editor Frank Boermeester fboermeester@thefifthconference.com production and Commercial Director Koen Christiaens kchristiaens@thefifthconference.com production Joris De Wilder sales support Maarten Roofthooft Design and Layout afreux.be printing Printer: Antilope Paper: 135 gr Magno star HV / cover : Sappi 350 gr Typefaces: Meta bold and regular Le monde Courier regular italic and bold Gravure Condesed light, regular, bold and black. published by The Fifth Conference Tervuursesteenweg 133/2 3001 Leuven (Belgium) TEL: +32 16 22 36 69 FAX: +32 16 29 20 95 info@thefifthconference.com www.thefifthconference.com ISBN: 9789079056026 All rights reserved. Reproduction in whole or in part without written permission is strictly prohibited. While every effort has been made to check the accuracy of the information in this publication, the publisher cannot be held responsible for any inaccuracy in the texts.
From the Editor
THE FIFTH CONFERENCE INNOVATORS is a ‘state of the nation’ on Belgian innovation achievements. We have two audiences in mind. On the one hand we speak to the international reader. Internationally this country is known more for its chocolates, beer and political complexity. In this publication we’d like to broaden that perspective. Notwithstanding the challenges of a small local market, high wages and high taxes, there are plenty of remarkable Belgian companies that are effectively harnessing the creativity and intelligence this country has to offer. We may not have many mega-multinationals along the lines of Microsoft and Nokia, but we do have numerous world-class companies who dominate specialised ‘niche’ sectors. These companies tend to keep a low profile. Partly, that’s the Belgian way; we’re not prone to boastful behaviour. It also is an economic fact; these companies tend to supply the often invisible building blocks in the consumer products we use in our daily lives. The electronic components in your car; the recycled metals in your iPod’s battery; the artificial grass that European cup matches are played on; the technology behind the next generation solar cells, and so the list can go on.
However, let’s be absolutely clear—this is not propaganda. We are addressing the challenges we face in this country head on. Innovation is a hot topic in this country. The debate among policy makers, entrepreneurs and academics is a heated one. In that sense we’d like to make a contribution to that debate. Hence this book is also directed at Belgian stakeholders. In some ways it is an appeal, a wake up call. Yes, we can take comfort from the fact that we do have some highly innovative economic sectors but it is, quite simply, not enough. If we are to secure this economy, our lifestyle and our social security for the next generations then we need to focus that much harder on innovation. Let’s figure out how and let’s act, today. THE FIFTH CONFERENCE is a new media concept. It is inspired by the Fifth Solvay International Conference on Electrons and Photons held in Brussels in October 1927, where the world’s leading physicists debated the newly formulated quantum theory. It was a conference that brought together great ideas and the people behind those ideas. THE FIFTH CONFERENCE works in a similar spirit: its mission is to get people thinking, to spark new ideas, to stimulate connections across disciplines. In this publication we have looked for good ideas, we have spoken to the people behind those ideas, we wrote about those ideas and we let the innovators themselves speak in their own words. More publications in this format will follow, as will a conference, an unusual conference that will have one single-minded objective: to inspire.
With Sincere Appreciation The Fifth Conference would like to express its gratitude to our numerous sponsors and contributors, for their valuable support, time and insight.
Vision Article Contributers
Research Participants
Case Sponsors
Christian Leysen
Chairman
Ahlers
Geert Polleunis
Consultant
Aconos
Aerogo Europe
Patrick Lecluyse
CEO
Betafence
Filip Tack
CEO
Aventiv
Alcatel-Lucent
Dominique Neerinck
CTO
Bekaert
Danielle Jacobs
Director
BELTUG
Arte International
Barend Van den Brande
CEO
Big Bang Ventures
Dominique Neerinck
CTO
Bekaert
Bekaert Textiles
Hugo Franq
Secretary General
Bio.be
Barend Van den Brande
CEO
Big Bang Ventures
Belgacom
Michel Goldman
Vice-Chairman
BioWin
Michel Goldman
Vice-Chairman
BioWin
Bureau Greisch
Benjamin Damien
CEO
BioXPR
Benjamin Damien
CEO
BioXPR
CVWarehouse
Erik Magnus
General Manager
Creamoda
Jurgen Ingels
Clear2Pay
DCM
Tom De Ceuster
CEO
DCM
Managing Director
Rudy Aernoudt
Prof Economics
EHSAL
Tom De Ceuster
CEO
DCM
Devgen
Johan Valcke
Director
Design Vlaanderen
Rudy Aernoudt
Prof Economics
EHSAL
DLA Piper
Thierry Bogaert
CEO
Devgen
Johan Valcke
Director
Design Vlaanderen
Ecover
Dirk Perquy
Managing Director
Duror
Michael Bremans
CEO
Ecover
Elia
Peter Claes
Director-General
Essenscia
Partners
Director Economic Dept.
Fedustria
Enthoven Associates
Flanders Investment & Trade
Chris De Roock
Axel Enthoven & Alain Denis Chris Moris
Director-General
Fevia
HSH Aerospace Finishes
Chris Moris
Director-General
Fevia
Karel Vervoort
Managing Director
FLAG
IBBT
Karel Vervoort
Managing Director
FLAG
Patricia Ceyssens
Minister
Flemish Government
Imec
Els Vanheusden
Previous General manager
Flanders Bio
Marc Voet
CEO
FOS&S
Movetis
Jean Stéphenne
CEO
GSK Biologicals
Nazooka
CEO
Group Vandemoortele
Wim De Waele
General Manager
IBBT
Participatiemaatschappij Vlaanderen
Kenneth Van de Velde
CEO
JAGA
Sirris
Jean Vandemoortele
Denys
FOS&S
Hans Van Heghe
CEO
ICMS Group
Hugues Bultot
CEO
Kitozyme, Artelis
Skyscan
Anton de Proft
CEO
ICOS Vision Systems
Koen Debackere
General Manager
Leuven R&D
Tribù
Kenneth Van de Velde
CEO
JAGA
Murielle Scherre
Founder
La Fille d’O
Umicore
Hugues Bultot
CEO
Kitozyme, Artelis
Joseph Lemineur
Director
Materia nova
VITO
Koenraad Debackere
Director
Leuven R & D
Bart Vancoppenolle
CEO
Metris
Vlerick Management School
Murielle Scherre
Founder & Manager La Fille d’O
Marcia De Wachter
Director
Xenics
Nicole De Smyter
Manager
Nationale bank van België Netmining
Leuven Inc.
Jan Leuridan
CTO
LMS International
Filip Lauweres
Founder & COO
Joseph Lemineur
Director
Materia nova
Ben Stassen
Creative Director
nWave Productions
Francis Frankenne
Head of Research
Mithra Pharmaceuticals
Bart De Smet
Director
Participatiemaatschappij Vlaanderen
Lieven Messiaen
CEO
Modular Lighting Instruments
Luc Burgelman
CEO
Porthus
Kristof de Spiegeleer
CEO
Q-Layer
Arne Quinze
Founder & Art director
Quinze & Milan
Bruno Van Pottelsberghe
Professor
Solvay Business School - ULB
Ben Stassen
Creative Director
nWave Productions
Michael Teacher
CEO
Ontex
Luc Burgelman
CEO
Porthus
Bart De Smet
Business Unit Manager
PMV
Michèle Sioen
CEO
Sioen Industries
Michel Salmon
CEO
Marc Van Sande
CTO
Bernard Rentier
Rector
Gilles Vandorpe Jef Verplaetse
Marc Van De Perre
Chairman
Stichting Marketing
CEO & Bus. Dev. Director
Straticell
Straticell
Michel Salmon & Deborah De Clercq
Umicore
Pierre Guillaume
Technical Director
Techspace Aero
Université de Liège
Michel Morant
Managing Director
Université Liège
Economic Advisor
Unizo
Marc Van Sande
CTO
Umicore
Previous CEO
Van Genechten Packaging
Bart Verhaeghe
CEO
Uplace
Koen Verhaert
CEO New Products & Services
Verhaert
Jo Bury
General Manager
Flemish Institute for Biotechnology
Dirk Fransaer
General Manager
VITO
Piet Desiere
Director
VLAO
Bart Clarysse
Professor
Vlerick Management School
Peter Verboven
Innovation Advisor
VOKA
Hans Bracquené
General Manager
VRI
Koen Swings
Managing Partner
Zappware
Lead Sponsor: Belgacom Group
Foreword by Didier Bellens Supporting SMEs as the driving force of innovation
Didier Bellens CEO Belgacom
It is with great pleasure that I accepted the invitation to write the preface to this book. Innovation is one of my preferred subjects certainly in the context of Belgium. The telecommunications sector in which I operate flourishes in innovation and requires continuous vigilance. Remaining attentive to developments is both a challenge and a major source of growth for our economy. Before commencing to read this book, one should reflect on the all important question: in what way is Belgium a land of innovation? It is not my aim to answer that question; this book does that brilliantly. As you read on, you will discover many Belgian innovations in a wide variety of disciplines such as science, design, cuttingedge technology and the pharmaceutical industry. As an introduction, I will limit myself to launching a few ideas to enable this country to remain a fertile ground for innovation. In our global economy, innovation is undoubtedly a source of growth and competitiveness for companies. On closer inspection, it appears that small and medium-sized companies are often the driving force behind innovation, especially when it comes to new technologies. We are all aware, be it at a political or industrial level, that the competitiveness of our economy must bring about a transition from a system that is based on the use of resources and on productivity to a system that favours creativity, innovation and knowledge. The United States, with its many startups, is a good example in this regard. It is still one of the most innovative countries in the world, and many countries are trying to follow its example. There is also a desire to do so at the European level. The Lisbon strategy aims to make Europe the most competitive zone in the world by 2010 and encourages the creation of an environment that is more favourable to SMEs. Given these elements, Belgium appears to be well positioned to distinguish itself globally. In fact, our economic fabric is
chiefly made up of small and mediumsized companies, and we have a great number of high-level researchers and scientists. Our universities and higher education institutions are of course at the center of our innovation strategy. It is on their campuses that we develop the main ideas and procedures that make us world leaders. But for this system to endure, it is crucial that we value our researchers properly in order to prevent a brain drain. Another vital aspect is linked to the provision of knowledge on the market. It is essential to facilitate the marketing of innovations and map out the critical path that separates the idea from the point-of sale. What use would it be for us to simply collect patents? Innovation is only useful if everyone can benefit from it. This is how we can energize the economy, stimulate growth and improve the economical position of our country internationally. Finally I would like to draw attention to the entrepreneurial willingness in our country. Unfortunately this is one of our weaknesses; not because of the lack of ideas and innovative initiatives but due to the constraining entry barriers. As is so often the case, money forms the sinews of war. Innovative SMEs find it hard to obtain cash, which puts a brake on their development. Risk capital therefore remains the only alternative open to them. For large financial organizations, this may indeed involve some risks, but it is certainly worth considering. We should not forget that investing in innovation remains one of the best ways for Belgium to gain a genuine competitive advantage.
Foreword by Koen Allaert Innovation power from Flanders
6
Koen Allaert CEO Flanders Investment and Trade (FIT)
Let me introduce you to a side of Flanders that probably isn’t as well known to a wide public. Most people do know that Flanders is noted for its delicious beers and chocolates. Stereotypical thinking like this often does not correspond with reality. Flanders has a lot more up its sleeve. We are a leading European region with a wide variety of successful companies in all kinds of industries. fDi, the Financial Times’ magazine on foreign direct investment, recently voted Flanders the number 2 European Region of the Future 2008-2009 and the second best region in Europe for foreign direct investment. And it is not rigid, stereotypical thinking that has put us there, it is the power of innovation. Support for innovation in its widest sense Flanders chose the path of innovation long ago. Realizing it is a key way to stay ahead in the global economy, our government successfully developed a strong vision and an effective policy that encourages and fosters innovation in its businesses. Both SMEs and large firms in Flanders can count on continued financial and technical support for innovation projects in every aspect aspects of their activities. It is only a small percentage of innovation that is born as a revolutionary new product in the R&D department of a hi-tech company. Innovation is mostly about ongoing improvement and optimization. It pops up in a wide range of aspects, such as methods and processes, business management and organizational structure. And we encounter it in a wide range of industries from food and fashion over life sciences and chemicals to logistics, automotive and ICT. Knowledge is key With its high density of businesses and knowledge centers, Flanders truly houses an innovation eco-system. Our region is, for example, home to world-leading strategic research centers on biotechnology and microelectronics. Companies located in Flanders collaborate on innovation projects with nearby centers of excellence in mechanotronics, digital signal processing, logistics, telematics, automotive, multimedia, graphic design and much, much more. This collabora-
tion between the academic and business world in Flanders provides both local and foreign companies with a head start in their quest for innovation. Flanders Investment & Trade at the forefront Foreign companies profit by our innovation-friendly environment for several reasons. When product sourcers rest their eye on Flanders, they find original and high-quality services and products of the future. For overseas companies that decide to base their operations in Flanders, the Flemish government provides financial support for their innovation efforts through its subsidiary, the Institute for the Promotion of Innovation by Science and Technology in Flanders (IWT). And they also benefit by partnering with our different knowledge clusters. Flanders Investment & Trade assists them with all of this to help them achieve profitable, sustainable growth. To improve our services to potential foreign investors, Flanders Investment & Trade has expanded its global network by recruiting several technology attachés. The prime role of these dedicated technological business experts is to detect and bring together like-minded parties. Having identified both supply and demand, they oversee the transfer of innovative and technological know-how between Flemish and foreign companies, centers of knowledge and government bodies. Currently, we have a technology attaché for Biotechnology in New York (USA), for Biotechnology and Nanotechnology in Tokyo (Japan), for Environment & Energy in Beijing (China) and one for ICT in Mumbai (India). A second ICT attaché will be posted to Los Angeles (USA) in the course of this year
Foreword by Jacques Evrard Innovation and scientific research policy
Jacques Evrard General Manager The Brussels Enterprise Agency
In today’s intensely competitive world, innovation has become a top priority in order to support economic growth and development. The figures speak for themselves. Innovation accounts for half of the increase in added value of the regions in Europe. The most innovative companies generate 50% of their sales on new products compared to 20% for the least innovative companies. Thanks to the large number of universities (ULB, VUB, UCL) and industrial engineering trade schools located on its territory, the Brussels Capital Region enjoys significant advantages when carrying out a scientific research policy. Through financial support and interface structures, the Region encourages active collaboration between the worlds of scientific research and business. Gaining the maximum benefit from science is always a priority. This is accomplished in various ways: by obtaining patents and granting licenses, through the creation of spin-offs, in collaboration with existing companies, or through participation in the European Union’s R&D framework programmes. The Region is involved in an ambitious programme intended to support the creation of technological companies. With an annual budget of EUR 1 million, the Region works with researchers from universities or the industrial sector to develop new projects.
The Region also provides new companies with incubators for innovative companies. These are real estate structures that accommodate and advise spin-offs under favourable financial conditions until they reach a commercial size that is sufficient for them to stand on their own two feet. In order to breed excellence, the Region has established networks of excellence through direct collaboration among the various research centres. The Region also assists in the mobility of researchers through organisations such as “Research in Brussels” which is a mobility centre intended to facilitate the integration of scientists into Brussels’ social fabric, while the program bearing the same name enables the accommodation of high-level foreign researchers. For its part, the “Prospective Research for Brussels” programme provides long-term financing (2, 3 or 4 years) for research projects which focus on an issue specific to Brussels. To accomplish these objectives, the goal of the Conseil de la politique scientifique (Scientific policy council) is to advise the Government in these matters. In addition, an administration dedicated to research has also been set up: the Institute for the encouragement of Scientific Research and Innovation of Brussels (ISRIB).
Corporate Articles Editorial Articles From the Editor With Sincere Appreciation Table of Contents Introduction Innovation Indicators: Increasingly Proactive Innovation Policies Technology Transfer Excellence Life Sciences & Chemicals Engineering & Technology Innovation in Mature Industries Creative Industries The Belgian Innovation Formula Tips for Policy Makers
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Table of Contents
Vision Articles Foreword by Didier Bellens Foreword by Koen Allaert Foreword by Jacques Evrard Bruno Van Pottelsberghe Marcia De Wachter Patricia Ceysens Wim De Waele Rudy Aernoudt Koenraad Debackere Michel Morant Tom De Ceuster Jo Bury Michel Goldman Deborah De Clercq & Michel Salmon Benjamin Damien Jurgen Ingels Luc Burgelman Filip Lauweres Danielle Jacobs Karel Vervoort Pierre Guillaume Joseph Lemineur Dominique Neerinck Marc Van Sande Chris Moris Alex Van Breedam Murielle Scherre Axel Enthoven & Alain Denis Arne Quinze Koen Verhaert Johan Valcke Ben Stassen Mick Bremans Filip Tack Bart Verhaeghe Marc Voet Jean StĂŠphenne Bart Van Coppenolle Kristof de Spiegeleer Kenneth Van de Velde Barend Van den Brande Hugues Bultot Marc Van de Perre Geert Polleunis
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Introduction
Innovation is a hot topic in Belgium, perhaps too hot, with the result that the term is often abused in hollow marketing slogans. But we need to be clear: from an economic perspective innovation is of fundamental importance to this country. The European Commission’s review of innovation policy (INNO Policy Trendchart 2007) sums it up nicely. Firstly, economic forecasts predict that Belgian growth rates in the coming years will not be sufficiently high to prevent the reappearance of public deficits, or in another scenario, sufficiently high to maintain social protection for an ageing population. Secondly, there is a long-term trend of declining rates of productivity growth. Thirdly, exporters are losing market shares due to the decline in (external) competitiveness of our main export industries. There is only one way out of this economic doom scenario and that is via innovation. It is via innovation that Belgian companies will be able deliver superior value on world markets, thereby increasing revenues and margins, and thus economic growth. The alternative is declining wages and protracted social conflict. In this first edition of THEFIFTHCONFERENCE INNOVATORS*, we present a ‘state of the nation’ on our innovation achievements. For the purposes of this project we have taken a broad perspective to innovation. Essentially, we are interested in any activity that is capable of adding value, and thus drive revenue growth and profit margins. Thus, we have looked at Technological Product and Process innovators
(OECD, 1997), the companies with labs and R&D departments, but we have also looked for organisational innovators, the firms that implement “significantly changed organisational structures, advanced management techniques or substantially changed corporate strategic orientations” (OECD, 1997). Closely related to this latter category are the “strategic innovators” (Debruyne & Schoovaerts, 2006), the companies that introduce new business models. Finally, we have looked at design-orientated companies. Design too can be a motor for innovation and hence drive growth and margins, a fact that is well illustrated by the design cluster in Northern Italy (Verganti, 2006). Across the course of our research, we interviewed over 40 CEOs and CTOs at Belgium’s leading innovative companies. We also spoke to leading academics and numerous sector associations, from biotech and chemicals to the food and textiles. It is these conversations that serve as the basis for our main text running through the publication. The book is organised in a reasonably logical manner. We begin with the quantitative facts, a review of the benchmarking studies on innovation performance that have been conducted by the likes of the European Commission. This lays out the key challenges we face in this country. Although Belgium scores reasonably well on the key innovation indicators, on a par with our neighbours, there are some worrying signs that the economy, from a structural perspective, is not sufficiently innovative. Our positive scores are due mainly to our
excellent innovation ‘inputs’—our highly educated population, our scientific performance—but we struggle to translate this into economic ‘outputs’, such as a high-tech orientated economy and exports. All the subsequent articles discuss our response to those challenges. Firstly, government policy is reviewed, based partly on formal policy evaluations and partly on the feedback we heard in our interviews. The news is reasonably positive in Wallonia as the Marshall Plan begins to lead to interesting projects. In Flanders there is reasonable consensus about what went wrong, and a new plan is in the make. Expectations about ‘Vlaanderen in Actie’ (Flanders in Action) are high. Nationally, a key stumbling block remains the weakness of the federal state, since it is responsible for the broader fiscal environment. Next, we look at ‘tech transfer’—the means by which scientific work conducted at universities and research institutes is valorised, the way it is transformed into economic value. Here we highlight the excellent work being conducted by entities such as the Flanders Institute of Biotechnology and the University of Leuven’s Tech Transfer unit. We report the positive feedback on the Marshall Plan’s ‘partnership’ approach, bringing large companies, SMEs and universities together in research consortiums. Finally, we highlight the unique model of Scientea Terra, a research institute set up by organic fertiliser specialist DCM. The next three articles cover innovation in industry. First we look at chemicals and life sciences, the main motor of R&D expenditure in this country. Secondly, we
take a broad look at engineering and IT, the ‘high tech’ companies. Thirdly, we cover the more mature manufacturing industries, such as automotive, food and textiles. We finish off this part by glancing at the creative industries (it deserves a separate book). In sum, his has been a fascinating tour of the Belgian economy. In addition to our own text, we invited more than 40 individuals—managers, academics and policy makers—to contribute a brief personal statement about innovation, on developments in their discipline or more generally about the challenge of managing an innovative company. We also profile the sponsors of this publication, all companies or organisations that either are leading innovators in their sector, or are key facilitators for innovation in this country, be it via education, legal services or capital provision. Remarkably, it does seem possible to make some general conclusions about the innovation process at Belgian companies. These conclusions we outline in our final article. It is a salute to the wonders of our science and technology, the way it plugs, mainly invisibly, into so many processes and products we take for granted in our daily lives. It also, however, is an appeal to entrepreneurs and policy makers to think bigger, much bigger, about our changing global economy and the role we should be playing in it.
Innovation Indicators: Solid foundations but lacking output In May 2007 Rudy Aernoudt, then director of the Flemish Department of Economy, Science & Innovation, bemoaned the state of Flemish public investment in R&D (“Vlaanderen is geen Innovatieve topregio”, De Tijd, 15 May 2007)—the latest statistics coming in for 2007 were showing a decline in public spending. Given that public spending was already below the EU average, this was not good news. Then later in the year, Steunpunt O&O Indicatoren released its heavyweight innovation indicators book for the Flanders region. That news was less negative: strong results in scientific output—more doctorates, more international publications and citations—and even a slight rise in R&D spending by business in 2006. But the fact remained: Flanders, though spending somewhat more on R&D than Wallonia, was still way off the Lisbon target, and only slightly above the EU average. Then in January 2008 in a De Tijd opinion piece (“Vlamingen moeten naar buiten komen” De Tijd, 12 january 2008), Herman Daens, boss of the largest private equity group in Belgium, wondered why the recently released KOF Index of Globalisation, showing that Belgium topped the list of the most globalised countries, went unnoticed by the press. Perhaps we’re not doing that badly after all? But then in May 2008, Marcia De Wachter, vice chair of the Belgian National Bank, spoke at the BELTUG VIP day to an auditorium filled to the brim with the country’s top ICT managers and suppliers. Her presentation was a stark warning to all innovation optimists. The stats she presented showed that Belgium underperforms the EU average on a range of key innovation indicator. We are exporting to low-growth countries, we are exporting in mature, low growth industries, we are not investing R&D in high-tech industries, and so the list went on. Ms De Wachter summarises her arguments in INNOVATORS on page 16.
So how is one to make sense of the ongoing stream of statistics, reports and commentaries on innovation? How innovative is Belgium? How does this country compare to other countries in Europe and further abroad? Is the country becoming more innovative, or less so? In this article we look at innovation from a quantitative perspective, i.e. we review the ‘key indicators’ or KPIs, that governments use to assess the effectiveness of their policies. The purpose here is not to conduct primary research in Belgian innovation performance. There are more appropriately positioned entities (like the European Commission) doing that sort of work. Our purpose in this article is to briefly review such research. Key sources in this area are as follows: • OECD Science, Technology and Industry Scoreboard 2007 • European Innovation Scoreboard 2007. COMPARATIVE ANALYSIS OF INNOVATION PERFORMANCE. PRO INNO EUROPE (European Commission, Enterprise Directorate-General) • Conseil des Politique Scientifique. May 2006. Evaluation de la politique scientifique de la Région wallonne et de la Communauté française. (The Science Policy Council of the Walloon Region’s evaluation of innovation performance and government policy). • Steunpunt O&O Vlaams Indicatorenboek 2007 (The Flemish government’s annual evaluation of innovation performance in Flanders). There also are several formal evaluations of government policy that are relevant here, although these tend to rely on data from the above sources to support their arguments: • INNO-Policy TrendChart - Policy Trends and Appraisal Report. 2007. PRO INNO EUROPE (European Commission, Enterprise Directorate-General) • OMC Policy Mix Review Report. Country Report: Belgium. July 2007. (A European peer review of Belgian innovation policy). • Soete, L. (2007). Eindrapport: expertgroep voor de doorlichting van het Vlaams innovatie-instrumentarium. www.soete.nl.
At a European level, the key benchmarking tool is the European Innovation Scoreboard (EIS). Developed at the initiative of the European Commission under the Lisbon Strategy, it aims to provide a comparative assessment of the innovation performance of EU Member States. The most recent EIS 2007 includes innovation indicators and trend analyses for the EU27 Member States as well as for Croatia, Turkey, Iceland, Norway, Switzerland, Japan, the US, Australia, Canada and Israel. Most commentators on innovation, including Ms De Wachter in her article on page 16, rely to some extent on the EIS data. The EIS conceptualises innovation performance along a number of key ‘input’ and ‘output’ indicators. Input indicators include ‘innovation drivers’ (mainly concerned with education), ‘knowledge creation’ (mainly to do with R&D spending) and ‘innovation & entrepreneurship’ (mainly self-reported innovation activity by companies). Output indicators include ‘applications’ (prominence of high-tech sectors in exports and employment, extent to which new products generate revenue) and ‘intellectual property’ (patents and trademarks). The EIS indicators rely on a number of data sources. Most of the data is collected annually by the member states themselves and is available via Eurostat or the OECD. Another key source is the Community Innovation Survey (CIS). The CIS is a series of surveys, implemented by the member states’ national statistical offices, but compliant with a set of guidelines so that they are able to serve benchmarking purposes. Four surveys have been carried out since 1992, with CIS4 in 2004 being the latest. Overall, the 2007 EIS shows a continued process of convergence within the EU. The innovation “leaders” (Denmark, Finland, Germany, Sweden and the United Kingdom in the EU and Switzerland and Israel as non-EU countries) continue to show strong performance, on a par with the US and Japan. Meanwhile, the majority of other EU Member States are catching up with the leaders. Noteworthy is that three of the newer Member States - Estonia, the Czech Republic and Lithuania - are on track to reach the EU average innovation performance within a decade.
According to the EIS, Belgium’s overall innovation performance is relatively positive. The performance is just above the EU average, but still just below the “innovation leader” countries. Belgium’s performance is comparable to Austria, France, Ireland, Luxembourg and the Netherlands. Important is that its innovation performance overall, the Summary Innovation Index, has declined relative to the average EU growth rate in the last five years.
continue at p. 19
EIS 2007 Innovation Performance (Relative to EU-25) Legend: 100 = EU norm
0
INPUT - INNOVATION DRIVERS S&E graduates Population with tertiary education Broadband penetration rate Participation in life-long learning Youth education attainment level
INPUT - KNOWLEDGE CREATION Public R&D expenditures Business R&D expenditures Share of med-high/high-tech R&D Enterprise receiving public funding
INPUT - INNOVATION ENTREPRENEURSHIP SMEs innovating in-house Innovative SMEs co-operating with others Innovation expenditures Early-stage venture capital ICT expenditures Organisational innovation
OUTPUT - APPLICATIONS Employment in high-tech services Export of high technology products Sales new-to-market products Sales new-to-firm products Med-high/high-tech manufacturing employment
OUTPUT - INTELLECTUAL PROPERTY EPO patent USPTO patents Triad patents Community trademarks Community designs Source: PRO INNO EUROPE, 2007
20
40
60
80
100 120 140 160 180 200
Bruno Van Pottelsberghe Europe’s R&D: missing the wrong targets?1
14
Bruno Van Pottelsberghe Professor, Université Libre de Bruxelles (ECARES and SBS), and Senior Fellow, Bruegel
Setting targets for private R&D without looking at technological specialization and the expected return is ineffective. The drivers of private R&D expenditure call for a more integrated European market for technology, notably a community patent in lieu of the current costly and complex system. More funding is needed for academic research, as a magnet for local and foreign business R&D activity in Europe.
Europe is not delivering on its commitment under the Lisbon agenda to increase its R&D-to-GDP ratio to 3% by 2010 (one third, or 1% of GDP, being funded by the government). In 2006 its R&D intensity was still below 2%, having been flat-lining for more than two decades. The Chinese business sector has even outperformed European firms, while Japanese and US firms’ propensity to invest in research activities has been higher than in Europe for more than 25 years. Belgium is close to an R&D intensity of 2%. ... None of the EU member states has fulfilled its self-set commitment, as no country actually devotes one percent of its GDP to the public funding of research activities. The only countries that are close to the 1% target are Sweden, Austria and Finland. Despite the Lisbon agenda, a large number of countries have actually reduced their government funding of R&D as a percentage of GDP. ... even when technological specialization is accounted for For most countries, R&D intensity is a by-product of specialisation. A country specialised in the finance industry (e.g., Luxemburg) would not need a high level of R&D expenditure in order to ensure growth. Similarly, a country specialised in the tourism, fashion, services or food industries would logically have a lower R&D intensity than a country specialised in the pharmaceuticals, engineering or biotech industries. For instance, Finland has a reputation for specialisation in information and communication technologies, an industry which is very intensive in R&D. Taking into account this specialisation, the Finnish R&D intensity may actually not be particularly high. A recent study2 shows that I. not taking into account industrial specialisation may lead to somewhat skewed ranking of countries;
II. when
industrial specialisation is taken into account, countries like Sweden, the US, Japan and France still outperform other countries, but Finland and South Korea, known for their high R&D intensity, do not invest particularly more than what their industrial structure would suggest. Belgium is similar to Germany, the UK and Finland.
The expected return to R&D is a key factor... However, Sweden, Japan, France or the US display an above-average R&D intensity in most of their industries. Something other than technological specialisation also seems to drive R&D expenses in these countries. The most important driver of business R&D expenditure is probably the expected return on the investment. What would improve this expected return? Beside the fashionable R&D tax credit or direct subsidisation policies designed to reduce the cost of carrying out R&D, two specific policy areas deserve particular attention in Europe. An integrated market for innovation: the community patent Larger markets would logically result in higher expected returns on R&D expenses. The market size hypothesis may explain why the US and Japan have an above-average R&D intensity (or larger than its industrial structure would suggest). The US benefits from a huge and homogeneous market, with one main language and one regulation. In Europe, sending a product from Amsterdam for sale in Brussels is still considered an ‘export’, whereas a product made in New York and sold in Los Angeles is labelled ‘distribution’. Emblematic of the lack of market integration is the way the innovation system works in Europe. The European patent system, and hence the European market for technology, is highly fragmented. Once a patent has been granted by the European Patent Office (EPO), it must be validated, translated, monitored and enforced in all relevant national patent offices. For that reason, a patent examined by the EPO and then enforced in 13 European countries costs about 11 times more than a patent granted by the United States Patent and Trademark Office (USPTO), and 14 times more than a patent granted by the Japanese Patent office (JPO).3 The policy implication is straightforward (cf. Table 1). The failure to create an EU patent
Table 1. European patent costs (enforced in 13 countries) relative to the US and Japan, 2004 Cumulated fees Total cost and translation costs (*) for 20 years (**)
US Japan
11 14
9 7
Source: Bruegel Policy Brief 2008/03; adapted from van Pottelsberghe and François (2006). These figures represent the simulated costs of a European patent divided by the simulated cost of an average patent in the US and in Japan. (*) The costs include the expenses (fees and translation costs) for a patent examined by the European Patent Office (EPO) and validated in 13 European countries after granting. (**) The total cost for 20 years also includes the renewal fees for 20 years in 13 European countries. These costs are related to the absolute cost of an average patent. The recently ratified London Protocol will reduce translation costs.
More academic research Market size may explain the US and Japanese performance with regard to R&D intensity, but it does not explain the performance of Sweden for instance. The explanation here is probably linked to the relatively high level of spending on academic research, the highest (as a percentage of GDP) in the whole OECD area (Belgium is below 0,5% whereas Sweden is nearly at 1% of GDP devoted to academic research). Not surprisingly, the three European countries with the highest aca-
demic R&D intensities are also the three countries with the highest business R&D intensities (Sweden, Austria, Finland), as illustrated in Figure 1. Provided effective technology transfer systems are put in place, academic research is probably the most effective source of new ideas, which in turn induce further research in the business sector. In this respect, the European Research Council (ERC), which provides merit-based fundamental research grants, is a recent positive example of what the EU can achieve. Not only does academic research feed ideas to the market, but it also attracts more funding from the business sector and promotes the setting up of scientific clusters. In the UK, universities with a high scientific output attract significantly more local and foreign research laboratories to their neighbourhood. This question matters because gaining a technological edge is the main driving force behind foreign business R&D investment, be it in the US, in Europe, or elsewhere. In fact, large firms increasingly invest in emerging markets, which provide a high-quality labour force at much lower cost than in Europe. The important role of academic research as provider of ideas to the business sector and as a catalyst of foreign R&D expenditure implies a need for more resources devoted to higher education research activities. Figure 2. Business-funded R&D and R&D carried out in institutions of higher education as a percentage of GDP, 2006 or closest Source: OECD, MSTI, 2007, adapted from van Pottelsberghe, 2008, Europe’s R&D: Missing the wrong Target, Bruegel Policy Brief, 2008/03.
3,0
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2,0 Industry financed R&D, % of GDP
places a heavy burden on the shoulders of European innovators and entrepreneurs at the very beginning of the innovation process - a clear comparative disadvantage for Europe with respect to the US and Japan.
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R&D performed by the higher education sector, % of GDP
Data source for figure 2 HERD Sweden Finland Germany Denmark Luxembourg Austria France Belgium Netherlands Czech Republic Slovenia Ireland United Kingdom Spain Italy Hungary Portugal Poland Slovak Republic Greece Romania
0,78 0,65 0,41 0,63 0,04 0,65 0,38 0,41 0,49 0,25 0,25 0,34 0,45 0,33 0,33 0,24 0,29 0,17 0,12 0,24 0,06
Industry-funded GERD 2,55 2,30 1,68 1,46 0,28 1,14 1,12 1,11 0,90 0,88 0,82 0,79 0,75 0,52 0,43 0,43 0,29 0,18 0,17 0,16 0,14
Endnotes 1. This note is based on: van Pottelsberghe B., 2008, Europe’s R&D: Missing the wrong target, Bruegel Policy Brief, 2008/03. 2. Mathieu A. and B. van Pottelsberghe de la Potterie: A note on the drivers of R&D intensity, in: CEPR Discussion Paper 6684, 2008. 3. van Pottelsberghe de la Potterie B. and D. François: The cost factor in patent systems, in: Journal of Industry, Competition and Trade, in press, 2008.t
Marcia De Wachter Talent, innovation and internationalisation: Building excellence in the Belgian economy
16
Marcia De Wachter Director National Bank of Belgium
The global economy is struggling with heavy head winds, accompanied by growing pains and financial turbulence. Political and business leadership will be kept occupied by three key changes for the 21st century: globalisation, technological development and the fight for talent. Our companies realise that talent management, innovation and internationalisation are the key skills for the coming decennia. Innovation is the new arbiter of national competitiveness. Innovation must be acknowledged as a national priority and a central strategy for the economy of the 21st century. An inventory of the strengths and weaknesses of our economy in these domains can be summed up in five questions: 1. Is the Belgian economy sufficiently specialised in future-oriented products? Belgium is less specialised than its three partner countries (3P) in products which are advantageous for securing a larger market share in world trade. There is too little specialisation in products which on average grow faster than the world economy (the so-called progressive products are medical, pharmaceutical and biopharma products, cars and bio‑chemical products, genetic engineering and micro‑organisms). On the other hand, Belgium is more specialised than the 3P in products which are unfavourable for the growth of our market share, particularly in so-called regressive products which grow slower than the average of the world economy, such as traditional sectors such as textiles and iron and steel. Belgium is not at all specialised in growth products such as telecom equipment, which nevertheless commands a distinctly progressive international market potential. Belgium performs even poorer in the production of computer appliances and equipment (i.e. computers and peripherals). Generally speaking, Belgian industry is specialised very little and only slightly specialised in very progressive products and hardly specialised at all in ICT products. Our strongest growth sector is the medical and pharmaceutical sector. On the other hand, Belgian industry is especially active in products without a strong progressive profile, which can be manufactured relatively easily by competitors in emerging countries, e.g., car assembly,
diamonds, plastic granules and textiles, activities which are gradually moving abroad. 2. Does the Belgian economy keep pace with the growth of international trade? Insufficient future-oriented product specialisation is the basis for the conclusion that our volume of exported goods during the period 2000-2006 has on average only increased every year by just 3.7% compared with 6.3% for the 3P and 6.1% for the three Scandinavian countries1 (3S), because our markets (5.4 v 5.7 and 6.0) grew slower, and also because our export performance was not as good (only 2/3 of exports maintained compared to 100% in 3P and 3S). Over the last four years, foreign trade did not contribute to the growth of gross domestic product, which was detrimental for employment. Belgium therefore lags somewhat behind compared to 3P and 3S regarding export of high-quality technology. The lower growth of our markets is to a great extent product-bound. We mainly export semi-manufactured goods, for which long-distance transportation costs it are not economically viable . In the Internet era, distance is dead, unless you must bridge a distance, in which case the distance will be the death of you… Three structural factors weigh down on Belgian competitiveness and export performance: • exporters focus primarily on slowgrowth neighbouring countries. About 75% of our exports still go to the EU15. The share of Asia in exports has barely increased over 10 years; • inadequate export performance to our markets. Only 2/3 of a percent of the growth of our export markets could be translated into Belgian export growth, compared to an increase of the international markets for the 3P and 3S, because Belgian industry is insufficiently specialised in futureoriented products. Belgium has also missed the ICT train; • import prices rise faster than in neighbouring countries and account for a larger part of unit prices, as we still have to import many items, especially energy, to bolster often out-dated industrial production. 1 Sweden, Denmark and Finland.
doctoral degree in science and engineering and more than 30% of new graduates are scientists or engineers, compared to only 22% in Belgium. In 2005, the best year ever, Belgium had only 13 computer science graduates per 100,000 residents compared to 35 in Finland, 29 in France, 25 in the Netherlands. In order to meet the acute shortage of ICT graduates – there are currently at least 15,000 job vacancies ‑ and that figure is set to increase - the number of ICT graduates in Belgium would have to double to the level of France and the Netherlands. 3.2 Creation of Knowledge Investing in knowledge is measured as total expenditure for higher education, expenditure on R&D and investment in software. In 2004, the 3S invested on average 6% of gross domestic product (GDP) in knowledge, compared to 4% GDP by the 3P and 3.8% in Belgium. Between 1997 and 2004, the 3S increased their investment efforts on average by a full percentage point of GDP. In Finland, this increase in investment is spent entirely on R&D while in Belgium, it is spent on higher education. Increased internationalisation of our products can only be realised by a greater focus on highly technological products and services, by sufficient price competition and by more dynamic non‑price competition (R&D, product innovation). 3. How does Belgium perform in the area of innovation? In addition to internationalisation, it is talent management and innovation that will be crucial in building ‘excellence” in the coming decennia. The innovation performance of various countries can be summarised on an innovation scoreboard, which shows both the means used or the input side and the results or the output side. The means or driving forces behind innovation are: education, creation of knowledge, R&D efforts; innovation and entrepreneurship. The results of innovation are new applications in the market; intellectual property or patents. 3.1 Education The number of new university graduates is an indication of the potential of a country to assimilate, develop and distribute advanced technological knowledge. In Sweden and Germany, more than 2.5% of young people between 20 and 29 obtain a
In 2005, looking specifically at R&D intensity (i.e. expenditure on R&D as a percentage of GDP), the 3S are with an average of 3.3% of GDP well above the 3% agreed in the Lisbon Agreement, significantly more than the OECD average of 2.2% and Belgium, with a figure of 1.8% of GDP has to let the 3P take the lead with 2.4% of GDP. Belgium does not only attract attention due to its low amount of investment in R&D, in which both the government and the private sector fall short, but also because R&D is concentrated at a few large foreign companies and especially in four large pharmaceutical companies. An important conclusion is also that R&D expenditure in Belgium is still being spent on medium and medium-low technology. 3.3 Innovation and entrepreneurship This comprises the innovation effort within a company, especially by small and medium-sized enterprises (SMEs). Belgium scores better than the 3P, thanks to the innovative behaviour of the SMEs. However, this is mainly about taking over existing technologies.
