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Archive for March, 2013


From Archimedes to Edison, attempts to improve quality of life have dictated a need for advances in science and technology. These advances are now widely understood as the key enablers of increasingly prosperous societies.
Despite this long history, the process of managing the expanding frontiers of new knowledge in a way that will benefit society is a work in progress. This is largely due to the unpredictable nature of scientific discovery most famously illustrated by Archimedes, when, upon stepping into the bath, he suddenly realised that the volume of water displaced was equal to the volume of the submerged portion of his body.
His discovery provided the solution to the previously intractable problem of measuring the volume of irregular objects and led to further advances in assessing the density and purity of precious metals among other things. In the modern world little has changed in how new knowledge is acquired. 
However, in an attempt to get the best value for their limited investments, governments have devised processes to manage its discovery.
Interestingly there has been a propensity to divide scientific research into a one-dimensional continuum starting with pure (sometimes known as blue-skies) research progressing through to applied research and on to technology transfer; the defining characteristic of pure research being that it seeks new knowledge with no view as to its application, while applied research seeks solutions to industrial problems.
Such a continuum has been the basis of R&D funding prioritisation in advanced economies around the world since it was promulgated by Vannevar Bush following World War II. In the past few years this mindset has been challenged as it does not accurately reflect the process of science and technology development.
The dynamic nature of the discovery of new knowledge and its commercial application can be observed in the remarkable career of French chemist and microbiologist Louis Pasteur, whose breakthroughs ranged from the first rabies and anthrax vaccines to paving the way for germ theory and pasteurisation. Pasteur was not driven by a quest for new knowledge for its own sake but was motivated by a desire to better understand and solve the problems of industry.
In his early career, he concentrated largely on uncovering new knowledge, but as he did so, came across other, previously unforeseen questions. While working as a chemist at the age of 22 he sought a theoretical understanding of why tartaric acid crystals derived from bio-mass rotated the plane of polarised light while the chemically synthesised form did not.
His experiments revealed that the naturally occurring compound is chiral, meaning its molecules exist in one of two possible crystal structures, each the mirror image of the other. In the process of uncovering this new knowledge, he laid the building blocks for the modern experimental science of crystallography, which is today used in one form or another in everything from gemstone cutting to DNA analysis.
Pasteur’s remarkable career uncovered whole new branches of science – such as microbiology – and, as he developed as a scientist, he began to seek to satisfy both theoretical and practical goals.
Of particular note is the fact that as the problems Pasteur chose to solve became increasingly applied in nature, the nature of his research became more fundamental. Pasteur’s research agenda was use-inspired. Understanding and exploiting the dichotomy between applied and theoretical goals is perhaps the reason behind the breadth of his contribution.
This philosophy is instructive for modern policymakers seeking to get the most from limited investment funds and move away from the outmoded, linear model. The effective management of applied research operations is much more complicated than simplistic models suggest.
A good example of the dynamic nature of new knowledge acquisition and the interaction between applied and fundamental goals is the former IRL’s (now Callaghan Innovation)  high-temperature superconductivity (HTS) research programme, which has its roots in fundamental research but has developed into an emerging New Zealand industry.
IRL’s world-leading capabilities in both fundamental and applied HTS research have positioned New Zealand as a key international player in an industry predicted to be worth billions of dollars globally in the coming decades and transform the way the world generates, uses and distributes electricity.
Ambitious Dunedin-based firm Scott Technology, which purchased a controlling stake in IRL spin-out HTS-110 , clearly understands the value of investing in technology. Its approach is already paying dividends, judging by its inclusion in the fast-mover list of the Technology Investment Network’s top 100 technology firms by revenue.

