Gulliver in the land of giants? Internationalisation of the r&d of a small enterprise 17.06.2004

1. Gulliver in the land of giants? Internationalisation of the r&d of a small enterprise 17.06.2004 Markku Rajala President, ABR Innova Oy

2. ABR Innova Oy ABR Innova Oy is a company, which commercialises ideas related to ceramics materials and high-temperature technology. The ideas are developed to products or processes inside ABR and then spinned-off to new companies, who produce the final products. Three companies have been spinned-off and three are under the development stage.

3. For an innovative, small company the international r&d is the only way to achieve the critical knowledge-mass required for the growth ABR Innova Oy, like most small companies, have to find a niche-area, where the global market size is comparable to the company’s revenue, so that the company can be a global market leader. The “nicheness” means that there are only few experts related to the specific technology area – globally. The company has to find these experts and co-operate with them.

4. The key force driving the (international) r&d of a small company has to be short-term sales – unless the company is heavily funded. Time-to-market and time-to-profit need to be clearly defined. R&D –people tend to provide excellent technical quality – but seldom in schedule. Time-to-market means nothing to the research organisations – and time-to-profit even less! A small innovation-based company may use more than 30% of its’ revenue to r&d – and it needs to know that the investment pays back in short time. This is even more important in (more expensive) international r&d.

5. The internationalisation process is complicated and requires an outstanding network and long-term relationships. Governmental organisations could do much better in helping the SME’s in this area. The organisations do not make the networks work – people do! Networks are created by face-to-face discussions developed by conference calls and organised by emails. (International) co-operation is easy, if the motives are same – unfortunately this is seldom true between an SME and a research organisation. Linear process is replaced by parallel process.

6. Happy Days PRODUCTION DESIGN PATENTING SALES DEVELOPMENT RESEARCH Finnish Academy Tekes Keksintösäätiö Banks, Finnvera Tekes TE-center • are gone

7. Bad New Days are here ? PRODUCTION DESIGN PATENTING DEVELOPMENT RESEARCH

8. SME clusters can work extremely well in globalising r&d The members (SME’s) of the cluster(s) share the same motive – making business. Requires open, reliable co-operation between the cluster members. Mostly change of information – much “silent knowledge”.

9. Multinational r&d programmes (like European programmes) are far too bureaucratic and slow for SME’s

10. R&D co-operation between SMEs is easy and straightforward – leave the European research money to universities Italian SME Danish Co. US SME INNOVATION PATENTING CONTACTING PARTNERS FEASIBILITY STUDY R&D PILOT-PRODUCTION 6 months to $5-15M market

11. Intellectual property rights (IPR) are a key issue to a knowledge-based SME. USA’s patent policy is superior to the European system and also one of the reasons why US is an attractive place for placing r&d efforts. European patent – never ? Patenting in US is easy – and after filing the patent, co-operation in r&d is much safer.

12. Thank you! www.abr.fi www.nanoharju.fi