3.4 New applications on the market Innovation by definition comprises a certain degree of renewal. The first step is renewal in the company itself. However, the real drivers of the innovation process are the companies which develop innovations for the market and for the world. It is remarkable that the innovative strength of Belgian companies, measured in product innovation which is new for the market, means that Belgium leads the OECD countries. Over 45% of large companies and 20% of SMEs innovate with market renewing products. This leads us to the conclusion that Belgian companies are strong innovators but too often in non-progressive products and sectors.
v
3.5 Patents There is a very high correlation between the output of R&D, as for example measured by the number of triad patent families and expenditure on R&D which is financed by industry (R² = 0.98). The more a country spends on R&D, the higher the patent registrations. An analysis of regional patenting shows the concentration of innovative activities in various countries. In particular, the number of Patent Cooperation Treaty (PCT) applications per region gives an approximation of the most innovative regions as a source of world knowledge. Invention activities are mainly concentrated in a small number of regions. In the EU, North Brabant in the Netherlands is the leader in the number of PCTs in ICT, followed by Ile de France, Upper Bavaria, Etela (Finland) and East Anglia. These are the regions which also surpass the strongest growing region in Belgium in economic growth because they spend more on R&D, employ more scientists, submit far more patents and are able to create more prosperity. It is, however, a fact that 40% of the inventions of Belgian inventors are submitted by companies established abroad (the highest of all countries examined). 4. What difference does policy make? With respect to education, Belgium is one of the best performing countries, an accomplishment that the government and the education sector may be justly very proud about. Nevertheless, there is clearly lost ground to be covered with respect to the number of S&E and ICT graduates. Regarding innovation, the interaction between industry and the government comes in many shapes and sizes. One aspect is without a doubt the direct financial flow earmarked for R&D between the government and the business sector. The Belgian government scores very well in this area, at the level of Sweden and Germany. About 5% of R&D expenditure in the business sector is financed by the government. On the other hand, Belgian companies account for about 12% of R&D expenditure in higher education and government agencies.. However, the government budgets for R&D expressed in terms of GDP are too small and should be increased to 1% of GDP as agreed in Lisbon in 2000.
Belgium, together with France, has allowed the most important income tax credits for R&D between 1999 and 2007, especially in connection with a general reduction in business withholding tax for researchers’ income up to 65%. Belgium also does well with respect to cooperation between innovative companies and public research departments. 60% of our large companies have such cooperative links. As far as the SMEs are concerned, this is only about 15%. The government should be able to aim for a higher target figure by means of a transparent innovation structure and communication. Most of the published patent applications comprise a list of references or quotes to “non‑patent literature (NPL)”. These scientific studies indicate the limits of patent rights to renewal, invention activity and industrial relevance. For the ICT sector, the average of NPL quotations is 18%. Within Belgium, this is 28%, which means that Belgium still benefits from scientific R&D in ICT. In countries with lower percentages, innovations are more likely on existing technology. This strong asset could also be expanded. 5. What are the core elements of a macro economic action plan to optimise the striking power of our companies in the area of talent, innovation and internationalisation, especially in the ICT sector? Regarding talent management, there should be: I. a larger influx of S&E and IT students to shore up the increasing shortage of experts. We need to catch up; II. more international exchange of students and professors to speed up knowledge transfer and globalisation; III. income tax credits to help employ more researchers is a step in the right direction, but a reduction in the employers’ contributions for all employees up to the Scandinavian level, would be the most effective stimulation for all forms of innovation; IV. the government must increase productivity and the attraction of its administration by emphasising its own innovative possibilities and by more efficient input of ICT;
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Regarding innovation: I. product specialisation of Belgian companies must become more innovative and future-oriented. Cooperation in the company is of the utmost importance: the most effective innovations occur over several disciplines: research, production, commercial services, etc. The most important innovations will be those which transcend every specific business or technology, with a broad social impact leading to real improvement in the lives of people. Belgian private and public cooperative connections are, when compared internationally, excellent but emphasis should be placed more on the market potential and the marketing of new products; II. to this end, the R&D budgets of the private sector and the government must be brought up to Scandinavian level. The government must bring its infrastructure and computerisation investment in its administration up to a level comparable with the 3P and 3S; III. innovative cooperative links on a global scale are necessary especially with the USA and with the BRIC countries, which represent an enormous market. The links with various Belgian toptechnological sectors such as pharmaceuticals, health, environment & energy can be strengthened with more cross-pollination. IV. more measurement of the output of efforts with respect to R&D and related investment must be made. Regarding internationalisation: I. attention must be paid to the leading role that high-technological products can play to improve our export performance. Companies must assume their responsibilities in this regard; II. however, the structural handicap in price competitiveness must be eliminated at national level, including employers’ contributions which should be decreased to Scandinavian level;
More input of talent, directed innovation and internationalisation and lower employers’ contributions, such as in the Scandinavian countries, must become the essential cornerstones of growth for Belgium. This will make our economy more vital, more dynamic, more competitive and richer in employment and actively prepare it for the knowledge economy of the 21st century.
Innovation Drivers On the Innovation Drivers dimension, Belgium performs above the EU average, mainly because the country has an exceptionally high proportion of tertiary education graduates and because the broadband penetration rate is high. However, Belgium compares negatively to the European norm when the number of Science & Engineering (SE) graduates are counted. This point on education needs further clarification. Other reports (e.g. Vlaams Indicatorenboek 2007) confirm the high participation rate in tertiary education, concluding that more than half the number of young people in Belgium today attempt some form of tertiary education. However, the actual study directions chosen do differ remarkably from European norms. Drilling down deeper in the study directions, Belgium has a comparatively high proportion of graduates in the Life Sciences (5,8% of all Belgian university diplomas in 2002-2003 and 6,9% of all diplomas in Flanders, compared to 3% as the OECD average) and in Engineering, Manufacturing and Construction (11,3% of diplomas in Belgium versus 7,3% in the OECD). What appears to pull the overall S&E score down in Belgium is the seeming unpopularity of computing/IT (2,5% of diplomas in Belgium versus 9,2% for the OECD). Ms De Wachter stresses the point in her paper: if we are to fill the 15,000 open ICT jobs in the market, then we will need to double the number of ICT graduates. On another note, the above discussed education indicators in the EIS pertain to young people (choosing study directions, graduates). In that sense they are important ‘drivers’ of innovation because young people, quite simply, are our future. However, the comparatively low proportion of S&E graduates does need to be placed against the fact that the current active population does consist of a relatively high proportion of scientists and engineers. According to 2005 Eurostat data, 7,5% of the Belgian active population are scientists and engineers, this compared to 4,6% for the EU-25.
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Knowledge Creation On the Knowledge Creation dimension of the EIS, Belgium performs slightly below the EU average—also, it is declining in its relative performance to the EU. The poor score is due mainly to the comparatively low public spending on R&D (0,55% of GDP in 2005; although the OECD reports 0,59% of GDP) and the comparatively low proportion of R&D spending going to high-tech sectors. Overall spending on R&D (including public and private spending) at 1,83% of GDP (Eurostat, 2006), however, is at the EU-25 average. Historically, total R&D expenditure rose gradually from 1995 to a peak of 2,09% of GDP in 2001 (well above the EU average). Following the collapse of the internet bubble, R&D spending has been in a steady decline, until stabilising somewhat in 2005. Belgium was not unique in this—spending across Europe declined after 2001. This does mean that total R&D spending in Belgium today is some way off the Lisbon target of 3%. While there are significant regional differences--R&D spending in Flanders, at 2,09% of GDP (2005), is slightly above the EU average and appears to be increasing slightly (Vlaams Indicatorenboek 2007)—the gap with the Lisbon target remains large. While R&D expenditure by businesses is still slightly higher than the EU average, it has been steadily declining since 2001 (although it is stabilising in 2005). The lack of spending is situated mainly among small to medium sized companies. Larger companies probably are at their maximum capacity for executing and absorbing R&D activities. In fact, the 33 largest Belgian R&D investors increased their R&D by 13% over the 3-year period 2003-2006 (data from the 2007 EU Industrial R&D Investment Scoreboard) and these same companies are responsible for close to 60% of all R&D spending in Belgium. If one includes foreign-owned companies in this list then that percentage increases massively—R&D spending in Belgium really is concentrated in a handful of large companies. Commentators often use this point to stress the vulnerability of Belgium’s innovation profile (e.g., OMC Policy Mix Review Report). However, this is not unique to Belgium. Take Finland, for example, where Nokia spends 37 times more on R&D than the
R&D Intensity International Comparison 2006 (as % of GDP) Sweden Finland Japan** Germany Austria Denmark OECD** France US EU-15 EU-27 Belgium UK Netherlands* Ireland Spain Italy* 0 0,5 1 1,5 2 2,5 Source: Eurostat, OECD / * Italy 2005 data ** OECD, Japan 2004 data
second biggest innovator in that country. Finland’s R&D intensity, in other words, relies entirely on the presence and good health of a single company. Sweden’s R&D spending too is concentrated in a handful of companies with Ericsson, Volvo and Scania taking the lion’s share. Belgium’s supposed vulnerability comes from the fact that many of its top R&D investors are foreign-owned companies and hence could retract those investments more easily than a home-grown company. However, this does not make sense. Multinational companies locate their R&D where it makes rational sense to do so, depending of factors such as local expertise and talent, the fiscal environment, subsidies and proximity to markets and customers. One can argue that a country that does not invest enough in its innovation ‘ecosystem’ or that is remote from major markets is far more vulnerable than Belgium, a country that is located in the centre of Europe and has one of the highest educational standards in the world. As mentioned, public spending on R&D in Belgium is comparatively low. While it has gradually increased, and hence has countered the declining trend in business spending, it is still some way below the EU average. Belgium scores comparatively poorly in another key “knowledge creation” indicator, i.e., the share of R&D spending going
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towards ‘future-orientated’ technologies. This needs to be seen in context. Firstly, the proportion of R&D spending going to high-tech sectors is already high (close to 80% isn’t exactly low). Secondly, most R&D spending in Belgium is concentrated in a reasonably small group of large companies. Some of these companies fall in the “high-tech” sectors defined by the EIS but some do not (e.g. banks). An argument can be made that companies such as Bekaert (specialised in advanced materials) are distinctly “high-tech” and futureproof, even though they do not fall in the high-tech definition ascribed to by the EIS. A company such as Sioen is another example. Active in the ‘uncompetitive’ textiles sector, this firm is specialised in technical textiles and dominates a distinctly hightech and high-growth segment of its sector.
Innovation & Entrepreneurship Belgium performs above the EU norm in the “innovation & entrepreneurship” dimension. This is attributable to the finding (in the CIS-4 survey) that a comparatively high proportion of small- to medium-sized companies do claim to have in-house innovation activities and that they tend to cooperate with other organisations (suppliers, customers, universities, etc) in innovation projects. In other words, Belgian companies clearly are making effort to introduce new products and processes. However,
this does not translate in high R&D spending—on that criteria Belgian SMEs perform under the EU norm. Early stage venture capital funding in Belgium is exceptionally low compared to the EU norm. This is confirmed in other reports too where venture capital is defined more broadly (Vlaams Indicatorenboek, 2007). Belgium is situated at the tail-end of the European ranking (together with Italy, Slovakia, Poland, Greece and the Czech Republic). Entrepreneurship—or the commercialisation of new ideas or scientific results—was repeatedly stressed by several of our interviewed entrepreneurs as a key area we need to work on. According to these individuals there is no lack of ideas or good science. On the contrary, the problem is more a question of whether our existing companies can absorb those ideas. For many commentators, we not only lack SME’s that are seriously innovative (in contradiction to the results of the CIS-4) but we also lack the competencies to develop companies beyond the SME category. Although we have several world-leading niche players, we seem to lack the high-growth companies, companies like InBev that have broken through into the league of seriously big companies. While Flanders’ economic success of the past decades is built mainly on its entrepreneurial mindset, Jean-Paul Bombaerts, editor of the leading French language financial daily L’Echo, concludes in his ‘tour of Flanders’ (published in De Tijd) that the work ethic and appetite for risk, both pillars of entrepreneurship, have declined in recent years in Flanders. The population is ageing and the youth of today only has eye for a comfortable lifestyle. These types of comments were heard repeatedly in our round of interviews around the country.
Applications Looking at the outputs that are generated from innovation, Belgium compares relatively poorly on the indicator: exports of high technology products. Belgium does, however, employ a great many people in high-tech services. The lack of an innovative ICT sector is one explanation. In other words, there is a large ICT services sector in Belgium (due to reasonably high ICT spending) but it isn’t Belgian and isn’t particularly innovative. Important exceptions
exist, obviously, as will be illustrated in later chapters. But it must be acknowledged that the Belgian economy, from a structural perspective, is not currently orientated towards high-tech sectors. Although it can be argued—as will be seen in the sector overviews—that Belgian companies are managing to make traditional non-tech sectors (like materials, like textiles) distinctly high-tech. Such developments tend to be missed by the statistics. The strong relative performance on the criteria ‘sales of new-to-firm products’ versus the poor performance on ‘sales of new-tomarket products’ suggests that the Belgian economy from an innovation perspective is a ‘follower’ rather than a ‘pioneer.’ That is, Belgian companies are quick to adopt existing state-of-the-art technologies but do not tend to invent or develop those technologies. Marcia de Watcher, in her paper, looks at this issue from another angle and finds that a very high proportion of companies introduce new-to-market products. What the EIS indicator shows is that these product introductions are not translating into sufficiently high revenues.
Intellectual Property Belgium scores particularly well on the Intellectual Property dimension, outperforming the EU average on EPO and USPTO patents. Deeper analysis of the patent statistics (Vlaams Indicatorenboek 2007) show that patents applications are concentrated in a handful of large, multinational companies. Key examples are companies such as Agfa Gevaert, GlaxoSmithKline (GSK), Janssen Pharmaceutica (J&J), Alcatel Bell, UCB, Solvay and Totalfina. In addition, a number of the larger research institutes, such as IMEC and the VIB, have developed impressive patent portfolios. Universities too are beginning to apply for increasing numbers of patents to protect and commercialise their research findings. There is, however, room for improvement among small- to medium-sized companies, where there appears to be a total absence of patent activity.
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In addition to patents and trademarks (which the EIS relies on), one can also look at scientific publishing and citations as an important IP output from innovation. The Flemish research group Steunpunt O&O Indicatoren (Vlaams Indicatorenboek 2007) conducted a thorough analysis of scientific publishing by Flemish researchers. They showed that the number of scientific articles published in leading international journals has increased significantly over the past 10 years. Not only in terms of the volume of scientific publishing, but also in terms of the visibility of such scientific output (i.e. citations of Belgian research), it is clear that the productivity of scientific activity in Flanders and Belgium has increased dramatically. Most of this output is generated by the Universities (85-90%) although the larger research institutes such as IMEC, VITO and the VIB are also increasingly prominent scientific publishers. Flemish researchers are particular prevalent in disciplines such as biology, biological sciences, biomedical research and clinical and experimental medicine.
Making sense of the KPIs To conclude, on the basis of the innovation benchmarking data, a number of general observations can be made: Academically, Belgium is a top performer. Most young people attempt tertiary education and a comparatively high proportion opts for science or engineering. The productivity of scientists, especially in the life sciences, is outstanding. This manifests itself mainly in the volume and quality of scientific publishing. However, in IT education, Belgium trails the EU norm significantly. Technical innovation (i.e. R&D activities) at Belgian companies is concentrated in a handful of large companies and research institutes. These are world leaders in their sector and they produce an impressive portfolio of patents. However, total R&D spending in the Belgian economy is too low—it is below the EU norm and some way below the Lisbon target. While a high proportion of Belgian SMEs claim to innovate and tend to do this in cooperation with other organisations, they spend comparatively little on R&D or innovation more generally. Also, they appear to struggle translating their innovation efforts into revenue growth.
Structurally, the Belgian economy is not orientated toward “high tech sectors”. R&D spending is not particularly “high tech sector” orientated and neither are the country’s exports. However, this sectorial perspective does not necessarily imply that all R&D spending and exports, even in sectors such as the textiles industry, is “low tech.” As will be shown in later articles, some of our most successful innovators are active in mature industries but have managed to carve out distinctly high-tech/high-growth segments of the market. Overall, Belgium’s overall innovation performance is relatively positive. According to the EIS, Belgium’s performance is comparable to Austria, France, Ireland, Luxem-
bourg and the Netherlands. However, given the resources this country has to work with, in talent, in scientific output, in infrastructure, in location, it is apparent that we are missing opportunities. As was heard repeatedly in our round of interviews, we should be more effective in translating our (human) resources and our achievements in science, into the creation of world-class companies and strong economic performance.
Increasingly Proactive Innovation Policies But lacking federal vision The challenges are clear, innovation performance in Belgium, while reasonable, is not good enough. The country is missing opportunities. More world-class companies should have seen the light of day in this country. More high-tech companies should be being spawned. Our exports should be more competitive, more high-growth and BRIC orientated. The country should be more of an IQ-magnet, the potential is here. With innovation increasingly seen as our passport to economic survival, government policy on innovation is bound to get people excited. And so it was in our round of interviews, but in an unexpected sense. In Flanders, where the statistics look rosier, where the bulk of Belgium’s R&D is invested, the mood was critical. Yes, there are good initiatives and some excellent organisations, IWT especially was applauded by many (and criticised severely by others). But the general response mirrored the criticisms made by the Soete report (Soete, 2007). The Flemish government’s innovation instruments are a chaotic jumble that no SME has the time or competency to make sense of. In Wallonia the statistics tell a less positive story. Also the economic and political situation more generally is seen to be particularly challenging (especially from a Flemish perspective). But in 2005, the Wallonia government came to recognise the need for drastic action to reverse the trend of decline and launched the aptly named �Marshall Plan��a strategic plan to lift Wallonia out of its economic gloom by rallying resources around a number of key existing strengths, the so-called competitiveness poles. Key here is the setting up and funding of research programs that involve universities, research centres and companies, both large and small. Scepticism in Flanders was predictably great. But the feedback this author received from entrepreneurs and academics in Wallonia was uniformly positive. Yes, it is early days and the programme is unable to show many concrete results (projects are just beginning to be set up and R&D takes time to show result) but the mood and attitudes have changed distinctly. There is more communication between universities and companies, academics are losing their distrust of commercial activities, career trajec-
tories and aspirations of young researchers are changing, people are seeing and feeling a distinct �cultural� change. The Marshall Plan appears to have been a powerful trigger to get people to think differently, to get out of their ivory towers and start collaborating in new ways. Furthermore, the plan has been an important impulse to set up bigger, more aggressive, more risky research programmes, and that, for many entrepreneurs, is a good thing. Such the impressions from our round of interviews, but a lot more has been said and written about innovation policy. In this article, we attempt to summarise the policy feedback from our interviews and the key conclusions made in recent formal policy evaluations: • INNO-Policy TrendChart - Policy Trends and Appraisal Report. 2007. PRO INNO EUROPE (European Commission, Enterprise Directorate-General) • OMC Policy Mix Review Report. Country Report: Belgium. July 2007. (A European peer review of Belgian innovation policy). • Soete, L. (2007). Eindrapport: expertgroep voor de doorlichting van het Vlaams innovatie-instrumentarium. www.soete.nl • Conseil des Politique Scientifique. May 2006. Evaluation de la politique scientifique de la Région wallonne et de la Communauté française. (The Science Policy Council of the Walloon Region’s evaluation of innovation performance and government policy). From a policy perspective, innovation is a remit of the regional governments. The federal government does have some responsibilities in this area but is limited mainly to the broader fiscal framework. The two primary actors are the Flemish and the Walloon governments. While their strategy and policies have traditionally differed markedly there does appear to be some converging in approach. For example, both governments have: – Set up financial institutions—in Flanders the key funding organisations are the IWT (subsidies for R&D projects), the PMV (seedand growth capital for innovative companies) and the FWO (funds research at universities); in Wallonia key finance organisations are SOWALFIN (SME funding) and the S.R.I.W. Group (public investment company).
– Attempted to simplify roles and numbers of agencies—in Flanders, for example, VLAO was set up as an ‘interface’ organisation to help SMEs navigate the various government services. – Structured R&D efforts around competitiveness poles and centres—Wallonia’s Marshall Plan is a 1 billion Euro economic reinvigoration plan that concentrates the Walloon government’s economic policies for employment, research and training on a number of key ‘competitive poles’ (pharmacy/health, agro-food, mechanical engineering, transport/logistics and aeronautics/aerospace). Each pole brings together companies (large and small), training centres and research units, both public and private, to work on projects with an industrial application. Also in Flanders, where the approach has traditionally been more bottoms-up (i.e. funding opportunities wherever they may come from) there appears to be a shift in thinking. For example, the Flemish Science Council’s policy advice in 2006 outlined a number of key ‘clusters’ (logistics, e-health, biotech, new materials & nanotechnology, etc) for priority attention. It must be said that the Flemish government’s new strategic plan ‘Vlaanderen in Actie’ is taking a more bottoms-up approach, using workgroups from industry to tackle a number of key themes: internationalisation, talent, innovation and transport & logistics. Supported clusters/networking to link institutes and SMEs—the whole Marshall Plan is based on clusters but also in Flanders numerous clusters are being funded, see Flanders Food, Flanders Drive, FLAG, etc.
Science & Knowledge While it is acknowledged that the country’s scientific credentials (and output) are world-class, there are some key challenges to resolve. Firstly, there is the challenge of attracting young people to science and engineering. Although today we still have a comparatively high proportion of scientists and engineers in the workforce, numerous commentators note the decline in science and engineering graduates and our companies report increasing difficulty finding technical personnel. The policy evaluators argue that more resources need to be allocated to promote science education among young people and set up training initiatives with industry.
Secondly, and related to the first point, the policy reviewers and many of our interviewees argued that our universities need to be more open to the world. Regional language legislation can be a stumbling block here, preventing universities from offering more education in English. Science is an increasingly global activity—there simply is no room for a “provincial” and “defensive” approach to policy, as Luc Soete argues in his review of Flemish innovation policy (Soete, 2007). Policy makers need to make more effort to develop Belgium, in the words of one of our interviewees, into an “IQ magnet.” Thirdly, numerous individuals we spoke to wondered if our scientific and educational impact could be strengthened by increasing the scale of our universities and institutes, or at a minimum by improving the cooperation between those organisations. The OMC policy reviewers make the point that while the Belgian universities certainly are internationally appreciated, none are found high on the various international rankings. One explanation for this is a lack of critical mass— Belgium has too many universities given its size. There appears to be merit in this argument given the success of some initiatives to improve scale. For example, some of our interviewees from Wallonia admired the Flanders-based Vlerick Leuven-Ghent Management School, a business school of increasing international repute, which was formed some years back by merging two schools, one from Ghent University and one from the University of Leuven. The VIB (the Flemish Institute for Biotechnology) is another sterling example. This ‘virtual’ institute funds and manages the research activities of 65 research groups located at the four largest Flemish universities. In the process it has become an absolute world-player in biotech. In plant biology, for example, the VIB is regarded as one of the top three institutes in the world and the top in the world in terms of technology transfer. On the other hand, economist Paul De Grauwe (De Grauwe, 2006) makes the point that the key problem is not scale but the way our universities are funded and organised. He notes, for example, that most of the top ranking universities worldwide are in fact smaller than the main Belgian universities. What distinguishes top universities from ours is that the top universities tend to be private or semi-private institutions, and thereby have the freedom to be selective, both in the students they accept and the staff they hire. They also are managed for performance, in
the way that academic staff undergoes regular evaluation and are rewarded on the basis of their performance. In Belgium all this runs counter the fundamental structure of our universities as publicly-funded institutes that offer almost-free education to practically anyone who applies. According to De Grauwe, it is a choice we make as a society—if we retain our current non-elitist system, then indeed we will never produce world-class educational institutions. There does appear to be a middle-way, however, looking at the way the VIB is run. One can argue, for example, that the VIB’s performance is due as much to its strong performance management as it is due to its scale. Finally, public R&D spending must be increased. As outlined in the previous article on innovation’s KPIs, public spending on R&D is less than 0,60% of GDP. This is one area where the difference between the Scandinavian innovation ‘leaders’ is particularly clear—in Finland and Sweden public spending on GDP stands at approximately 1% of GDP. However, simply increasing spending without proper performance management, without a strong strategy, is useless too. As discussed further in the last point of this article, it makes sense that the Flemish and Walloon governments are prioritising the development of their overall innovation framework (Vlaanderen in Actie and the Marshall Plan) instead of simply increasing spending.
While acknowledging the strength in tech transfer, the policy reviewers argue that more could be done at regional and national levels. Tech transfer indeed works well around university towns like Leuven, Ghent and Liege, but the reviewers pose the question whether such public-private partnerships should not be orchestrated more proactively at a national level. This is hard given the devolvement of innovation responsibilities to the communities (regional level). One does see broader regional initiatives appear, such as the recent launch of Generaties, an innovation platform focused on renewable energy technologies, which enjoys the participation of all major Flemish universities. This is a bottoms-up initiative (i.e. the initiative came from industry) but top-down the approach also is becoming more proactive. Wallonia’s Marshall Plan certainly is the most ambitious example in the way it concentrates the government’s resources at several ‘competitiveness poles.’
Creating knowledge enterprises: technology transfer and entrepreneurship Technology transfer, i.e. the valorisation of scientific output, or the translation of scientific outputs into economic outputs, works particularly well in some areas, as is illustrated in a subsequent article dedicated to this topic. In Wallonia, interviewees commented that the spin-off creation approach was not optimal, resulting in too many small, under-equipped companies. This is changing, however, with the Marshall Plan beginning to spawn stronger, better resourced research consortiums or partnerships. Certainly among our interviewees, the feedback on the Marshall Plan was uniformly positive—there is a detectable change in attitudes and far better communication and cooperation between the universities and business in the region. continued at p. 29
Patricia Ceysens Looking for a long term strategy to innovation policy
26
Patricia Ceysens Flemish Minister for Economy, Science, Innovation & Foreign Trade
Nancy Vermeulen is 32 years old, has a Master’s in physics and astronomy and is the Flemish ESA Astronaut candidate for missions to “the moon and beyond”. She believes that we should send people to Mars to push ourselves to the limit and to engage in self reflection. I do not know this woman personally but I found her statement inspiring and at the same time a reflection of an unconditional belief in man’s creativity and ability, a belief that I share entirely. During a working visit to the VITO (Flemish Institute for Technological Research), I noticed that Flemish researchers were actively engaged in the next Mars mission. They were investigating the possibilities of a self-cleaning water circuit on board the Mars probe. This was not the only occasion that I as Minister of Economics, Innovation and Science was pleasantly surprised by the know-how of our scientists and inventors. For example, the Karel De Grote Technical High School of Antwerp managed to convert an ordinary car into one run on hydrogen, a first in Europe. DHL, the international express delivery company, is investing in the further development of these cars and want to make use of 70 of these vehicles as soon as possible. In May of this year, VDS GROUP T presented its design for the car of the century. VDS is an international project in which GROUP T cooperates with the largest international universities, including MIT, Harvard, TU Delft and Tsinghua University (Beijing) to develop a car for the 21st century. The aim is to design, produce, test and market the VISION, a revolutionary sustainable car, which is meant in the first instance for the Indian and Chinese markets. The GROUP T team plays a key role in this by taking on the design of the frame, the electrical engine and the scheme’s project management. At the start of my presentation, I should like to mention three original and inspiring examples of the know-how and spirit of the young, highly educated generation of Flemings. These people and their respective stories are the best reasons to support innovative entrepreneurship in Flanders. Our welfare, measured in GDP, has over the last 25 years risen by 80%. Flanders
still forms part of one of the richest regions in the world. Still but for how much longer? Like the rest of the world, our country is suffering from a faltering economy and a drop in consumer confidence. In Flanders and in Europe due to the greying of the population, we are faced with a decrease in the active population. This means a drop in the growth potential of our economy. Globalisation increases our economic competitive vulnerability. New players have appeared on the scene: Brazil, Russia China and India. Currently only four European countries can be counted among the eight largest economies. However, by 2050 these will have disappeared from the top league. Global warming is affecting the environment. The ever-increasing price of oil is a heavy burden on our economy. So there is no shortage of challenges. Apparently people need challenges to see how far they can go. The bigger and more complex the problem, the more human beings feverishly look for ways of tackling it. Using a plaster to cover a gunshot
“Innovation is research, development and entrepreneurship. “ wound is no longer adequate; temporary solutions can help a bit but do not produce durable solutions. A long-term strategy is what is needed in this case. A viable, conceptual framework on which to base this long-term strategy has been provided by Michael Porter. He developed a “three-step model” of economic development for the World Economic Forum in Davos. In the first stage of development, “the factor-driven economy”, growth is driven by using cheap production factors. In this case, mainly standardised goods and services are produced. Countries such as China and India are for the most part still at this stage. But how long will this last? As the economy develops, countries arrive at the second stage: the “efficiency-driven economy”. At this stage, economic growth is mainly driven by improved efficiency. The third development stage is that of the “innovation-driven economy”. In this stage, price and efficiency are no longer key factors but innovation, knowledge and skills to tackle the root causes of problems are. I see Flanders as being in a transition phase from efficiency to the innovationdriven economy. It is extremely important that we get to the third stage as quickly as possible. In the innovation-driven economy, knowledge is the engine of economic development with social challenges determining the speed of the engine. Translational research is an example of this. However, also convergence initiatives between nano- and biotechnology provide new opportunities – just like the success with hydrogen and biomass which is being tried out in Flanders to obtain a non oilbased economy. But innovation is not just a matter of research and development. It is research, development and entrepreneurship. Scientific insights should result in social and economic improvements. Our Dutch neighbours bluntly express it as innovation is a matter of knowledge, skills and cash.
Successful companies invest in research and development. They work closely together with our knowledge-based institutions and in this way are often ahead their time and ahead of their competitors. Innovation is also globalisation. The world has become our village. You cannot survive in the research and business world if you do not leave your village or if you close it off from the outside world. Our research and knowledge institutions are fast becoming global but one thing still stands in the way – the problem of language. Flemish youngsters easily find their way to foreign universities and research centres because they are multilingual while their foreign counterparts do not easily find their way to Flanders because they do not master the language. If we want to continue playing a role of any significance on the international knowledge stage, we must be prepared to allow English as lingua franca in scientific exchanges and joint projects. Recently, a number of successful companies decided to spread their wings internationally. They attracted foreign talent to Flanders, opened branches abroad and managed in this way to keep employment going in the country while creating jobs. Some companies are still hesitating to take this step outside and to think big. That is a pity as we are missing a chance to be successful on foreign markets. During those trade missions which I have led, I got to know fellow Belgians who were successful internationally selling products for which they were global market leaders. None of them had an easy time of it. Every one of them had to overcome obstacles and were pastmasters in coming up with creative solutions in order to reach their goal. These meetings strengthened my conviction that innovation and globalisation go hand in hand. By 2020, the European Union wants to reduce carbon emissions by 20%. In addition, the share of renewable energy in total energy consumption in the EU should reach 20%. It will not be easy for Flanders to reach this objective. We are a heavily-populated region, we have an energy-intensive industry and are not blessed with tides or a great deal of wind and sun. What we do have, however, is knowledge and know-how to give an impetus to green innovation which will
put us in a position where we can move ahead full speed towards the sustainable economy. A minister of innovation is someone who looks towards the future. For this reason, I want to make a commitment to sustainable green projects. As a policy maker, I am also able to translate this commitment into a number of concrete measures. Not through strict prohibitions but by colouring the invisible hand of the market green. Eco-taxation and carbon emission trading schemes can guide producers and consumers in the direction of sustainable production and consumption. Ecological incentives must be built into the market mechanism itself. Financial support for companies to help them make their production procedures greener also makes the innovation chain in Flanders more environmentally friendly. Our companies will have to call on the many small Flemish environment and energy technology companies for their ecology investments which in turn will give them a chance to expand. However, we cannot put all our green eggs in one basket. It is therefore advisable to invest risk capital in various new green energy technologies such as sun, wind, geothermic energy, fuel cells, waste recovery, etc. Lastly, public procurement could be used to stimulate the innovation potential in Flanders. Up till now, innovation was mainly concentrated in the defence sector. But why can’t it also be applied to the environment and energy sectors? An example of this is the new soil purification technologies that are used to clean up polluted sites. By calling for innovative tenders, innovative solutions will be demanded by the market and at the same time Flanders will be able to present the world with large-scale innovative pilot projects. It is my ambition to provide not only our children but also our grandchildren and great grandchildren with the building blocks for a prosperous Flanders that is underpinned by a sustainable structure, that offers permanent answers to the new challenges ahead and that confidently views globalisation as an opportunity.
Wim De Waele Can Europe and Belgium play a role in the Internet economy?
28
Wim De Waele General Manager, IBBT (Interdisciplinary Institute for Broadband Technology)
By now everybody is aware of the impact Internet technology has had on the lives of people in the developed world. Most of us are also conscious that we are still in the early stage of a revolution that will increasingly impact our lives as more and more of our environment gets connected and the Internet of Things becomes a reality. Our policy makers are aware of the fact that the competitiveness of our economy is no longer resource or productivitybased but relies on innovation and creativity to keep up with international competition. Nevertheless Europe and Belgium are struggling to reach the level of other economies in terms of innovation and creativity. Silicon Valley is still the center of the world as far as software technology is concerned and India and others are fast becoming ICT powerhouses. I want to put forward five conditions I believe are necessary to ensure we keep up with that global race. These conditions are based on my experiences and lessons learnt in the field of information and communication technology both in the private sector and the research community. While some remarks might be generically applied to all fields of technology, others are specific to my discipline and I am not convinced they can be universally applied. Europe prides itself on its social responsibility. While I applaud that, we need to also ensure we are internationally competitive. There is a worldwide war for talent underway and specifically our university systems need to be upgraded to build and nurture an intellectual elite. That implies we need to pay well, select only the best and ensure research staff have the capability to also start business ventures. ICT is a very applied research field and consequently researchers should all be involved at least part-time in startups or company collaborations. Google has a mantra called ‘ideas come from everywhere’. No longer individual inventors or corporate labs are the sole generators of ideas. User communities, designers and professional users are all sources of innovation that researchers and product developers should tap into. Content and services are driving our industry and technology should be regarded as an enabler for these. Multidis-
ciplinary teams, that are able to translate user needs into seductive offerings, are what is needed to remain competitive. Let us also rethink our government research policies. When I made the move from an American software company to a European public research organization I discovered there is apparently such a thing as a distinction between fundamental and applied research in information and communication technology. While I think I was involved in some pretty stateof-the art software development before, we never worried about that distinction. We focused on finding clever ways to solve complex issues, implemented in such a way that they provided a user with a rich and rewarding experience. Currently European subsidy percentages are higher for fundamental research. This has a perverse effect: it stimulates companies to perform R&D that is still far from market introduction or at least pretend that they are doing so. Given the speed of evolution in our sector it provides them with a cushion to be slower than their international competition. Large companies tap into subsidies with the help of consultants that are specialized in writing applications that solve complex fundamental issues that nobody is waiting for. In the meantime Google releases new beta-software every month. Our universities should be instrumental in creating a flow of ideas and start-ups. This can only be realized if they start wor-
“there is a whole world market out there if we have the ambition to conquer it.“ rying about letting their most creative researchers reap the benefits of their work. While universities have come to realize the importance of intellectual property as a driver of our economy, the policies they are implementing unfortunately do not necessarily help the economy as a whole because they frequently put the institution before the individual. Their focus is on protecting their IP and building up a patent portfolio. There is nothing wrong with the creation of a more professional technology transfer function but let us not forget the individual researcher in the process. He or she should be the ultimate beneficiary of the research results, not the institution where he happens to
continued from p. 25
Entrepreneurship more generally remains a sore point for many of our interviewees. Far more needs to be done to encourage entrepreneurship. Although people do note some changes in attitudes, especially in Wallonia, more can be done in early education to stimulate an entrepreneurial spirit. Also, supporting companies beyond the start-up/ seed phase is an issue, although agencies such as the PMV (see profile article page 30) see a distinct role for themselves here.
work. And let us also not forget the dynamics of the ICT sector. As open source grows in importance, speed-to-market and open innovation are more important competitive differentiators than a patent portfolio. Technology transfer organizations should be renamed into business development departments and the mindset should change accordingly. If we succeed in the above we have a good chance of creating enough dynamics on the supply-side of the innovation equation. But we also need the market. In my experience the US market is an easier market for software than Europe, and I frequently recommend European start-ups to start a US-based sales office as quickly as possible. The US market is larger and has more technology-savvy and daring customers who do not scare away from buying from a small company. Our European corporate customers are often conservative and our market is fragmented and has protectionist tendencies. Europe should continue to integrate the market for services and put into place policies that simulate the usage of new technology no matter where it comes from. Only then will we also create the required demand-side effects. But in the meantime our innovative companies should not refrain from getting going, there is a whole world-market out there if we have the ambition to conquer it.
The policy reviewers note that much policy is directed at large innovative enterprises and that SMEs tend to miss the boat (Soete, 2007). SMEs do not miss out only because there is a lack of initiatives, but also because there are too many uncoordinated initiatives creating unacceptable administrative burdens. In simplified terms, government can offer financial support to innovative companies in two ways, via subsidies and via fiscal ‘discounts.’ But the complexity and structure of such initiatives limit their accessibility to SME’s. Large companies have the resources and staff to exploit the fiscal opportunities and also tend to be first-in-line for new subsidised research consortiums. For SMEs, the clusters do play an effective role here. For example, organisations like FLAG, the Flemish aerospace cluster coordinating body, is well respected by SMEs for the way it has managed to involve numerous small companies in R&D projects around the Airbus 380. Hence, the policy reviewers argue that government should do more to fund such clusters. This does however seem to be happening, certainly in context of the Marshall Plan.
Attracting & retaining innovative enterprises Large companies matter, obviously, especially in Belgium where R&D is so highly concentrated in that segment. Moreover, many of those larger companies have their headquarters, their decision making centre, located outside Belgium. Hence, government needs to do everything it can to create an environment that retains the existing players and attracts additional investors. On the whole, the regional and federal governments are reasonably effective in this. Numerous fiscal measures have been introduced that clearly are recognised and utilised. More can be done to improve Belgium’s competitiveness from a taxation perspective but policy has been moving (slowly) in the right direction. However, much of this fiscal do-
main is a federal remit, which is currently immobilised somewhat by the difficult state reform negotiations. The regional governments are highly proactive in their attempts to retain and attract multinational innovators. They too offer fiscal incentives where possible, subsidise R&D costs, and help set-up partnerships with universities and research institutes. The Wallonia Marshall Plan is particularly focused on this, funding research consortiums that are geared toward the needs of companies such as GSK and UCB. Wallonia has also managed to attract new investments by Google and Microsoft. While ‘high tech’ multinationals obviously are important, some of our interviewees argued that we should not ignore our existing industrial base, such as the automotive, chemicals and textiles sectors. Opinions differed on this. Some individuals commented, for example, that Belgian companies have been too focused on their manufacturing operations, trying to achieve ever better efficiency, and in the process losing perspective on the role of innovation (and losing the efficiency battle anyway against low-wage countries). Others, however, argued forcefully that industry must remain a fundamental part of this economy—we cannot base our economy simply on R&D centres—and thus criticised government policy for being too focused on fundamental research. Companies like Sioen illustrate the point well. Sioen is a company in the textiles sector, a sector that typifies the structural change this economy is going through, moving away from labour intensive manufacturing toward high-tech sectors and services. Sioen remains a manufacturing company, however, but thrives via its innovation. The company is innovative in the way it develops new technical textiles but it is also highly competent in managing a vertically integrated manufacturing operation that is spread around the world. While manufacturers like Sioen have retained parts of their production, usually the really critical bits (the complex, the technical, the core), in Belgium, the cost differential, even against neighbouring countries like France, is increasingly tough to deal with. Hence, the appeal by many industrialists that government take a more integrated approach to economic policy, to not only focus on R&D and fundamental research but to also focus on the broader fiscal and regulatory environment so as to create conditions where innovative industrials can continue to thrive. continued at p. 35
PMV Creative financial instru encourage innovation
30 PMV
Hooikaai 55 1000 Brussels Belgium T +32 (0)2 229 52 30 F +32 (0)2 229 52 31 www.pmv.eu info@pmv.eu • Science & Technology • Business Model & Process Innovation • Design & Creativity
PMV (ParticipatieMaatschappij Vlaanderen) is an independent investment company in Flanders (www.pmv.eu) PMV aims to strengthen the competitiveness of Flemish companies and mainly targets small and medium-sized enterprises (SMEs). The company encourages investment in innovation activities and facilitates access to fi nance through venture capital investment, mezzanine and loan guarantee instruments. Since mid-2005 PMV has set an example for other European regions by launching a range of complimentary SME-fi nancing instruments. These instruments do not only aim to encourage innovation of enterprises, they are groundbreaking on their own by marking the end of an era of government support mainly based on subsidies.
