Open innovation for the developing world

Open innovation is a term promoted by Henry Chesbrough, a professor and executive director at the Center for Open Innovation at University of California Berkeley, in his book Open Innovation: The new imperative for creating and profiting from technology (2003, Boston: Harvard Business School Press). “Open innovation is a paradigm that assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as the firms look to advance their technology”.

The central idea behind open innovation is that in a world of widely distributed knowledge, companies cannot afford to rely entirely on their own research, but should instead buy or license processes or inventions from other companies. In addition, internal inventions not being used in a firm's business should be taken outside the company (e.g. through licensing, joint ventures, spin-offs).

The concept has been adopted most widely in the computing world where open source software projects are built and maintained by a network of volunteer programmers. Prime examples of open source products are the Apache HTTP Server, the e-commerce platform osCommerce, the internet browser Mozilla Firefox and the GNU/Linux operating system.

Open innovation is also beginning to emerge in life sciences as the pharmaceutical industry struggles to cope with declining R&D productivity; examples include:

• Sage (http://sagebase.org): using data from Merck and seed funding from private sources; and
• Two initiatives created and spun out by Lilly: InnoCentive (http://www.innocentive.com) and Collaborative Drug Discovery (http://www.collaborativedrug.com), harnessing the collective talent accessible through the Internet.

However, the area where open collaboration may have the greatest potential could be in bringing about genuine innovation in science and technology able to make a real-life difference to billions of poor people in the developing world who can benefit from scientific advances. An example that has really impressed me is Science for Humanity (http://www.scienceforhumanity.net/), a charity that has created a network of scientists and technologists (“solvers”) in order to provide innovative solutions to the urgent problems brought to the charity by developing communities, local NGOs and international agencies (“seekers”).

Science for Humanity was founded by Professor Baroness Susan Greenfield together with Justin Anderson, an IT entrepreneur, and Andrew Doman, a former Director of McKinsey. The aims of the charity include:

• identify science-based problems in association with their seekers and community partners
• ensure that the problem has not been addressed or already solved by another party
• establish projects to tackle the problems and develop viable solutions
• communicate the project to the Science for Humanity network of scientists and solvers
• facilitate collaboration and innovation on potential solutions through their network
• support funding of information gathering and pilot projects
• develop new models to support the design, development and delivery of innovative solutions
• share the outcomes to demonstrate new ways of applying science and technology in the interest of developing communities

Examples of current projects include:

• Green Charcoal, based in Uganda, this project aims to develop alternatives to using wood biomass as energy by finding innovative technologies and machinery for transforming crops, such as candlenut seed kernel, palm seed kernel and cotton stokes, into green charcoal. A solution to this problem could reduce the dependency on forest mass for energy, avert climate change effects on the local environment and people, reduce the time and energy for people to collect wood biomass, and create employment for local communities.
• The Peru Coffee project seeks to improve soil fertility for coffee production on the eastern slopes of the Andes due to deforestation, insufficient coverage to protect the soil, and agriculture without application of inputs to the soil. Whilst technologies exist to regenerate soil fertility, the solution to this challenge needs to be adaptable to the reality of small producers focused on organic markets.
• The Ecosan project, initiated by the WAND Foundation in the Philippines, aims to test the concept of ecological sanitation, which explores the response of crops, such as trees, vegetables and coconuts, to Ecosan product treatments (http://www.ecosan.ph/index.php), such as urine and faeces. A solution to this project could improve food security, reduce water consumption, and decrease the spread of infectious diseases.

These are some of the Science for Humanity projects that can meet people’s needs, help to alleviate poverty and contribute to sustainable development. If you are interested in making science, technology and innovation work for poorer people in the developing world then please consider becoming a member of Science for Humanity (both individuals and organisations are eligible for membership) and get involved.

See http://www.scienceforhumanity.net/get-involved/become-a-member

New models for innovation in the biotech industry

In an earlier blog I discussed the call by Sir Chris Evans and others for the British government to provide a £1 billion bail out for the UK biotech industry. The call was prompted by fears that the UK biotech industry will collapse as hundreds of companies go to the wall due to a lack of venture capital funding. I would like now to discuss alternative models for innovation in the biotech industry.

The traditional UK biotech innovation model has been for an invention to be patented by an academic researcher, licensed by that researcher’s university technology transfer office to a biotech company that then develops a technology or product through to a demonstration of proof of concept (creating further intellectual property along the way) before licensing the accumulated IP package to a large company that subsequently markets the product, resulting in royalties flowing back to the biotech company and the university.

This is a grossly simplified summary and there are of course many variations on this theme. However, a key aspect of this model is that biotech companies play a key role in taking an early stage opportunity through to a point where the big companies are willing to get involved.

The major problem with this model is that, currently, funding for biotech companies is in short supply as investors are reluctant to part with their cash as they seek to ride out the financial storms raging across the global economy. In late February, Intercytex (a UK regenerative medicine business) announced that it was putting itself up for sale after its lead product failed in a clinical trial (http://www.reuters.com/article/rbssPharmaceuticals%20-%20Diversified/idUSLN16839220090223). At the same time Summit, another UK biotech, announced that it had failed to secure a sufficient level of funding to continue its current business strategy and may be forced to sell itself or part of its business (http://www.scripnews.com/scripnews/business/Summits-woes-continue-as-cash-resources-dry-up-115995?autnID=/contentstore/scripnews/codex/8b0bdf26-ff6a-11dd-bc01-51f4f230b844.xml).

Are there alternative innovation models available? Well, yes there are some. For example, James Lyons-Weiler of the University of Pittsburgh has proposed the development of an IP Share Market through which funders could invest in IP rather than in companies (http://www.the-scientist.com/2009/02/1/28/1/). He believes that direct investment in market-valued IP could dramatically increase the rate of development and technology transfer.
Before anyone shouts that companies would never pool their IP, let’s not forget the recent announcement by Andrew Witty, the CEO of GlaxoSmithKline (GSK) that they intend to put IP that is relevant to finding drugs for neglected diseases into a "patent pool", so they can be explored by other researchers (http://www.guardian.co.uk/business/2009/feb/13/glaxo-smith-kline-cheap-medicine).

In a similar vein, it is worth examining some Israeli initiatives to deal with the funding crisis faced by its biotech industry (http://www.genengnews.com/articles/chitem.aspx?aid=2759). Some of these initiatives are based on funding projects rather than businesses.

Giza, an Israeli VC fund, introduced a pre-seed and seed-stage investment plan called the Ofek Program, a milestone-based plan in which the firm will invest no more than $500,000 in seed funding for early-stage projects being developed into commercial ventures in an incubator setting. As a project matures, if it meets established milestones, then Giza will invest additional funds. If it does not, then Giza can cut its losses. The Ofek Program also includes early investment-round funding to bring experienced entrepreneurs and managers in-house.

A biotech incubator, BioLine Innovations Jerusalem, owned by BioLineRx (http://www.biolinerx.com/), an Israeli clinical drug development company, received a special $23 million grant from the Israeli Ministry of Trade and Industry. Unlike a traditional incubator, in which a corporate structure is built around a drug or technology, BioLineRx takes a different approach and in-licenses projects that are developed as independent programs under a single corporate structure. Successful projects can be developed further by BioLineRx or licensed out. If a project is successful, the incubator pays the government back for that project; if it is not, BioLine shuts it down.

So, there are alternative innovation models out there and, in my view, the UK biotech sector (including government, industry, investors and the research community) needs to become much more creative in exploring new ways of commercialising innovative technology.