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The Institute of Public Affairs (IPA) in Australia has proposed cuts to a range of different Australian Government departments and programs, including completely cutting government funding for agricultural research and development.  Here is the paper by IPA .
The Australia Farm Institute  has been quick to respond and contends that  the recommendation are based on a quick and dirty attempt to generate Australian Government budget savings rather than on any proper analysis.  
Of course, the question of how to utilise science for the benefit of industry and business is not new and increased funding is not the whole answer. The “right” answers have morphed continually across countries and for decades.
What gets obscured in the discussion at times, and yet has remained relatively constant, is the fundamental value of science. Furthermore, using science as a driver of economic growth without regard to its underlying core is dangerous. So what are the core components that remain at the heart of science’s value proposition?
First, science is a body of knowledge, a vast one that has accumulated and built upon itself over hundreds of years. Trying to define its origins highlights the extent of human endeavour that it encapsulates. For example, Hippocrates’ work some 2300 years ago is still visible in the practice of medicine today. 
Secondly, science offers a consistent and structured approach to observation and problem solving. Again this isn’t a modern construct, rather something Isaac Newton is credited with formalising.
Thirdly, science’s role as a generator of new ideas and opportunities, whether through design or serendipity, has been well traversed. From the discovery of penicillin to the invention of the microwave oven and Teflon, there is a seemingly endless list of stories of how science has delivered significant advances from the unexpected.
While by its very nature science changes, these core components have remained constant. As discussions on R&D, innovation, and knowledge economies (or however the contemporary analysis is described) evolve, it is important to keep in mind these foundations, which have seen science assume such significance in the drive for wealth and wellbeing.
Another important aspect that should also be kept front of mind is that at its heart, science succeeds through talented, creative, and motivated people. Creating and maintaining a diverse environment where people can flourish is a necessity. 
It is important to recognise  therefore, that an increased support in the Budget for R&D will have the greatest long-term impact in the drive for productivity and prosperity increases.

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One of the myths of business is that only new companies innovate.  Another myth is that only established companies do research and development. 

In reality, new firms need to invest in R&D to gain market share. And, established firms need to invest in innovation to lead the market or to protect their slice of the pie.

But what type of R&D? How do we classify what will work and what won’t? There is no straight answer to the innovation mystery.

Innovation is a complex process that has become a confused concept in recent times. The challenge with complex concepts is converting them into the simple.

In a recent issue of Research.Technology.Management, Jim Euchner, the vice president of global innovation at Goodyear, proposes a set of innovation types:

  • Innovation that feeds the existing profit engine
    • Process innovation
    • Faster, better, cheaper product innovation
    • New feature (incremental) innovation
  • Innovation that creates a
    • New profit engine
    • New product innovation
    • New business innovation
    • Disruptive innovation

Experience shows that organisations seem to find it harder to become successful as they move down the list. Success in the latter categories, although harder to achieve, leads to greater profits.

Euchner also suggests that we pay more attention to the context or the circumstances – generally business circumstances – in which the innovation is situated, effectively matching the type of innovation needed to best suit the situation.

The key is to recognise that innovation is not a standard process. As the context changes, so does the approach to innovation. And as approaches change, so does the need for different types of innovations.

A couple of examples from NZ  highlight how different companies achieve success through quite different innovation strategies.

Glidepath is an excellent example of innovation that changed according to the situation. When Glidepath started out as a ’new kid on the block’, its product offering could be classified as a ‘process innovation’. The business has since matured and the ongoing innovation now falls into the ‘faster, better, cheaper’ category.

AQUI-S New Zealand showcases how a new firm is breaking into the market with a unique product innovation – humane fish tranquilisers. They are exporting to South America, Asia and may soon add the European market to their list. They had a simple, good idea that needed a lot of R&D to commercialise, and of course, gain regulatory approval.

So it is important to understand that there is no one-size-fits-all philosophy in terms of successful innovation. The one constant is that you have to be open to change and new points of view. Innovation is continuous.

Successful innovators and entrepreneurs all embrace change and the risks that they pose. In fact, innovation is the poster child of the mantra that there are no rules. Only by trying out new things, by failing, by discovering what works and what doesn’t, do you gain answers to the innovation question.

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