“our instruments are groundbreaking by marking the end of an era of government support mainly based on subsidies.” Starting up a company or expanding it requires money and raising the right kind of fi nance can be a major difficulty for SMEs. On the one hand, risk-aversion makes investors and banks shy away from fi nancing start-up companies. On the other hand, the world of fi nance is often less accessible for SMEs than it could be and European entrepreneurs sometimes have limited understanding of investors’ or banks’ concerns, making it even harder for them to fi nd the fi nancial backing they need. PMV focuses on reducing or removing market gaps and working with the market (instead of competing with it), to stimulate the provision of equity and debt-fi nance to SMEs. The PMV instruments target companies in different stages of their lifecycle: seed, start-up, expansion and business transfer; and support investments in technological development, innovation, and the crossborder expansion of business activities.
SUCCESS & INNOVATION INDICATORS • Investment company for the Flemish Government • Exemplary business model for SMEfi nancing • Over € 300 million available for investments in young dynamic companies ARKimedes reinforces the capacity of venture capital funds to invest in companies in their early stage and expansion phase. For every Euro raised from private investors, the ARKimedes-Fund provides an additional Euro to venture capital fi rms which they invest in high-potential Flemish enterprises. The ARKimedes-Fund raised its 110 million Euro investment base through a public issue of shares and bonds. Over 35,000 Flemish citizens signed up for ARKimedes paper, eager to contribute to the future growth and prosperity of their home region. Since then the ARKimedes-Fund has made thirteen investments in a variety of professional venture capital fi rms, which in turn have already given a fi nancial boost to over sixty high-growth enterprises. CultuurInvest is pioneering with risk capital investments in companies that operate within the cultural industry (music, fashion, design, theatre, …). The fund fi nances ventures that create cultural content or invest in companies that generate so-called cultural infrastructure (music studios, internet platforms, bookstores…). Having twenty-eight projects approved in just eighteen months of operation, CultuurInvest proves that there are alternatives to subsidies when boosting cultural development. Flanders International Fund (FIF or “Fonds Vlaanderen-Internationaal”) stimulates the international growth of Flemish SMEs by providing risk capital to their investment projects abroad. Traditional exports are no longer sufficient to guarantee the survival of companies. International investment projects reinforce the competitiveness of enterprises by opening up new markets, serving clients more globally, or optimising and diversifying production units. By sharing risk with Flemish companies abroad, FIF fills the market gap when banks and investors shy away from fi nancing projects far away.
ments Below: © www.christophevandereecken.com
The Flemish Innovation Fund (“Vlaams Innovatiefonds”, “Vinnof” in short) provides risk capital for innovative SMEs in their seed and start-up phase. On the one hand, it provides finance to study, assess and develop an initial business concept. On the other hand, it complements start-up funding coming from the entrepreneur, friends, professional contacts and family. With Vinnof on board, private early stage investors are less reluctant to finance a start-up in a very early stage than they would have been in case they had been on their own. Since the launch of the Flemish Innovation Fund in spring 2006 over hundred innovative entrepreneurs in Flanders were able to start up their venture thanks to an investment by Vinnof. The Guarantee Facility (“Waarborgregeling”) provides loan guarantees to encourage banks to make more debt-finance available to SMEs by reducing the banks’ exposure to risk. In a period of just three years, over two thousand companies in Flanders obtained a bank loan with the assistance of the PMV Guarantee Facility, leading to investments worth over 400 million Euro. Through the NRC-Fund (Non-Recurring Costs), PMV provides finance for specific innovation projects in high-tech industries. These projects usually require high upfront investments which need a long revenu period before being paid back. Finance by the NRC-Fund can be provided for periods up to fifteen years and its return is dependent upon the success of the project. The Winwinloan (“Winwinlening”) is a mechanism developed by PMV to encourage private citizens to provide start-up capital to entrepreneurs in their entourage by means of a tax incentive. Every day at least one start-up in Flanders is funded by means of a Winwinloan. Considering that both the private lender and the entrepreneur benefit from the mechanism that makes two winners a day! These seven creative financial instruments encourage innovation in every stage of the company life-cycle, from its early beginnings up to growth and internationalization.
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WinWinLoan flemish innovation fund (Vinnof) cultuurinvest arkimedes Guarantee Facility (“waarborgregeling”) NRC-Fund Flanders Int. Fund
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Vlerick Leuven Gent Educating entrepreneurs: innovation & creativity
32 VLERICK MANAGEMENT SCHOOL T: +32 (0)9 210 97 11 F: +32 (0)9 210 97 00 www.vlerick.be info@vlerick.be • Business Model & Process Innovation • Science & Technology • Design & Creativity
At Vlerick Leuven Gent Management School, they say that entrepreneurship is part of the school’s genetic make-up. Vlerick places a strong emphasis on innovation and creativity—both in research and education—in order to contribute to successful entrepreneurship, in Belgium and elsewhere. Vlerick Leuven Gent Management School has been the leading management school in Flanders for over half a decade and is one of the top management schools in Europe. It was founded in 1953 by André Vlerick, a professor, politician and entrepreneur, who recognised the need for a European approach to management. He started the Centre for Productivity Studies and Research at Gent University, the forerunner of today’s management school. Over the years, the School went through four development phases: 1. Entrepreneurial or pioneer phase: this initial phase carried the School from its founding in 1953 until 1980 2. Consolidation: beginning in 1980, some of the School’s educational activities were grouped into Gent University’s Interfaculty Centre for Management 3. Integration: in 1988, all of Gent University’s advanced managerial education programmes were integrated into the Vlerick School for Management 4. Internationalisation: during this time, the Katholieke Universiteit Leuven management school had also been developing, with a more research-focus approach, compared to Gent University’s business-community focus. In 1998, Gent’s Vlerick School for Management became independent from the university, and the Leuven MBA programme was transferred to this new school, which was named Vlerick Leuven Gent Management School. Since then, a new campus in St Petersburg, Russia, was established. The School’s overall goal is to make an important contribution to professionalising management and encouraging entrepreneurship. It achieves this by conducting rigorous and relevant scientific research and by offering a wide range of high-quality management courses with a specific European dimension. Its accomplishments are built upon its core values of synthesis, entrepreneurship, integrity and autonomy, respect for diversity and customer orientation. Research is central to the school’s mission, and the school has achieved international renown for its excellence in this area. It covers 9 knowledge domains: accounting and fi nance, governance and ethics, human resource management,
innovation & entrepreneurship, marketing and sales, operations and technology management, strategy and specific industries. In the innovation and entrepreneurship domain, research, education and workshops are used to build a profound expertise. The educational programmes include MBAs, Master’s degrees and management programmes for organisations. Vlerick Leuven Gent Management School is one of a select group of institutions in the world to hold all 3 of the major international accreditations relevant to management education: EQUIS, AMBA and AACSB.
INNOVATION & ENTREPRENEURSHIP The School takes an active role in all parts of the community—social, political, educational and economic—in order to stimulate a sense of entrepreneurship and innovation in society at large. Besides the numerous competency centres that focus on entrepreneurship and innovation, the school was also the first to set up a Business Angels Network (BAN) in Europe, to provide seed and startup financing to entrepreneurs. Vlerick has also been home to the Belgian Global Entrepreneur Monitor research team since 2000, funded by the Flemish Government through Steunpunt Ondernemerschap, Ondernemingen en Innovatie. GEM, which carries out an annual assessment of the national level of entrepreneurial activity, is the largest survey-based study of entrepreneurship in the world, and now includes over 42 countries.
“entrepreneurial spirit is not only seen as an asset for smes and start-ups, but for large organisations as well” Linking the worlds of science and business, the School has worked with the Interdisciplinary Institute for Broadband Technology (IBBT) to organise the IBBT Entrepreneurial iBoot Camp. These sessions teach researchers with innovative ideas to develop viable business plans. The programme itself uses innovative techniques, creating multidisciplinary teams of researchers to create a productive mix for building up the ideas. The researchers are then instructed in the business techniques necessary to create a marketable product.
Management School building Belgium’s future with Vlerick is also a leader in the field of creativity management, collaborating with Flanders DC (District of Creativity), a knowledge centre/think tank that conducts research into entrepreneurial creativity, innovation and international entrepreneurship. Since 2005, Flanders DC, with Vlerick, has promoted a creative economy in Flanders, and so far has published some 35 studies in the field. It also offers Creativity Classes and Creativity Talks that aim to bring creativity and entrepreneurship together into successful business. In the academic field as well, Vlerick Leuven Gent Management School is a pioneer in innovative teaching. A part-time Executive Management Class in Innovation & Entrepreneurship brings together a heterogeneous group of entrepreneurs and intrapreneurs, teaching state-of-the-art knowledge and best practices in innovation and entrepreneurship and developing entrepreneurial spirit for identifying and growing new venture opportunities. Entrepreneurial spirit is thus seen not only as an asset for SMEs and start-ups, but for very large organisations as well.
VISION Vlerick Leuven Gent Management School “practices what it preaches”, applying internally what it teaches in its programmes. About 25% of graduates go on to become entrepreneurs themselves: an impressive proportion, especially considering that Belgium is still somewhat below the European average. The School sees an international future for itself. The internalisation strategy set out in 1999 focussed not only on attracting international students to the campuses in Belgium, but also, in effect, taking the School abroad. This is being accomplished through entering into associations and alliances with reputable business schools abroad, and through the opening of the Vlerick campus in St. Petersburg. While currently most of the knowledge transfer moves from Belgium to Russia, the School sees two-way benefits in the future, both for academics and research. St. Petersburg offers excellent opportunities for executive teaching, while Vlerick’s presence in Russia will open up new research topics of interest to Belgian companies. Further internationalisation is in the pipeline. For example, there also is a joint chair with Stellenbosch University in South Africa, and two MBA partnerships with the University of Bejing and the University of Amsterdam.
SUCCESS & INNOVATION INDICATORS • has more than 7,000 participants attending postgraduate management and executive development programmes per year • has particular expertise in 3 research domains: Doing Business in Europe, Technological Venturing and Corporate Social Responsibility. • has more than 12,500 graduates of its alumni association working in over 100 countries In recent years, the School has been steadily climbing the international rankings in the Financial Times and the Economist, and is in the process of achieving its ambition of figuring among the top 10 in Europe. However, Vlerick does not view raising its position in the rankings as a true objective, but rather as an acknowledgement of improvements the School has made under the stimulus of its own strategic objectives.
Rudy Aernoudt Innovation is not a choice, but a necessity!
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Rudy Aernoudt Professor Economics, EHSAL; Chairman Think Tank ‘België Anders / La Belgique Autrement’
Innovation is the key to prosperity. But finding recipients of this largesse is harder than you might think and some fundamental flaws need changing, and fast. Labour cost by the hour in Bulgaria is estimated at 1,5 euro/hour, whereas in Belgium the level is 35 euro/hour. Thus we should stop thinking about competing with emerging economies along productivity issues, enabled by process innovation, as we can never neutralize the difference in labour costs. We cannot compete with them on that level, so we need to be creative and come up with new, innovative products and services that we can sell to them. Our companies need to embrace that fact and start investing more in product innovation. More, we need to change our entire attitude to innovation and entrepreneurship. It’s been proven that innovation and entrepreneurship can boost the economy by as much as 75%. That’s why in the Lisbon Treaty of 2000, our leaders set an objective to make Europe the most dynamic and competitive knowledge economy by 2010. Yet figures show that R&D investments are actually decreasing. Every European country should be investing 3% of GDP in R&D (1% public, 2% private). However, since 2004, private investments in Belgium followed the European trend and dropped relatively! We have to acknowledge that the Lisbon objective failed and that we won’t make it to achieve the 3% goal. Scandinavian countries top the innovation and competitiveness index. Meanwhile our competitive score has fallen from 17 (2000) to 33 (2007). What makes the Scandinavians so successful? They, confronted with a sense of urgency, understood the need to redirect their economy towards innovation. We should do the same. If we don’t start now, it might soon be too late. Therefore, innovation is no longer an option, but a necessity. In this context, the government, in an attempt to stimulate innovation, set up a whole plethora of government funding entities. From basic subsidies to coaching, from venture capital and seed capital to co-investments and loans. Evaluation, however, showed that this patchwork of measures is considered too complex by enterprises. Therefore, (public) research institutes and large enterprises are the biggest consumers of government funding. Research shows that only 7% of
Belgian companies apply for funding. There are different reasons for this. Real entrepreneurs are busy running their businesses and have little or no knowledge or interest in public funding. Therefore, mostly the requests for government funding are consultancy-driven. Another reason is a profound distrust of government institutions. Companies ‘do innovation’ in their little corner, reluctant to disclose confidential information to government officials, confidentiality clause or not. Companies tend to turn to their personal banker or seek out venture capital. We need to turn around this habit of focusing on one financial instrument. In fact, the entrepreneur should learn to think more in terms of a hybrid solution: a combination of grants, postponed loan, innovation incentives, etc. Lots of opportunities are being missed here. I would like to see an intelligent grants databank: when you key in the input for your specific project it would automatically provide you with the optimal combination of funding instruments. Right now the existing databank is too static. Another positive step would be to empower companies with knowledge about their own position when asking for loans. In Belgium we don’t have a rating culture; even stock quoted companies aren’t rated. A business leader could use the company rating when negotiating with banks for loans. But too many companies are ignorant about their own position.
continued from p. 29
In Belgium we are quite good at hightech innovation. IMEC and VIB are at the top of the nanotechnology and biotechnology sector. We should now go one step further and see what comes out of clustering companies in the nano- and biotechnology sectors. To reach their potential, companies should look across borders (both organizational borders and geographical borders). However, innovation is not an elitist activity solely for high-tech companies with highly-skilled researchers. In fact, the whole economy should be involved. Our healthcare services, education and medical sciences are top notch in Belgium and can be equally innovative. Innovation is also about design, about adapting products to a changing world. It’s all about seeing business opportunities. We should also put a stop to ‘box thinking’. Economy, innovation and sciences can no longer be treated as separate entities. They should graft onto one another by creating a culture for popularising sciences and stimulating entrepreneurship.
“In fact, the entrepreneur should learn to think more in terms of a hybrid solution” Foreign investors are scared off by our 33% corporate tax rate, which is way higher than the European average of 20%. In fact, the notional interest deduction brings it down considerably. But this is not being publicised enough to investors. To make things worse we have the highest personal income tax rate in Europe: 55%, and rather inefficient public services. This is our Achilles heel. A Harvard study showed a perfect correlation between government efficiency and regional competitiveness. According to the Geneva Economic Forum, Belgium is 115 out of 117 where fiscal efficiency is concerned; only Benin and Brazil are quoted worse. Combine all these factors and you may conclude that to boost our economy we are in need of a fiscal ‘big bang’. Optimised taxes and a changed mentality towards innovation could really turn around our economy. Yet adapting to the innovation economy also means embracing risk. This doesn’t come naturally to us Belgians. For us, a bankruptcy is a source of shame. In the U.S. it’s seen as a proof of entrepreneurship.
Thirty years ago America was 30% more productive than Europe. By making an ideological choice we bridged the productivity gap. But instead of translating this into increased prosperity we opted for more leisure time. It is now time to make up our minds and determine where we want to go. Do we want a Europe with more leisure time? Or do we want to become the world’s most productive and richest region? My personal preference would be to create an economic model in which every citizen could make his or her own choice. But for those who want to compete, innovation isn’t a choice anymore, but a necessity.
Innovation strategy Perhaps the most important point to make in the area of innovation policy regards strategy. In a context where the challenges are critical and where substantial (but not unlimited) government resources are available it obviously is essential that those resources are channelled as effectively as possible to dealing with those challenges, and that all (or most) stakeholders are firmly behind the strategic approach. This is a well accepted business principle. It also applies to government policy. In Wallonia we need to conclude, on the basis of our interviews, that there is in place a strategy that is energising the region. But the tide is high—Wallonia has some catching up to do with its northern neighbour Flanders. In Flanders, notwithstanding the reasonably strong economic performance and the worldwide fame of its centres of excellence, we await the impact of the new strategic plan “Vlaanderen in Actie.” As it stands, the entrepreneurs we talked to amplified the findings of the Soete report (Soete, 2007)—the Flemish government’s innovation instruments are too complex and lack transparency. As the European Commission’s policy evaluation argues (generally about Belgium’s innovation policies), there has been too much tinkering at the edge, too much “business-as-usual” thinking. Political discussion has focused too much on the incremental bits of budget added each year, not on the core structure of Belgium’s innovation ‘infrastructure.’ Regarding the regions, such criticism is outdated, given the high ambition of both the Marshall Plan and Vlaanderen in Actie. Nevertheless, at a Federal level, the criticisms do apply. In the words of the report’s authors; “it is a great pity that, at least at Federal level, political attention appears more focussed on issues of electoral boundaries and short-term quick fixes to respond to interest-group politics than on the more fundamental challenges facing the Belgium economy and society.” The country needs to move beyond “business as usual and focus on how innovation could actually drive change in Belgium’s society…” We suspect that most of the entrepreneurs interviewed in this project would simply applaud.
Flanders Investment Free-of-charge advice in in and from Flanders
36 FL ANDERS INVESTMENT & TRADE Gaucheretstraat 90 1030 Brussels, Belgium T: + 32 (0)2 504 87 11 T: + 32 (0)2 504 88 99 www.flandersinvestmentandtrade.com info@fitagency.com
• Design & Creativity • Business Model & Process Innovation • Science & Technology
Flanders Investment & Trade is a government agency that provides free-of-charge assistance for Flemish companies looking to do business outside Belgium. We offer the same expert advice and guidance to foreign companies looking to invest in Flanders or those which are interested in importing our high-quality products and/ or in sourcing our wide range of services.
SUPPORTING YOUR QUEST FOR INNOVATION Flanders Investment & Trade supports both local and foreign companies in their ongoing quest for innovation. We provide, among other things, expert advice and guidance for: • Obtaining government subsidies for innovation projects; • Tax incentives for R&D staff and for patent-derived income; • Partnerships with our research centers and knowledge cluster; • Joint ventures and transfer of technology with Flemish hi-tech companies.
PLANNING TO INVEST IN A THRIVING REGION? fDi, the Financial Times’ magazine on foreign direct investment, recently voted Flanders the number 2 European Region of the Future 2008-2009 and the second best region in Europe for foreign direct investment. And we can assist with your plans to relocate your operational base to this thriving region at the heart of Europe. Offering expert advice and assistance on all aspects of business relocation, that is our core business. Flanders Investment & Trade can provide you with useful insights and up-to-date data on site availability, local labor supply, recruitment, training, suppliers and technical support. And we put you in touch with the local and national authorities and utility providers. Once established in Flanders, we assist you with your expansion plans and help you identify new export markets. We provide clarity on the numerous benefits Flanders has to offer foreign companies, such as tax relief measures, R&D and training incentives, and much more besides.
& Trade doing business suppliers of profitable products and fi rstclass services. Flanders Investment & Trade has an extensive network of representatives in over 90 locations around the globe. To fi nd out more on what Flanders has to offer foreign companies looking to do business in and with the European region of the future, please visit: www.flandersinvestmentandtrade.com
ARE YOU LOOKING FOR HIGHQUALITY SUPPLIERS OF PRODUCTS OR SERVICES? If you are a company selling foreign products or looking for high-quality services, Flanders is the place to turn your attention to. This region is known the world over for its fashion designers and diamonds, a multitude of beers and delicious chocolates. But there is more to Flanders than that. Our industries offer many high-quality innovative products and semi-manufactured products that will astound you. These are
DEDICATED TECHNOLOGY EXPERTS AROUND THE WORLD To encourage the fl ow of innovative and technological know-how between Flemish and foreign companies, centers of knowledge and government bodies, Flanders Investment & Trade had posted several technology attachés around the globe: • Information and Communication Technology (Mumbai, India); • Biotechnology and Nanotechnology (Tokyo, Japan); • Biotechnology (New York, USA); • Environment & Energy (Beijing, China); • Information and Communication Technology (Los Angeles, USA)
“from fashion and diamonds to life sciences and automotive” made, for example, by our renowned chemical, automotive and life sciences industries, and by our cutting-edge building materials, fashion, interior design and environmental technology industries. Flanders is also in high demand for its high-quality services, e.g. in logistics, ICT, and banking. We can put you in touch with the many Flemish
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Technology Transfer Excellence
The term ‘tech transfer’ usually applies to technology that is discovered or developed at universities or public research institutes, and is then transferred in some form or other to the economy (or transformed into economic value). Hence, good technology transfer rests on two pillars. First, there needs to be effective creation of technology, technology that is unique and has potential to be ‘valorised’ in the market. Secondly, the technology needs to be further developed into applications that have economic value and subsequently commercialised. These are several distinct steps and, predictably, there are different models to facilitate those steps. How to stimulate innovation and scientific performance at universities? For some, the debate in Belgium is leaning toward the idea that academic freedom is of paramount importance. In fundamental or basic research it is typically impossible to predict where a future economic application may lay—hence, better leave it alone and give free reign to creativity. Certainly in Flemish biotech, it is the unusual that has led to success. However, performance is important too, and in that sense, some commentators justify the trend toward the setting up of research institutes or centres, that are run independently of the university Faculties. Let the faculties be responsible for teaching, let the institutes manage research activities. Furthermore, set up multidisciplinary research institutes where possible, to maximise cross-pollination of ideas, to stimulate new ideas and new applications. How to effectively transfer technology to the wider economy? Clearly it is recognised in Belgium that creating economic value from research results is a separate discipline to the management of research. Tech-transfer increasingly is a responsibility handled by dedicated departments that are specialised in patenting, licensing, creating and supporting spin-offs, etc. But also here there are different models or approaches, and debate that is not yet settled (if it should ever be settled, a mix of approaches probably is a good thing). To illustrate the various approaches to tech transfer in Belgium, we describe below a number of key achievements: the Flemish Institute for Biotechnology, Leuven University and IMEC, Wallonia’s Marshall Plan, and an unusual new institute, Scientia Terrae.
VIB – Flemish Institute for Biotechnology For numerous entrepreneurs, on both sides of the linguistic border, the Flemish Institute for Biotechnology (VIB) is the example of effectively managing both fundamental research and technology transfer. The VIB was set up 12 years ago around a number of key scientists in Flanders who were doing remarkable things in the field of biology. These individuals were, however, located at a number of different universities around the region. Hence instead of building a new centralised scientific institute (which would have destabilised the universities), a ‘virtual’ institute was set up in joint-venture with the major universities. The University Faculties focus on teaching while the VIB focuses on research. The result is that today the VIB coordinates the research activities of 1000 researchers and technicians at eight departments at four major universities. The purpose of working with departments (as opposed to ‘principal investigators’) is that the VIB aims to create an environment that supports the development of young researchers. The point is to create centres of excellent around a number of key individuals of world repute. In this way the problem of scale, discussed earlier (i.e. too many universities, a limited number of key scientists), is effectively addressed. The VIB has two core functions: on the one hand the management of scientific research, on the other hand technology transfer. For its research activities, the VIB has essentially applied a number of key management principles. Thus, every department is required to write a vision and strategic plan for its research activities (every 5 years, to be fine-tuned annually). This plan is all-encompassing and includes the actual scientific questions that each department strives to address. The plans are ambitious too—one generic objective is to maximise the scientific impact of the research activities. The execution of these strategic plans and scientific performance more generally are then monitored on a systematic basis, mainly via the scientific publishing output (not simply the number of publications, but also the reputation of journals and number of citations). In addition, every 2-3 years the VIB set ups an international scientific advisory board to review the departments’ strategic plans and performance. In other words, the VIB has essentially put in place
a comprehensive performance management system for its researchers, while keeping academic freedom intact. The VIB puts in place processes and structures that encourage scientists to be transparent about their objectives, especially toward respected scientific peers, but the scientific decisions remain in the hands of the scientists themselves—it is not under political influence and neither does it need to answer the interests of large enterprises. The model seems to work. The VIB today produces a phenomenal scientific output. In 2005 the VIB published 60 papers in journals with an ‘Impact Factor’ of 10 or higher (Impact Factor, often abbreviated IF, is a measure of the citations to siencejournals. It is frequently used as a proxy for the importance of a journal to its field). For example, a recent paper published in NATURE (on VEGF vascular growth factor) elicited 1500 citations. Producing good science is one key element of the VIB’s story. Another is effective technology transfer. The VIB has a dedicated tech-transfer team who continuously monitor the institute’s scientific results. When new discoveries are made—usually even before these results are published— the tech-transfer team will assess whether there is potential for patents. If there is potential, then the tech-transfer team will take responsibility for writing up the patent application and the subsequent follow-up of that application. In a third phase, the VIB will explore the commercialisation of the intellectual property, either via licensing or via the creation of a new company (a ‘spin-off’). To date, seven companies have been set up by the VIB. What is remarkable about these companies is that they are nearly all successful. The VIB sets itself the criteria that it will only create a company if that company has the potential to lead its market. Competition is so extreme in biotech that one needs to perform at a global level. Hence, when creating a company, the VIB will bundle different research groups into a scalable company. These tend to attract capital and international managers. As a result, the VIB does not produce a huge number of spin-offs (about one a year) but it creates spin-offs that tend to succeed because they have the scale, resources and competencies to do so. The average biotech company in Flanders has 60+ employees—internationally that’s comparatively large.
Thus, to conclude, the VIB has applied a number of useful principles. Firstly, it has applied performance management processes to its research activities while respecting scientific autonomy. This point of academic freedom is important. Even the VIB is not immune to criticisms from the sector that it is restricting academic autonomy. The comment was made, for example, that most successful biotech companies in Flanders are based on technologies that were discovered completely coincidently (with Ablynx perhaps illustrating this best)—no strategic plan could have predicted such discoveries. Nevertheless, the VIB’s scientific autonomy is unique compared to the other Flemish public research institutes such as IMEC and VITO. These latter organisations, according to some commentators, are reliant on contract research for large multinationals and hence have lost some of their innovative character. Secondly, the VIB has professionalised the tech-transfer process, unburdening scientists and their departments from this specialised (and time consuming) field.
KU Leuven Research & Development and IMEC Leuven R&D from the University of Leuven is probably the most well-respected techtransfer unit in the country. Granted they have been at it for quite some years now (30 years) but the output is still tremendous. According to Leuven R&D director, Koenraad Debackere, the University of Leu-
ven has the largest patent and licensing portfolio in Europe. It has created a string of successful spin-offs, from Metris and ICOS Vision Systems to Tigenix and Thrombogenics. It is behind a number of worldfamous research institutes, including the Inter-university Micro-Electronics Centre (IMEC), Europe’s most important research institute in nanoelectronics and nanotechnology, and itself a creator of spin-off companies. Today, Leuven is not unique in this model. The universities of Ghent, Liege and others are catching up fast, but the model took shape in Leuven. The Leuven story effectively shows how an innovation ‘ecosystem’ can begin to develop around a set of key ‘knowledge centres.’ Leuven’s key knowledge institutes are the University of Leuven, the Gasthuisberg University Hospital and IMEC. The university delivers about 400 doctoral students a year and publishes more than 3000 international publications in science journals, of which about 1/4 appear in the top 10% of all journals. IMEC accounts for another 1000 publications a year. The university hospital is large—1900 beds and 63,000 admissions— and is one of the country’s most important teaching and research hospitals.
continued at p. 41
Koenraad Debackere Total innovation management: The need for an integrated perspective on innovation
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Koenraad Debackere General Management, Leuven Research & Development; Professor of Managerial Economics, Strategy and Innovation at the Katholieke Universiteit Leuven
Innovation probably is one of the hottest themes in the broad areas of management and policy. Just Google the worldwide web and you get close to 100 million hits for “innovation management” or “innovation policy” in less than a second. No one should thus be astonished that the interpretation and the use of innovation concepts are appropriated by managers, policymakers and scholars alike. Hundreds of books have been written on subjects like technological innovation, new product development, service innovation, process innovation and more recently, business model innovation. All of them contain useful insights, lessons and best practices. Consultancy practices are flourishing all over the globe, advising managers and policymakers to enhance the innovation performance of their companies and institutions. This is good news as it shows a practice and a discipline that are thriving. But, what is the essence of it all? What are the key messages any innovation practitioner should cherish and strive for, every hour, every day? I think there are four of them, and they go back to the roots of innovation as a human activity. First, innovation is about blending creativity, opportunity and organization. It is both content and process. Creativity only is the starting point, however. It merely is a necessary condition. Linking creativity to opportunity is the germ for progress. This is not an easy link, though. Multiple studies have shown that many people are prolific at generating ideas. But, establishing a credible and tangible link between idea and opportunity often proves to be an endeavor of a different order of difficulty and complexity. Studies have suggested that opportunity seeking and recognition may therefore be the hardest part of the innovation job. Opportunities should always be relevant to a particular use, a specific application, thereby generating value to users. Scholars have claimed that some people may be more inclined than others to spot and to assess opportunities. Once the link between opportunity and creativity is obvious, a lot of hard work remains to be done. This requires an adequate organizational approach towards implementing and monitoring the innovation effort. Without organization, no discipline will exist. Without discipline no innovation effort has ever met or surpassed goals and expectations.
“First, innovation is about blending creativity, opportunity and organization” Second, in order to blend creativity, opportunity and organization, a special kind of person is needed. He should be a credible champion, one who is willing to go for it against all odds. The person best known to have the traits needed to succeed this blending is the entrepreneur. Entrepreneurs have an instinct for positioning themselves at the nexus of creativity and opportunity. They are willing to assume the risks and uncertainties that come along. They are prepared to deliver the 99% perspiration needed to conclude the job. They are the animal spirits of any innovation activity. Of course, there are numerous examples of innovation efforts that were planned in an almost bureaucratic way, managed almost anonymously by project structures and review boards. The majority of those efforts have proven to be quite incremental and predictable, though. Without entrepreneurial spirits, no fault lines on the technology, product, service or process front have ever emerged. Third, innovation is about competition. Companies innovate in order to differentiate so that they can build a longerlasting competitive edge. Even cooperation is a form of competition. Without competition no innovation will thrive, without innovation no competition can be sustained. Innovation never ends as it always invites competitors to do better and different. Competition now extends from the market place to the very forefront of the innovation process. Managers and policymakers have embraced the open innovation concept. Open innovation just is a different dimension of the competitive process, though. Cooperation merely is a preparation for stronger, better quality, competition. Hence, the much lauded innovation ecosystem definitely is not a free lunch. Rather, it is a knowledge sphere in which managers and policymakers position their organizations and institutions for tomorrow’s competition. Fourth and finally, innovation requires a proper legal context. For innovation to thrive, contractual frameworks are needed that enable managers to cope with the many transactional issues that pop up during the course of an innova-
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Various instruments are in place for transferring knowledge. As mentioned, at the University, Leuven Research & Development (LRD) facilitates this process. At IMEC the business development and INVOMEC divisions focus on tech-transfer opportunities. These units essentially look for opportunities and offer professional legal, technical and business advice. One key focus is contract research, which has grown into a substantial business over the years, for the university but especially for IMEC, which receives up to 80% of its income via contract research. IMEC also transfers knowledge to existing companies by setting up joint R&D projects. Secondly, the tech transfer units focus on the management of intellectual property. The idea here is to generate income from commercial use of protected technology. Accordingly, the university is in the European top 3 in generating income via licence fees. LRD also supports researchers with their patent applications.
tion trajectory. Clear intellectual property policies and frameworks are a condition sine qua non. In a knowledge economy, knowledge has become a major production factor. As a consequence, there is a need for means to adequately articulate, protect and transfer that knowledge within or outside the boundaries of the organization. These actions and transactions will only happen when the partners and parties involved know and understand each other’s rights and freedoms to operate. This requires a proper and enforceable legal framework that appropriately deals with contract rights (especially in contexts of high degrees of uncertainty) and intellectual property rights. Innovation practice in Belgium has revealed the need to pay attention to all four elements simultaneously. They should co-occur and co-exist. That is why we badly need a “total innovation management” approach. Not just focusing on technology nor on product, but on the integration of the aforementioned elements into a holistic approach towards innovation, one that sustains deeprooted, fundamental renewal at the level of the business models deployed by our companies and institutions.
Thirdly, the University and IMEC found spin offs. Many of these spin-offs are located in the Leuven region’s Science Parks and the Incubation Centre, which also were developed under impulse of the University and the regional development agency. Capital is important too. Several Venture Capitalists have set up base in Leuven (Capricorn Venture Partners, Quest for Growth, Stone Fund) and the university itself has set up several funds in partnership with the banks. All this development in knowledge, companies and infrastructure has attracted other companies to set up sites in the Leuven region. In the process, the city of Leuven has grown into a knowledge region of international repute. In 2001 it was estimated that there were more than 300 knowledgeintensive companies in the region, with a total direct employment of more than 15,000 and a common turnover of more than 4,4 billion euro (quoted in brochure “Leuven, Knowledge Pearl”).
Important in the Leuven region’s evolution is the development of clusters, that have formed around several ‘centres of excellence’ (i.e. specific research departments at the university, the hospital or IMEC). Key clusters in the Leuven region include: • Life sciences cluster, concentrated around the Group Biomedical Sciences of the university (other departments also play a role here, including IMEC). Spin-offs include Thrombogenics and Tigenix in therapeutics, and Materialise and Medicim in bio-informatics and medical software. • Feed-food-health cluster, around the Faculty of Applied Bioscience and Engineering and its centres of excellence, like the Laboratory of Tropical Crop Improvement (this lab houses about 1100 banana varieties – the world’s largest in vitro collection of bananas). About sixteen innovative companies are clustered in this sector, including Orafti (see the article on the food industry). • Mechatronics cluster: domain of mechanics, robotics and electronics. The Faculty of Applied Science at the university is key here with some important centres of excellence like the P.M.A. (Production Engineering, Machine Design and Automation) research group. Companies in the cluster include IPCOS, Metris, LMS International and Materialise. • Telematics and Communication cluster: IMEC is the centre of excellence here, with its division Design Technologies for Integrated Information and Communication Systems. Several spin-offs have been created, like Sirius Communications (develops chips for satellite communication, acquired by Agilent) and Acunia (acquired by Punch International). • Microelectronics and nanotechnology cluster: again IMEC and the university are key knowledge centres. Key here has been research into the next generation of chips. IMEC clusters the largest part of the international semiconductor industry around its research centre. This has led to spin-offs like ICOS Vision Systems and attracted numerous foreign companies to set up sites here. • e-Security cluster: the COSIC research group does good work in cryptographic algorithms. Companies like Ubizen (acquired by cybertrust) are based in Leuven. • DSP Valley: a network of research centres and companies that focus on the design of hardware and software technology for digital signal processing systems. continued at p. 43
Dr Michel Morant The University: a key role player for innovation and regional development
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Dr Michel Morant Head of Tech Transfer Office University of Liege, CEO of Gesval sa
Since the late nineties, it has been accepted that universities have a third mission, in addition to education and research: services to society. Even more, the university should be involved in society, by taking part in cultural projects, ethical reflection, philosophical debates, and economical development. Economical development has two dimensions: regional development (macroeconomic) and the industry-university relationships (micro-economic). In both areas the university can play a key role. Western European economies are increasingly turning into knowledge economies. The Liege Region for instance was based on heavy industries: mines, steel, heavy mechanics, weapons, textiles … Since the Second World War these industries have been in decline, with huge jobs losses as a result. The university subsequently became one of the most important employers, and could benefit from its strong international relations (since good research tends to be international). The University came to recognise its responsibility and decided to set up a science park in the 70’s, to build a new campus in the 70’s and the 80’s, to set up an industryliaison office in the early 90’s, and a Technology Transfer Office in the late 90’s. Now the hot spots in the region of Liege are : aerospace, advanced materials (including high value steel), biotechnology, digital imaging, logistics, medical devices, … in all these sectors, the university has played a key role by contributing research and developing the stature of the technology. Renewing of the industrial network by setting up new start-ups clearly contributes to changing the reputation of the region. About 90 high tech spin-offs have been created, and some are leaders in their markets. This is the more visible effect of the university’s involvement in the regional economy. A second aspect is that the university clearly helps attract foreign investors, this by way of the availability of skilled people, access to up-to-date laboratories, being plugged in an intellectually stimulating environment that is open to the world. The result is about 100 new companies in 20 years, 20 patents filed a year, 15 technology transfers, 150 European research projects---clearly these are effective outputs of this policy.
“It is critical that managers make effort to update their knowledge, to refresh their thinking about management skills. “ On the other hand, the interaction between laboratories and companies is the basis for transferring new research results in the market. In the last ten years, the relationship between academic research and industrial research has drastically changed, from the “open science model” toward “the open innovation model”. The university has moved from a subcontractor position toward a partner position. This involves new responsibilities, new challenges and new opportunities. New responsibilities in managing research projects and in controlling the Intellectual Property in a professional way; New challenges in correctly balancing the partnership agreements and in developing technology transfer in order to maximize the use of research results through different business areas; New opportunities in following up research and development processes to the actual product on the market and in developing the network around a particular technology This new era is challenging for scientists, but also for companies and especially SME’s. By fostering the innovation network of the region, the University helps to pull the SME’s in the global knowledge economy. Patenting, licensing, creating start-ups, networking, thinking internationally, carrying out good research— it all becomes part of the innovation chain’s day-to-day business. Last but not least, the primary responsibility of the University is to educate people to face the challenges of this rapidly changing world. It is critical that managers make effort to update their knowledge, to refresh their thinking about management skills.
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Off course the Management School HEC plays a major role in this area, as most famous management schools do, but also in the area of science, top managers need to be able to recognise and understand opportunities. Obviously, universities also have an important responsibility in the education of technicians. The more sophisticated the equipment, the more sophisticated the technicians. In all these aspects the University needs be involved, to boost the innovation culture in its environment and to increase the value of a region. This has been the credo of the University of Liege for 20 years now, because there can be no successful university in an economical desert, and conversely there can be no successful region without a dynamic university.
Marshall Plan The government of Wallonia’s Marshall Plan represents a different model for technology transfer. While the Marshall Plan is a general economic invigoration programme one of its central components is a 280 million budget (to be spent over four years) to develop ‘competitiveness poles’ in pharmaceuticals & health, agriculture & food, mechanical engineering, transport & logistics, and aeronautics and space. The idea is to bring together large companies, SMEs, research institutes and universities around substantial and mostly market-driven research programmes. While Wallonia’s universities have spawned numerous spin-offs over the past two decades, policy makers came to recognise that this process was not leading to successful high-growth companies (with some important exceptions obviously), mainly because companies were being created with insufficient capital and competencies. Hence the idea to set up (and fund) broader research consortiums that incorporate the larger innovative companies. In this way the programme can rely on the experience and resources of larger companies and reduce risk (since the research will be commercially relevant—for those larger companies). Spin-offs will still be created, but the idea is that they will emerge from stronger foundations. On the whole, the programme (in its 3rd round appeal for projects) is being very well received. It has led to a number of new collaborative research projects, involving not only large companies and universities but also a substantial number of SMEs. In our round of interviews, people explained that they sensed a much more constructive attitude among scientists and entrepreneurs, a new willingness to work together and a general enthusiasm about the future. In Flanders similar initiatives are beginning to happen, albeit not framed in such an all-embracing economic programme. Flanders Food, for example, is an initiative of the Flemish government, in partnership with the food industry federation (FEVIA), via which several collaborative research projects are set up, including participation from SMEs, large companies and research centres. Again, the feedback we heard in our round of interviews was positive. continued at p. 45
Tom De Ceuster Culture innovation …
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Tom De Ceuster CEO DCM
Innovation is one of those words that we all like to use – we agree it is a positive thing and for the most part want more of. And yet, the term ‘innovation’ seems to defy a commonly accepted definition. Notwithstanding thousands of books on this subject, reading and understanding the literature doesn’t enable us to generate innovations. It seems like we lack practices for deliberately and consistently producing distinctive innovations. Yet, I do not believe that a competency for innovation is a gift that only a few endowed people have inherited. While it is true that some of us come by this ability seeming naturally, it is my belief that many people can be triggered to break with the norm and accomplish breakthrough outcomes. This is where business culture makes its entrance. I consider business culture of primary importance in promoting and enhancing systematic innovation. Business culture and innovation can in my view not be dealt with separately. They are inextricable linked with one another and surely are cut from the same cloth. My understanding of business culture is that it reflects the complex mix of employee and corporate beliefs, attitudes, values, rituals and behaviours that permeate an organisation and give it its unique personality. In cases in which a culture is sprung organically from the nature of its passionate and enthusiastic founder – such as is the case in my organisation – the company’s whole existence hinges on that cultural heritage. Business culture can attract the best employees and maintain their loyalty. It can rally people around an important belief or shape the definition of a corporate brand. Nowhere does culture have a more direct impact than in a company where creativity and innovation represents the livelihood of the organisation. Despite its impact, business culture is not always given sufficient weight or consideration, and its effects are underestimated primarily because they are difficult to measure. To many, innovation is equated with change. But does this view tell us the whole story? I believe change – whether large or small, continuous or breakthrough – is just a part of the big picture. After all, isn’t change happening all the time, whether we are aware of it or not? In my view innovation needs to be relat-
ed to some practical ‘in the world’ value and needs to be brought into existence ‘intentionally’. Innovation is about bringing forth something new which allows human beings to accomplish something they were not able to accomplish before. This is where art differs fundamentally from innovation. Although art is also about bringing forth something new, it requires no utility to be art. It is creative
“It is more about creating the right business culture, than about hiring the right people to systematically generate incompany innovations.”
