  • The second roundtable focused on cooperation perspective of large Spanish corporations, with a panel moderated by Leitat and formed by Indra, Gas Natural, BBVA, Telefónica, Ferrovial Agroman and ADIF
  • The third roundtable focused on Intellectual Property Management, moderated by the Licensing Executive Society, and with the participation of Repsol, Elzaburu, Clarke, Modet & Co, Tecnalia and KIM

You can visit here the lessons learnt at the VI Innovation Meet (only in Spanish)

Or have a look how was the programme of the event (only in Spanish)

Are we killing creativity? The risk of a “task-oriented” society

It is now over 10 years since Sir Ken Robinson´s talk in 2006 where he addressed the lack of creativity issue in our society, and pointed at the educational system as one of the causes “all children are born artists, the problem is to remain an artist as we grow” (Robinson, 2006). This video had more than 32 million visits, but, what has changed since 2006?

Over the last decade, an intense debate has taken place regarding how to promote creativity at an early age (primary school), and some recent publications compares several international educational models at school-age (Hernando, 2015). This research provides interesting insights, however it does not seem to address the key issue: the idea that focusing on the improvement of primary education will solve the lack of creativity in society seems almost reckless. We should start from the premise that creativity is a form of disruption and that disruptive changes require from disruptive actions; therefore, the very fact of planning how to “manufacture future creative people” may end up becoming part of the trap. It is important to understand that people have become used to reproduce and copy contents, which can be done very quick due to the easy access to universal information, the referencing practices, and an overall risk aversion to think out-of-the-box. This is making society evolve towards a “task-oriented society”, where professionals are able to manage assets but not create to create new assets (“tell me what do I have to do to sort this issue, and I will do it”, a sentence I have heard very often at work). This trend is particularly visible in younger generations, which is becoming a big global issue for corporations according to the CEO Global Study (IBM, 2010). This report pointed at creativity as the core competence for leadership in the companies of the future, and is consistent with many other findings available on the Internet.

We should take big steps within our closest environment to promote creativity, and here are some recipes open to debate:

  • Reach the break point. The creative process mush start yourself by taking a disruptive approach towards problem-solving. When facing the next problem, practice asking yourself “How might I find a unique solution to this challenge?” Assume certain levels of risks when ideating solutions, and reward such approach within your ecosystem.
  • Creativity is not the same as ideas. Creativity consists of using new “ideas” to find novel solutions to problems. Thus, the key to foster creativity is not just generating ideas, but also finding feasible solutions. Practice the whole cycle!
  • Less referencing. The global modern culture is oriented to an overuse of references: everything must be referenced, almost to the point of referencing opinion (no doubt there is a dark side in most things, and this might be the dark side of intellectual property). Such practice is even more accused due to the easy access to information. As a consequence, the firs step when facing a new challenge is usually searching for references or case studies on the Internet. Let´s reverse the order: try to start by using a blank piece of paper to ideate a solution when facing your next challenge, and then search for existing models and references to support your concept, thus avoiding any initial contamination.
  • Rethink “efficiency”. This term has become a global mantra, but unfortunately under its most simplistic interpretation: do more in less time. Efficiency should be understood as the ability to make unique, meaningful and feasible contributions as a result of individual or collective creation. Practicing and sharing this definition will bring more powerful and sophisticated results.
  • Rethink measurement indicators. The Global Creativity Index (Florida, Mellander, & King, 2015) intended to define an international system to measure and compare creativity among countries; however, in my opinion it is a failed attempt to measure such intangible. The system provides a creativity index combining indicators such as R&D investment, number of patents, number of highly skilled jobs, number of university students, tolerance for ethnic and racial minorities, and other. However, nothing seems further from creativity! If we are not sure how to measure creativity, let not waste time trying to do it; instead let´s focus on rewarding new ideas and out-of-the-box approaches.
  • Technology at the service of creativity, not the other way around. Apps have evolved towards task management and performance measurement, thus fostering analytical practice and hindering creative reflection. A new generation of tools should be developed to assist users in their creative process using big data solutions; it may seem fiction today, but I would be delighted to see technological development turning into that direction.
  • Facing the Human Resources challenge. HR management got stuck in the past and has evolved in most cases into a low-profile administrative function: CV gathering and selection, profile design, interviewing, staff performance monitoring and other tasks, leading the final hiring decision to the internal or external client. HR needs to totally reinvent itself and be able to detect creative talent in order to face the leadership requirements of the future. The transformation towards a more creative society will not take place if we do not start working on ourselves. I believe this is the real big challenge and our best legacy will be allowing disruptive change to take place within our closest environment. 

