Two giant technology companies like Alcatel-Lucent and CISCO Systems view innovation in a completely different manner. Alcatel-Lucent spends huge sums of money in its research and development departments, while CISCO Systems purchases what it considers to be promising ideas, technology or patents. Henry Chesbrough, a professor at the University of Berkeley and “father” of the revolutionary concept of “open innovation” thinks that both companies obtain the same results.
Innovating from scratch requires time and, above all, capital. Moreover, R&D is specialised and no longer location-specific. Israel, for example, has established itself as the Silicon Valley of the Mediterranean. The question that hence arises is: why not establish links with locations where the major technological and scientific production takes place?
Innovation is composed of flows of constant change and each wave requires more know-how and capital. The large companies of today do not have the required capital to carry out innovation and the small and medium-sized companies do not have the capital to access innovation. What is needed is a link to facilitate the transfer of technology between the two worlds.
Four years ago, a certain Carlos Marquerie moved to Israel from Spain with the intention of studying all about patents, research hubs, start-ups, seed capital, technology and funding. Four years later, he set up 4iWatch, an organisation with over 3,500 innovation agents focusing on energy, the treatment of sewage and water, advanced ICT, new materials and health sciences.
Today, 4iWatch supports companies, works with the Israeli government and risk capital funds to define what is innovative for each client with the scope of changing their business model, adding value to what they are doing or diversifying. The best way of collaborating is then explored and this can range from direct investment in an Israeli start-up to scientific collaboration, commercial agreements or even setting up its own company in Israel. 4iWatch has a network of 50 scientists around the globe who scout the market and analyse the life cycle stage of these technologies.
For $200,000, one can have 20 per cent of the share capital of one of these companies in Israel, today also being called “disruptive innovative companies”. In Israel, three out of every five start-ups venture on to the stock exchange, while in many countries such a possibility does not exist for R&D companies.
After getting to know Israel so well, 4iWatch has started working in Singapore and Finland, the two other big nuclei of innovation, according to the 2012 Global Innovation Index.
It used a manual scouting system whereby between €20,000 and €40,000 was paid in gathering information. This is too expensive, so 4iWatch is working on a new project to become the “The Linkedin of Innovation”. It will be an open system just like Linkedin and will be known as StartUp Neural Network Spain (SUNN) and the Spanish Industry Ministry will be contributing €750,000 to this project. In order to be registered with SUNN, a company has to go through a rigorous on-line filtering process and companies selected will pay an annual fee based on the number of sectors in which they are interested and the number of services to which they have access.
With the click of a mouse, a company can access other companies, obtain information on projects, sign non-disclosure agreements with other organisations, make Skype and videoconference calls and organise one-to-one meetings. With this project, 4iWatch hopes to increase its present revenue of €5 million to €15 million by 2016.
The links to import ideas already exist, so 4iWatch argues “Why not export innovation?”. 4iWatch has perhaps introduced this concept of open innovation which could serve to leapfrog Europe in this most important sector, where it has been lagging behind now for decades.
Ing. Micallef is a former executive chairman of the Malta Communications Authority and former CEO of Malta Enterprise