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and may have value to its admirers, but is does not allow for something else, some possibility or accomplishment or value beyond the art itself. If someone comes up with a new hammer that does what our existing hammers do, then that is a design change and design is an art. When someone creates a new kind of hammer, however, such as a nail gun or a new method for hammering, then we can distinguish that as innovation. At DCM corporation, much innovation seems to come from the involvement and the passion of its employees. Our traditions and values seem to motivate people largely from within and inspire them to excel. Each individual is granted the legitimacy of his or her own view and the freedom to take action given the circumstances. They see themselves as responsible, as owning, as being master of their own destiny. We believe this involvement is crucial in stimulating creative and outside-the-box thinking. It makes innovations at DCM become a natural by-product rather than something artificially generated or demanded. And yet, many companies struggle to defi ne the values and beliefs that underpin their cultures and many more wrestle with how culture should be articulated within their organisation. In order to generate genuine inspiration or passion naturally, my advice is to start at the core of your business. It is more about creating the right business culture, than about hiring the right people to systematically generate in-company innovations!
Company-driven research platforms (Scientia Terrae) The above outlined tech transfer models are either university- or governmentcentric, that is, the initiative comes either from a university/research institute or from the government. Thus, the VIB and Leuven R&D both rely on public research resources and attempt to ‘valorise’ the scientific output via licensing and the creation of spin-off companies. The Marshall Plan is a government initiative that set ups ‘clusters’ in a top-down manner via a funding mechanism. There is a third model, however, where the initiative comes primarily from industry. One key example here is Scientia Terrae, a not-for-profit research institute affiliated with plant health and soil fertility specialist DCM. Not withstanding a long and fruitful collaboration history with universities, DCM felt the need to take its technological future more in its own hands. Mainly it found that it could not gear university research sufficiently to its own market applications. There are probably several reasons for this. DCM is not a particularly large company (it is a large SME) and hence does not have the clout to influence university research departments in their scientific choices; neither does it have much leverage in the IP negotiations with university tech-transfer units. Also, there was no sector-initiative along the lines of Flanders Food. In response, DCM set up Scientia Terrae in 2001 with a mission to translate fundamental research to practical commercial applications. The institute was positioned on the interface between fundamental research and the commercial world. On the left hand side they are building an international network of scientists at universities and laboratories and on the right hand side a network of customers, i.e. other companies who wish to participate in joint research programmes, or simply use the lab infrastructure for contract research. Initially these were the companies in the De Ceuster group but this has, since then, expanded to other companies. Scientia Terrae is an actual laboratory with highly competent staff (in other words, it is not a ‘virtual’ lab that outsources all research activities to university labs) and reasonably well-equipped too.
The institute is driven by its customers’ need first. Those determine its scientific agenda within their fields of expertise. Once key questions or research domains are formulated, it subsequently scours the world’s fundamental research to see if there is something useful it can take further in its own lab. If there are IP issues then that is dealt with on a contractual basis. The purpose of the institute is to prepare scientific results for the market, not only technically but also from a regulatory perspective (in other words, the institute will not set up projects in areas that are restricted from a regulatory perspective). Since its inception, the institute has grown in stature—it is beginning to secure funds from science funds (in other words, it is competing directly with academic research centres), its people lecture at universities, and it attracts personnel from all over the world. For its customers, the institute offers some distinct advantages over universities. Probably most importantly this has to do with IP. The institute’s mission is not to build up an IP portfolio—essentially it offers expertise and an infrastructure (and network) for its customers to build that IP portfolio. The institute expects only a reimbursement for incurred costs and a fair contribution towards the overhead expenses. It will negotiate agreements on an adhoc basis where projects are collaborative in nature.
DLA Piper Protecting Intellectual Property
46 DL A PIPER 106 Avenue Louise Brussels B-1050 Belgium T: + 32 (0)2 500 15 00 F: + 32 (0)2 500 16 00 www.dlapiper.com louis.puts@dlapiper.com • Business Model & Process Innovation • Science & Technology • Design & Creativity
DLA Piper’s IP team is valued for the high quality of their work and the close and open-minded consultation with its clients DLA Piper helps its clients protect and enforce their intellectual property rights. In Belgium, the firm has a specialist team dedicated to the protection and valorisation of intellectual property. Its core business is representing clients in patent and trademark infringement proceedings. The firm also offers advisory services on IP-related contracts, patents, trademarks and licenses. As a large international group the firm is exceptionally well set up and experienced in protecting IP rights worldwide, hence many of its clients are global brands. Also, the Belgian team is frequently asked by other DLA Piper offices to coordinate international litigation work.
OVERVIEW OF ACTIVITIES Innovative companies create and rely on intellectual property: new technology that delivers more and better functionality, reengineered business processes that disrupt entire business models, brands that inspire customer loyalty, design that transforms ordinary products into exclusive objects, the know-how of their people. But too often companies simply assume that they own their intellectual property. This is not necessarily so, especially in today’s era of ‘open innovation’ where companies increasingly collaborate with each other at various levels.
“where dLa Piper earned its stripes, the enforcement of IP rights” Companies collaborate with key customers, with research institutes, with other companies. These organisations have certain legal rights. Employees also have legal rights – not all intellectual property is automatically ascribed to the company. DLA Piper steps in at various points of the innovation ‘value chain.’ Firstly, it helps companies protect their IP by wrapping it in a legal framework. This is mainly advisory work: writing or reviewing contracts that govern co-development work, reviewing employment contracts for research or creative staff, working out a patent and/or trademark strategy. ‘Inventions’ usually are best protected via patents. But patents need to be correctly scoped. How narrowly or broadly should the invention be defined? How does a company ensure that its patent cannot be too easily circumvented by competitors? In which countries should patents be applied for (only where one plans to be commercially active - applying for and maintaining a patent is expensive)? Obviously, patenting is just one way of protecting intellectual property. Brands can be protected by trademarks. Then there is everything that falls
outside of the domain of patents and trademarks, like know-how, ideas, design, etc. Some of these elements are covered by copyright law, others are not. DLA Piper advises clients on a suitable contractual framework to cover those elements of IP. For example, R&D divisions and design departments need to be particularly careful with their employment contracts. Companies are not infrequently faced by situations where ex-R&D staff patent inventions that where developed on the company’s payroll, or where IP they assumed was theirs is in fact owned by the employee. Often contracts are too weak, but conversely, contracts also often are far too strictly formulated with result that they are in effect invalid. Secondly, DLA Piper helps companies commercialise their IP via licensing models. Once the IP is legally owned and protected, a company can ‘rent’ it out via a licensing model. However, licensing is a complex business where due care needs to be taken to legally clarify the rights and duties of all partners involved. As such, licensing contracts need to be customised to the company’s specific situation. Even in companies with in-house counsel DLA Piper is often asked to provide a second opinion on licensing contracts. Thirdly, and this is where DLA Piper earned its stripes, the enforcement of IP rights if these are infringed by others. DLA Piper’s IP team has been particularly active in litiga-
SUCCESS & INNOVATION INDICATORS • Expert team in counterfeiting, trademark and patent litigation • 100 lawyers in Brussels and Antwerp provide full legal advice service • International strength – group has 3700 lawyers in 25 countries tion work around counterfeiting. Branded consumer goods companies are often exposed to the wholesale infringement of patents, trademarks and design copyright restrictions. In response, DLA Piper sets up legal procedures to, for example, block the import of counterfeited goods or to confiscate such goods if they are already in the country. All this requires specialised legal expertise (for example in customs law) but also a good understanding of the various means by which dubious operators circumvent IP protection. The first and third phases of IP management outlined above obviously go hand in hand. Companies that do their work properly in phase one, that is, build a solid legal framework for protecting their IP, can avoid difficult disputes later in the process. Companies that are not adequately protected via contractual means or via patents and trademarks will find the likely infringements of their IP rights difficult to deal with later.
Life Sciences & Chemicals
A pillar of the Belgian economy If we talk about innovation in Belgium, we must firstly talk about the life sciences and chemicals sector. According to Essenscia, the sector’s federation, research and development expenditure in the chemical and life sciences industry totalled an estimated 2.32 billion EUR in 2007. This represents nearly half of all private-sector R&D spending in Belgium. Life sciences, which includes pharmaceuticals and biotechnology, accounted for about three quarters of the sector’s R&D. Also, R&D expenditure has over the past 10 years consistently increased, both in absolute money terms and as a percentage of turnover (4,5% of turnover in 2006). In other words, the decline in the country’s total R&D expenditure over the period 2001-2005 was countered by the life sciences sector. The life sciences and chemicals industry not only is a key driver of this country’s innovation performance; it also is one of the key building blocks of Belgium’s economy. Again according to Essenscia, the industry’s turnover exceeded 54 billion EUR in 2007, accounting for one-fifth of total turnover in Belgium’s manufacturing sector as a whole. Direct employment in the chemical and life sciences industry totals about 94,000 jobs, or 16% of all employment in the entire manufacturing sector. Investment amounted to 1.96 billion EUR in 2007, representing more than one quarter of total investment in the manufacturing sector. Finally, the industry is highly export-orientated, clocking 99,2 billion EUR in 2007 (more than the country manufactured because Belgium serves an important transit function).
Chemicals—process innovators The chemicals industry in Belgium has managed to survive because it is innovative, both in products but especially in processes. While product innovation is more the domain of the pharmaceutical and biotech sector, discussed below, the chemical sector in Belgium is mainly about process innovation. This is because much of the chemicals business is a commodities business, where efficiency is key to success. It is in process innovation that major R&D investments have been made and that major success has
been booked. Perhaps the best example in this regard is the BASF plant in Antwerp. The new BASF plant being built in Nanjing in China will not be based on a BASF plant in home country Germany, but will be based on the Antwerp plant. This is because the Antwerp plant is the absolute world benchmark in the way it processes energy and materials. The challenge in process innovation pertains to the way processes are integrated or linked to each other so that materials and energy are optimally exploited, reducing waste as much as possible and optimising the overall production process and supply chain. In the lingo of the sector, the challenge is all about “debottlenecking” the production process so that one can maximise production capacity. Competitive advantage comes from the percentage of time that one’s plant can run at 100% of its capacity. But the complexity of managing so many interlinked processes is particularly daunting. It is not simply a matter of debottlenecking a sequence of processes geared to the production of a single product. The idea is to use the “waste” generated by one production process as inputs in other processes. Hence the entire operation, responsible for producing a large array of different products, hangs together in an interdependent way. Thus, one cannot simply “switch off” the factory for maintenance. If a plant needs to be shut down for maintenance, then this needs to be done in a phased way, starting with some processes up to three days earlier. The same applies for switching a plant back on; this needs to happen in a phased, fully programmed way. Post-production logistics too is another core competency that needs to be managed critically well. Given their high production volumes, Belgian chemical plants need to be connected to excellent logistics network. If something goes wrong in the logistics chain then products will rapidly stockpile to unmanageable levels. Hence, companies like Katoennatie in Antwerp have built up tremendous expertise in taking care of the entire logistics chain for companies like Solvay. Other companies that are noteworthy for their process innovations in Belgium are Solvay, Total, Tessenderlo and Borealis.
Pharmaceutical – R&D powerhouses According to Pharma.be, the Belgian sector federation for the pharmaceutical industry, the R&D expenditure ‘intra muros’ of the sector increased from 14,6% of total R&D expenditure by the private sector in 1995, to 24,4% of total R&D expenditure. In others words, today a quarter of all private R&D expenditure in Belgium is made by the pharmaceutical industry. Looking at the pharmaceutical companies that conduct fundamental research in this country, their total R&D expenditures have increased tenfold since the early 90s (and average of +14,5% per year). That is a phenomenal rate, given the overall decline in private R&D spending in this country since 2001. The three most important R&D investors in Belgium are GlaxoSmithKline Biologicals, UCB and Janssen Pharmaceutica (part of Johnson & Johnson). Solvay’s pharmaceutical division is also noteworthy. Janssen Pharmaceutica has a tremendous tradition of innovation in the pharmaceutical industry and is known for developing several household names like Imodium, Motilium and Daktarin. GSK Biologicals is GSK’s biopharmaceutical R&D site and is renowned for its work on vaccines. UCB, which transformed itself from a chemicals company into a biopharmaceutical company, focuses primarily on central nervous system disorders, inflammatory disorders and oncology. UCB is a world leader in neurodegenerative disease, like Epilepsie, Parkinson and Alzheimer. It is particularly well known for its anti-epileptic medicine Keppra. Solvay is a more diversified group with activities in chemicals, plastics and pharmaceuticals. In pharma, it is active mainly in cardiometabolics and neuroscience. These companies not only conduct a tremendous amount of R&D in-house but they also form essential cogs in the broader innovation network. For example, UCB has 140 different partnerships running with Belgian universities.
Biotech—a hive of activity According to Bio.be, the Belgian biotech federation, there are 140 biotech companies active in Belgium. That translates into 7% of all European biotech companies, but Belgian companies account for 16% of the European turnover and almost 10% of the
Biotech in Flanders As outlined earlier in the tech transfer article, the VIB has a worldwide reputation and a truly unique business model. Essentially it is a virtual institute that coordinates the research activities of 8 research departments at Flemish universities, covering the work of 1000 researchers and technicians. Its tech transfer approach is to create spinoffs very selectively—it will only do so if it believes the company has potential to lead its market globally. Hence, VIB spin-offs tend to be exceptionally well-equipped, not only from an IP perspective but also in terms of a sizable team of people, capital and infrastructure. Recall, Flemish biotech companies average 60+ employees—the VIB plays it part in this. The VIB’s scientific achievements are remarkable. It is particularly well known in: • Plant biology—the VIB is in the top 3 of plant institutes globally and is surrounded by (and partly responsible for) some major players in the field including Devgen, Cropdesign (acquired by BASF Plant Science) and Bayer CropScience. • Cardiovascular • Neurobiology • Oncology • Inflammatory disorders Some of the better known scientists at the VIB are Dirk Inzé and Peter Carmeliet. Dirk Inzé at the University of Ghent is probably the most reputed scientist in the field of plant biology. He heads a group of 245 people at the Department of Plant Systems Biology. Peter Carmeliet, Director of the VIB Department of Transgene Technology and Gene Therapy (University Leuven), is known for his work on vasculogenesis, angiogenesis and vascular endothelial growth factor (VEGF). R&D expenses. In other words, biotech in Belgium is comparatively large, successful and R&D intensive. There are three broad areas of activity: • Healthcare applications (80%) • Agro-food applications (15%) • Industrial and environmental applications (5%) The sector has witnessed strong growth since 1997: the number of companies has increased by 17% a year with 10% employment growth. This has led the evolution
of several clusters, situated around major universities and research institutes. In Flanders, biotech is centred in Ghent, Leuven and Mechelen. The key driver in this region is the uniquely structured VIB (Flanders Interuniversity Institute for Biotechnology), which was comprehensively discussed in the earlier “tech transfer” article. In Wallonia, the biotech centres are in Liege, Charleroi, Mons, Ottignies, Gembloux and Namur. Within the Marshall Plan a specific health cluster, BioWin, is pushing the sector forward.
The VIB’s spin-off companies are Devgen (1997), CropDesign (1998), Ablynx (2002), Pronota (2004), Solucel (2006) and ActoGenix (2006), with the first three being the better known.
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Jo Bury A vision on the future of medicine
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Jo Bury
Managing Director, Flemish Institute for Biotechnology
Today, the medical corps treats disease using block buster drugs that are supposed to treat all patients with a “same” or common disease. However, we are beginning to realize that only part of the patient population – sometimes only a small fraction – is effectively treated, while others are not cured by the treatment or suffer from minor or major side effects. This is explained by the fact that there is no such thing as a “common” disease or a “standard” patient. Every disease is different. Every patient is different. The vision is that in the next two decades a knowledge-based medicine will be developed, enabling personalized medicine, defined as a treatment, that is specific for the “personal” disease and the individual patient. This knowledge-based medicine will be based on the following two developments: • understanding the molecular mechanisms of disease • understanding the genetic constitution of a patient 1. Molecular mechanisms of disease Current therapies are based on the false assumption that macroscopic evaluation of a patient and current clinical testing is sufficient to differentiate between diseases. Once a disease is diagnosed, a treatment is installed. It is comparable with shooting from a long distance to a target with a rifle without a sight. As a matter of fact, the chances of hitting the target are small. More and more, the understanding grows that “a” disease (e.g. ‘breast cancer’), is not “a” disease, but a “collection” of tenths - or even hundreds – of different diseases, each having a different cause. Only by understanding the molecular mechanism of this cause a specific target can be identified. Knowing the target will enable scientists to develop specific drugs, designed to hit this disease-specific target. It is like putting a sight on the rifle. If you know how to shoot, you will hit the target. This conceptual evolution will have several consequences for drug development. Instead of the current practice of developing a single drug for “a common” disease, drug developers will have to turn to the development of more “specific” drugs for
“Current therapies are based on the false assumption that macroscopic evaluation of a patient and current clinical testing is sufficient to differentiate between diseases.” smaller cohorts of patients with a disease with a particular molecular mechanism. It is to be expected that the clinical development of such a drug will require less patients, time and money to develop the drug. This development will also have consequences for clinical practice. Indeed, the clinician will have to identify the molecular nature of the disease before prescribing the drug. Therefore, there will be a need to develop diagnostics to differentiate between the different molecular forms of a disease. This means that use of therapeutics and diagnostics will go hand in hand, being inseparable partners in the development of drugs and the treatment of disease with so called “theranostics”. These diagnostics will also have a tremendous benefit for the early detection of a disease, long before the diagnosis in current practice. 2. Genetic constitution of patients It is very well known today that there are significant individual variations in response to treatments. These variations range from effective response, to non-response, to over-response. Over responders show side effects that can be more severe than the disease to be treated. These differences from patient to patient find their explanation in the different genetic constitution of each patient. This is why every individual is unique. In the future, knowledge about this uniqueness of every individual patient will be used to decide on the right treatment and dose of treatment for an individual patient. In order to enable us to do so, scientists will have to unravel the relation between individual differences in patient genomes and the differences in response to treatment. The ever increasing speed in the development of disruptive genome sequencing technologies
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most probably will have a major effect on speeding up our understanding in this field. While today the sequencing of a patient’s genome still amounts to about 100.000 €, this cost will go down in the next decades to less than 10 € per genome. This research should lead us to the development of cheap diagnostic tests enabling us to predict how a patient will respond to a specific therapy. Conclusion Taken together, the understanding of the molecular mechanisms of a disease and the genetic background of response to specific drugs, will lead us in the coming decades to a knowledge-based health care, allowing personalized medicine at a payable cost.
continued from p. 49-
Devgen and Cropdesign are two key players in agri-biotech or so-called ‘green’ biotech. Green biotech has a particularly strong tradition in Flanders, in fact, scientifically it has its roots in the region (given the early work on plant genomes). Since the early nineties a number of flourishing biotech companies have been set up. Devgen and Cropdesign belong to this group. Another noteworthy company is Plant Genetic Systems (since acquired by Bayer CropScience). Devgen, as one of the older and more successful biotech companies in Flanders, illustrates the transition from science to commercial success particularly well. Like most high-tech companies, Devgen was founded in 1997 on the basis of a promising ‘enabling technology’ which it looked to apply in pharmaceuticals and crop protection. Important is that the company has in fact evolved from pharma to crop protection to seeds. They managed to enter a particular segment of the market using an interesting enabling technology but then promptly innovated in the ‘depth & breadth’ of that segment to position themselves as a global leader in that market. For Devgen CEO and founder, Thierry Bogaert, one cannot rely only on good science. Equally important are ‘intelligent capital,’ i.e. capital providers who are able to play a constructive role in the development of the business, and an international perspective to markets and people. For Bogaert it is striking how biotech in Flanders appears to be quite countercurrent. For example, scientific work was done on functional genomics in plants at a time when agriculture was totally out of fashion in the world of biotech. But today, with high commodity and food prices, the field has become important. Similarly with regard to CropDesign, Galapolos and Ablynx—all companies that emerged from science that was somewhat unusual and certainly not predictive of future commercial success. Given Belgium’s scale it has been (and still is) difficult to compete head-on with the large players in the main playing fields (i.e. the areas where most R&D is channelled into). Ironically, this appears to be at least one reason why successful companies emerge here. As experience shows, some very interesting technologies do emerge out of the unexpected and this allows the resulting spin-off companies to carve out a dominant position because they
are set up so early in the technology’s life cycle. The ‘flat out’ approach, as is common in the US and UK is not only unfeasible in Belgium but also can be less effective. Compared to the US, the capital secured by Belgian biotechs tends to be much smaller and supplied in a more phased manner. Hence, the cash ‘burn rate’ of Belgian biotechs is much lower, and the approach more pragmatic too. Companies like Devgen, CropDesign and Ablynx have focussed on professionalising their business rapidly, by securing capital, attracting international people and managers, and building international partnerships—but in a way that protects the IP assets. This latter point is important. One needs to work with industry as quickly as is possible because that way one learns about the commercial applicability of one’s technology. But it must be done in such a way that the core IP (with its exploitation rights) is retained. This is what Devgen and Ablynx are doing particularly well. These companies are partnering early on but have kept important applications outside those first contracts. It allowed them to start generating income and hence be less reliant on venture capital. Most importantly they are learning about their markets, which for Devgen especially, was critical for mapping out a solid roadmap for its innovation efforts. Compare this to the US, where most companies hang on to all their IP until Phase II of the research process—this reduces the change of success, i.e. that one’s technology will still “plug in” the current technology market.
continued at p. 53
Michel Goldman Joining academia and industry strengths to boost innovation
52
Michel Goldman Director, The Institute for Medical Immunology, ULB Vice-President of BioWin, the Health Cluster of Wallonia
The government of Wallonia has set a decisive step on the path towards socioeconomic rejuvenation of the region through the creation of 5 competitiveness clusters. A key feature of these clusters is to establish new relationships between the academic and industrial sectors. BioWin, the cluster dedicated to human health, aims at boosting innovative projects with a high market potential in the biotech sector. It offers SMEs and start-ups the benefit of a critical mass assembled with large companies, universities and related research centers. Taking into account existing strengths, Biowin focuses its activities in three fields of major importance for public health: inflammation, cancer and brain disorders. Indeed, there are a number of unmet needs in these disease areas for which breakthrough advances are eagerly awaited.
To take full advantage of these assets, the government of the Walloon Region promotes different forms of publicprivate partnerships. The Institute for Medical Immunology which I lead was one of the first examples of these new models of research organization where industry, university and government invest jointly in projects selected on the basis of scientific excellence and potential for industrial exploitation. Within BioWin, the first endeavor was to foster academia-university partnerships for the development of biomarkers, which are indicators of disease activity essential to accelerate the processes leading to approval of new drugs. Thus, the platform “KeyMarker” involves 19 industrial and academic partners working together to develop new biomarkers for imaging in cancer and inflammation. A first spin-off company of this platform is expected to be created soon.
“The ambitious program of BioWin is based on a tradition of scientific excellence in the universities of the WalloniaBrussels area.”
In parallel, major efforts are currently made to adapt education and training programs to societal needs. It is indeed the vision of BioWin that the long-term success of public-private partnerships will depend on the emergence of a new generation of “innovative bioentrepreneurs” with excellent scientific background and strong management skills.
The ambitious program of BioWin is based on a tradition of scientific excellence in the universities of the Wallonia-Brussels area. As examples, the group of Professor Thierry Boon (UCL, Ludwig Institute for Cancer Research) pioneered the field of cancer immunotherapy by the seminal discovery of tumor antigens, the laboratory of Marc Parmentier (ULB, IRIBHM) opened new perspectives for the prevention of AIDS by the identification of a key target of the HIV virus, and the team of Michel Georges (ULg, GIGA) recently identified an important susceptibility gene for Crohn’s disease. On the industrial side of the health sector, Wallonia is home to major companies operating worldwide including GSK Biologicals which delivers 1 billion doses of vaccines yearly, UCB which produces an anti-epileptic drug given to 2 million patients, and IBA which already installed 350 particle accelerators. Beside those large companies, many successful innovative SMEs contribute to create a rich network covering the whole innovation chain.
continued from p. 51
Ablynx is probably one of the most promising biotech companies to have emerged in Flanders recently. Scientists at the VUB (University of Brussels) made the somewhat accidental discovery that the antibodies of camel-like animals (e.g. lamas) are much smaller and malleable than human antibodies, but are still 80-90% identical to human protein. In other words, the nanobodies of lamas can be ‘trained’ (and manipulated to replicate a human version) and that way form the basis for a myriad of pharmaceutical products. The resulting spin-off company very quickly attracted major partnerships with Boehringer Ingelheim, Wyeth and Novartis. In exchange for exclusivity over one of its nanobodies Ablynx receives a licensing agreement and R&D money. In these partnerships Ablynx works on ‘validated targets,’ proteins that are proven to have a direct impact on disease and where there are products on the market already. The potential is huge— there are probably about 2000 targets that can be approached with nanobodies and only about 1% of those have been framed in exclusivity agreements (De Tijd interview with Ablynx CEO Edwin Moses, 15 December 2007). Ablynx is moving beyond the tech platform, however, toward product development. Its first research program is focused on a medicine for thrombosis patients but with the money it is earning from partnership agreements it plans to set up another 6 to 8 new research programmes. Other important biotech companies in Flanders include Tibotec (HIV), Tigenix (first cell therapy company in Belgium), Galapagos, Thrombogenics, Innogenetics and Movetis. Mention must also be made of IMEC, which is doing increasingly groundbreaking work in the field of bioelectronics. Specifically, it is making progress in developing models for the transduction of biomolecular interactions into electrical signals, which will make possible the development of highly sensitive biosensors. It is also doing some pioneering work on so-called hard-soft (bio-electronic) interfaces, in which neurons interact with electronic chips.
Biotech in Wallonia As in Flanders, the biotech sector in Wallonia rests on particularly strong academic credentials. In Wallonia, key scientific achievements have been made in genomics, G-protein-coupled receptors and cancer. In the field of genomics, Prof Michel Georges at the University of Liège won the 2008 Francquin prize for his work in animal genomics. Earlier, in 1999, Prof. Parmentier at the Free University of Brussels won the Francquin prize for his observations on the structure and function of G-protein-coupled receptors, which is of particular importance to the field of HIV. Then in cancer, there is particularly noteworthy work being done in the field of breast cancer and cancer antigens. For example, Prof Thierry Boon (another Francquin prize winner), Director of the Ludwig Institute for Cancer Research and professor at the Université Catholique de Louvain, is known for his groundbreaking work on cancer antigens. Marc Lacroix from the Institut Jules Bordet in Brussels is renowned for his work in breast cancer. While there is no overarching institute comparable to the VIB in Flanders (there are several excellent smaller institutes in Wallonia), Wallonia’s initiative to bring the sector together, to exploit synergies, is the Marshall Plan cluster BioWin. The idea is to develop a biotech ‘cluster’ in Wallonia and Brussels where universities, research centres, large pharmaceutical companies and smaller SMEs collaborate around ambitious research programmes. The point is to build on existing strengths, both in an academic sense but also, crucially, on the presence of companies such as GSK Biologicals, UCB and Solvay. In that sense the approach differs fundamentally from that in Flanders. KeyMarker was the first promising program to emerge from the first round of projects selected in the BioWin framework. Based on research work conducted on biomarkers, which led to a new patent being filed, the plan is to launch a spin-off by 2009, also to be named KeyMarker. The programme clearly illustrates the ‘partnership’ approach of the Marshall Plan—it involves 19 partners from university research groups to large pharmaceutical companies. The risk-factor of this type of work is minimized because the programme is aligned with the needs of participating pharmaceutical companies. continued at p. 61
DEVGEN Working on tomorrow’s agriculture
54 DE VGEN Technologiepark 30 B-9052 Gent Belgium T: +32 (0)9 324 24 24 F: +32 (0)9 324 24 25 www.devgen.com info@devgen.com • Science & Technology • Business Model & Process Innovation • Design & Creativity
Globally, agriculture today is facing a number of important challenges. The fast growing world population is accelerating the demand for food and energy. In addition, further urbanisation is reducing the amount of land available for agricultural use. The land area available for agriculture has already been reduced to half the area available in 1960. Furthermore, farmers are faced with increasing regulatory pressure to reduce the use of agrochemicals, due to their negative environmental impact. Today Devgen has innovative solutions under development which should lead to increased yield for a number of specific crops. These solutions represent: • a portfolio of germplasm for rice, sorghum, pearl millet and sunflower, collected globally and a pipeline of new, high quality hybrid rice, sorghum, millet and sunflower seeds for the Indian/Asian market. Experts based in Belgium, Kenya and India are developing new and better varieties through hybrid breeding supported by molecular techniques; • a proprietary technology developed by Devgen which allows for the introduction of new biotech “traits” into plants so as to make these plant resistant towards specific insects and pests; • technology – “traits “(under licence) for improving drought and salt tolerance of plants and optimizing nitrogen uptake by plants in order to reduce the amount of fertiliser needed to make these crops grow to their full potential.
SUCCESS & INNOVATION INDICATORS • Short term (< 2 years) Expansion of the current hybrid seed business in India Regulatory approval for launching new nematicide product • Medium term (2 - 4 years) Successful introduction of new hybrids addressing specific territorial needs Growth of the hybrid seed business into South East Asia • Long term (> 4 years) Introduction of biotech traits in crops of interest
Devgen is combining these technologies to improve its current hybrid seed portfolio for rice and other Asian crops. In the shortterm, new high performing hybrids are being developed but for the mid-to-longer term Devgen is looking to develop high performing biotech seeds to address the emerging global food shortages. In addition, Devgen has made its own in-the-crop insect protection technology available to other leading seed companies in the corn, cotton and soy markets.
“today, devgen has innovative solutions under development which should lead to increased yield for a number of specific crops”
Devgen furthermore has a new agrochemical product under development to address the problem of the nematodes â&#x20AC;&#x201C; small worms which cause significant damage to crops by damaging the roots of the plants. The products in use today are under high regulatory pressure due to their unfavourable environmental profile. Devgen believes its new product, which classifies as less acute toxic under the WHO classification, represents an excellent alternative for the farmer to address the problem of the nematodes and maintain the yield for the farmers in a more environmental friendly way. Devgen fi nally has a pharmaceutical division which develops new candidate drugs for the treatment of inflammation and arrhythmia. The company is working on a plan to allow the pharma unit to further develop independently in order to allow the company to focus entirely on its agricultural activities.
Movetis Innovator in gastrointestinal disorders
56 MOVE TIS Veedijk 58 (1004) B-2300 Turnhout Belgium T: +32 (0)14 40 43 90 F: +32 (0)14 40 43 91 www.movetis.com info@movetis.com • Science & Technology • Business Model & Process Innovation • Design & Creativity
MOVETIS IN SHORT Movetis N.V. is an independent Belgian specialty pharmaceutical company specialized in the discovery and development of innovative compounds for digestive or gastrointestinal (GI) disorders. The company was founded in November 2006 as a spin-out company around a portfolio of products from Janssen Pharmaceutica N.V. and Ortho-McNeil Pharmaceutical Inc., two Johnson & Johnson companies. The company has a broad GI portfolio of eight products, three of which are in clinical development and all of which address areas of unmet medical need. In addition, Movetis has rights to a large library of more than 600 qualified lead products with potential for development in different GI indications and access to know how and a library of compounds in secretory diarrhoea. The company is based in Turnhout and currently has 40 employees.
ACTIVITIES Movetis’ lead product RESOLOR® (prucalopride) is indicated for the treatment of severe chronic constipation in patients who are not adequately relieved by laxative treatments. Prucalopride is a novel, very selective small molecule that stimulates certain sites (5- HT 4 receptors) in the GI tract in a specific manner. As a result it increases movement of the colon and stimulates mass movement in the bowels. Prucalopride has successfully completed 3 clinical phase III pivotal studies. It has been tested in more than 3,000 patients in 82 well controlled trials supporting that the product is effective, well tolerated and fit for longer term usage.
SUCCESS & INNOVATION INDICATORS • Grown from 4 to more than 40 people in less than 2 years • Investors from Belgium, France, Luxemburg, Netherlands and USA • 3 products in clinical development, 1 ready to go into man, 4 preclinical compounds and total library of potential leads > 600 compounds • Current development projects are run in more than 15 different countries all over the world • R&D budget > 60 % of turnover • Awarded more than 3 MM euro subsidies from Flemish government to strengthen discovery efforts
In April 2008, Movetis filed prucalopride with the European Medicines Agency for marketing approval in the EU territories. The company’s other products in clinical development are: M0002, which has completed Phase IIa testing to treat ascites, an accumulation of fluid caused by liver malfunction in patients such as those with cirrhosis. M0002 has demonstrated a dosedependent effect in a multiple dose phase IIa trial in a small number of patients in the target population. The company’s ‘next generation gastrokinetic’ development program has two lead products: M0003 (currently in phase IIa) and M0004 (ready for clinical development). The M0003 program’s primary development indications will be for diabetic gastroparesis and reflux in infants, two indications with clear unmet medical need.
COMPETITIVE ADVANTAGES Within the very large GI market, Movetis focuses on a number of growing, underserved areas of unmet medical need which represent an addressable market estimated at $7 billion in 2007. This market represents a significant number of patients who would benefit from new, innovative therapies. Movetis believes that these commercially attractive segments are accessible for new
“movetis aims to generate value from its product portfolio by focusing its resources first on its most advanced products.” prescription drugs and believes that its large, balanced and late stage product portfolio addresses this market. Secondly Movetis has a senior management team with substantial discovery, development and commercial experience. The founders and key employees of the company have had senior careers with big pharmaceutical companies or have been involved with eminent scientific institutions. They have had experience of taking a company through the start-up phase into a profitable commercial entity, as well as experience in discovering, developing, filing and launching new pharmaceutical products. Furthermore Movetis is supported by a distinguished group of investors from blue-chip venture capital and pharmaceutical organizations. The company has a robust IP estate protecting the portfolio of assets.
FUTURE GOALS Movetis aims to become a leader in the discovery, development and commercialisation of proprietary, innovative and differentiated drugs for the treatment of gastrointestinal diseases. It aims to generate value from its product portfolio by focusing its resources fi rst on its most advanced products. Company history and milestones Since 2003, as a result of strategic evaluations and through a stepwise process, Johnson & Johnson’s (JNJ) pharma organisation re-directed its focus away from a number of non-core businesses, including those in the GI franchise. In August 2006, the Board of JNJ Pharma endorsed the decision to spin-out the GI development and preclinical portfolio of small molecules discovered at Janssen Pharmaceutica. One compound from Ortho McNeil was added to create a balanced portfolio covering all stages of development. In November 2006, Movetis secured funding in the amount of €60 million from major European and US investors and Janssen Pharmaceutica. The company also received more than €3 million in grants from the Flemish government to kick start its discovery and development efforts in collaboration with premier academic partners.
DCM Ingenuity inspired by nature
58 DCM Bannerlaan 79 2280 Grobbendonk BELGIUM T: +32 (0)14 25 73 57 F: +32 (0)14 21 76 02 www.dcm-info.com dcm@dcm-info.com • Science & Technology • Business Model & Process Innovation • Design & Creativity
The DCM company is a 100% familyowned organization, established by its current chairman, Mr. Herman De Ceuster. Being raised on a small farm in northern Belgium, he developed a profound passion and respect for nature and life. Over the last 3 decades, this passion has given rise to a European one-stop source par excellence for organic gardening. Both professional and amateur gardeners recognize DCM’s fertilizer line as the most unique, carefully engineered, and precisely formulated plant nutrition products available. Today, DCM offers its clientele an extensive gamut of over 300 different product formulations, representing different grades. All of these products are manufactured in DCM’s own state-of-the-art facilities, where great effort is exerted in developing internal standards to consistently assure maximum quality and traceability. Every day, humans and plants around the world grow a better way with DCM.
DCM FERTILIZERS – MUCH MORE THAN ONLY NUTRITION! Unlike composts and low-budget organics, DCM fertilizers are composed of a large and diverse set of top-quality raw materials from both vegetable and animal origin. All of these raw materials are derived from materials already deemed fit for human consumption as they are carefully selected from the processed food industry. In addition to supplying primary and secondary nutrients, these ingredients also provide the required trace elements, micronutrients and biostimulants, which are crucial in obtaining a well-balanced plant food. But there is more: let us take another look at what we are really doing when we apply DCM fertilizers. We are building our soils up with natural nutrients, creating a living soil that is teeming with microscopic organisms that are doing the job of providing our plants with the nutrients they so desperately need. We are building a soil that will sustain plants for many generations instead of just one crop at a time. We fi nd that our soil will hold more water, reducing the need for constant watering. We fi nd healthier, less stressed plants that are strong and able to use their own natural mechanisms to fight pests and diseases. We are growing natures way, using only organic, environmentally friendly soil additives that provide us with more nutritious plants for human consumption. We eliminate the risks that
come with chemicals, both to ourselves and other creatures in nature. The benefits of DCM fertilizers are many and the alternatives just don’t make good long-term sense. By taking into account nutritional, biochemical, physical and biological soil elements, DCM stretches and breaks the boundaries that once constrained comprehensive soil health management. At DCM, soil fertility becomes much more than only nutrition!
MINIGRAN® TECHNOLOGY – A NEW GENERATION FERTILIZER DCM was the fi rst to make the transition from powders to granulated fertilizers. In 2001, DCM was again the fi rst to introduce a totally new way of producing organic granules. This new and unique technology, called Minigran® technology, allows the formation of homogeneous and perfect formed beads for an unmatched, even distribution, since each prill contains exactly the same amounts and ratios of all labelled nutrients. Particle sizes can also be customized for optimal application and performance characteristics in different fields of use. But most importantly, this unique production process ensures the absence of fractured pellet surfaces for
above: dcm, headquartered in Grobbendonk, belgium has local service centers in the netherlands, Germany, france, Greece and the uk to support its clientele to the best of its capabilities. © DCM
pleasurable application with virtually no dust or offensive odors. Since the release of nutrients matches the demands of the plant (nutrient-on-demand® technology) for up to three months without the use of chemical coatings, synthetic inhibitors, membranes or urea complexes - virtually no nitrogen leaching or volatilization occurs. Therefore, the Minigran® technology permits environmentally safe use, even in environmentally sensitive areas around bodies of water and wetlands.
Continuous drive to innovate Besides premium-quality products and services, technological innovation has especially positioned DCM as the benchmark by which most of its competitors strive to adapt their standards. Time after time, DCM consistently applies new technologies to the market, which obligates others to pursue. To further distinguish its research and development activities, Scientia Terrae Research Institute (STRI) was founded in 2001 by DCM’s current CEO, Mr. Tom De Ceuster. In close collaboration with technical universities and renowned research centers around the globe, STRI’s main challenge is to translate fundamental science into practical and real-world applications. In essence, STRI
conducts research not just for the sake of scientific achievement; rather, its primary function is to move science into solutions. If you want to know more about Scientia Terrae’s activities and achievements, please visit their website at www.scientiaterrae.org.