 

REFERENCES

Florida, R., Mellander, C., & King, K. (2015). The Global Creativity Index 2015. Retrieved from http://martinprosperity.org/media/Global-Creativity-Index-2015.pdf

Hernando, A. (2015). Viaje a la escuela del siglo XXI. Retrieved from http://www.fundaciontelefonica.com/educacion_innovacion/viaje-escuela-siglo-21/

IBM. (2010). IBM 2010 Global CEO Study: Creativity Selected as Most Crucial Factor for Future Success. Retrieved November 1, 2015, from http://www-03.ibm.com/press/us/en/pressrelease/31670.wss

Robinson, K. (2006). Do schools kill creativity? Retrieved May 20, 2012, from https://www.ted.com/talks/ken_robinson_says_schools_kill_creativity

Re-thinking Technology Transfer

Since Henry Chesbrough originated the term “Open Innovation” (Chesbrough, 2003), technology transfer has been often understood as a lineal process, where one side represents the “supply of technology” (technologies and know-how resulting from R&D activity and typically developed by universities, technological institutes and other knowledge generators), and the other side the “demand of technology” (normally represented by the enterprises, the market). This vision assumes that working on the prioritisation and evaluation of technology portfolios, allows to identify potential applications, and by setting the right protection mechanisms a researcher may be able to find potential buyers of the technology.

The reality beyond this model is that results are poor, and according to some estimates only 1% to 5% of R&D results reach the market and remains as a viable product/process for a period of 2-5 years.

The big issue lies in assuming that technology transfer is a lineal process addressed from the “supply” side (i.e., the technologies that are to be sold), while technology transfer should be understood as a circular process, where the focus shall be placed on the “demand” side, the market needs. The figure below explains this approach:

Figure showing the Pull Technology Transfer Model developed by Francisco Velasco and licensed under CC BY-NC-SA 4.0. Blog de Francisco Velasco: www.fvelasco.com

 

Following the proposed model above, technology transfer shall start with co-creative field work conducted with enterprises and assisted by experts, to re-evaluate their value chains, their products and their business models, aiming at defining specific industry challenges or needs. Such “needs”, shall be marketed adopting appropriate communication strategies, targeting technology suppliers that are able to provide incremental solutions and get involved in a participative process with the buyer to adapt the solution to the specific need.

This approach challenges the settled logic of starting technology transfer work with the categorisation and prioritisation of technology portfolios, and the design of technology catalogues; and suggest to take a similar approach with the “needs”, thus conducting a categorisation and prioritisation of product/process improvement needs, and developing needs catalogues, that shall be framed in a form that the scientific community is able to understand.

I believe that the greatest mistake in the technology transfer business, has been assuming that is ruled under the same logic than traditional product sale (if I am willing to sell a product, I prepare some advertising material and target potential customers –sometimes with some previous user research-). However, technology and innovation requires a different approach because the purchasing driver is not emotional or physical, but a business need. Thus the sales cannel cannot be a catalogue that explains the technology, but a working process with the company to understand how they could earn more or avoid losing money by acquiring a new technology; and the greatest challenge lies in translating this information into a language that is understood by knowledge generators. This way, we are able to focus marketing on finding “sellers” (technology suppliers) instead of finding “buyers” (companies willing to buy technologies), thus simplifying and improving success probabilities. A basic principle to continue developing and investigating further!

 

REFERENCES

Chesbrough, H. W. (2003). The era of Open Innovation. MIT Sloan Management Review, 44(3), 35–41.