Organic gardening – a growing trend! Organic gardening starts with a focus on healthy soils, which support healthy plants. A study of some of the richest soils in the world finds that they are teeming with microscopic life. Humus, or living soil is the perfect growing environment for plants. Not only do plants thrive in this environment, they are also healthier and less stressed. Less stress means that they are better able to fight diseases and pests without the use of any pesticide. Organic fertilizers, unlike many chemical fertilizers, continually build the soil, promote better structure, and foster soil organism growth. The chemical fertilizers do not build soil and soon you have plants that are solely dependent on the fertilizers, not the soil! Now, you need more chemicals to battle the problems you created in the first place. It’s like a dog chasing its tail. More and more people
Above: Technological innovation and state-of-the-art production facilities have especially positioned DCM as the benchmark by which most of its competitors strive to adapt their standards. © DCM
Success & innovation indicators • Family-owned business • Major European manufacturer and marketer of organic soil fertility products • Subsidiaries in the Netherlands and Germany • Exclusive partnerships in France, UK and Greece • Export to South America, Africa, MiddleEast and Asia • Minimum 4% of turnover to R&D • 10% annual growth start to understand that organic specialty fertilizers are vital in building a healthy soil and strong plants. Greater awareness of the benefits contributes to a greater demand for organic fertilizers. In the past decade and a half, organic specialty fertilizers have achieved almost mainstream status. Statistics are encouraging indications that organic soil fertility management is here to stay. This is good news for the well-being of people, the environment, and last but not least for the well-being of the plants themselves!
Above: DCM has developed a molecular biochip (DNA multiscan®) to detect, identify, and quantify both diseases and beneficial organisms in soils, plants and water. This technology also allows routine analyses to guarantee the absence of undesirable chemical, biochemical and microbiological components. © DCM
Deborah De Clercq & Michel Salmon Why innovation is more than a buzzword in an SME
60
Deborah De Clercq & Michel Salmon Business Development Manager General Manager - StratiCELL SA
The key word for a Small and MediumSize Enterprise (SME), especially in the biotechnology sector, is innovation. Within a highly competitive and technological environment, know-how, knowledge and intellectual property ensures the future of a company like StratiCELL. Trying to generate a good idea in science is not that hard, but trying to come up with a good idea that nobody else has come up with is another thing. At StratiCELL, we need to innovate daily to meet our customers’ standards. In the cosmetic business, where StratiCELL is active, a product has an economic lifetime of about 18 months; hence constant innovation in the product’s claims and effects requires constant innovation in the testing service provider. That is where StratiCELL’s innovation comes in. We promote innovation with extensive in-house Research & Development (R&D), with the intention to create an added-value for the client’s product that is based on the testing of its efficacy and toxicology. Since innovations are based on outstanding ideas, initiatives tend come from talented people with creative brains. Hence also at StratiCELL, our people’s attitudes are the driving force for our technologydriven growth. Our team consists of highly-educated individuals (PhDs, Irs,… ); these are people that are eager to learn and to discover new things. The educational level in Belgium is ranked quite high, and according to Eurostat’s recent report (“Science technology and innovation in Europe”) 7,9 % of the active population in Belgium are scientists and engineers, the highest of all EU Member States. In other words, talent is present. A bottleneck for SME’s could be the investment in innovation. Before any new technology sees the light of day, an extensive preliminary R&D is required. This is a costly and labor intensive process. Some of our R&D activities are funded by our own resources. But these have limited impact and visibility. Fortunately SME’s can rely on measures taken by Regional and European Governments. There is funding available from the Walloon and Flemish Regions, from the European Union 7th Framework Program (7th FP), from initiatives to innovate across borders, from Marie Curie mobility fellowships, etc.
“However we should be aware of the fact that the US and Japan invest more in R&D (2,62% and 3,33% of Gross National Product) than the European Member States” The 7th FP gives SMEs like StratiCELL access to large consortiums that improve our visibility. They give us access to shared intellectual property and knowledge; allow us to participate in high impact projects. StratiCELL is involved in three such major European projects (Matiss, Markage, and Skintreat). On the other hand, regional projects help to achieve highly targeted projects, like those of the First or RIT program from the Walloon Region. We embrace the effort that policy makers, the public and investors have made to boost innovation, through the development of financial support programs. However we should be aware of the fact that the US and Japan invest more in R&D (2,62% and 3,33% of Gross National Product) than the European Member States (1,86% of GDP). Belgium is a small country, but thanks to continued support, we can play a key role in science and technology geared to the improvement of global health, well-being and safety.
continued from p. 53
Another example of such partnership is Neurocom, a project on neurological disease including participation by the Wallonia government (funding), the University of Liege and UCB. The objective is to research the exact functioning of Keppra, one of UCB top products against Epilepsy, and see if it could possibly be used against Alzheimer or Parkinson. It illustrates the mechanics of private-public partnership well: all three parties help fund the programme and the research team is compiled by UCB and the University. The Marshall Plan and BioWin obviously are not the birth of the Wallonia biotech sector. The sector covers numerous companies, in fact, probably more companies than in Flanders. Probably the best known companies in the region are IBt and IBA, although these are not strictly biotech companies. IBA certainly is one of the more important companies in Wallonia but probably should be mentioned in our engineering & technology article, as opposed to life sciences. This is because its core competency is in the design of cyclotrons and radiopharmaceutical tracers. IBA was created in 1986 as a spin off from the Cyclotron Research Center of the Catholic University of Louvain-la-Neuve (UCL), which produced its ďŹ rst cyclotron in 1947. Since then it has grown into a world player in its ďŹ eld, generating close to 200 million EURO in revenues (2007). IBt, a much smaller company, produces radioactive implants for prostate cancer. It took a knock in its share price when it closed its US activities but the company is still growing and recently completed another acquisition. In the world of biotech, it is striking to see that many of these companies have needed to take a distinctly commercial route to survive. Key examples here are Eurogentec and DNAVision. Eurogentec today is an international company of about 300 people and a major supplier of products and services to R&D operations in the life sciences. It is an example of a company that started life as an R&D project, but one that did not deliver its hoped for results. In response, the company redirected its activities to the commercialisation of its competencies. These were not particularly innovative but they did have the skills and infrastructure to offer valuable services. Now that they are up to scale and generating cash they have apparently embarked on another research programme. continued at p. 63
Dr. Benjamin Damien Being one step ahead.
62
Dr. Benjamin Damien General Manager, BioXpr
I tend to address all things with a very competitive mind. Being first is always a strong motivation, whether it is in work, studies or sports. Going higher, faster or farther became a cure for the daily routine. This thrill-seeking mentality led me to the faith that tomorrow is exciting, and should be longed for instead of feared or even ignored. Better moving and (maybe) failing than standing still. However, I’m still baffled that some people may think that most of what can be invented is already available in the shops, for a handful of euros, and we should not bother looking for more. „Everything that can be invented has been invented.“ was a statement made by the commissioner of the U.S. Office of Patents at the close of the nineteenth century, implying that he could close the U.S. patent office forever. From his privileged vantage points, he monitored the birth of the train, the steamship, and the telegraph, fundamentally altering the way people could move, consume, and communicate, and he assumed that never again such fast progress of technology would be encountered. He was, hopefully, plainly wrong. In the later 100 years came the aeroplane, antibiotics, the computer, the DNA sequencer, the cell phone, space exploration, Internet, nuclear power and the polio vaccine, to name a few of the most extraordinary breakthroughs. And the most revolting part of his assessment, was the thought that mankind could give up innovation and stop any exploration of any kind, giving up creativity and the feeling of liberty to satisfy our natural curiosity. To innovate is as much a part of our nature as to breathe, eat or love. It is about hindsight, and the faith that tomorrow will bring improvement and progress, to help us to tackle the great challenges of the future: mobility, environment, health, economy,… Innovation, as for entrepreneurship or competitiveness, is a state of mind. Moreover, the concept of innovation is intricately associated with entrepreneurship, as innovation itself integrates the concept of “bringing the ideas to life”,
“ innovation is a vital part of our businesses, and is what makes the difference between being a leader and a follower, between success and failure” hence generating value by commercial exploitation. For us entrepreneurs, innovation is a vital part of our businesses, and is what makes the difference between being a leader and a follower, between success and failure. At BioXpr, the process of innovation is part of our everyday lives. We integrate it into our R&D, to create new products and increase the quality of existing ones, but we also innovate on the marketing front, by emphasising that high-technology products and services should become a commodity for our Pharma/Biotech customers and therefore should be marketed as such, or by extending our expertise to other markets and other fields, and by integrating ever-tightening regulations compliance into our products. Innovation is present at every echelon of our still-modest company, stimulated by improved information transit inside and outside the company, a strong network of business relations, and the systematic reward of associates who bring in new ideas. But more importantly, innovation is the main component of our motivation to work even harder. Thanks to this, we have developed a flexible product range and agile processes, which can adapt instantly to the everchanging needs of modern pharmaceutical R&D, where our competitors have much more rigid business models and technologies. And by sticking to those rules, we are becoming a strong player in the bioinformatics market, and a trusted partner of many top pharmas and innovative biotechs. The message here is that you should be open to new ideas, new process and technologies, but still be prepared to change course early if your venture would reveal to be inefficient. These are the simple rules that I’ve integrated very early in my
continued from p. 61
active life, as a researcher, teacher or entrepreneur, learning from wide aspects of culture, because fresh ideas might come from completely different disciplines. I’m a scientist by training, so I trust science and engineering to be the vectors of progress and economical success for Belgium in the years to come, emphasizing the need to reinforce the chain of education and transmit the taste of science and entrepreneurship to our pupils, at a time where many of them are veering away from hard science. Belgium is a country of engineers and scientists, and our science heritage has made us respected and successful. Our future challenge would be to uphold this advantage in a world where India and China alone are churning half a million new engineers a year. The solution resides in a single word: Innovate, to be always one step ahead of the competition.
DNAVision is another example. Founded in 2004 as a spin-off from BioVallée (a research centre active in immune response) and based on science conducted at the Université Libre de Bruxelles (ULB), the company today provides analytical services to the pharmaceutical industry, specifically in genetic analysis. Other commercially astute companies, companies that have funded their innovative activities largely out of own pocket, are StratiCell, BioXpr and Mithra Pharmaceuticals. StratiCell is a spin off from the University of Namur’s cell biology department. At the university the research team’s work on reconstituted human epidermis attracted the attention of cosmetics companies who saw value in testing their products’ active ingredients on ‘in vitro’ human skin. As a result, StratiCell was set up in 2004/2005. Now three years later 90% of their business is testing for cosmetics companies. Their key value proposition is not the in vitro skin as such, but the models developed to predict in vivo results. They have developed several models for a variety of different skin conditions, for example, skin irritation, dry skin, aged skin. None of this is ‘blockbuster’ drug development but it is a company that is well positioned given the increasingly regulated environment in which cosmetics companies have to operate. For example, by 2009 all toxicity testing on animals will be banned. BioXpr was created in 2003 as a spin-off from the statistical division of molecular biology at the University of Namur. Some of the research in statistical models attracted interest from GSK Biologicals. As a result, a small spin-off company was created to deliver services and products to the pharmaceutical industry. Today they’re a company of 10 people, still active mainly in services and consultancy, but also at the point of releasing a first own-developed product specialised in DNA sequence analysis. The driver of their business is that biological research today generates an increasingly impractical amount of data, hence the need for advanced computational techniques. It is still an emerging field but absolutely essential to pharmaceutical industry as they attempt to rationalise their R&D activities (in the face of increasing costs and smaller product pipelines). Strong analytical tools allow pharmaceutical companies to “frontload” their R&D process, i.e. doing more characterisation of the molecule early on in the process, especially in the pre-clinical phases, to reduce costs and enhance the predictability of success.
Mithra Pharmaceuticals, currently 40 employees strong, was spun out from the University of Liege in 1999, from the Obstetrics & Gynaecology departments. Initially the company struggled to find capital and hence could not set up a R&D pipeline. Thus, they first focused on OTC products specialised in women’s health. In a second phase, they started manufacturing generic products. Today, in a third phase, they’ve launched their first long-term R&D projects. One programme is focused on the development of an IUD device for optimised drug release in the uterus. The R&D is done in collaboration with the university, who also is shareholder of the company and has certain IP rights. Another project is developing a drug for cervical cancer. Supported by BioWin, the objective of this project is to develop a treatment alternative to surgery. Again, this is an example of a company that has had to learn to make money first, before becoming truly innovative. Two companies that do not fit the above mould, in the way they are focused on R&D and reliant on invested capital, are Kitozyme and Artelis. Both companies were set up by prominent entrepreneur Hugues Bultot. Kitozyme is unique in its sector because it is an innovative company in a sector that is not particularly innovate. Created in 2000 as a spin off from the University of Liege, Kitozyme was founded to capitalise on research conducted in the field of vegetal biopolymer extraction. It currently produces fungal biopolymers for use by the nutraceuticals, cosmetics, medical, pharmaceutical and beverage industries. In essence the key added value of the company’s technology is that it offers a vegetable-based replacement for an ingredient that traditionally is derived from crustaceans, to which many people are allergic. An interesting aspect of the business model is that the company is active in five completely different sectors but still manages to exploit synergies at the level of R&D. Artelis’ technology is based on work conducted by co-founder Jose Castillo on biotech culture processes and bioreactor technology. Several patent applications later, the company today focuses on the development of single-use devices for bioproduction and the development of new bioproduction processes that incorporate such single-use devices. The impact of this technology has the potential to dramatically improve the efficiency and productivity of biotech companies.
Engineering & Technology
‘Engineering and technology’, admittedly a broad and perhaps vaguely defined category of economic activity, but used in this case to cover the so-called ‘high-tech’ industries (excluding life sciences, covered in the previous article), the companies that rely primarily on their technological prowess and hence tend to be reasonably R&D intensive. We include here ICT, aerospace, mechatronical engineering, industrial automation, electrical and electronic engineering. Sectors like automotive and metals and materials could arguably fit in here but we will address those in the next article, dedicated to the more ‘mature’ manufacturing industries. The point of this article is not to list all innovative high-tech companies in Belgium. In all honesty, there are simply too many. Instead we describe a selection of some of the more successful or promising companies. While the number of new engineering graduates may be declining somewhat, today Belgium is still a land of engineers. As mentioned in a previous article, Belgium leads Europe in the proportion of scientists and engineers in the active population. For some, this is a weakness because our innovation story is indeed so concentrated in the life sciences and high-tech sectors, and thus, in the R&D labs (where are the strategic innovators, the business model innovators, these commentators ask). That may be, but let us not underestimate the strength and relevance of high-tech industries, since it is here that this country has spawned a number of world-leading companies.
Electronics & ICT
development centre for End-user Applications. It also includes an IP competence centre and an IP transformation centre. For example, Alcatel-Lucent Belgium is a leader in IPTV, which delivers a digital television service using Internet Protocol over a network infrastructure. In the world of electronics, mention must first be made of IMEC, the Interuniversity Microelectronics Center in Leuven. This institute is undoubtedly one of the world’s most visionary research centres in the field of nanotechnology and nanoelectronics. It also conducts ground breaking work in mobile terminals, bioelectronics and solar cells. Its mission is “to perform R&D, ahead of industrial needs by 3 to 10 years, in microelectronics, nanotechnology, design methods and technologies for ICT systems.” In so doing it hopes to put in place the enabling technologies for an intelligent environment, in which miniaturised electronic systems are integrated in the environment. Typically this means that such systems must have a certain degree of energy autonomy (hence the work on solar cells, bioelectronics, etc). IMEC’s work tends to stretch the imagination. For example, it recently announced that it made substantial progress in the development of plastic solar cells that can be sprayed. This makes possible the production of solar cell stickers, the application of solar cells to clothing, and many more applications. IMEC’s work on the interface between the physical and biological world is also truly revolutionary. This is not technology one will find on the market tomorrow but IMEC plays a fundamental role in bridging the gap between fundamental research and real-world application.
In Belgium, the two most important innovators in the broader field of electronics are probably Alcatel-Lucent (see profile page 68) and IMEC (see profile page 66). These two stand out both in the scale of their R&D investments and their technological breakthroughs.
IMEC has also created several successful spin off companies, such as XenICs (a technology leader in ‘uncooled’ infrared cameras - see profile page 70), Photovoltech (European leader in the production of photovoltaic cells), Septentrio (satellite navigation systems) and Sirius Communications (acquired by Agilent Technologies).
Alcatel-Lucent was formed via the merger of French Alcatel and US-based Lucent and is a global leader in communications technologies. Though not a Belgian company, Alcatel-Lucent does have one of its most important R&D centres located in Belgium. Belgium is the lead-house development centre for Access Networks (DSL was first developed in Belgium) and the lead-house
A third company of tremendous stature in the electronics field is BARCO, a display hardware hardwaremanufacturer (or visualisation technology specialist, as it calls itself). It specialises in high-end displays and projectors and has carved out strong positions for itself in medical imaging, defence, digital cinema, and industry and utilities. Coming close to BARCO in repute is Option, a special-
ist in broadband wireless solutions, and perhaps best known as a developer of mobile data cards, in which it is market leader worldwide. A recent development, for example, is the GlobeTrotter Fusion plus card which was the first to integrate HSDPA/UMTS/EDGE/Wi-Fi technologies on a single data card. Melexis is another big name in microelectronics, supplying the automotive electronics market with Mixed Signal semiconductors, sensor ICs, and programmable sensor IC systems. Zetes also needs to be mentioned here, as a key player in identification technology such as smartcards (the Belgian electronic ID card is based on Zetes technology), biometrics, RFID and barcode scanners. At the interface of IT and engineering are companies such as ICOS Vision Systems (develops vision and inspection solutions for semiconductor industry), LMS International (testing and simulation equipment), Metris (develops metrology solutions for the aerospace, automotive industries) and Materialise (rapid prototyping equipment). None of these companies are particularly large (e.g. LMS International employs 850 people, Materialise 500) but they all have a global presence and are dominant players in their technology and market. IBA, mentioned in the previous article on life sciences, is a world leader in the design of cyclotrons and radiopharmaceutical tracers,
used in hospitals around the world. Internationally, Agfa Healthcare probably is one of the best known technology companies from Belgium but it has struggled to meet expectations. Building on its strengths in medical imaging technology (PACS systems) Agfa has invested massively in the development of a hospital-wide patient management system (ORBIS). Although it has secured approximately 750 customers around the world to date, revenues have declined and margins are under pressure. The innovative ICT sector (i.e. developers of hardware and software) in Belgium, though not particularly large (see the article ‘innovation indicators’), does include a number of innovative gems. Liege-based EVS, for example, has a near monopoly position in the field of digital production systems for TV broadcasters. It earned this position via its R&D, consistently outpacing any competition in its technology. Though a niche player, this is a tremendously successful company. IRIS, also from Wallonia, is an important player in document management systems. It first innovated in optical character recognition (for intelligent scanning of documents) but is increasingly focusing on the broader field of Enterprise Document Management. continued at p. 81
IMEC In a nutshell
66 IMEC
Kapeldreef 75 3001 Leuven Belgium Tel.: +32 16 28 18 80 www.imec.be Katrien.Marent@imec.be • Science & Technology • Business Model & Process Innovation • Design & Creativity
IMEC is a world-leading independent research center in nanoelectronics and nanotechnology. Its research focuses on the next generations of chips and systems, and on the enabling technologies for ambient intelligence. IMEC’s research bridges the gap between fundamental research at universities and technology development in industry. Its unique balance of processing and system knowhow, intellectual property portfolio, state-of-the-art infrastructure and its strong network of companies, universities and research institutes worldwide position IMEC as a key partner for shaping technologies for future systems. IMEC is headquartered in Leuven, Belgium, has a sister company in the Netherlands, IMEC Nederland, concentrating on wireless autonomous transducer solutions, and has representatives in the US, China, Taiwan, and Japan. Its staff of more than 1600 people includes more than 500 industrial residents and guest researchers. In 2007, its revenue (P&L) was EUR 244.5 million. IMEC’s mission is to perform R&D, ahead of industrial needs by 3 to 10 years, in nanoelectronics, nanotechnology, design methods and technologies for ICT systems. IMEC successfully carries out its mission by combining fundamental and applied research in a wide range of domains. These domains are: CMOS scaling, advanced IC packaging and interconnect, heterogeneous integration, nomadic embedded systems, photovoltaics, GaN power devices, biomedical electronics, wireless autonomous transducer solutions, and organic electronics.
IMEC forms a bridge between the academic and the industrial world. Its microelectronics training center (MTC) provides continuous education in the evolving domain of nanoelectronics. MTC offers introductory and advanced technical courses to IMEC staff, industry, universities, and polytechnic high schools. IMEC also supports doctoral students. IMEC shares its expertise as a leading nanoelectronics center with academic and research centers, and with industrial partners including world-leading semiconductor device manufacturers. These industrial partners collaborate in IMEC’s strategic technology programs following a unique business model. For successful research tracks, the knowledge can be
transferred to interested companies, or to new spin-off companies. The cooperation with universities and research institutes also covers joint research, often as part of EC-sponsored projects. In its turn, IMEC can rely on an elaborate international network of industrial and academic partners for early insight into future industrial needs and technology roadmaps. IMEC offers its employees and partners all the infrastructure and equipment they need for advanced research in their domain. This way, IMEC creates the best possible atmosphere, freeing the researchers from logistic issues so they can focus on what really drives them: scientific exploration. The IMEC campus has 24,400m² of office space, laboratories, training facilities, and technical support rooms. Showpieces are the two cleanrooms that run a semi-industrial operation. The IMEC4 infrastructure, compatible with the latest 300mm wafer standards, supports the More Moore research on (sub-)32nm process technology. The IMEC1 cleanroom handles wafers with a diameter of up to 200mm and is used for the Moore than Moore research. It supports semiconductor manufacturing processes with added functionality, such as sensors, actuators, and MEMS and NEMS. IMEC has, among others, a pilot line for silicon solar cells, unique laboratories for bioelectronics research, and state-ofthe-art equipment for materials characterization and reliability testing. For the research on nomadic embedded systems, there are a DSP and multimedia lab, and the latest EDA tools.
IMEC’S MISSION IS BACKED BY 3 TRENDS IN THE ELECTRONICS INDUSTRY. The fi rst trend, also called More Moore, concerns further scaling electronic devices and circuits towards (sub-)32nm
SUCCESS & INNOVATION INDICATORS • Joint R&D with cost, risk, talent and IP sharing. • Worldwide ollaborations with more than 1000 companies. • Research 3 to 10 years ahead of industrial needs.
Left: Imec facilities Below: hybrid power supply using energy harvesting and solar cells for wireless eeG (electro-encephalogram) sensor system. Bottom: 300mm silicon wafer
nodes, and exploring new device architectures and new materials. The focus is on technologies for logic, DRAM, and non-volatile memory (such as Flash). The research covers process steps, materials, and device concepts for the (sub-)32nm node. An example is research on 3D integration, studying how the number of functions per chip can be increased by using the third dimension. This research is enabled by IMEC’s unique 300mm research platform. A second trend – More than Moore – involves using current CMOS processes used to develop new micro- and nanodevices with extended functionality such as sensors, MEMS, or NEMS. These More than Moore applications promise to be the driver of a new industry with strong
business growth and exciting R&D opportunities. The More than Moore research looks into building innovative, integrated applications by combining heterogeneous functionality. IMEC has set up generic R&D platforms, such as CMORE and APIC. CMORE is concerned with heterogeneous integration. And the advanced packaging and interconnect center (APIC) examines advanced packaging and interconnection technology with a special focus on 3D. Building on these platforms, IMEC develops solutions in the domains of nomadic embedded systems, wireless autonomous transducer systems, biomedical electronics, photovoltaics, and GaN electronics. IMEC’s 200mm cleanroom is dedicated to More than Moore research. And the third trend is the convergence of More Moore and More than Moore. Scientists envision an increasing need to combine higher performance (More Moore) with complex and extended functionalities (More than Moore). This convergence will impact IC design, processing, integration, and packaging. Further scaling will create new opportunities for heterogeneous integration—think of nano-bio convergence. But mastering the integration of complex nanoscale components will require disruptive methods. Leading players in complexity, such as IMEC, have a substantial advantage in the development of such future nanoelectronic systems.
Alcatel-Lucent Bell Changing how we connect–globally
68 ALC ATEL-LUCENT BELL Copernicuslaan 50 2018 Antwerp Belgium T: + 32 (0)3 240 40 11 F: + 32 (0)3 240 99 99 www.alcatel-lucent.be general.info@alcatel-lucent.be • Science & Technology • Business Model & Process Innovation • Design & Creativity
Belgium may be small in size, but it’s big in technology. Innovation powerhouse Alcatel-Lucent takes full advantage of Belgium’s pioneering credentials, by maintaining some of its most important research and development centres here.
COMPANY BACKGROUND AND HISTORY Alcatel-Lucent was formed in 2006 by the merger of French Alcatel and American Lucent. Today, Alcatel-Lucent is a world-wide leader in communications innovation, introducing products that have changed the face of communications and, consequently, the world. The Belgian unit is one of the group’s innovation powerhouses. Alcatel-Lucent separates its R&D into individual research and development centres. The research centres translate ideas into product concepts. The product-based development centres then have the role of transforming the concepts into marketable products. Often, the development centre for a product is co-located with the research centre where it was initiated, but this is not always the case. For example, FTTH (Fiber To The Home) was researched in Belgium, and then developed as a product in the US for the local market. Alcatel-Lucent in Belgium is a keystone in Alcatel-Lucent’s success. Belgium is home not only to one of Alcatel-Lucent’s seven Bell labs, but also to some of its most important development centres. Belgium is the lead-house development centre for Access Networks and the lead-house development centre for End-user Applications. It also includes an IP competence centre and an IP transformation centre. All of this research and development is additional to the daily local operations of the company in Belgium, making AlcatelLucent Bell a truly critical piece in the company’s global puzzle.
INNOVATION ACHIEVEMENTS A remarkable number of universally important technologies and products have come out of Alcatel-Lucent Belgian’s stable. For example, DSL was first researched and developed in Belgium (in Access Networks), and ADSL, VDSL and VDSL2 were all introduced here. New versions continue to be developed. In End-User Applications, Alcatel-Lucent Bell is a leader in IPTV, which delivers a digital television service using internet protocol over a network infrastructure. Other important End-User Applications developed in Belgium
include various payment systems and Information Management System (IMS) applications. Alcatel-Lucent Bell is also a leader in FTTU – Fibre to the User (including Fibre to the Home, Fibre to the Premises, etc.) , which runs optical fibre right into the user’s premises. This solution allows telecommunications companies to deliver high-speed broadband triple-play (voice, video and data) services to their customers. Also, Alcatel-Lucent Bell introduced managed home network device management and is now working on home network service management solutions. Other areas of focus include rich communication, ambient intelligence and service platform architecture blending telecom and IT web services. The Belgian centres have won many awards, including the DSL Forum award, the DSL Forum Circle of Excellence award and the AT Kearney Best Innovator Award Belgium 2007 Laureate for Innovation Strategy and Processes. The large range of communications solutions researched and developed in Belgium by Alcatel-Lucent creates a snowball effect, allowing the company to continue to take advantage of the intellectual capital and expertise available in the country.
MANAGING INNOVATION Managing innovation in a global environment requires creative management techniques. Like most large R&D-driven companies, Alcatel-Lucent has developed several ‘derisking’ procedures to ensure maximum efficiency in developing new technologies. All new ideas must pass through several ‘stage gates’, designed to ensure their viability within the organisation. For example, a new concept could first be assigned a small research project, with a limited budget. It is then evaluated and, if successful, is given more budget, deadlines and deliverables. Ultimately, a prototype is developed. If the product concept technology is of interest to one of the product development centres, it is transferred there. However, not all technologies fit neatly in one the existing product groups. The technology may not offer synergies or the timeframe for expected returns is too long. To give such ideas a chance, Alcatal-Lucent relies on an internal venturing model. In this way, a reasonably autonomous unit is set up and provided with capital (and given access the group’s support services – HR, IT, legal, etc) to explore
“This flexible innovation management guarantees that both ‘evolutionary and revolutionary’ ideas are supported by the company.” its technology. A venture’s lifespan typically runs for several years, after which it may be acquired by a product group, become a new product group of its own (as happened with DSL technology) or be sold off or dismantled. This flexible innovation management guarantees that both ‘evolutionary and revolutionary’ ideas are supported by the company. Corporate venturing is an important component of Alcatel-Lucent’s innovation process. However, there are risks associated with venturing. Alcatel-Lucent has learned, for example, that a venture’s success is due not only to the brilliance of the core technology and its developer (typically an engineer) but also to the management competencies within the venture (i.e. the commercial acumen, the market knowledge, the way in which the technology is ‘sold’ to internal and external clients, etc.). The problem is that the ideaowner rarely excels in both these domains. To address this problem, Alcatel-Lucent Bell has set up what it calls the “Bootcamp” programme. Alcatel-Lucent’s novel Bootcamp programme offers employees who have promising ideas
an intensive training programme to turn those ideas into marketable products. It is especially aimed at projects that do not fit the regular development process: square pegs in round holes, as it were. The best ideas (usually 10 at a time) are first selected by an innovation board. The ideas’ owners are then invited to a ‘dating’ event. Any Alcatel-Lucent staff interested in the programme can attend. In this way the idea owner is able to recruit a multi-disciplinary team of people to help set up the business. Subsequently, each team attends an intensive 3-month training programme that runs on Fridays and Saturdays: in effect, both the company and the individuals invest one day per week in the project. On the first weekend, the business plans are presented and provided critical but constructive feedback. It allows the teams to diagnose their key weaknesses, so they know what to focus on in the coming weeks. Each weekend, the teams undergo intensive training sessions. After each training session, the team must immediately apply the learnings to building a business plan on its own idea. At the end of the programme, a final event is organised, at which each team again presents the idea to a multi-disciplinary jury. To succeed, projects must prove that they offer a potentially large opportunity that is at least adjacent to the core business, and that the team has the competencies to deliver success. Winning projects are turned into ventures (i.e. provided with capital and additional resources). Five Bootcamps have been run in the 2 ½ years since the programme was launched. In this way several successful ventures have been set up and a number of projects have in fact been immediately
adopted by a product group. Besides the internal innovation processes, Alcatel-Lucent is also committed to building an ‘innovation ecosystem’ in the country. This includes partnerships with research institutes such as IMEC and IBBT. The company also collaborates with industrial partners that have complementary competencies and products. Working with these partners reflects the importance Alcatel-Lucent places on open innovation, allowing the company to maximise the impact of the intellectual capital available in Belgium and elsewhere.
Vision Alcatel-Lucent Bell will continue to play the role of architect in stimulating, researching and developing new ideas. The goal is to focus on a solutions approach, rather than a product approach, in order to help its customers—the world’s telecommunications service providers—to transform the way we communicate.
Success & innovation indicators • 77,000 employees worldwide of which 1,800 in Belgium and operations in more than 130 countries • €2.7 billion R&D: 15% of group’s revenue, in Belgium: 19.3% of AlcatelLucent Bell’s revenue • Over 25,000 active patents, covering all areas • 6 Nobel Prizes in Physics (shared by 11 scientists)
XENICS Seeing the invisible with state-of-the-art IR techn
70 XENIC S Ambachtenlaan 44 3001 Leuven Belgium T: + 32 (0)16 38 99 00 T: + 32 (0)16 38 99 01 www.XenICs.com sales@XenICs.com • Science & Technology • Business Model & Process Innovation • Design & Creativity
XENICS is the leading European-based infrared (IR) technology provider with an exceptional scientific background in IR cameras and detectors, both cooled and uncooled.
BUSINESS DESCRIPTION AND HISTORY XenICs develops and markets state-of-theart infrared detectors based on a number of exclusive patented technologies. The Leuven-based company, led by founder and scientist Dr Bob Grietens, designs in addition cooled and uncooled advanced cameras which have a range of applications in manufacturing, medicine, security, aerospace and automotive industries. For example, in industrial applications, IR detectors are used for process monitoring— checking for defects in glass, cracks in materials, and faults in chip manufacturing. In medicine, IR technology can detect skin cancer and “see through” blood vessels to guide surgical interventional procedures such as stent placement. Other applications can include vision enhancement, for example to navigate in the dark and during bad weather conditions, in airborne and automotive applications. To achieve these types of applications, XenICs relies on two distinct technologies: • Heat sensing cameras that detect differences in temperatures • Light sensitive cameras that detect radiation differences emitted by various IR light sources and that are invisible to the human eye. XenICs was founded in 2000 as a commercial spin-off of IMEC, the Leuven-based inter-university microelectronics centre, which is one of the leading European research bodies in advanced microelectronics and nano-technologies. Grietens, a former IMEC researcher, completed his doctoral thesis in infrared radiation before setting up XenICs to commercialise IMEC’s IR radiation technology based on a worldwide exclusive licence. At the time of its incorporation, XenICs secured an initial capitalization of several million euros from investors as well as government funding and additional capital from major Belgian venture and equity funds such as Fortis Private Equity and Dexia Ventures. In 2003, Grietens and his team secured further venture capital funding from existing shareholders and new investors, which allowed XenICs to increase R&D investment and begin marketing the technology. In 2005 the company moved
to larger premises in Leuven in order to accommodate the rapidly expanding team. Since 2004 XenICs has been profitable and now generates sufficient cash flow to fi nance its product portfolio expansion and research activities. While the company sells approximately 300 high-end cameras a year, mass production of cheaper IR cameras (for example in the automotive sector) is in the pipeline.
INNOVATION ACHIEVEMENTS XenICs’ major innovation achievement has been the development of uncooled IR cameras and detectors. While traditional IR cameras need elaborate cooling equipment to cool the IR chip to minus 200 0C, XenICs’ uncooled IR technology allows for much cheaper manufacturing and hence a wider range of applications, especially in sectors such as health care and automotive. The company is the only non-US manufacturer of these types of chips. Another key achievement for XenICs is the development of the fastest infrared camera in the world, which operates 20 times faster than its competitors at a speed of 1700 frames per second. The Airbus projects too are noteworthy. XenICs is involved in two prestigious projects with Airbus, which involves technology for in-flight aircraft stress management and an enhanced vision system for landing in bad weather conditions, such as heavy fog. For the fi rst project XenICs is collaborating with the highly-specialized fibre optics technology company FOS&S from Geel. Finally, XenICs’ distinguished engineering team is working on a ‘smart’ heat-sensing camera which incorporates Digital Signal Processing into the hardware and enables easier interfacing with other technology.
SUCCESS & INNOVATION INDICATORS • 50-70% growth a year • 90% export • 50%+ of turnover in R&D • From 7-37 FTEs in 7 years • IMEC spin-off • Fastest infrared camera
ology XenICs is also also supported in its R&D by the Flemish Institute for Science & Technology (IWT). In addition the IWT also facilitates the search of enterprises for technologicaly partners, both in Flanders and more broadly in Europe. Once a project is on track and a product can be commercialized, you also gain new customers. While the use of patents to protect its intellectual property (IP) has been limited thus far — largely because of concern that the patent will “give away” the secret recipe — XenICs exclusively owns the core technology. Strategic partnerships with key customers are being considered which would involve co-development and sharing of the IP. As part of XenICs’ management strategy, the company has hired marketing and sales personnel to complement its core technology-focused R&D staff. This enables XenICs to market its technology more comprehensively through exhibitions, conferences and the exploration of other sectors.
Vision for the future
“XenICs’ advanced infrared cameras allow for faster and more reliable decisions opening up numerous ground-breaking applications.” Innovation management XenICs is an established high-tech leader with strong technology capabilities, allowing it to offer a well balanced mix of standardised OEM products and customised solutions. A significant part of its revenues earned from standard products is reinvested into the development of new state-of-theart development products. Customised projects serve the needs of highly complex and demanding applications, where totally unique features need to be developed. This stimulates a market player like XenICs to keep up with new technology challenges.
Looking to the future, XenICs is working on the mass production of cameras in a lower price range as well as the development of cameras with higher resolution, faster speed and better heat and light sensitivity. Since most of the manufacturing of the cameras and detectors (camera housing, packaging and related electronics) is outsourced, XenICs is able to focus exclusively on the development and application of its customer-driven technology. As a well-established, profitable and rapidly growing high-tech company, XenICs is uniquely placed to take a leadership role in the development of IR technology applications across a wide range of sectors. We’ve only seen the tip of the iceberg.
FOS&S Sensing a safer future with fibre optics
72 FOS&S
Cipalstraat 14 2440 Geel Belgium T: + 32 (0)14 58 11 91 F: + 32 (0)14 59 15 14 www.fos-s.com • Science & Technology • Business Model & Process Innovation • Design & Creativity
FOS&S is a world leader in fibre optic sensory systems. From the aerospace and automotive industries to construction and energy, FOS&S uses state-of-the-art fibre optic technology to provide vital sensing solutions for its global partners. Founded in 2001 as a fibre optic sensing system specialist, FOS&S developed from a small research company, ID FOS Research, to a global player with branches in Belgium, Germany and Hong Kong. The company is able to supply and support a wide technology portfolio covering projects such as the structural monitoring of high-level bridges, subsea oil pipelines, nuclear waster depositories, high-speed rail tracks and the in-flight structural analysis of aircraft.
“fos&s is able to turn optic fibre into a sensor” FOS&S’s core competency, fibre optic sensing technology, presents a clear breakthrough in the world of sensing technology. This is because conventional electrical sensing technology is vulnerable and sometimes even dangerous in extreme environments. Electrical sensors can fail due to prolonged exposure to extreme temperatures, pressures or electromagnetic radiation. Since they operate via electrical signals they can even trigger explosions. Fibre optic sensing technology offers a solution to these risks. While optic fibre is more commonly known as a communication technology, FOS&S is able to turn optic fibre in a sensor by exploiting a physics law known as the Bragg condition. Simply put, by exposing the core of a fibre to intense ultraviolet light the reflective properties of the fibre can be ‘programmed’ in such a way that it is possible to use the fibre to measure temperature and strain.
SUCCESS & INNOVATION INDICATORS • Specialist in breakthrough sensing technology • Exponential growth from EUR 0.5 mil turnover in 2001 to EUR 2.5 mil in 2007 • More than 50% of revenue is invested in R&D • Affi liates in Germany (fi bre manufacturing), Hong Kong FOS&S Asia, France FOS&S Air (pending)
A fibre optic sensor offers some clear advantages over an electric one. Firstly, a fibre optic sensor does not require an electric signal to function. Hence, they are far safer to operate in environments that carry explosion risk. Secondly, they are exceptionally rugged, because the sensor is an intrinsic part of the optic cable. This allows the sensor (i.e. the fibre) to be embedded in the material of the structure that is being monitored. Thirdly, fibre optic sensing technology is exceptionally efficient. Being part of the optic fibre, the sensors can transmit measurement signals over several tens of kilometres precluding the use of complicated repeater networks. Also, they have the ability to multiplex many sensors using only one optical fibre, hence reducing the cost of complex network configurations. Finally, fibre sensors are extremely light and thin (comparable to human hair), which make them particularly interesting for the aerospace industry. All this allows FOS&S to develop fibre optic sensors that deliver durability, efficiency, flexibility and safety in their monitoring of factors such as temperature, strain, pressure, load, earth pressure and humidity in vital structures. Besides the development of customised sensing solutions, FOS&S is able to install and maintain the complete optical sensing network, providing their customers with a complete, automated solution.
Innovation achievements Some of the more notable projects that the company is currently engaged in include the in-flight structural health monitoring of aircraft structures for Airbus (in R&D phase), the structural health monitoring of the Athens Olympic Velodromeâ&#x20AC;&#x2122;s roof structure and the structural health monitoring of the Stonecutters Bridge in Hong Kong, a massive 1.6km long dual 3-lane high level structure due for completion in mid-2008. This bridge connects Stonecutters Island and Tsing Yi Island and is one of the longest span cablestayed bridges in the world. FOS&S monitors the temperature and strain inside the stay cables using optic fibre sensors that are inserted inside those cables. With over a decade of in-field experience and an investment of more than 50% of revenue into research & development, FOS&S is able to deliver innovative sensing solutions across diverse industries (aerospace, automotive, oil & gas, construction and mining) and in demanding physical environments.
FOS&Sâ&#x20AC;&#x2122;s ongoing commitment to R&D has reaped exceptional rewards â&#x20AC;&#x201D; 500% revenue growth from 2001 to 2007. Initially fibre optic technology struggled to compete price-wise with traditional sensors. Advances in the technology and a growing worldwide acceptance of its benefits in terms of durability, efficiency, flexibility and safety have allowed fibre optic sensing to emerge as a superior monitoring option. This translates into a healthier margin and allows for ongoing reinvestment and expansion.
Innovation management Essentially FOS&S is a fibre optic research centre steered by market needs. Customers approach them with problems that involve possible applications of fibre optic sensing technology. The company responds by setting up R&D projects, bringing in specialists from different disciplines (e.g. physics, metals & materials) to develop new solutions, new technologies and new applications for those technologies. Collaboration with companies such as Xenics (for optical monitoring on the Airbus project) and FBGS (in the manufacturing and commercialisation of highly reliable Fibre Bragg Grating sensors) forms part of their innovation management strategy. FOS&S continually looks for ideas and opportunities across different industries and works closely with universities via contract research and the hosting of doctoral students.
Vision for the future FOS&S aims to maintain R&D as its core business while outsourcing the manufacturing of its growing supply of off-the-shelf products. Research and development of new solutions for a variety of problems remains the life-blood of the organisation, while the sale and marketing of standard products is a growing part of the business. Based on its strong internal R&D, exponential growth and its excellent partner network, FOS&S is set to entrench its position as the industry leader for a wide variety of optical sensing applications.
Belgacom Group The principal supplier of telecommunications serv
74 BELGACOM GROUP
Boulevard du Roi Albert II, 27 B-1030 Brussels. Belgium T: + 32 (0)2 202 41 11 www.belgacom.be/one • Science & Technology • Business Model & Process Innovation • Design & Creativity
BACKGROUND Combining its strong background as the national telecoms operator and the multiples talents of its teams, Belgacom Group is the principal supplier of integrated telecommunications services in Belgium. As a result of its continuous investments in leading-edge technology, the Belgacom Group – including Belgacom, Proximus and Telindus – is able to offer its clients high-capacity solutions on all networks, fixed or mobile. At the forefront of technology, the Group provides its clients, private or professional, with telephone, internet and television services, at every moment of the day, wherever the place, and whatever type of equipment is being used.
Regarding technology, the company’s strategy is to invest proactively and continuously in cutting-edge technologies. For example, the launch of its high-capacity VDSL2 facility will make it possible to deploy IP and High Defi nition television on a much larger scale. While the shift to multiple-play services and the development of a single all IP-platform are central to Belgacom’s strategy, the company has also innovated in a range of other areas. For example, in 2007 Proximus and Fujitsu Siemens Computers launched the fi rst laptop with integrated UMTS/HSDPA technology in Belgium. With its embedded 3G broadband modem, this laptop is automatically ready for mobile access to e-mail, Internet and corporate applications using the Proximus 3G network.
INNOVATION ACHIEVEMENTS To maintain its leading position in the market the Belgacom Group has made continuous investments in cutting-edge technology and new services. Probably most relevant today is the trend toward convergence, i.e. the delivery of any service any time, anywhere, through any device. The Group was the fi rst to launch”multi-play” offerings, combining television, internet and telephony. On 30 th June 2008, more than 231,000 clients responded by choosing Belgacom for at least two services in bundled offers. In the business market, the Belgacom Group has launched Belgacom Explore, a single, converged infrastructure based on IP & Ethernet that combines Belgacom’s separate networks. Once connected to the Belgacom Explore platform, companies have access to all the ICT services of the Group (e.g. storage, data centers, wireless, security, voice, video, media screens …). It is through this ‘next-generation network’ that most existing and future services will be delivered. In other words, one-stop shopping for all ICT and telephony needs on one single platform. The Belgacom Explore initiative won the LightReading ‘Award of the European Ethernet Service Provider of the Year’ in the innovation category at the Ethernet Expo Euro 2007 in London. This innovation award is given to the service provider that has demonstrated the greatest sales, marketing and product innovation. Moreover, Belgacom impressed the jury by showing that Fixed, Mobile and IT can be integrated and translated into a unique proposition.
“the company has launched belgacom explore, a single, converged infrastructure based on IP & ethernet that combines belgacom’s separate networks.” Also in 2007, Proximus and energy provider Nuon started their ‘smart meters’ pilot project for electricity and natural gas in collaboration with Bond Beter Leefmilieu. The smart digital meters will send consumption data of gas and electricity at regular intervals to a data centre, where customers can consult their expenditure at any time. In this way, the smart meters will enable tailored products and rate plans to be developed that will take into account the personal consumption profile of customers. A third example is the SMS public transport ticket, a fi rst for Western Europe. De Lijn (bus and tram) travellers in Antwerp and Ghent can now pay for their journey by mobile phone. This new payment system was developed in collaboration with Proximus. Telindus Surveillance Solutions Ltd, developer of high quality video surveillance solutions, has implemented networked surveillance systems at several reference projects throughout the world, including the London Underground, Miami Airport and Metro of Moscow. Early 2008, it has been selected by Incheon Subway to design, implement and support a
integrated ices in Belgium fully integrated video surveillance system on several stations of the Incheon Subway (South Korea).
Innovation Management The Belgacom goal to become an integrated broadband solutions group is supported by three strategic pillars, ‘Lead & Innovate’, ‘Excel & Delight’ and ‘Grow & Transform’. The company aims to maintain its leadership position in the provision of traditional basic services, voice and broadband, and to become the leader in new markets such as media, TV and ICT. The constant innovation required to accomplish this mission encompasses far more than just introducing new products and services into the marketplace, and involves all levels of the company and all departments. Belgacom recognises that the foundation underpinning its achievements is its staff, and fosters culture change and change management while ensuring the best possible utilisation of talents and skills. Optimisation of IT systems and procedures in the call centres, for example, was backed up by continuous training to help employees serve customers more efficiently. These efforts were rewarded with the ‘Belgian Contact Centre Award 2007’. The strategic pillar ‘Excel & Delight’ reflects the fact that excellence remains a key focus for the Group, which makes every effort to be cost competitive while providing a superior end-to-end customer experience. The customer is firmly at the centre of the innovation philosophy, and customer feedback influences the development of all new products and solutions. The sheer number of certified people skilled to implement and support our solutions is unique in the market place. Whether we support a specific tailor-made solution or a massive network roll out covering major distances and regions, our teams fully trained to respond to customers needs.
Vision The Belgacom Group already offers a complete quadruple-play solution that integrates fixed and mobile telephony, Internet and television. For the future the company is committed to meeting the expectations of its professional and residential customers and anticipating their needs well into the future. On the business side, the Group aims to transform itself from a telecom company into a complete ICT supplier and to continue providing its customers with innovative, tailor-made solutions.
Success & innovation indicators • ‘Explore’, the new multi-service platform driving convergence, won the European Service Provider Innovation Award • Belgacom TV customerbase more than doubled to over 391,000 • More than 231,000 ‘multi-play’ packs sold For instance, supporting e-Health development in Belgium, the Group is working on health information network concepts such as e-prescription and secure patient data exchange between medical practitioners. Another example is road charging: to meet the European road toll directives, the Group is working on mobile solutions to charge tolls. On the residential side, Belgacom will continue to follow a segmented approach, with offerings adapted to the specific needs of consumer groups such as families with children and senior citizens. With an eye to closing the digital gap, the Group is concentrating on the development of e‑services and providing a comprehensive range of innovative applications. Generally speaking, the group intends to anchor its leadership ambitions on the continued roll out of Belgacom TV, the development of a complete “ecosystem” based on television, Proximus’s capacity to create new flows of income based on mobile data, and the progression of Telindus in the value chain.
SIRRIS Driving industry by technology
76 SIRRIS Diamant Building Boulevard A . Reyerslaan 80 B-1030 Brussel Belgium T: +32 (0)2 706 79 44 www.sirris.be info@sirris.be • Sience & Technology • Business Model & Process Innovation • Design & Creativity
BACKGROUND Technological development is the driving force of an economy, with new ideas in products, processes and organization being vital for long-term growth. Sirris, the collective centre of the Belgian technology industry, helps companies to introduce technological innovation enabling them to strengthen their competitive position. Sirris helps to implement such changes by researching new technologies, raising industry awareness of promising innovations, and providing advice at all decision-making levels and support from the initial concept to the operational solution. The organization’s tailor-made services can range from a few hours’ consulting to research projects spanning months or years. Founded in 1949 under the name WTCMCRIF by Agoria, the Belgian Federation for the Technology Industry, Sirris has changed its name but not its commitment to increase industry effectiveness through technology and innovation.
INNOVATION ACHIEVEMENT Sirris has played a vital part in many remarkable success stories, which bear testimony not only to their wide range of expertise but to the extent of assistance they offer. A few examples of such innovation achievements follow. ACM Implants produces customised hip prostheses while the surgery is underway. Sirris helped them develop a new technology to provide the surface of the hip joint ball with a Physical Vapour Deposition coating, significantly prolonging the lifespan of the prosthesis. Sirris also identified and evaluated a new measuring technique that avoids the surface damage and need for costly re-polishing associated with previous methods. Open Scrolling Technology, on its way to becoming a world player in roll mechanisms for advertising panels, can now respond to customers’ demands far more quickly. With the support of Sirris they were able to bundle all of their research and development expertise into a single production model, which they now use as a basis to configure all products for serial production. Pharmaceutical company Aseptic Technologies developed a new concept for transferring solid substances through the wall of a
sterile room. Sirris wrote the manufacturing plans and calculated the list of standard parts that needed to be developed. The organization also helped with the production of functioning prototypes using rapid prototyping techniques such as vacuum moulding.
INNOVATION MANAGEMENT Sirris sets up collective research projects to seek solutions to the shared technological challenges facing Belgian industry. Sometimes the organization takes this initiative alone, sometimes it teams up with companies that want to pursue and refi ne promising innovations. As a collective centre it also provides companies with infrastructure and human resources for testing new technologies.
SUCCESS & INNOVATION INDICATORS • Approximately 2400 member companies • More than 4000 industrial interventions each year • Assisting more than 2000 different companies • Turnover of 20 million Euros • More than 100 European innovation projects already carried out • More than 100 technology experts
The Sirris target group is companies from all areas of the Belgian technology industry, large or small, that have a common goal â&#x20AC;&#x201C; to build their future on the foundation of technological progress. As a collective centre Sirris strives to distribute its services equally among them. Comprising over three thousand companies and with access to a wealth of in-depth expertise in more than twenty fields, the extensive Sirris member and client portfolio forms a close-knit but diverse network where partnerships, co-operation and knowledge pooling allow for a broad and comprehensive approach and enable effective solutions. Highly qualified staff, strategic partners and an established presence in the Brussels, Flemish and Walloon regions ensure a smoothly run and accessible establishment. Local employees have direct access to a
comprehensive network within the organisationâ&#x20AC;&#x2122;s core, while also having close working relationships with the other industrial and economic players in their area. Employees at Sirris do not consider their work complete until the client has an appropriate, functioning solution. No passive middle-men, they are outcome-orientated, guarantee results for their clients, work on site and are committed to involvement in every aspect of the solution-finding process. Their approach is all-inclusive, and as architects of innovation they look at every question from various angles and have access to numerous areas of expertise. Initially making use of in-house competencies and with access to the expertise of knowledge partners, Sirris looks to the marketplace to find usable technology
but remains independent of suppliers and manufacturers. As a partner for knowledge building, they keep up to date with global developments in the industry and are able to inform member companies about what is happening in the rest of the world via their website, newsletters, seminars and training programmes.
VISION Sirris strives to be the backbone of the Belgian technology industry, ensuring its continued progress and increased strength through the support of entrepreneurship and innovation. The organization is committed to continuously improving the quality and diversity of their services, combining creativity and cutting-edge technology in order to meet the ever-changing challenges of the industrial arena.
IBBT The human face of the future’s technology
78 IBBT Zuiderpoort Office Park G. Crommenlaan 8 (bus 102) B-9050 Gent-Ledeberg Belgium T: + 32 (0)9 331 48 00 www.ibbt.be • Science & Technology • Business Model & Process Innovation • Design & Creativity
From hospitals to government offices to private homes: IBBT’s research projects touch all areas of society, and all types of IT users. Supported by the Flemish government and private industry, IBBT builds the human capital to create solutions that solve very human needs.
BACKGROUND IBBT is an independent research institute set up by the Flemish government in 2004 to stimulate ICT innovation. While much of its funding comes from the government, it also works directly with the private sector on companies’ research projects. It keeps a finger squarely in the market; maintaining its focus on end-user needs. IBBT develops projects in five main application domains: New Media, Mobility & Logistics, eHealth, Enabling Technologies and eGovernment. Consequently, it relies on the expertise of specialists in many domains. To achieve its goals, IBBT networks with a broad range of organisations, working with and developing the expertise of engineers and social scientists in different disciplines, including universities, smaller companies and big national and multi-national companies. IBBT has several roles to play in the development and management of research projects. Depending on the project, it can provide infrastructure and equipment; services, such as testing, user labels, etc.; act as a hub to bring partners together; and provide some of the financing. But IBBT never forgets the need to create economically-effective solutions that are marketable and user-oriented. Its support, therefore, extends into valorisation, coaching and developing business plans.
INNOVATION ACHIEVEMENTS IBBT is responsible for a broad and very important set of research projects that have the potential to touch on the lives of nearly everyone. One example is the ASCIT (Again at my School by fostering Communication through Interactive Technologies) project. This project aims to develop a cost-effective yet high-quality solution that allows children in long-term healthcare to continue their education ánd the social contact with their peers remotely. Some of these children stay in one location, but others are moved around during their care, so the solution must allow continuity for the child.
SUCCESS & INNOVATION INDICATORS • One of the four strategic Flemish research institutes • 18 staff members but uniting more than 700 researchers from numerous Flemish universities and knowledge centres • Yearly grant of 23 Million Euro from the Flemish government • Over 80 ongoing projects, mainly Common Basic Research & Interdisciplinary Strategic Basic Research The ‘proof of concept’ created by IBBT incorporates innovative hardware and software, and connectivity features. These are focused on high quality communication between the sick children and their regular school and classroom learning environment—including teachers, peers and school friends. Also in the healthcare domain is the E-HIP (eHealth Information Platforms) project, which aims to build a patient-centric, communitywide healthcare information platform. Much private patient data exists in fragmented form across many healthcare enterprises and proprietary information systems. IBBT’s E-HIP project is exploring ways to take advantage of IT and communications technology to create a platform that will allow fast and complete access to all patient data at the point-of-care. The platform will evolve into an integrated regional ICT infrastructure in which care providers (general practitioners, hospitals, specialist practices, health centres, etc.) collaborate to offer adequate healthcare to all citizens. IBBT is also leading the way in developing Wireless Building Automation. This project will allow the automation of Building Management Systems (HVAC control, lighting, access control, motion detection, fire detection, surveillance cameras, etc), networks and enduser devices in a building without laying cable or wires. The economic and social benefits of this system are numerous: this is a much
more cost-effective and flexible means of automating than cabling. It can also be used in difficult-to-wire premises, such as historic buildings; allowing more effective and safer use of those locations. The potential benefits of this system stretch even further and other applications foreseen include: hospitals, airports, car parks and temporary events such as festivals, exhibitions and trade shows.
Innovation management IBBT is not a research institute that operates in a vacuum. Instead, it fully acknowledges the importance of ensuring that the projects selected have value in the market. Thus, part of its mandate is to provide a range of businessoriented programmes and support services to its partnering research groups and companies. For example, the iStep programme is organised jointly by IBBT and the Vlerick LeuvenGent Management School. These multiple-day, IT-focussed, Masters-level training sessions are targeted to researchers involved in IBBT projects. Participants learn how to link technology with the market and how technological projects can be developed into marketable products. IBBT’s incubation projects are specifically aimed at valorising research results and supporting the incubation trajectory of a spin-off company. IBBT uses the stage gate process to drive these projects, which can be initiated by a research group or an industrial partner.
“IBBT’s research projects have the potential to touch on the lives of nearly everyone.” The projects follow 9 stages, from technological analysis to a completed business plan, to develop the technology, the market and the business opportunity. To support the successful creation of ventures, IBBT was one of the first organisations to set up iBoot camps, again with the Vlerick Leuven-Gent Management School. The overall goal of the iBoot camp is to make sure that all spin-offs have a business-savvy team attached when they are acquired by venture capitalists. Often, the researchers who are developing the projects have exclusively technical backgrounds and educations, which does not make stepping into the business world easy. The iBoot camps provide both training and coaching in entrepreneurial skills. As part of its efforts to support the ventures and innovation in general, as well as to build an ‘ecosystem’ of cooperation with other players, IBBT set up the iCubes incubation centre, together with the Provinciale Ontwikkelingsmaatschappij (POM) Oost-Vlaanderen and the ParticipatieMaatschappij Vlaanderen (PMV). iCubes offers space and services to IBBT
spin-offs and innovative departments of ICT companies in Flanders, but also to innovation facilitators. Finally, in 2007, IBBT launched the iVentures pre-seed financial programme to provide spinoffs with some initial funding. Combining this pre-seeding with the incubation services offers the researcher/project owner the necessary means to bridge the gap between research and market introduction. By providing both research support and tomarket assistance, IBBT is working to ensure that innovation in Belgium focuses on technologies and products that offer a true value in the market. The most important aspect of this marketability is ensuring a user-focus: the value is not only measured in economics, but also in usability and how it answers an unmet need. This, in effect, is the human face of technology innovation in Belgium.
Vision To ensure continuous innovation, IBBT depends on motivated and knowledgeable people. Its vision, therefore, is to build the innovative and creative human capital necessary to support Belgium’s future, by continually renewing and expanding its network of professionals. Having built a substantial network in Belgium, IBBT is currently looking further afield to internationalise both its research network and its commercial partners.
Jurgen Ingels The future of electronic payment systems
80
Jurgen Ingels Co-founder, CFO Clear-to-pay
After my university studies in political and social sciences, I started working at Dexia Ventures as a Senior Investment Manager, identifying opportunities for investment, in particular in technology companies in both Europe and the US. Every time we made an investment abroad, money had to be sent from the Brussels office to the foreign entity. For some reason, this process was always difficult and cumbersome. Not only was it expensive to send money abroad, it also took a lot of time. Sometimes the money simply disappeared for a few days without anyone being able to trace the transaction inside the payment flow! Not being familiar with the payments’ systems industry, my curiosity grew. I couldn’t understand how this could be normal working practice in the
“I believe that this globalization will be the engine for a convergence of electronic payments and card payments” Internet age. When I started to examine this further, asking people at different financial institutions to explain to me how payments were executed, I was staggered by their answers. The international payments traffic system was nothing more than a “spaghetti junction”, with every bank using a different proprietary system which was in no way directly interconnected with any other bank. In fact, even on an intra-bank level (i.e., within the same bank), multiple separate payments systems existed whereby payments were organized in silos (i.e., databases not cross-linked with other databases), causing the duplication of different processes and making it impossible to have an overall view. Strange, certainly, when you compare this system with that of a courier company like Fedex. If you send a package to the other side of the world one can – through the Internet – always find out where the package is at that moment in time. And yet in the world of high finance, where trillions of dollars are constantly going back and forth, tracking the money was almost impossible. Furthermore it seemed that no one had ever questioned this ‘disappearing act’, or even just the high costs associated with these labour intensive efforts. Banks were continuing to build proprietary non-linked payment networks in an age where the mother of all networks already
existed: the World Wide Web. This effort to streamline payment systems became the foundation on which Clear2Pay was born. Clearly, the payment systems innovations that we have developed at Clear2Pay – now being used in banks around the world – would not have happened without the changes in computing technology and the existence of the Internet. It is true that even before the emergence of the Internet, proprietary networks with wide geographical scale did exist. However, using these networks led to higher costs, not lower. Furthermore, access to these embryonic networks was restricted largely to those firms that owned the networks, and, if they were generous enough, perhaps to their suppliers and/ or customers as well. The evolution of the Internet has changed all that by creating an open standard platform that anyone can use, anytime and anywhere, enabling the entrance of new firms such as Clear2Pay. We know that to be fully successful, low cost is only one of many criteria we must meet; other criteria such as 24/7 access on land or by WiFi, security and traceability, and of course speed are equally vital. For a payment innovation system to work, all of the key participants, whether they are consumers, merchants, payment providers, or networks, must benefit from its adoption. Two major forces persistently shape the demands of these constituents: demographics and globalization. As each new generation is exposed to more and more advanced technology, younger consumers often favor payment mechanisms that provide superior or combined functionality. Globalization of the payments market, enforced by new regulation and facilitated by the Internet, is creating demand for new payment products that support cross-border trade. I believe that this globalization will be the engine for a convergence of electronic payments and card payments. In the future I will be able to use my debit card in a shop in Sydney and swipe that card through a PC. The PC reader will recognize my card and will open the internet banking application of my bank. I’ll use my internet bank access code to execute the payment. A payment that will get routed directly over a common infrastructure, together with the needed information like TVA ticket or invoice etc. For corporates this payment will directly feed into the ERP system, allowing immediate control and allocation to a budget.
continued from p. 65
The future of commerce will rely on the Internet, as the Internet itself relies on commercial activities. Clear2Pay’s payment’s architecture will facilitate fi nancial transactions between any parties, anywhere, anytime. Belgium can play an important role in this process as it is home to many payment companies. The headquarters of Mastercard, Swift, Bank Card Company are located in a square of 20km around Brussels and Belgium is also the place where systems like Proton and Swift were born. There is a lot of payments expertise in Belgium and it should continue to develop into a real center of excellence for payment systems. I’m happy to see that Clear2pay contributes to the development of such a Belgian competence center and that we are able to export our payment software around the world. Transics won the 2006 prize for most promising company by the Flemish government. It develops and commercialises on-board computers, software and telematica solutions (on-board fleet management solutions) for commercial vehicles in the transport & logistics sector. The company has shown explosive growth since 2004, is active in 23 European countries, and has become market leader in its sector. Porthus is a Benelux leader in the world of complex on-demand software. While ondemand software is gaining prominence via the likes of Google or Salesforce.com, most people are unlikely to have come across Porthus’s solutions, unless that is, one works in the Benelux distribution sector. Porthus developed a logistics platform for the retail sector and their suppliers. Currently they have every retailer in Belgium on board and about 800-900 suppliers. The result is that 75% of products in the supermarket can now be traced in the chain via their platform. Why logistics, why the Benelux? That is no accident—the Benelux is the key European logistics hub and hosts about 60% of all European distribution centres. In the telecom sector, Porthus plays a similar role: it manages the number transferability database, to which all 26 operators in Belgium subscribe. Further R&D work is being done in collaboration with the IBBT around eHealth. CVWarehouse (see profile page 92) is another player that exploits network effects, but in their case in the world of HR Recruitment.
Q-Layer, founded by serial entrepreneur Kristof De Spiegeleer (see his vision article on page 168), is a promising young company that provides software for data centers. It plays into the trend toward ‘true cloud computing’—the idea that one can increasingly deliver IT resources (storage, applications) as a service by optimally managing a dispersed network of IT infrastructure. Clear2Pay is a payments technology company that is dramatically simplifying bank’s existing payment infrastructures. Read founder Jurgen Ingels’ vision statement on this page. Also in the financial sector, Callataÿ & Wouters deserves a mention. With roots as an IT service provider specialised in the financial sector, it has, via its years of project work at several large banks in Europe, developed a core banking solution based on an SAP platform. This type of evolution is not unique—there are several IT service providers that have developed vertical ERP ‘add-ons’ for the local market—but Callataÿ & Wouters is managing to develop a European reputation for itself.
continued at p. 85
Higher income and GAPA and Proximus introduce: parking by SMS
82 GAPA Jordaenskaai 25 2000 Antwerpen Belgium T: +32 (0)3 727 16 60 F: +32 (0)3 727 16 70 www.parkereninantwerpen.be info@gapa .antwerpen.be • Science & Technology • Business Model & Process Innovation • Design & Creativity
Nobody is keen to pay for a parking space. But when paying becomes easy and correct, fraud quickly disappears. That is why you can now pay for your parking in Antwerp by SMS. The Autonomous Municipal Parking Company of Antwerp (Gemeentelijk Autonoom Parkeerbedrijf Antwerpen - GAPA) is accountable for everything parking-related in the city on the Schelde. GAPA defines parking policy, operates car parks and is responsible for implementing the policy and for actually supervising parking. There are around a thousand parking machines – spread across the city – through which GAPA collects seven million euro in parking charges every year. Drivers who don’t pay are fined by GAPA. Last year, there were some two hundred thousand fines, bringing in a further four million euro.
CHANGING PARKING BEHAVIOUR “Before GAPA was set up, parking policy just cost the city money”, says managing director Eric Dubois. “The city picked up the cost of managing the machines, but there was scarcely any supervision.” Now, parking charges and fines are a nice source of income for Antwerp. “The most important thing is actually that the policy has changed parking behaviour. Long-term parking is now confined to the car parks. This means that residents and visitors who need to visit the city for a short period can find a parking space more easily. This clearly has a positive effect on the city’s residents. That was the main reason for setting up GAPA.”
PAYMENT MADE EASY GAPA found an innovative way to increase the public’s willingness to pay. Eric Dubois: “Obviously, you have been able to pay at
SUCCESS & INNOVATION INDICATORS What is the Autonomous Municipal Parking Company of Antwerp (Gemeentelijk Autonoom Parkeerbedrijf Antwerpen - GAPA)? • fi fty staff • manages around a thousand parking machines • total turnover of parking charges and fi nes: thirteen million euro • winner of BGC Group Award 2007 • nominated for ICT Trend Award 2006
parking machines with cash or Proton for a long time. We specifically set out to find a new way of making it easier to pay. Nobody is keen to pay for parking; that is why we wanted to make it as easy as possible.” The previous situation is well-known: to pay, you had to walk to the parking machine and then back to your car to put the ticket on the dashboard. “People are in a hurry; they don’t always have change on them; it’s bad weather and so on. There are lots of reasons for skipping that walk to the parking machine. We also wanted to have less money in the machines, to discourage theft.”
PARKING BY SMS MADE SIMPLE Payment via mobile phone was the solution. A first trial had a fairly high threshold, as the users had to register first. Not long after that, GAPA tested a new application for parking by SMS, the result of cooperation between Proximus and Mobile-for (recently acquired by Belgacom). It was an immediate hit. Proximus and Mobile-for implemented for GAPA a transaction platform for parking by SMS that had already been successfully introduced in Estonia. The system is very simple. A number is displayed on every parking machine, which is visible even from inside the car. The driver just has to send that number and the car’s number plate by SMS. “In that way, you are immediately registered in the system. As confirmation you receive a message stating the maximum period you can leave the car in the parking space. And when the parking time is almost up, you get another message.”
lower fraud in Antwerp
Easy for drivers and wardens How is parking by SMS controlled? Wardens input the car’s number plate on their mobile GPRS hand terminal. They connect with the Mobile-for databank via the Proximus broadband network. The system then immediately informs the warden whether the driver of the car has registered by SMS. Payment of the parking charge is just as simple. When the driver leaves, he/she sends ‘q’ (for ‘quit’) to the system by SMS. He then receives a text indicating the amount due. The parking charge is paid later through his mobile phone bill. Proximus invoices the SMS’s for registering, departing and confirming the amount payable by Proximus customers. The SMS’s themselves are handled by Mobile-for. Mobile-for invoices customers who are not signed up with Proximus and users who have asked, via the website, for a separate invoice for parking charges. The company collects the parking charges and pays them to GAPA. In this way Mobile-for can provide an additional payment facility for GAPA. Mobile-for is also responsible for managing the underlying system.
Higher revenues Since the introduction of parking by SMS in Antwerp – some two years ago – the system has already been used around a million times. “We expected that parking by SMS would account for ten to twelve per cent of total parking charges in the mediumterm, but it’s already at twenty per cent.” Apart from its ease of use, parking by SMS is quite a bit cheaper for the driver, even when you allow for the cost of two text messages. With a traditional parking ticket, part of the period paid for remains unused. Not with SMS: because you can cancel it when you drive away, you only pay for the parking time that you use. “That realisation significantly increased people’s willingness to pay”, according to Eric Dubois. “The solution offered by Proximus and Mobile-for not only gave us a new innovative payment facility but also effectively increased the city’s revenues.”
Luc Burgelman Linking businesses around the world
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Luc Burgelman Co-founder & CEO Porthus
If you ask me to define what I think innovation is, I’d have to say that it’s ‘revolution’. And it’s vision combined with entrepreneurship. Some areas of business move faster than others and so the rate of innovation varies accordingly. In my domain, IT, innovation is something which has led to a series of revolutions rather than to gentle evolution. Over the past decade or so, we’ve experienced several revolutions in IT. First there was the move from computer to microprocessor and the mobility that this brought with it. Then we had the changeover from developing applications, essentially a manufacturing process, to simply purchasing the software you needed. This was followed by renting rather than buying software. We’re now seeing migration from network to ‘cloud’ computing. This is the direction in which information infrastructure and its use is moving. Cloud computing is where the computing resources are not in the user’s room, but in the ‘cloud’, typically a variety of providers supplying IP services. This liberates consumers from computer technology, yet allows them to use computers on demand, as a service. Another revolution is that people used to give computers instructions about how to address an issue or solve a problem. Today, computers will interpret the questions or problems they’re presented with and they will define what the solution should be. Queries in Google, for example, are not predefined in the application… A similar situation applies to standards. They’re basically a set of instructions about how to address an issue. We will see a transition taking place where we will present an issue and the most suitable solution will be offered from the ‘cloud’. This takes artificial intelligence (AI) to a new level. Of course, today’s innovations have their roots in those of the past, such as EDI (Electronic Data Interchange) which has come a long way since it was first introduced over 20 years ago. EDI is a set of national and international standards which govern the formatting and presentation of data in any given transaction. It’s no secret that smooth electronic communication between businesses depends on the translation of data and business documents. Today, we can store documents electronically, translate them into standard data formats, transmit them in
seconds and have them processed by a business partner’s application. But I do find it strange that despite all these possibilities, less than 30% of all data exchange between businesses is automated, the rest is still transmitted manually. We’ve all seen how EDI and its successors have dramatically changed the way that companies do business, and they do still provide value. However, there’s still a growing need for broader data exchange, due to the rapid growth of electronic data traffic between business partners, a wide variety of formats, applications and devices, as well as demanding governmental regulations. But we have to ask ourselves whether the introduction of new and even more standards will allow organizations to implement and integrate flexible and strategic business process improvements across their company boundaries. I believe that developing a standard that can cope with this highly complex evolution will be extremely time-consuming and may not even be possible. Even if it were, reconciling the different standards and technologies would again result in a temporary and limiting solution. We know that it’s easy for two parties to agree on the format and structure of their electronic transactions. However, with an ever-growing shift towards electronic transactions and the increasing number of business partners, B2B collaboration will pose a significant challenge to the continued use of standards. We can see that the telecommunications industry is clearly moving in a different direction. Telecom companies and service providers quickly recognized the value of increased collaboration. Independent of the format, channel or device, they’ve resorted to central platforms because they need faster and more automated processes, so that they can offer their customers a complete set of services and stay ahead of the competition. I’m sure that other industries will take this same approach. Today, we’ve noticed that companies are already increasing their focus on electronic connectivity and collaboration with their suppliers, customers, and logistics partners. They’re shifting from EDI towards web-based B2B solutions. OnDemand platforms are emerging as an effective and flexible way to increase the scale of collaborative processes across many business partners.
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At Porthus, we’re convinced that instead of seeking a new generation of standards, businesses will seek solutions providers who specialize in translating different formats and content, distributing them, and as such ‘taking the burden out of their hands’. OnDemand solutions eliminate the need for companies to spend time and money agreeing on formats and structure of their electronic transactions and any concerns they may have about technologies or devices. Using a centrally managed platform like Porhtus.net offers companies many benefits and will introduce de-facto standardization. The biggest benefit is that their IT operations can evolve without any disruptive change and they can adapt quickly to ever-changing business requirements. Companies and people who take the lead in creating these revolutions are the true innovators. They nurture entrepreneurship and have their own clear vision. They lay the foundation for future revolutions…
“ondemand solutions eliminate the need for companies to spend time and money agreeing on formats and structur”
Everybody has heard about Facebook and MySpace but have you heard about Netlog? With 36 million members, Ghent-based Netlog is the largest European social networking service. Whether the company is innovative is disputable—social networking functionality is not rocket-science. Nevertheless, given the competition, it is a phenomenal achievement to have built up such scale, and that from a small base in Belgium. The key to its success appears to be its localisation strategy. The service is available in multiple languages, which is at least one important differentiator with the likes of Facebook. Also, it has developed what it calls a ‘localization technology’ ensuring that all content is geotargeted and personalized to each member’s profile. Two more young companies that deserve a mention are iNEWIT and Netmining. iNEWIT is a company focused on wireless video streaming solutions for various applications (e.g. wireless video surveillance). This is an example of a company that is innovative in the way it combines various established technologies in new ways, for new applications. Netmining is a young but promising company in the emerging field of online behavioural targeting. It sits on the interface between traffic optimising (e.g. search engine optimisation, google adwords) and company’s internal CRM systems. Netmining’s engine basically monitors the online behaviour of website visitors and builds real-time profiles of those visitors. It subsequently can deliver tailored lead-generating messages to visitors if their profiles meet certain criteria. Finally, the ICT sector in Flanders is supported by the IBBT (see profile page 78), the youngest of the four Flemish public research institutes. This institute is facilitating some interesting collaborative R&D projects between various universities and companies, including Alcatel-Lucent. Key focus areas are wireless networks, mobile television services and eHealth applications. The institute is also gearing up for its first spin-off company, Wishbone, focused on wireless mesh networks.
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A technology for com Belgacom innovates to the elderly a better life
86 CPAS CHARLEROI Résidence Brichard rue Casimir Lamber t 27 6000 CharleroI Belgium T: +32 (0)71 28 62 50 F: +32 (0)71 42 10 23 www.cpascharleroi.be contact@cpacharleroi.be • Science & Technology • Business Model & Process Innovation • Design & Creativity
Thanks to a Belgacom solution, the work of the care staff at the Résidence Brichart nursing home in Charleroi has become easier. And the quality of life of the pensioners has been improved at the same time. Résidence Brichart is one of 9 nursing and care homes run by CPAS of Charleroi. Based in Charleroi-Nord for some 30 years, it houses invalids and semi-invalids. It also has a special floor for those with dementiarelated conditions (Alzheimer’s, senile dementia), who can be offered care tailored to their individual needs and a living space open to their family, while the team is backed up by an educational expert and an occupational therapist. In order to pursue its approach focused on continuous quality improvement and respect for the individual, CPAS Charleroi has invested in a system for calling care staff, along with the computerisation of medical files and the real time recording of in-room care. It selected a quality solution: Forum Care Interactive from Belgacom.
EFFICIENCY IN CARE Through a call system using BIP, combined with the recording of services on a computer with a very easy-to-use interface located discreetly in each room, the nurses and care assistants can rediscover their vocation to help patients, by simplifying administrative tasks. The process is simple and, thanks to Belgacom’s overall management, the training period is minimal. Residents benefit from increased security. 100 % of their calls are answered rapidly and no care tasks can be forgotten. In fact, the bell on the BIP results in calls being displayed in all rooms and an on-screen reminder of outstanding tasks until such time as they have been performed. Residents also gain in terms of comfort. Care staff get to their bedside more quickly and have more time to concentrate on the quality of services performed, since the system for recording care reduces their administrative workload. Entering tasks in real time and in the resident’s own room also prevents errors and omissions in reporting. The team leaders can monitor activities more easily as there is no longer a need to systematically check paper-based care notes one by one. All they need to do is have a look at their PC to fi nd any tasks that may not have been carried out. Finally, management benefits from the
complete traceability of calls and of care, which makes it easy for them to provide formal proof of the work done by the teams, during inspections by the Walloon Region. The network is connected remotely with the technical facility operated by Bloom healthcare intelligence, Belgacom’s partner, for 24/7 support.
DISCREET AND FRIENDLY The Forum Care Interactive solution, installed by Belgacom and Bloom healthcare intelligence in just 20 working days, was selected above all for its unique innovative character: it integrates the call system with recording of care provided. A button and a ball device were installed in each room in order to be always close at hand in case of a problem, from the bed or armchair. As the system is wireless, it is quick to install and adapts to the lay-out of the room. The agreeable design of the boxes and the discreet placement in each room of the IT work station, which requires minimal cabling to connect it to the network and electric current, contribute to the family environment that the care home aims to provide. Being used to working with BIPs, the home does not use cordless telephones but new BIPs which also have technical alarms. This has contributed to the easy adoption of the solution, which was installed by Belgacom technicians without a hitch. When the nurse or care assistant enters the room following a call on their BIP, they insert their ID key into the IT work station, automatically indicating that the call is being taken care of. Inserting the key brings to the screen the care planned for the resident, but also key data for their well-being, such as the telephone number of their family, doctor and even their diet. The display varies depending on the access rights defi ned for the different authority levels of the individuals, and can change from one house to another. Once their tasks have been completed, the staff record what they have done on the screen with a few clicks. The IT work station communicates in real time with the resident’s computerised socio-medical file, the information is automatically stored in Mythos, the care software of the Forum Care Interactive solution installed on the managers’ PCs.
plete rest give To guarantee the quality of the global solutions it offers, Belgacom has chosen to work with partners whose commitment and professionalism are beyond question. The Forum Care Interactive solution was therefore developed in cooperation with the companies Bloom Healthcare Intelligence and Headstart, both subsidiaries of the Niko group, specialists in automation. User satisfaction is the reward for this demanding approach.
Success & innovation indicators • 79 full-time equivalents including 14 nurses and 30 care assistants: By working with more staff than required by the standards, the home gives priority to quality of care. • 118 beds and a long waiting list: concern for the well-being of residents, quality of the care provided and numerous organised activities make this a popular establishment for those who want a ‘living place’. • As the home’s philosophy is to spend the maximum possible amount of time with residents by constantly questioning the way things are done, it selected automation solutions that would contribute to improving the quality of service.
Filip Lauweres Where is the online sales agent?
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Filip Lauweres Founder & COO of Netmining
Have you ever asked yourself the question where the largest showroom of a brand is located? Your first answer is probably cities like Brussels or Antwerp. Guess again…your largest showroom is online. Everyday, thousands of individuals visit your web site and no other ‘traditional and in real life’ showroom can boost a better result. Nevertheless, no sales person is online to meet the need of your web visitors in search of buying a product or a service. The internet is so much driven by hypes, technical break-troughs and marketing innovations that it is odd that an e-sales person is not yet a common feature on all business sites. Of course you have prospects already today ending their online journey with filling in forms and starting chats with sales people. But this is only a very small percentage of all visitors who visit you online. What is missing in todays internet landscape to ensure a bridge between the internet on one hand and the sales process on the other? I think that overall the next step is making sure that the websites deliver concrete performance, such as driving sales, is delivering the right content and facilitating dialogue with customers and this in a more pro-active constellation. And, in that trend - personalisation and interaction - will be key. Active personalization through behavioral targeting is the first key element. Because of the near-infinite variety of content available online, customer engagement becomes increasingly important. Just providing “sticky” – attractive – content is not enough any more; matching this “sticky” content to the individual website visitors is becoming necessary. The right content, delivered at the right moment and to the right audience will be one of the leitmotifs of the e-future. If you look at the success of television on demand, web content management systems and interest-specific blogs you see the huge potential. But … all of these technologies are based on declared personal preferences. You have to select actively your interest in jobs, news, movies and the website will in return adjust its content.
This approach is changing as we speak. More and more websites are adopting their content not only in line with the declared interest of web visitors but also based on their un-declared or “behavioral” input. This is basically done by analyzing the history of the online behaviors of an individual or a group of people and by observing their behavior in real time. Based on this, websites today can predetermine the true – undeclared – interests of the website visitors. This analysis is called behavioral targeting and is far more powerful than the current methodologies. If used in a proper way – in line with privacy laws – this approach is highly beneficially for the online audience. Behavioral targeting can be used to show the right white paper, product information or movie to the right audience. Or why not, to show the right job opening out of a data base before a visitor have found it. The result of this trend is a much better user experience and more repeat visits to companies’ websites – in other words, more customer engagement. Cross-channel Interaction is the second key-input. Though people do more and more things online, it is the blend of the online with the off-line – the clicks and the mortar – that really helps the companies get the most out of their websites. Keeping this in mind and combining it with technologies such as behavioral targeting it will be the core of successful business websites in the future. New and smart technologies – such as behavioral targeting - can be used it to blend online interactions with real-world, human interactions. By connecting the internet to the right “real life” interaction channel – a paper brochure, an instant messaging chat, a phone call – the websites will become what they should be: a business tool that brings return on investment.
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Mechatronical Engineering Belgium makes machines and plenty of them. In the mechanical sector, companies like Hansen Transmissions, Pauwels Trafo, LVD and Picanol have strong positions in their world markets. Picanol especially is a success story that is built on innovation. It develops weaving equipment for the global textiles industry. Some time back it developed a new “direct drive” technology in weaving equipment, which subsequently placed the company in a near monopoly position in the world market. Punch Graphix is one of the most dynamic companies to have emerged in recent years. Via strong R&D investment and an aggressive acquisition strategy it has built up a world position in digital printing and pre-press technology. Its bigger brother, Agfa’s Graphics division, remains a world leader in printing technology.
Aerospace
“the internet is so much driven by hypes, technical break-troughs and marketing innovations that it is odd that an e-sales person is not yet a common feature on all business sites.“
Although Belgium had a strong pioneering background in air travel (one of the first airports, one of the first helicopters), that tradition almost disappeared following World War II. In Wallonia the sector remained reasonably large but was focused mainly on the military. However, at the close of the cold war even that industry began to decline. That is, until the last decade or so. Since then both the Wallonia and Flemish governments have attempted to stimulate a new emerging aerospace sector that is geared toward non-military aerospace, and that is focused on the supply of components and technology to European-level aerospace consortiums (such as Airbus). In Wallonia today, the aerospace sector employs approximately 7000 people and generates a total turnover of 1 billion EURO. In the Marshall Plan framework two competitiveness poles have been set up, one dedicated to aeronautics and another to space. The aeronautics cluster gathers seven main regional players (Alcatel Etca, FN Herstal, Forges de Zeebrugge, Sabca, Sonaca, Techspace Aero, Thales Communications Belgium) and a large group of innovative SMEs working in engines, structures, systems and equipment technologies. The pole also set up a dedicated research centre, CENAERO, specialised in simulation technology. This research centre also functions on the basis of collaborative R&D, involving companies and universities. Wallonie Espace,
the space cluster, is particularly prominent in the Liege region. On the whole, the feedback on Wallonia’s initiatives in these sectors is positive. Projects are being set up, new forms of collaboration between universities and industry is emerging, and success is being booked. Wallonia companies are working on a wide range of development programmes linked to companies such as Airbus, Boeing, Bombardier, Dassault, GE, Snecma and others. In Flanders the aerospace sector had to be rebuilt practically from scratch but via the industry body FLAG (Flemish Aerospace Group) some real progress has been made. FLAG’s mission is to look for technologies and competencies in other sectors in the Flemish economy that are applicable to the aerospace sector, especially to the large Europe-backed aerospace projects. FLAG currently counts approximately 30 Flemish companies active in the aerospace sectors. The strongest businesses in this area today are BARCO (board avionics and display systems) and ASCO (structural elements of aircraft). Companies such as LMS International and Metris are also important suppliers to the aerospace industry. LMS, for example, develops software to measure strain, noise, vibration for companies like Airbus and Boeing. Metris’s 3D measuring systems, though mainly used in the automotive industry, is being picked up by the aerospace industry. Septentrio, with its advanced satellite navigation receptors, is an emerging player in the sector. FOS&S (fibre optic sensors – see page 72) and Xenics (infrared camera technology) are examples of smaller innovative companies that are being pulled into large projects around Airbus.
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Danielle Jacobs ICT and innovation: ICT clearly plays a role in the innovation process
90
Danielle Jacobs Director BELTUG (Belgian Communications Technology User Group)
ICT plays a vital role in the development of the knowledge-based economy. Most innovation projects rely fundamentally on ICT and an increasing number of companies consider ICT to be a strategic factor in their organisation. According to research done by Heliview, 64% of service organisations indicate that ICT at a strategic level is of vital importance. In the industrial sector opinions differ, but also there, for more than 40% of companies ICT is of real strategic importance.
solution because it is not real-time. Chat technology, and audio and video conferencing are ideal though. Temporary teams can be formed easily, even across borders and time zones. The physical location of employees is no longer a determining factor. Also engaging external employees is made possible easily. And you can go even further, the information channels between several companies can also be integrated (temporarily). Indeed ways of collaborating can be developed across several companies.
Today, the expectations of companies and government institutions concerning the use of ICT differ markedly compared to some years ago. Each year we survey BELTUG members (mainly large Belgian companies and government institutions) regarding their priorities in the field of communication technology and services. Until a few years ago these organisations were chiefly concerned with the more technical aspects, such as managing their ICT network. Today they want to know above all how ICT offers new ways for improving productivity, for strengthening their competitive positive, for introducing new products or services, for cost reduction, etc.
Clearly, ICT allows people to work in different ways. Partly due to communication technology developments, the line between professional and personal lives has become blurred and as a result of this evolution companies are faced with tremedous new challenges. ICT lies at the root of this evolution, but also offers part of the solution. Working from home and flexible working hours are only two of the new possibilities that allow employees to make their lives more manageable.
As such, ICT is no longer solely the domain of the ICT manager. Increasingly, it is a responsibility shared by various individuals across the organisation. The lines of business are looking to ICT to support and develop their core business. Also, corporate management wants to align ICT more fundamentally to the company’s corporate strategy. And Marketing and Human Resources increasingly see an added value in the new technologies. Innovation plays a key role in the improvement of productivity. Frequently it is the innovate application of ICT that leads to productivity enhancement. And not only productivity in general—the innovation process itself can be made more productive and effective in companies via intelligent use of ICT. For example, creativity and innovation are stimulated by working in small teams, by giving people freedom. Also, innovation starts with knowledge, especially the sharing of knowledge, which leads to the stimulation of new ideas. Thanks to the mobility that ICT provides, companies can structure themselves into virtual workgroups, spread across different countries and organisations. Email often is not a viable
Companies must be creative in the possibilities they offer to (potential) employees, both in ICT tools (software, working from home,…), as well as in the way in which they organise their work. Presence based control is in every way much less pertinent today. Mobility has become more important. People want to be able to work where they want, with the same communication resources as they would have in the office, and with the possibilities they know from home. We are evolving rapidly in a new style of working. Organisations which anticipate this are a step ahead in attracting new people. Companies are clearly driven by the expectations of their younger employees, who are used to chatting and being available wherever they are. This revolution is not so much a technical revolution, as a cultural and organisational revolution. But people and therefore also organisations have by nature a capacity for change. Companies that effectively use ICT to innovate tend to display a certain “agility”, a capacity to renew continuously, precisely because the fast technological evolution almost dictates it. Innovation may not always be technical, but technology surely helps in stimulating and facilitating the innovation process.
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frequently it is the innovate application of Ict that leads to productivity enhancement.
Civil Engineering Mention must be made of Bureau Greisch (see page 106), in the ďŹ eld of civil engineering. Located in the University of Liegeâ&#x20AC;&#x2122;s science park, this innovative engineering bureau is responsible for some phenomenal engineering feats around Europe. Its most well known work is the engineering work for the construction of the viaduct of Millau in France, the tallest viaduct in Europe. The construction was achieved by launching the deck of the bridge from both valley sides. Given the extremes in weight, height and length, this was a world record. The key to their success is their innovation strategyâ&#x20AC;&#x201D;in partnership with the University of Liege, they have developed (and continue to develop) a state-of-art simulation tool for calculating forces in complex civil structures.
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CVWarehouse reinventing e-recruitment
92 CV Warehouse Duboisstraat 50 2060 Antwerpen Belgium T: + 32 (0)3 202 42 20 F: + 32 (0)3 248 64 91 www.cvwarehouse.com • Business Model & Process Innovation • Science & Technology • Design & Creativity
CVWarehouse delivers as a single integrated solution, the answer to many recruitment challenges modern companies face, by bringing the classic job-site and tracking systems into an integrated and highly efficient service.
CVWarehouse platform that allowed them to collaborate with their clients over the web. A combination of solid organic growth and venture capital funding has allowed the company to embark on further development work, resulting in the current improved version of CVWarehouse.
Research shows that ‘high potential’ applicants typically have a job and are only open to other opportunities during periods of frustration while being at work. For such candidates, speed, simplicity and especially confidentiality are critical, which is exactly what the CVWarehouse platform offers: no cumbersome registration procedures with guaranteed confidentiality via its patented technology.
So what is the key innovation here? How does CVWarehouse manage to deliver value to companies such as Brussels Airlines, Kraft Foods and Acerta? Essentially it comes down to the way various components are combined to create a remarkably integrated and effective solution. This integration is established with state of the art technology in a fully integrated WEB 2.0 concept and environment. Usually the recruiting process will weave through at least three different, typically unconnected systems: i.e. public job sites (e.g., Monster), job sections on company websites and a company’s internal tools to track applicants (which can range in sophistication from mere Excel to a full-blown CRM system). Understandably, this fragmented state will lead to problems and efficiency loss (cumbersome registration procedures, re-entering information in different systems, information loss, confidentiality concerns). CVWarehouse solves these types of problems by offering
Research also shows that most companies get 70% of their recruits through high cost channels, such as agencies and advertising; while only 30% comes from low cost channels like their own website. CVWarehouse helps companies to turn this pattern around, saving costs and improving the effectiveness of their recruiting efforts. Essentially CVWarehouse is an integrated service platform that matches companies and candidates in a confidential and efficient way. Candidates can leave their CV or apply online for specific vacancies in a simple, fast and confidential manner. Companies can access the service-platform through a web portal and, most importantly, can integrate the solution with their own company website, avoiding major IT investments. On top of that, the solution offers an easy to use, on-line and integrated model to manage all candidate applications. Hence it combines the strengths of a job site and an applicant tracking system, but does so in a very intuitive way for both companies and candidates. With a candidate hotline, an end-user support line as well as proactive services matching candidates to the right job or company, CVWarehouse offers software and a service. CVWarehouse was set up in 2006 by Inge Geerdens (currently CEO of CVWarehouse) and originated from her Antwerp-based recruitment and selection agency Executive Research. Realising that she could address her clients’ needs more effectively via a good applicant tracking system, Inge scoured the market for a suitable tool. Not fi nding an appropriate tool the company began developing its own tool, which ultimately resulted in the fi rst version of the
in a single solution an application tracking system, a platform for creating a job section to the company website, and linking all of this to a central job site and database where candidates are guaranteed confidentiality. Finally, an element of human service is added to ensure the matching process works as effectively as possible. So, CVWarehouse clients are offered ‘virtual private’ applicant management systems that are hosted within a centralised CVWarehouse system. Companies are able to maintain comprehensive files on their candidates, including photos, test results, evaluation forms, all of which is kept private from other CVWarehouse clients. Although candidates are able to present their personal data to known parties only, they do not miss out on opportunities with unknown parties. How? Candidates can activate a separate option to be kept informed on future opportunities by CVWarehouse only. Companies that use CVWarehouse can search for and find a blinded profile of such candidates and ask CVWarehouse to invite the blinded candidate to review their job opportunity. Only when the candidate is interested, will he or she reveal his or her full identity and profile. This allows companies to find latent talent and allows candidates
Success & innovation indicators • Patent pending for innovative e-recruitment solution • Commenced operations 2006 • 80 major clients • Used in 15 countries • 120,000 registered CVs to stay anonymous but not miss out on interesting opportunities. The result? Across the past three years CVWarehouse has earned a reputation as one of this country’s most impressive erecruitment solutions, suitable for companies of all sizes and in any sector. On a daily basis, the site attracts over 1,500 candidates and processes 200 to 500 job applications. The CVWarehouse database has grown to 120,000 candidates who regularly maintain their profile.
CVWarehouse is built by recruiters for recruiters. New releases of CVWarehouse are based on continuous input from the professional user community and from candidates. Looking ahead, CVWarehouse will continue to invest both in its technology and its customer service team. Both elements are critical to the firm’s success. Expanding flexible services on top of a highly reliable and efficient platform is the way forward. For Inge Geerdens, the CVWarehouse model is based on software and service. The technology is an important differentiator but simply isn’t complete without the human service element.
Elia Subtle innovator in the electricity market
94 ELIA Keizerslaan 20 1000 Brussel Belgium T: + 32 (0)2 546 70 11 F: + 32 (0)2 546 70 10 www.elia.be info@elia.be • Science & Technology • Business Model & Process Innovation • Design & Creativity
BUSINESS DESCRIPTION AND HISTORY “In the highly complex energy market there is one stakeholder we do not hear about much, yet who plays a key role: the electricity transmission system operator.” That was how an article published in a major Belgian daily newspaper began its comments on Elia’s 2007 results. For our company, this key role means operating proactively in multiple domains in Belgium and Europe, in our relations with our customers and regulators, in our maintenance efforts, in designing new facilities, and in devising operating rules linking network technology, sustainable development and the operation of electricity markets. Elia is the Belgian transmission system operator, transmitting electricity efficiently, reliably and safely from producers to distribution system operators and major industrial users. Elia owns almost the entire Belgian high-voltage grid (380 kV tot 30 kV). Its grid comprises 5,650 kilometres of overhead lines and 2,717 kilometres of underground cables, and is a key link between electricity markets in northern and southern Europe, as well as between Belgian producers and consumers. As a result of recent investment in interconnection capacity with neighbouring countries, Belgium has become one of the most open and interconnected countries in Europe. Elia was created on 28 June 2001. As an independent transmission system operator, Elia has become a trendsetter in Europe by developing and applying new market-driven mechanisms and systems, which enable market participants to deliver the benefits of the liberalised electricity market to their customers. As the Belgian transmission system operator, Elia has a legal monopoly awarded by the federal government in 2002 for a renewable term of 20 years. The Flemish, Walloon and Brussels regional governments have also appointed Elia as system operator for the 30 to 70 kV high-voltage networks, for which they are competent. Elia’s transmission tariffs are approved by the Commission for Electricity and Gas Regulation. Elia is also trendsetter in corporate governance. All directors are non-executive directors; of whom one on two is independent, appointed by the general meeting and having received a positive unanimous opinion by the Commission for Electricity and Gas Regulation on his or her independence.
Independent directors are independent of any market party in the electricity market and any shareholder with a stake above 10%. Elia’s corporate governance rules are a guarantee for an open and transparent treatment on an equal base of all electricity market parties. The European Commission considers this model of corporate governance of an independent transmission system operator as an example for unbundling between electricity generation, transmission, distribution and supply in Europe.
INNOVATION ACHIEVEMENTS: MORE THAN MEETS THE EYE We usually associate innovation with new products, such as a mobile phone or a microwave oven. Innovation, however, can take a lot of forms and is not necessarily visible. If we look at the liberalisation of the electricity market, one could rightly say there is not much visible change, except for the company that invoices you after you switched from supplier. If high-voltage infrastructure still looks pretty much the same, procedures and software systems in the electricity market have completely been redesigned. Ronnie Belmans, professor electric power and energy systems at the University of Leuven and the European Energy Institute: “The implications of the liberalisation of the electricity market in Europe for the electricity sector were extremely profound. The electricity sector had to change all systems and modus operandi at the same time while ensuring that no one would notice any difference in its power supply. It is like changing all systems and wires in an Airbus A380 in full flight.” Elia took up the challenge and has organised and designed the Belgian electricity market in an innovating way with a focus on giving the market players the tools to enable them to deliver the benefits of liberalisation to their customers. The market will, of course, need to continue to adapt itself to take up the challenges imposed by the need for sustainable development and security of supply. Elia was the driving force behind the setting up of the Belgian power exchange Belpex and the development of the software system that performs market coupling of the electricity spot markets in Belgium, France and the Netherlands. Its partners in this adventure were the Dutch and French transmission system operators and the
Dutch and French power exchanges. Belpex and market coupling started operations in November 2006. Coupling several electricity markets implies handling their respective supply and purchase curves jointly by matching the highest purchase orders and lowest sales orders, regardless of where they have been introduced, but taking into account the available interconnection transmission capacity on the borders. The overall aim of market coupling is to maximise the total surplus of all participants: cheaper generation in one country can cover more valuable demand in another country. This coupling implies an energy flow across the borders and is therefore limited by the available cross border capacity. When no congestion occurs on borders between coupled markets, they form a zone of unique prices. When the demand is higher than the available interconnection capacity (congestion), there remains a price difference between the coupled zones, which is brought down to a minimum by saturating the available capacity. It is all about creating a win-win situation in the three countries. It was the first market coupling of this kind in the world. This development offers market participants in the three participating countries access to an integrated electricity market, encompassing the three countries.
Such a remarkable achievement was noticed by the European Commission, which endorses an extension of market coupling to Germany and Luxemburg. After completion, it will create an integrated electricity market with more than 170 million inhabitants and 40% of electricity consumption in Europe. Elia has of course other arrows in its quiver. It is consortium leader of European Wind Integration Study, an international study funded by the European Commission. The European Wind Integration Study is an initiative established by the associations of the European transmission system operators. It aims to work with all the relevant stakeholders especially representatives of wind generation developers. The development of wind power is crucial to meeting the European Union’s targets to mitigate climate change and for developing renewable energy. As the front runner renewable electricity production technology, wind power is already achieving substantial market penetration in some areas and significant further growth is expected and desired. Such development contributes to securing Europe’s energy requirements, ongoing prosperity and competitiveness. There is definitely more than meets the eye behind our wall plugs.
Success & innovation indicators • Transmission tariffs have decreased by 27% since 2002 as a result of permanent innovation and cost reductions • Elia and Belpex received the Belgian Legal Awards 2007 for the groundbreaking legal work associated with the setting up of Belpex and trilateral market coupling • Elia is consortium leader of European Wind Integration Study, a Europeanwide study on how to best accommodate wind energy on a large scale into the electricity transmission grids
SKYSCAN The smallest detail in 3D
96 SKYSCAN Kartuizersweg 3B 2550 Kontich Belgium T: + 32 (0)3 877 57 05 F: + 32 (0)3 877 57 69 www.skyscan.be info@skyscan.be • Science & Technology • Business Model & Process Innovation • Design & Creativity
SkyScan NV is one of the most important players worldwide specialized in three dimensional (3D) imaging of the internal microstructure of objects in a non-destructive, non-invasive way using microCT (Computer Tomography) technology. In other words, by using the instruments of SkyScan it is possible to look inside an object without damaging it. There is no need for any sample preparation. The technology is comparable to the medical CT scanner (or CAT scanner) where one is able to look inside the human body without cutting (non invasive) by using X-rays. SkyScan combines the basic concept of the medical scanner with X-ray microscopy. This allows to see details down to 300 nanometers (0.0003 mm), one million times smaller details than the ones that can be seen with a medical scanner. The microCT scanners of SkyScan are used in a very broad field of applications: biomedical (e.g. bone and tissue), materials (foams, fibers, textiles, ceramics), electronic components, geology, wood, paper, seeds, and more. Also small live animals (mice and rats) are scanned for pre-clinical studies.
SUCCESS & INNOVATION INDICATORS • 1996 prototype at the university • 1997 founding of SkyScan • 1997 fi rst commercial product • 1998 worldwide sales network • 2000 fi rst profi t • 2001 world’s fi rst high resolution invivo microCT scanner • 2002 break even • 2004 original fi rst scanner re-engineered • 2005 fast in-vivo scanner • 2005 world’s only supplier of • nanoCT scanner • 2006 company buys own building • 2007 device allowing to do microCT in an electron microscope • 50% of personel involved in R&D • Partnerships with university labs • Worldwide market share of 30-40% • Compound average growth rate (CAGR) 2004-2007 is 28%
The company was founded in 1997. One of the main founders is prof. Alexander Sassov. In the late eighties he was the fi rst scientist worldwide to publish results on microCT, a breakthrough in the scientific world. He continued his work as a professor at the universities of Moscow, Reims and Antwerp. In 1996 he built a prototype of a standalone microCT scanner at the University of Antwerp. In 1997 SkyScan was founded to commercialize the technology. Since then several instruments have been developed serving specific needs in the market. Today Alexander Sassov is the research director of SkyScan. The mission of the company is to deliver the highest possible resolution in CT scanning. In other words, offering a technique to see the smallest details in an object in 3D, without damaging the sample. To realize that one needs profound scientific competences in research and product development. Besides the high-end hardware, specific software algorithms are a crucial element to realize the mission. Users do not simply want pretty images, but also need to be able to process and analyze the 3D images and calculate specific parameters. Continuous innovation is at the heart of the company. For ten years now the technology of SkyScan is state of the art worldwide. To keep this position in the future, technology innovation is fundamental. One way of doing this is by improving the existing instruments using currently available knowledge and experience. A second way is to aim for disruptive innovation by doing fundamental research. At SkyScan both ways are applied via a combination of in-company R&D and research projects in collaboration with universities and other companies. SkyScan has an open innovation approach where close contacts also exist with suppliers and the end-user community. For example, every year the company organizes a meeting where the user community comes together for several days, to have in-depth discussions about the performance of the instruments, their current limitations and how future needs are developing. SkyScan has a customer intimacy strategy, where it is not only important to deliver state of the art instruments, but also high level services that help the customer to solve his/her specific scientific or technical problems. Internal application engineers are available for this purpose.
“Continuous innovation is at the heart of the company” One of the recent important achievements is a device that is able to generate 3D images using an electron microscope. This unique system is very easy to install as an attachment to a SEM (Scanning Electron Microscope). These microscopes are only capable of imaging the surface of an object in high detail. Using the SkyScan SEM-kit one is able to access the 3rd dimension, offering a whole new range of possibilities. Key here is that one can visualize the internal structure of the object. Today, all activities (R&D, product development, production) of SkyScan are concentrated near Antwerp. But for sales purposes there are distributors in more than 20 countries. This is because more than 95% of production is for export. Systems are installed worldwide, even in Antarctica and the Himalayas, where they are used to analyze the 3D structure of ice crystals and snow: this to make mathematical models to predict avalanches. SkyScan is well aware of the importance of human capital. Having well trained, creative and motivated people is essential to realize the mission of an innovative company. Growth prospects are closely related to knowledge workers. Because knowledge is an invisible asset that resides largely in the minds of human beings, management can no longer be about close observation and monitoring. Knowledge workers can’t be ‘managed’ in the traditional sense of the word. This type of individual can only be led, not managed, by visionary, inspirational leaders who build trust and mutual respect in their organization.
Karel Vervoort Aerospace sector re-emerging in Flanders
98
Karel Vervoort Managing Director FLAG
FLAG is a non-profit organisation established in December 1980 as one of the Technology Development Groups, under the auspices of the Flemish Employers Organisation (VEV), and within the framework of the “Third Industrial Revolution in Flanders” actions (DIRV Program) launched by the first Chairman of the First Regional Flemish Government, Gaston Geens. FLAG was tasked to bring Flanders back into the Aerospace Industry after having been part of the early development of aviation in the period before World War II, as manufacturer of indigenous airplanes and even of the first helicopter prototype. After World War II, the Belgian and European aerospace industries were in ruins, and many an old car and aircraft manufacturer disappeared forever with it. The US Marshall Plan filled up the economic vacuum in Europe , brought back on its feet the traditional industries, and did later lead to the creation of the European Community for Coal and Steel (EGKS), the early predecessor of the European Union (EU). The European Aerospace sector took longer to get back on its feet. With the advent of NATO and the Warsaw Pact, the beginning of the Cold War and the Korean War, many Western European armies and air forces were equipping mostly with loaned military systems, fighters and even transport aircraft from the USA under the MDAP Program (Mutual Defence Assistance Program). This US gesture did retard even more the resurrection of a true indigenous European aerospace industry. Moreover, the European nations tried for years to redevelop their national aerospace industries on a national basis, with a whole series of tremendous failures and setbacks, and only few real successes except that it kept the brains and design offices working. France and the United Kingdom then decided to make a quantum leap in developing the first supersonic airliner Concorde, a tremendous technological success, but commercially not viable. The same phenomena happened in the space industries, where European nations tried first individually to re-establish itself in space, but failed. After all these individual trials and failures to develop a true European Aerospace Industry, it was finally by pulling all the European resources together
and with the advent of Airbus, ESA and the Ariane space program, that a more and more economically uniting Europe regained some of the lost terrain of WWII. The success of Airbus lead to a breakthrough in the late nineties, and finally the year 2003, the first year in which Airbus and Europe sold more airliners than Boeing and the USA . In the field of military aircraft, some European nations tried very hard individually to catch up with the USA , but again failed. They decided too late to unite all European resources in the military field to build a generation of fighter aircraft, military airlifters, tankers, Awacs, surveillance planes and UAV’s, comparable to the latest USA generations. Finally, the decision to built the first really European military airlifter, from FLA (Future Large Aircraft) to the Airbus Military A-400M, has the potential of breaking the USA military airlifter monopoly for the first time after WWII, and to stop the legendary C-130 from going on forever. Also the European tanker development of the highly succesful civilian airliner A-330 into the A-330 MRTT was crowned with success when it won the USAF tanker competition in 2008. However, combat fighters, AWACS and UAV’s are domains in which Europe fails yet to be competitive with US and Israeli products. The smaller nations, such as Belgium after WWII, were forced to recover slowly by assembling, build-to-print, co-produce, licence-produce and maintain, repair and overhaul military aircraft, used by the air force, to slowly build-up capacities that made them able to associate with Airbus and ESA programs later. As long as Belgium was a Unitarian State, there was a non-written national industrial policy after World War II to establish the aerospace and defence industries in the South ( Wallonia ) and Brussels area, while the Northern part of Belgium, Flanders was to develop shipbuilding and the telecommunications sector. This kind of “communist style state directed plan economy” went overboard when the Belgian nation started to become a Federal State in the early 80’s, and the increasingly autonomous Regions started to develop their own economic policies. This is where FLAG was called in to re-establish Flanders in the field of aerospace through two major strategic actions: the use of foreign offset obligations to create or expand our own and new
continued from p. 91
technology niches, products and services in the aerospace field, and the push for innovation studies and projects in the aerospace domain to ready ourselves for the role of supplying to any major international aircraft building programmes. The ultimate aim and FLAG philosophy was to become a supplier for “a hundred items to each and every aircraft” built in the world, instead of even trying to re-establish ourselves via the assembly or coproduction of military aircraft or systems into the building of complete aircraft. This strategic option now sounds obvious, it was not in 1980! It also explains why the aerospace industry in the North of Belgium is different and complementary to the more traditional aerospace industry in the South of Belgium. The results are rather spectacular. Companies that did start up with FLAG in the early years, like ASCO and BARCO, became world champions and world players in their selected technology and product niches about twenty years later. Through highly innovative projects, FLAG is breeding a whole new generation of AeroSME’s, which we hope will be joining the early world leaders in an even shorter time period. Whereas only 3 FLAG members supplied to earlier Airbus aircraft, to-day 11 FLAG members are working on the A-380 development and production, and 4 on the B-787, while others are to follow. Our suppliers deliver to any major aircraft system in the world now, from the steel cord in the aircraft wheel tires, over the most essential hard metal critical subsystems and structural components, to complete avionics suites, software systems and contributing with unique technologies. Some of our smaller AeroSME’s are again building general aviation and VLA aircraft and engines after an absence of more then 50 years in this field! The Flemish Government actively supports our aerospace sector through the IWT and FIT governmental agencies. FLAG also became the innovation front office, on behalf of the IWT and Flemish Government, for the aeronautical industry. More then 95% of the production of our member companies is for export! FLAG is also the partner of the Federal and Regional Governments and their agencies.
Managing Innovation in Engineering
FLAG was tasked to bring Flanders back into the Aerospace Industry after having been part of the early development of aviation in the period before World War II
With the exception of companies like Netlog, many of the Belgian success stories mentioned in this article are niche players, companies that dominate a specialised technological area but do so at a global level. What makes these companies successful? Looking at the innovation process at companies like ICOS, LMS International and Metris (read CEO Bart Van Coppenole’s statement about the role of company values at Metris on page 164) it is clear that it is not simply a matter of throwing money at R&D. Equally important are a customer-or market-focussed innovation strategy, good processes, internationalisation and ‘open’ innovation. Take LMS International as an example. LMS develops and markets worldwide testing systems and simulation software to the mechanical industries, i.e. automotive, aerospace, tractors, printers, etc. It clearly is an innovative company. It spends approximately 30% of its total expenses on R&D and frequently comes up with breakthrough technologies and applications. LMS is focussed on supporting its customers in their product development process. LMS’ testing systems and simulation software allows such companies to engineer more innovative products, to speed up product development and to reduce costs via ‘frontloading’ the development process. Hence innovation for LMS is all about understanding client needs, which has necessitated their international presence. It is this customer focus which has determined their product strategy (and hence innovation strategy). The company’s roots are in testing systems, where it achieved its first technological (and commercial) breakthroughs. With advances in numerical analysis and simulation during the 1980’s, LMS also developed a strong business with simulation software, in parallel to the testing systems business. Note that at the time this was an entirely new technology and competency for them – which was built up both organically and via acquisitions. The point was to follow market need and exploit the potential for synergies.
continued at p. 105
AeroGo Europe Moving the world on air
100 AeroGo Europe NV Kloosterstraat 107 BE-2180 Ekeren Belgium Tel.: +32 3 546 39 00 Fax: +32 3 546 39 39 www.aerogo.be www.aerogo-europe.eu info@aerogo.be • Science & Technology • Business Model & Process Innovation • Design & Creativity
AEROGO IS ONE OF THE WORLD’S LEADING INTERNAL INDUSTRIAL TRANSPORT COMPANIES USING UNIQUE AIR CUSHION TECHNOLOGY. “Heavy and delicate load moving using air cushions is the core of our business,” says Christian Vanderstichele, managing director and owner of the Belgian-based AeroGo Europe. “Our record is a monumental 5.200 tonnes but in theory there is no limit. Everything is movable.” Founded in 1967 as a division of Boeing, AeroGo Inc has a long history and covers the globe. The air bearing technology developed by General Motors in the 1950s was perfected by Boeing and applied in the construction line of the Boeing 747. From its inception AeroGo Inc quickly became active throughout the world as applications for this simple but revolutionary technology became apparent. To serve its burgeoning European customer network, in 1990 AeroGo Inc acquired the Ekeren-based Belgian company M Claessens, which manufactured specialised containers, to act as a sales, manufacturing and support centre serving half of the world. In 1997 Vanderstichele acquired AeroGo Europe through a management buyout, under the name “Industrial Transport Systems NV”.
AeroGo Europe concentrates on the development, production, sale, maintenance and repair of client-specific industrial transport applications using air bearing technology in Europe, Africa and the Middle East. The company has a number of standard air cushion products which they sell and maintain in these regions through an authorized dealer network. They also work with clients on a number of specialised industrial transport systems using wheels, rails and air cushion technology or a combination of them. The equipment works excellently in a factory setting but equally well on a customised project basis, as long as the ground surface is level and the structure is closed
SUCCESS & INNOVATION INDICATORS • Clients include NASA and the European Space Agency • Maximum load moved = 5.200 tonnes • Founded as a division of Boeing in 1967
INNOVATION ACHIEVEMENTS The core air bearing technology perfected by Boeing in the 1960s has been the major innovation achievement, allowing AeroGo Europe to move everything from jumbo jets and huge ships to entire assembly lines. Anything that is heavy, delicate and which needs to be moved over relatively short distances can be moved quickly, safely and at relatively low cost. Since that first breakthrough innovation in the 60s, the engineers and designers at AeroGo Europe have continued to innovate, adapting fluid film (air and water bearing) technology for a variety of uses and settings. Standard products using the trademarked Aero-Caster® air cushions include Load Module Systems™, Aero-Planks™, AeroPallets™, Rollmovers™, Rollmasters™, Aero-Jacks™ and water casters. Engineered products using the technology comprise an assortment of different sized transporters, going from automated guided vehicles (AGVs), over transporters for aerospace or shipyard applications, to coil & reel transporters, lift tables, manipulators, tool changers and turntables.
Innovation management
“Move smarter using air” The advantages of air cushion equipment over forklift transportation, to take one example, are several. Forklifts concentrate the load weight on the front wheels, they are noisy, dirty and potentially damage floors. Air cushion transporters on the contrary are lightweight, high tech, clean and adjustable with easy movement in any direction. Air cushion movers can be used in small spaces where other equipment such as cranes are not practical. Moreover the Aero-Caster® technology allows for fine precision manoeuvrability. The absence of moving parts also allows it to be used in “cleanrooms”.
AeroGo Europe’s team of designers and engineers insists on a clear conception of the client’s needs for specific projects, whether they are delivering standardised modular equipment or custom-engineered products. The company operates from a relatively small headquarters in Ekeren with a staff of only 28 people. Fully aware that industry tends to be conservative towards the adoption of new technology such as air cushion transport, Vanderstichele has been careful not to grow the business too fast and cause it to become financially over-extended. Nevertheless, the company currently achieves a turnover of EUR 4 million, which climbs annually. AeroGo Europe has an impressive list of clients which includes NASA and the European Space Agency. Exports account for over 85% of equipment sales and AeroGo Europe is able to draw on an extensive network of sales and support distributors through the European Union. AeroGo has cornered the market in air cushion equipment system provision throughout the globe.
HSH Aerospace Finishes Finishing up: high flying safer aircraft
102 HSH AEROSPACE FINISHES HSH AEROSPACE FINISHES Research Park 130 1731 Zellik BELGIUM T: + 32 (0)2 481 10 65 T: + 32 (0)2 481 10 66 www.hsh.be info@hsh.be • Science & Technology • Business Model & Process Innovation • Design & Creativity
Not everyone will have heard of HSH Aerospace Finishes, but anyone who has travelled extensively by airplane has probably come into close contact with this company’s innovative products. That’s because HSH is a technology leader in the niche but vital market of coatings for aircraft cabins. Providing top-of-themarket interior coating products to both OEM aircraft manufacturers and airplane repair companies, HSH has led the way in ecological, safe and cost-effective solutions, proactively addressing the main challenges the airline industry faces.
BACKGROUND HSH Aerospace Finishes was founded by Hans Helsdingen in the early 1980s in Zellik, strategically located near Brussels. Beginning with a single product targeted to the aircraft repair market, the product range evaluated into a complete list of coating materials sold around the world to both OEM and repair stations, the so called MRO’s. The company manufactures the INTERPLAN range of non-toxic, water-borne products for aircraft interiors. These scratch resistant, easy to clean and fast drying coatings comply with a host of regulations and standards, including FAR 25-853, ATS 1000-001 and ABD 0031 specifications for heat release, smoke emission, flammability and toxicity. The HSH INTERPLAN range includes primers, fillers, topcoats, sealers, noncrazing cleaners, paint additives, in-mould coatings, and other specialties such as nonphenolic, non chlorinated paint strippers.
SUCCESS & INNOVATION INDICATORS • Water-borne primers, fi llers and topcoats for aircabin • “Green” product line • Extremely short drying time • Unique thermo formable paint • In mould coating for composites parts • Coatings for OEM and Maintenance
INNOVATION ACHIEVEMENTS HSH’s strength in innovation is rooted in its very beginnings. Early in the company’s history, Hans Helsdingen developed the fi rst water-based coating for cabin interiors. This visionary step came well before the dangers of solvent-based coatings, such as toxicity and environmental damage, were known. It also preceded regulations like the EU REACH legislation that came into effect in 2007, which covers the production and use of chemical substances in all industries, not just aerospace. Since that auspicious beginning, HSH has continued to work to develop products that are both ecological and cost-efficient. A recent example is the new in-mould coating. Increasingly, components for aircraft interiors are made from composite materials that are shaped using moulds. HSH has developed the idea to apply the coating already in the mould, so before the manufacturing of the composite part. This innovation cuts several production steps, saving money and time – key success factors for specifically the OEMs. The company has also introduced thermoformable coatings. These flex with the material during moulding, making this a cost-effective technique for short production runs and if special colours are required.
to cleaner,
“Pressing the limits in design & innovation” HSH has a fleet of similar success stories in its product hangar. Its INTERPLAN 100SP fine pore filler is the only one certified by all of the worlds’ major OEMs. INTERPLAN 1065B one-component finish coat is the ‘classic’ and preferred MRO product for all major airlines, and is used in every corner and continent of the world. INTERPLAN 1083 two-component finish coat is the only feasible alternative to traditional polyurethanes for aircraft interiors. INTERPLAN 1200 fire-resistant primer/filler is the only primer that easily meets the OSU 55/55 requirements.
Innovation management HSH Aerospace Finishes stays ahead in innovation by staying true to the original vision of the founder. This innovation focus keeps the company growing fast as the market for water-based coatings increases due to the effects of the REACH regulations. The company invests 10% of its revenue in R&D. Projects are undertaken in cooperation with testing centres and other select companies, such as SABIC (formerly part of General Electric). HSH also takes
part in some EU projects. Customer service and logistics are a critical element in this business. Finishes are not only the last element in the building or repair of an aircraft—they are often the last element thought of by the customers. The entire production process is therefore geared towards rapid order fulfilment. By keeping a stock of semi-finished products, HSH can respond immediately to customer requirements. And, as the products are water-based, transportation has much less restrictions.
Vision HSH’s vision is to continue with its innovation strategy, developing products that meet—and exceed—the stringent needs of the aerospace sector. Its strategy is to expand the business in the OEM market. This is challenging work, given the strict supplier certification that OEM players use, but it is a process that is well underway and looking very promising.
Pierre Guillaume Innovation management tactics from the aerospace sector
104
Pierre Guillaume Chief Technology Officer Techspace Aero
Air travel has revolutionized communication, businesses, understanding and agreements between populations all over the world. During the second half of the last century, its expansion has helped sustain economic growth never before experienced in North America and Europe. Nowadays, newcomers like China, India, Russia or Brazil are boosting the world’s economy and consequently are developing their own air traffic infrastructure.
On the other hand, we should keep in mind that innovation is not confined to technology. At Techspace Aero, great benefit is also drawn from innovation in methodologies that help bring a new technology to the market much faster than before. The way supplier relationships are managed and working on the best possible business deals are also essential in optimizing customer satisfaction. How to make the right choices?
In this context of growth, even if air traffic is responsible for less than 3% of the planet’s CO2 emissions, the whole industry is conducting a tremendous amount of research in order to develop innovative technologies that will reduce the environmental impact of aviation. More efficient, more compact and quieter: those are the main drivers behind research when it comes to jet propulsion improvement and working towards ACARE goals that aim to cut CO2 emissions by 50%, NOx emissions by 80% and noise emissions by 50%. Starting from generic know-how in turbomachinery licensed by the sister companies of the SAFRAN group, Techspace Aero is further developing cutting-edge technologies specific to low pressure compressors and oil system equipment. Most of our research programs are managed via the collaborative research model encouraged by European Commission and Walloon Region Framework Programs. These programs gather in consortia major industrial companies, SME’s, academia and research centers. The goal is to align efforts and to bring innovations to the market that support ACARE targets. It is my view that open exchange of ideas between scientists and engineers from various companies, whether large or small, creates the best conditions for identifying high potential innovations and defining the best way to assess and mature them until service incorporation. We need to be clear, in this highly competitive world of aviation, innovation is of fundamental importance, especially for companies located in Western Europe. Technological advances are the foundation for delivering added value on the market. This is because increasing production and engineering capabilities in emerging countries offer real alternatives for “standard” aircraft design and production tasks.
The right choices are generally the choices that will be successful on the market and in that respect a global vision is the only way forward. At Techspace Aero, we have implemented a score card assessment for our research projects. These score cards are filled out by a multidisciplinary team made up of highly skilled representatives from the sales, engineering, manufacturing, supply chain, purchasing and quality departments. This methodology helps eliminate dozens of less attractive projects and invest your money in the best possible way .When it comes down to selecting the top five projects, the partnership developed with key customers is what will help determine the final choice. How to transform innovation into success? Finally, when it comes to gaining real competitive advantage from innovation, we need to look further than the tools, the methodologies and the network that we have set up. We have come to the conclusion that ultimately it is people that make the difference, not only in terms of their academic credentials, but also in terms of their personal motivation, drive and enthusiasm. Obviously we need the technical skills of qualified engineers, most of whom come from our Walloon Region universities. However, we must not neglect the importance of enquiring minds, people who are receptive to new ideas and are able to connect different concepts from a variety of different fields. Determination and project management capabilities are also vital to developing, validating and implementing good ideas. Critical thinking and solid decision making skills—these too are important competencies. And finally the people who are customer-orientated, people who have an almost hard-wired sensitivity to customer needs and are capable of “selling” ideas
continued from p. 99
“on the other hand, we should keep in mind that innovation does not only mean technology.” and making it all happen. Building teams of people with such varied qualities and skills, which are nevertheless focused on a single aim, is our daily and tremendously exciting management challenge.
Given their market focus, they do not attempt to invent everything themselves. LMS frequently acquires new technology or works with strategic alliances. What is critical in their innovation process is the overall roadmap and the organisational processes that ensure the company moves toward its goals. Innovation strategy at LMS has its roots in three areas: • Understanding customer needs—the Engineering Services group plays a strategic role in the company, not because they are important from a revenue perspective (revenues come primarily from systems sales), but because they work on-site at customers dealing with their key engineering problems • Understanding technology evolution— here the point is to figure out “what is possible” (not necessarily to invent it all) and manage the technology portfolio • Understanding how to integrate new technology into products and services that address real needs of the industry, and therefore deliver superior added value. All this information is subsequently used to develop a technology roadmap, structured in three “horizons”, i.e., a six year horizon where the focus is on identifying the technology for future applications and an approach is decided on how best to develop it (via R&D, acquisitions, alliances); a three year horizon where the focus is on the technology’s development, some of which is done in collaboration with research institutes; and a one year horizon where the focus is on applying the technology to actual products. All this is tracked systematically, so that at any one point in time the company knows exactly where it stands in these horizons. The point is to keep it focused on customer need. Thus also the actual technology development processes are highly methodological, allowing the company to accelerate or redirect development when necessary.
GREISCH Civil engineering at its most spectacular
106 GREISCH LIEGE science park Allée des Noisetiers, 25 B-4031 Liège Belgium T: +32 (0)4 366 16 16 F: +32 (0)4 366 16 18 www.greisch.com bureau@greisch.com • Science & Technology • Business Model & Process Innovation • Design & Creativity
Greisch Engineering was founded in 1958 by René Greisch. He was both an engineer and an architect, and this tradition has remained, with the firm offering services in structural engineering as well as design. It has grown to be one of the largest engineering corporations in Belgium, with a portfolio of some of the most spectacular and challenging man-made structures ever to be built. The company is primarily involved with the design, the planning and calculation work required for small- and/or large-scale civil works projects, finding the optimal structural design and ensuring stability while discovering alternative and more efficient methods for the construction process. René Greisch always said: “The art is that the effort is not felt, that it seems to flow naturally; and yet...” The accuracy the quality and the creativity of its civil works are the fundamental values of Greisch Engineering The company’s innovative approach is a primary reason for its success. Greisch is situated in the Liege Science Park and the company has fostered a close working relationship with the Liège University’s Applied Sciences faculty. The collaboration has resulted in a mutually beneficial joint venture researching and developing simulation software. A department in the firm is devoted to R&D. Here stability and computer software specialists, in partnership with professors from Liège University, develop and refine software that is the state of the art in calculation methods to simulate the behavior of civil engineering structures that is liable to any type of external forces. Computing with the software reveals the stability or instability of a proposed structure and how the forces are distributed, and can simulate anything from a high wind to the impact of the passage, at 350 km/h of a high speed train over a bridge, for example.
SUCCESS & INNOVATION INDICATORS • Engineering partner in construction of Millau Viaduct, tallest vehicular bridge in world • Co-developer, with Liège University, of state-of-the-art simulation software for civil engineering structures • 2007 annual turn-over: 16,5 million euro • Growth in employee numbers: 15% per year, over the past 5 years
“Greisch was involved in the construction of the millau viaduct, the tallest vehicular bridge in the world” In finding the easiest and most efficient way of building while ensuring stability this software enables huge reductions in time and cost. It is also vital in calculating the feasibility of the new methods and ideas that are required to tackle particularly challenging projects. For instance, if for some reason it is impossible or to expensive to use a crane it will be necessary to study the possibility to move tons of concrete and steel in alternative ways, and the engineers at Greisch relish the challenge and the chance to develop new techniques. Greisch’s partnership with the university may centre around software development but it runs deeper than this, with some Greisch engineers lecturing at the university, postgraduate students receiving guidance and stimulation in the R&D department, and the outsourcing of difficult calculation work to the university being just a few examples of the ways in which the partnership is helping to continue the Greisch legacy of collaboration and innovation. Examples of the work Greisch has done speak volumes about the firm’s unique ‘spirit of questioning’ approach to engineering challenges. The company needed to use its audacious, can-do brand of innovative thinking when they built a 180 m high telecommunications tower. They couldn’t build straight up because of the sheer height of the structure and therefore constructed it horizontally, pulling it erect once it was finished. Another challenge was the construction of the new Liège railway station, which needed to take place while allowing the trains to run as usual. Greisch was responsible for the engineering and devised a strategy whereby the entire structure was built off site and then pushed once completed over temporary supports. Simulation software was vital in this case to compute the internal forces that being moved would impose on the structure and its potential deformation by the wind. Greisch was involved in the construction of the Millau Viaduct, the tallest vehicular bridge in the world, in collaboration with
Below: Liège-Guillemins Railway Station, last launching stage of the main roof, 6th June 2006 / Greisch, engineering, S. Calatrava, architecture, Euro Liège TGV, management © JL DERU / photo-daylight.com
Bottom: Millau Viaduct, before the last step of the deck launching (270 m above Tarn river) , 28th May 2004 / Greisch, engineering, Eiffage, construction and management © JL DERU / photo-daylight.com
several other leading European companies. The immense length (2460 m), height (360 m) and weight (43.000 tons of steel) of the proposed structure made it a project almost unprecedented in scale. Greisch were responsible for general calculations of the final structure, particularly resistance calculations for winds of up to 225 km/h (140 mph), and designed all steel parts of the structure. Their engineers have also imagined and designed the procedure and all the necessary tools to ensure a safe building method of the steel deck situated at 270 m high. Only 38 months have been necessary to build the bridge without major incident for the workers. Greisch Engineering is characterized by an open environment that lauds lateral thinking, encourages discussion of fresh ideas and embraces challenges. The collaboration efforts on which the firm focuses create unique partnerships and endless possibilities for new methods and techniques. Complacency is a concept foreign to the employees of Greisch as they strive to remain leading innovators in their field.
Denys Ground-breaking advances in construction
108 DENYS Industrieweg 124 9032 – Wondelgem / Ghent Belgium T: + 32 (0)9 254 01 11 F: + 32 (0)9 226 77 71 www.denys.com info@denys.com • Science & Technology • Business Model & Process Innovation • Design & Creativity
Construction isn’t the first sector that comes to mind when thinking of ‘sexy’, innovative fields. And yet it is a sector that uses—and needs to use—increasingly advanced technology. Construction is about more than building—it’s about building dreams. Those dreams are only limited by the available technology. Denys continues to work to break the boundaries between what we can only imagine—and what we can actually achieve.
BACKGROUND The history of Denys lies in water and fire. Started as a family business in the 1920s, it built fire-fighting installations and water pipes. Over the years it continued in the pipeline business, and expanded into civil engineering. When natural gas was opened up in the Netherlands in the mid-60s, Denys was ready to construct the most important gas transport pipeline in Belgium for Distrigas. Over time, the company branched out into a number of related construction sectors. Its activities now include pipelines and cables; tunnelling and drilling; buildings and civil construction; sewers and water mains and renovation, restoration and special techniques.
INNOVATION ACHIEVEMENTS Innovators lead, they do not follow. They develop a leading edge that puts them in another class than their more traditional competitors. The construction sector has the potential to address some of the more serious issues our communities face. This is where Denys innovates, looking beyond solutions for the sector, into a vision of solutions for society. One area in which Denys has made considerable inroads is the transportation of people and goods. Such transportation is a cause of serious problems, especially in populationdense areas. Governments are continuously seeking ways to address the horrific traffic situation, as well as to decrease accidents and mortality rates. But the very nature of the problem—the incredible number of vehicles on the roadways—makes infrastructure improvement a serious undertaking. Shutting down heavilytrafficked roads and finding alternative routes while construction takes place causes serious consequences, as well as serious costs. And yet, it must be done! Now, imagine that this imperative infrastructure modification and/or expansion could be carried out without disrupting the current traffic flow…That’s the objective of Denys’
Tunnel Without Hindrance (TWH) project. The patented TWH uses a combination of special foundation techniques and a road surface made of prefabricated elements. It makes it possible to keep traffic disruption to a minimum. In fact, the company states that traffic flow is adjusted for only 2 to 4 weekends! Another innovation project, Denys’ Tube Cargo Express (TCX) proposes fast underground goods transport and somewhat resembles something out of a science fiction film. At the same time, it is in many ways similar to the underground transportation systems used for almost 150 years to move people around metropolitan areas. People have gotten used to having the goods they want when they want them. This places tremendous strain on the existing transportation infrastructure. New solutions must be found. These, however, must be both sustainable and capable of being expanded unlimitedly from the outset, as there is no slowdown of demand foreseen. On the contrary, demand for goods will increase exponentially with population growth. Thanks to Denys’ expertise in underground construction works, the tunnels can be constructed alongside or beneath the existing infrastructure. This again ensures minimum disruption of current transporta-
tion. Electronically controlled, electrically powered vehicles loaded with euro pallets or mini-containers move on underground rails. Automatic loading and unloading systems in the logistic centres ensure rapid transfer of the freight. TCX offers huge potential as a fourth transport mode, in addition to road, rail and water. And it’s not futuristic fiction anymore: it’s a reality now. Both of these innovative project underline the important role construction companies can play in addressing some of the most serious social and environmental issues we face, now, in the short-term and in the longterm. Denys has used its strong history and expertise to find solutions that are cost effective, cause minimal disruption and offer the potential for future growth as needed. That’s definitely taking a leading role in building our future.
INNOVATION MANAGEMENT “Our slogan is ‘Building Past, Present and Future’”, says Denys CEO Johan Van Wassenhove. “This isn’t an empty slogan. It’s a reflection of our ongoing and shared commitment to quality”. And while innovation may seem to focus on the future, it must be built and based upon both the past and the present.
SUCCESS & INNOVATION INDICATORS • we spent annually between 800 000 € and 1 200 000 € on R&D . • we have 7 patents on our name , several world wide . • we have 8 registered Trade Marks • in 2003 we were Laureaat “ Prijs Hubert Raedschelders “ with our “Tunnel Without Hindrance ( TWH )” project on the 13th K VIV Innovatieforum.
Few sectors are as ‘grounded’ as construction. And yet Denys manages to balance this need for practicality with a sense of imagination. It addresses the requirements of public bodies, but uses them to create new possibilities. The result is solutions that address the here-and-now, with a touch of futuristic appeal. But this is only possible with a strong foundation in quality. Denys is certified ISO 9001:2000 (quality management), ISO 14001 (environmental management) and OHSAS 18001:1999 (safety management). Denys also works with a network of universities, laboratories and institutes to develop some of its innovations. This allows it to combine its own expertise with the R&D infrastructures and resources of these other organisations.
VISION Denys has a clear vision: to continue to build better infrastructure. This includes developing new techniques, technologies and tools. Transportation is only one area in which innovative solutions are needed, and Denys, with its dual background in quality construction and innovation, is well poised to address society’s needs. “If you dream it, you can do it”.
Building sites under When Belgacom combines reliability and innovation
110 V TC SPRL Rue chêne aux corbeaux 75 1380 Lasne Belgium vtconstruct@skynet.be T: +32 (0)2 633 16 24 F: +32 (0)2 633 66 95 • Science & Technology • Business Model & Process Innovation • Design & Creativity
Belgacom offers an efficient response to the problem of surveillance on the building sites of VTC Group, a top-end real estate developer. An ICT solution that prefigures the future. VTC Group was established 25 years ago and has specialised for the last 10 years in the construction and marketing of prestige buildings. Its added value is to integrate the latest innovations in terms of implementation, comfort, liveability and the art of living. The company therefore pays constant attention to computers and technology. The trend towards automation, the intelligent home, passive construction and the home as a ‘multimedia centre’ are at the heart of these concerns. It is with a view to the continuity of this high-level performance, demanded by its clients, that it has selected Power Max Pro to provide remote security for its sites 24/7 in real time. This intuitive solution, the most innovative on the market, makes full use of the latest intrusion and video technologies. On-time development without clashes between projects is therefore guaranteed.
A GUARANTEE OF PEACE OF MIND Responding to the expectations of its clients, VTC Group has consolidated its leadership position from an initial investment of 2,000 euros. Espionage or piracy by its competitors, which was formerly difficult to prove because of the absence of copyright, has been reduced to zero. The unique character of the buildings is protected. Power Max Pro provides peace of mind to its users, who receive all risk-related information in real time, wherever they are, by e-mail, SMS or MMS. They can then react in the appropriate manner, rapidly or even in an automated manner. Financial losses due to theft, fire and floods are avoided, while video evidence provides protection against lawsuits in the case of an accident or a fine in the case of a false alarm to the emergency services. Building site management has become more efficient. Putting in place Power Max Pro increases the self-discipline of the workers and a review of the last 250 events makes it possible to analyse the comings and goings of the various teams. Remote management as well as automated alerts reduce the need for on the spot controls. Furthermore, the installation requires only a few minutes because of the wireless equipment and because it can easily be connected to the existing electrical circuit on the site.
With an easy-to-use web interface as well as a modular design, Power Max Pro supports the business through all the needs as the site progresses. It is simple and inexpensive to add peripherals aimed at prevention (cameras, etc.), protection (flood detector, etc.), access (remote opening of grilles, etc.) or site management (panic button for emergencies, etc.).
A WINNING ALLIANCE On the building site, a camera films systematically. It is backed up by a movement detector which can raise the alarm by SMS, 15-second video MMS (half of it before and half during the intrusion) or by e-mail. Capable of being de-activated, they are connected wirelessly to the central unit located in a watertight box connected to the site’s electrical circuit and containing a UMTS router which transfers data to Belgacom Explore, the platform that administers all Power Max Pro units. The manager can access information through a secure web interface. Belgacom offers the Power Max Pro sector solution in collaboration with Eureca Vision. This approach fits in with the vertical positioning the Belgacom Group is currently developing in the market. For certain key sectors, such as construction, the Group aims to combine its generic offering with sector-focused solutions with credible, longstanding and flexible partners, such as Eureca Vision, in order to offer clients in these sectors the most integrated, innovative and reliable ICT solutions possible. This is how the duo came to propose a solution that combines a high-quality video surveillance service on the one hand with easy connectivity (UMTS Mobile Internet router for data transfer and wi-fi connection on the site) and a stable network platform (Belgacom Explore).
surveillance
Success & innovation indicators • VTC Group (Valorisation, Transformation, Construction) is one of the major players in the complete development and sale of very high quality residential and commercial property. Its target customers are expatriates, embassies and wealthy individuals. • Its unique products are characterised by exceptional finish, paying attention to the smallest detail. They include the very latest technical design, technology and luxury features. • 10,000 m2 is fitted out or started each year (surface areas of 500 to 1000 m2). The company has real estate assets of 45 million Euro in its portfolio, mainly on the outskirts of Brussels.
Innovation in Mature Industries
While innovation is frequently associated with specific sectors of the economy, such as pharmaceuticals, biotech and ICT, the argument can be made that the strength of the Belgian economy lies not in the fact that it has such ‘high tech’ sectors, but that the broader industrial economy, the mature industries such as chemicals, automotive, materials, textiles, food and others, is undergoing a gradual but certain transformation from an efficiency-based economy towards a more knowledge-based economy. In some cases this manifests itself in companies that have redirected their activities entirely, such as the way UCB transformed itself from a chemicals group to a pharmaceutical company. Less radically, but similarly, the way Solvay has built a pharmaceuticals business adjacent to its chemicals business. Another formula is to move from commodities to ‘added value’ products. Here companies like Bekaert and Umicore, in the metals and materials industry, are illustrative. Other examples exist in the food industry (Vandemoortele’s Alpro) and the textiles industry (Sioen’s technical textiles). A design-orientated strategy is also applicable here, as illustrated by companies such as JAGA, Tribu, Modular Lighting Systems and many others. Finally, there are the process innovators, especially in automotive and chemicals. The Belgian sites of companies such as BASF, Volvo and Volkswagen are the absolute benchmark in their respective groups and hence continue to attract investment. Quite simply, this is why this country still has an automotive sector.
Automotive Industry The automotive industry in Belgium remains one of the most important industries in the Belgian economy. Four major car manufacturers have large production sites in the country: Ford in Genk, Opel in Antwerp, Volvo Cars in Ghent and Volkswagen in Brussels. Trucks, buses and trailers are important too, with companies like Van Hool, Volvo Europa Truck, Stokota, Atcomex and Jonckheere Bus and Coach. An additional 300 automotive suppliers are located here, covering the full range of products and services. As a result, the sector is
the largest contributor to the country’s exports; it employs close to 100,000 people; and it is responsible for a sizable chunk of Belgium’s GDP. The sector is, however, faced with challenges. Not a year passes without a major restructuring or at least a threat of restructuring. This is because the labour costs in Belgium are simply not competitive against lower-cost countries in Europe or even neighbouring countries. Nevertheless, and contrary to the doom-predictors, the industry remains a pivotal component of this economy. Over the last ten years the industry’s exports have consistently increased (with exception in 2007 and 1999). Part of the explanation lies in Belgium’s central location (and its transport infrastructure) and the presence of an extensive supplier network with its finely tuned supply chains. But innovation also plays its part. The manufacturing plants in Belgium have been under tremendous pressure to keep on improving the efficiency, quality and flexibility of their operations—and they have been largely successful in doing so, thereby attracting more investment from their corporate HQs. Thus, Volvo Cars Ghent is Volvo’s largest industrial site outside Sweden and produces more than half of its global output. Audi recently converted the Volkswagen plant in Brussels and aims to make it the ‘Best of Benchmark’ plant. Ford also modernised its production plant in Genk and builds the hit model Ford S-MAX. Toyota too is active in Belgium, not in assembly, but its European logistics centres for parts and vehicles is located here as is one of its 4 global R&D centres. The strength of the automotive sector also plays a role in the strength of the earlier described engineering and technology companies. Thus, Transics, as a developer of fleet management systems, is located among its target market. Also companies such as LMS International and Metris have some of their customers located here. Other industries also rely on the automotive sector. Take Bekaert, for example, a manufacturer of steel wire for tyres and advanced coating technologies, or Recticel, a world-leading producer of polyurethane foam products (for car interiors). Finally, government funded R&D plays a role too. Thus, Flanders DRIVE is a com-
petence centre for the automotive industry, focused on manufacturing, lightweight materials, active safety and clean powertrains. VITO, one of the four large public research institutes in Belgium, is a leading European contract research and consulting centre. It is, for example, currently doing work in hybrid propulsion.
Metals & Materials Two major Belgian companies, Umicore and Bekaert, perfectly illustrate the transformation of uncompetitive and typically ‘dirty’ industrial companies to highly innovative and highly competitive players in their global segment. Bekaert, traditionally known for steel wire, currently transforms this base product into a myriad of advanced materials. For example, hyper-thin steel thread for weaving into textiles or via the application of advanced coatings to improve adhesiveness with other materials. Its innovation process is highly illustrative in the way it is anchored to customer need and the way it relies on partnerships with universities and research centres around the world. To learn more about Bekaert’s story read the interview with Bekaert CTO Dominique Neerinck on page 118. Umicore has its roots as a mining company but has since gradually transformed itself into a company that today is focused, especially from an R&D perspective, on clean technology. Essentially it is applying its competencies in metals and metallurgy to operate a ‘closed-loop’ business model, i.e. managing the metals it produces throughout their entire lifecycle, including recycling. In the process it is developing the building blocks for use in rechargeable batteries, solar cells, fuel cells, etc. Read more about Umicore’s innovation story on page 116. Umicore CTO Marc Van Sande also contributed a visionary article on page 122. Mention also needs to be made of Materia Nova, a research institute in Wallonia focused on materials. This is a reasonably small institute (35 full-time researchers) funded by the Wallonia government, EU research funds and contract research for large companies. In this latter area they have been very successful in attracting companies like Mittal Arcelor, Total, AGC Flat Glass (formerly Glaverbell) and others, mainly because of their competencies in light emitting polymers. The implications
of this technology are remarkable—just think of light emitting ceilings, windows, walls. In 2003 they won the EU’s innovation prize (Descartes prize) for their work in this area; essentially they have a worldwide reputation in this area. Although the institute does not own any of the original patents they do have strong expertise in the area and substantial equipment for research and testing. Other work for which they’re known is in the covering of materials with coatings that have specific properties.
Food Industry and FMCG Abroad Belgium probably is best known for its beer and chocolates. There is more to the food industry, obviously. The solid growth in the Belgian food industry is in fact driven mainly by new product introductions that play into consumer demand for health and wellness. On the face of it the food industry does not have a reputation for being innovative but look closer
and one recognises how a number of innovative companies are leading the way in linking scientific developments (in nutrition, in biotech, etc) with changing consumer trends. Similarly to other manufacturing sectors, the food industry in Belgium cannot grow anymore by simply increasing volumes. Growth needs to come from new products that deliver added value for consumers. Companies that find themselves in a ‘commodity trap’ struggle to survive, especially since the pressure from a consolidated retail sector has become so extreme. Companies that are showing the way are Orafti and Cosucra Groupe Warcoing, who have emerged as world leaders in inuline, a fat and sugar replacement on the basis of chicory root. Puratos, a supplier of ingredients for bakeries, is also a strong innovator (and growing company). Process innovation is obviously important too. Barry Callebaut, for example, is a leading process innovator in chocolate production. Perhaps the best known example among consumers is Alpro, which has shown the largest organic growth in the sector via its range of new soya-based products. The Vandemoortele group, the company behind Alpro, illustrates perfectly how Belgian food companies are using innovation to expand their business. Known traditionally for its cooking oils, the Vandemoortele group has consistently innovated both in new product development and its business processes. They were the first to put oils in plastic bottles (in the 1960s), the first to sell deepfreeze dough, the first to launch soya products such as milk and cream on the market (and today are still expanding their soya range to yoghurts and meat replacements). Certainly in Europe they are recognised as pioneers in their product segments. Not that being the pioneer is always the critical factor, execution is equally important. Thus, Vandemoortele was not the first to place deepfreeze donuts on the European market but once they did they quickly became market leader.
continued at p. 115
Joseph Lemineur
114
Joseph Lemineur General Manager Materia Nova
Can we in Belgium, and in Wallonia in particular, carry on making consumer products with a particularly high level of labour costs? Today, China and many other countries manufacture the traditional products and export them to Belgium. A few examples: textiles, computing products, games, etc. Unless we are content to confine ourselves to service industries, we need to innovate. Helping our businesses, both small and large, with targeted applied research strikes us as the best way of retaining our industrial base, which is currently in decline. Hainaut used to have a gross domestic product below the European average. The Walloon Region and Europe had the good sense to offer subsidies for research within the framework of the Objective 1 and Phasing Out programmes. The new research centres were able to equip themselves with modern, efficient equipment and to hire highlyqualified personnel. It was also possible to apply this subsidisation to existing research centres (De Groot). The establishment of a synergy with the Hainaut universities also allowed research themes to be defined and numerous new ideas to be contributed.
“These new research centres will allow the ideas germinated in the universities to be applied to industry” the development of a new type of airline by one company will enable it to employ fifty workers in the coming years. This means that Belgium will have succeeded in retaining an activity which, without this innovation, would have been irretrievably lost to Brazil.
Today this phase is complete, and it was essential to survey businesses in order to determine the innovation needs. This is what the Materia Nova research centre in Mons has done since it was established in 2001. Do we need to tell you that applied research on behalf of businesses, subsidised or otherwise, accounts for 67% of the activities of this centre, with some forty researchers? The area of functional materials seemed to us to be an excellent gateway into the industry.
These new research centres will allow the ideas germinated in the universities to be applied to industry. For example, in 1974 a Nobel Prize was awarded to 3 (foreign) researchers who had discovered the conducting properties of certain polymers. Professor Jean-Luc Brédas of Mons University was the theoretician who made it possible to determine the best molecules by a process of calculation. Today, people are beginning to talk seriously about OLEDs (Organic LightEmitting Diodes), a subject that enabled Materia Nova, in collaboration with other universities and businesses, to win the 1st European Descartes Prize for Innovation in 2003. This achievement made it possible for Materia Nova to sign applied research contracts with major companies with a view to the production of white-light lighting on glass, steel or other substrates. The centre’s researchers are hopeful of success. It is more than likely that in 2 or 3 years, these new lighting systems produced by Belgian or European companies will make their appearance on the market, and this will undoubtedly help employment in our regions.
We have not yet been able – since applied research is sometimes a long process – to compile a full summary of the jobs that it has been possible to create or save, but as a single example we can already report that
A wish, however: that our regional and federal politicians should attach increasing importance to innovation, which is the only way of ensuring the long-term prosperity of our businesses.
continued from p. 113
How do they do it? Innovation is not the responsibility of a specific department. On the contrary, this is a company that thrives on change. Accepting that change is fundamental to their market, the company is constantly reviewing its processes, its products, it is in fact constantly reorganising. This is some accomplishment given that change, for many large companies and government departments, is a time of crisis and transition that needs to be carefully managed. At Vandemoortele change is part of the corporate culture, change is the status qua. Entrepreneurship also is critical to the group; hence they have various cells and teams that operate in quite an entrepreneurial manner, taking risks where necessary. Vandemoortele’s innovation process is market driven. They prefer not to sell via thirdparty distributors for that very reason, to keep a finger on the pulse of their market’s needs. At the other end of the chain, their R&D departments (one for soyafoods and one for lipids and dough) focus mainly on development work, preparing new technologies for the market. For the R in R&D they tend to rely on the universities and the research consortiums such as Flanders Food (see below). In other words, this is an innovation process that is anchored at both ends to the real world, on one end to the emerging needs of the market, on the other end to the best that science has to offer. The problem with innovation in the food sector is that it is expensive to do—one needs to set up labs, R&D departments, set up projects with universities, etc—hence it has thus far been the domain mainly of large multinationals like Nestlé, Unilever and Danone. In Belgium most food companies are SMEs and these tend to lack the experience and resources to set up professional innovation programmes (although there obviously are exceptions, as Orafti and Warcoing testify to). Thus, to stimulate further innovation in the sector, the food sector federation FEVIA and the governments of Flanders and Wallonia have set up regional innovation platforms that bring companies and universities together around common R&D programmes.
In Flanders the key achievement is Flanders Food. This platform has launched four R&D programmes with another four in the process of being approved. Set up only three years ago, the organisation is growing at a phenomenal rate. In Wallonia, in context of the Marshall Plan, an Agro competitiveness pole was set up, named Wagralim. Both organisations are supporting R&D in a number of key areas, mainly in preserving technologies and replacements for fat, sugar and sodium. While the funding of R&D is one thing, companies also recognise value in the facilitator role such platforms play in the relationships with universities. On a one-to-one basis the discussions around IP can be a struggle to get through. Platforms like Flanders Food do a lot of the groundwork and hence lower the threshold for many companies to work with universities. Logistics is another area where food companies are innovating—the optimisation of the supply chain toward retailers. Key developments here are Just-in-Time delivery, onsite replenishment, tracking and tracing (e.g. recall the Porthus supply chain management platform which allows for the tracing of 70% of products in the supply chain). In the fast-moving consumer goods category mention must absolutely be made of Ecover, manufacturer of ecologically sound household cleaning products. In a category that is dominated by multinational titans, here is a Belgian company with humble roots that is rapidly staking a claim as the European player in ‘green’ household cleaning products. This is a superb example of a company that has made innovation—in its case dedicated to ecologically sound business processes and products— part of its organisational DNA. The company’s innovation story can be read on page 126. CEO Michael Bremans also offers his personal vision on page 154 .
continued at p. 123
UMICORE Creating sustainable value: what comes around, goes
116 UMICORE Broekstraat 31 rue du Marais B-1000 Brussels Belgium T: + 32 (0)2 227 71 11 www.umicore.com info@umicore.com • Science & Technology • Business Model & Process Innovation • Design & Creativity
How does a 200-year old mining company move from a commodity player to an innovation pioneer? By transferring knowledge and expertise in metals into energy-efficient and environmentalfriendly solutions. This is the incredible journey that Umicore has taken, to turn a traditional commodities-based company into an innovator in high value, close-loop materials technology.
BACKGROUND Umicore’s history runs back more than 200 years, to an original mining concession for the Vieille-Montagne mine in Moresnet, near the current Belgium-Germany border. Through mergers and acquisitions over the years, the company eventually became Union Minière: an integrated industrial group, positioned as a specialty materials company focusing on precious metals, high-margin zinc products and advanced materials. In 2001, the company changed its name to Umicore, to reflect its new focus on the frontier between metallurgy, chemistry and materials science.
“Innovation has to happen fast, or we miss the boat entirely” Umicore now operates in 4 business areas: Advanced materials, Precious Metal services, Precious Metal produsts & Catalysts and Zinc specialties. The Advanced Materials business group produces high-purity metals, alloys, compounds and engineered products for a wide range of advanced applications. Precious Metals Services is the world market leader in recycling complex waste streams containing precious and other non-ferrous metals, and provides refining and recycling services to an international customer base. Precious Metals Products and Catalysts produces a range of complex functional materials based on precious metals and its expertise in technology platforms such as catalysis and surface technology. Zinc Specialties develops zinc-based chemicals, powders and materials for a wide variety of applications. But Umicore’s mission goes much further than advanced metal. Umicore is committed to creating sustainable value by developing, producing and recycling materials in a way that creates materials for a better life. And this is where Umicore’s true drive to innovation lies.
What prompted this focus on clean technology? Umicore CTO Marc Van Sande explains the 3 main triggers. The fi rst is the company’s history in an activity that is perceived as ‘dirty’, and the need to clean up both the company’s reputation and the sector. Secondly, the global market has boomed for devices such as consumer electronics that use the materials Umicore produces, for batteries, printed circuits, hardware and more. Finally, there has been a huge jump in environmental awareness, both within the company, and amongst end-users, manufacturers and governments, pushing and pulling demand for eco-friendly solutions. Umicore wants to respond to these movements, but also strives to lead the way, going beyond what is required today, to fi nd solutions that already address the demands of the future.
INNOVATION ACHIEVEMENTS Thanks to over 200 years of experience in metals, Umicore is a true leader in the sector. And the company does not take the responsibilities of this leadership lightly. Umicore now operates on a ‘closed-loop’ business model, which requires managing the metal throughout its lifecycle. “We supply our customers with the advanced metalbased materials,” explains Marc Van Sande. “We then collect the secondary materials that come out of the production process and recycle them. But it doesn’t end there. We also recover the original material at the end of its lifecycle and recycle it as well. And since metals don’t really have an endof-life, in principle we can reuse the metals endlessly. Nothing is discarded: that’s why it’s a closed loop.” Umicore has succeeded in creating closed loops for previously non-recyclable products. One example is rechargeable Lithiumion (Li-ion) batteries. These are among the most popular types of battery used in consumer electronics, because they offers one of the best energy-to-weight ratios, no memory effect and a slow loss of charge when not in use. However, they are subject to aging, even when not in use, and are expensive to manufacture. Until recently, these batteries could not be recycled. Umicore developed the VAL’EAS™ process which recycles, refi nes and transforms most of the cobalt contained in the Li-ion batteries into lithium cobalt dioxide (LiCoO2), which is then used in the
around
production of new Li-ion batteries. Umicore is the only company in the world proposing a real closed loop solution for Li-ion batteries, combined with an environmentally sound management of these end-of-life batteries and high recycling and/or recovery rates. Umicore is leading the way in closed-loops for other ground-breaking technologies, too, such as germanium-based solar cells to generate energy for space usage, including satellites and NASA’s Mars Exploration rovers; optic materials for night vision equipment, for the automotive sector; and nanomaterials, for optic applications and solar cells.
Innovation Management Striking the balance between creativity, which requires openness and freedom, and ROI, which requires discipline and control, is a constant endeavour at Umicore. At the same time, the company must weigh the advantages of sharing information with the importance of protecting its innovation processes. Umicore is also dealing with the need to innovate quickly in the face of new technology. “We used to be able to buy technology from suppliers who didn’t really understand its potential. That doesn’t happen anymore: information spreads so quickly, innovation has to happen fast, or we miss the boat entirely,” comments Marc Van Sande. To address these challenges, the company has developed an innovation management system. Firstly, R&D is divided into 2 components. Each business unit has its own, dedicated R&D department focussing on its core business. At the same time, certain
competencies -- including modelling, patent applications and some metallurgy disciplines -- are coordinated within the central R&D unit in Belgium and Germany. The Business Unit R&D departments can then use these centralised services. To stimulate a spirit of innovation and creativity throughout the company, Umicore set up its Umagine programme to foster new business development opportunities. Together with the Venture Unit, it operates as a structured ‘innovation funnel’. First, the Umagine team uses ideation workshops to generate ideas from inside or outside the company in an “Idea Lab”. It coaches the idea owners to help them quantify and formalise their ideas, screening and incubating projects in an “Action Lab”. Projects then pass by the Venture board in a series of gates, from a test phase, through the creation of a venture unit, to –if successful— integration into a business unit. Like other successful, innovative companies, Umicore recognises the importance of creating an ‘ecosystem’ of networks and contacts. Key customers are vital to the development process. “We collaborate almost systematically with some of our large customers, especially on new products like solar cells and batteries,” clarifies Van Sande. “You have to be careful to keep your focus on the broader perspective, but it is certainly the most efficient way of working.” Umicore also collaborates with a series of smaller technology companies around the world, managing a whole network of development activities. Finally, Umicore develops and maintains important connections with universities and research institutes. As always, Umicore must manage a balance between protection versus openness,
Success & innovation indicators • R&D budget of € 124.5 million, equalling 5.8% of revenue • 80% of total R&D expenditure is dedicated to clean technology projects. • Applied for 50 patents in 2007 • First to develop recycling technology for Li-ion batteries speed versus quality and current business opportunities versus future prospects. But for a company that has transformed itself from a commodities dinosaur into a pioneer in literally out-of-this-world technologies, creating a new balance is all part of coming around full circle—just like its products.
Vision Umicore is now well-positioned in clean technology, and plans to continue to deepen and broaden its expertise in this area. With its R&D and innovation systems functioning well, it has many new ideas in the pipeline. Thanks to the strength of its market drivers – especially the demand for ‘miniaturised’ devices – the company is primed for continued growth. application know-how
metals
Chemistry Material science Metallurgy
recycling
material solutions
Dominique Neerinck Innovation lessons from Bekaert: open it up and internationalise it
118
Dominique Neerinck
Chief Technology Officer & Member of Bekaert Group Executive
The term innovation often conjures up a world of spin-offs, start-ups and venture capitalists. In fact, from a technical innovation perspective, most R&D investment in Belgium is concentrated in a handful of large industrial companies. The argument can be made that the real innovation story of Belgium is not so much the success of our biotech and IMEC spin-offs but the transformation of Belgium’s major industrials, from commodity producers to R&D-driven producers of valueadded products. Classic examples here are Umicore (from mining to advanced materials), UCB (from chemicals to pharmaceuticals) and of course Bekaert (from barbed wire to a variety of sophisticated steel wire and steel cord applications). This article is based on an interview with Dominique Neerinck, Chief Technology Officer and member of the Bekaert Group Executive. Bekaert is a global company of 20,400 employees that describes itself as being “built around two core competencies: advanced metal transformation and advanced materials and coatings.” In simplified terms, Bekaert’s main raw material is wire rod, steel wire about the thickness of a finger, which it converts by mechanical deformation and heat treatment into wires that can be as fine as 1/50th the thickness of a human hair. These wires are then turned into cable and cord, woven or knitted into cloth or processed into ultra-fine filters and fibers, for a wide range of industrial applications in virtually all sectors of the economy. The company aims to achieve maximum technological synergy between its two core competencies. For example, it applies coating technologies to wire and steel cord to improve adhesion between steel and rubber or provide better corrosion protection. In pursuit of its strategy of sustainable profitable growth Bekaert is aiming for global market and technological leadership. Market leadership and high volumes are necessary to generate the funds required to invest in research and development and hence secure the future of the company. Indeed, as the life-cycle of industrial products is becoming ever shorter, Bekaert wishes to continuously renew its product portfolio and maintain its technological leadership. Innovation is thus a vital element in fulfilling the strategic objectives of the company. Beka-
ert balances its efforts between product innovation (to drive growth) and process innovation (to maintain profitability). Today Bekaert employs an international research team of over 400 people, the majority of which is located at the Bekaert Technology Center in Deerlijk (Belgium), from where all research and development activities are steered. In 2008 R&D investments will amount to € 63 million. The company holds a technological portfolio of 2 076 patents, of which 363 inventions. So how does Bekaert do it and what lessons are there for other industrials? According to Dominique, Bekaert has done several things really well, such as letting the business drive the bulk of R&D investment:70% of R&D projects are initiated by the production and sales units, ensuring that the technological research is attuned to the needs of the customers. Additionally, Bekaert benefited from, exploiting synergies between its two core competencies and an in-house engineering department, which designs production lines and develops and maintains the various production facilities. Looking at it more broadly, however, Bekaert has done well in pre-empting what Dominique calls two fundamental trends in technological innovation, i.e. open innovation and the internationalisation of innovation. Open it up Much has been written of late about ‘open innovation’ (a concept promoted by Henry Chesbrough in his book “Open innovation”). While it does seem an unstoppable trend given the inherent logic of the argument and the success being booked by companies such as Procter & Gamble, many companies—especially smaller companies—do have difficulty translating the principle into practice, mainly because joint projects with other companies or universities often stumble over disputes around IP ownership. For Dominique, open innovation is not a hype that ignores the hard pragmatics of IP protection. On the contrary, it aptly describes much of the way innovation is managed at Bekaert. Take the co-development work with key customers for example. Bekaert expressly seeks out co-development projects with its largest clients, a strategy that is actively communicated via its better together baseline. Many ideas for R&D come out of the work
Working with universities and knowledge centers also is a main pillar of Bekaert’s innovation strategy. The trick here is to build long-term ‘strategic partnerships’ with several research institutes around the world. The relationship is typically formalised via a framework agreement which sets certain guidelines around IP. In this way project-specific haggling over IP rights can be avoided. Also, the emphasis on a long-term ‘partnership’ allows the relationship between the two organisations to grow beyond a specific project, department or discipline. A multidisciplinary approach is often critical to the development of useful industrial applications and to gain speed in the innovation process. To this purpose Bekaert has formed strategic R&D partnerships with the Fraunhofer Institut (Germany), Tsinghua University (China), the University of Cincinnati(United States), the Holst Open Innovation Centre (Netherlands) and Sirris, the Belgian technology industry research center.
Bekaert conducts with its clients or via proactive information gathering initiatives such as its “voice of the customer” exercises, essentially an in-depth analysis of the processes by which the customer receives, processes and sells Bekaert products.. Bekaert uses this information to offer its customers innovations that strengthen their processes or reduce the total cost of ownership, through improvements in the production process, products with a longer service life or cheaper technological solutions. Selected ideas are turned into R&D projects that are jointly run by Bekaert and the relevant customer, which in turn is the main reason why Bekaert has set up R&D centres around the world close to its main customers. One fine example of successful co-development with the customer in 2007 is the metal fiber medium Bekaert developed for diesel particulate filters in close co-operation with a German global industrial manufacturer of filter systems for truck engines. Another example is the continuous research effort conducted with tire manufacturers to develop ever lighter and more tensile steel cord for the reinforcement of truck and passenger car tires. Making a stronger and more flexible tire with less material leads to weight reduction and improved fuel consumption.
Corporate Venturing is another way of opening the innovation process up. Bekaert provides risk capital to other innovative companies which specialise in technologies that complement Bekaert’s. Internationalise R&D The internationalisation of the world economy is probably the mega-trend defining the past decade or two. But while many European manufacturers still look upon globalisation as a simple export and ‘delocalisation’ (i.e. cost cutting) story, Dominique is looking way ahead. Yes, Bekaert is Belgium’s biggest investor in China. But what is remarkable about this investment is that it has little to do with cost cutting or ‘delocalisation.’ On the contrary it is an investment that fits entirely in Bekaert’s strategy of being close to its customers, both from a manufacturing perspective and an R&D perspective. Hence, the company has built several plants in China, has set up an R&D centre in Jiangyin (Jiangsu province) hosting 100 researchers, and engaged in a technology partnership with a major local university. The idea is to set up joint R&D projects with Chinese manufacturers and to tap into the knowledge economy that is rapidly emerging in that country.
“The company aims to achieve maximum technological synergy between its two core competencies” This type of commitment is seen across the world, not just in China. In the process the company is learning and innovating—in fact it is forced to innovate, since local conditions continuously throw new challenges at the company. It is learning about building modern manufacturing plants, about handling different types and grades of raw material, about harnessing local talent and skills, and off course about how its customers’ needs around the world are evolving. And in this way the company’s competitive position, via its global leadership over its core competencies, keeps growing.
VITO Technology for ecology and economy
120 VITO
Boeretang 200 2400 MOL Belgium T: + 32 14 33 55 11 F: + 32 14 33 55 99 Plassendale I 8400 OSTEND Belgium T: + 32 59 24 27 60 F: + 32 59 24 27 69 www.vito.be vito@vito.be • Science & Technology • Business Model & Process Innovation • Design & Creativity
VITO (Flemish Institute for Technological Research) is a leading, independent European research and consulting centre that develops sustainable technologies in the area of energy, environment, materials and earth observation. VITO designs intelligent technological solutions for large and small companies, and performs objective research, studies and consulting activities for government and industry. A selection of its research expertise.
ENVIRONMENT AND HEALTH: hot topics for society and research At the request of the European Centre for the Validation of Alternative Methods (ECVAM), VITO developed an alternative to acute toxicity tests on living fish. For the cosmetics industry, it developed an in vitro test that is capable of detecting the sensitising properties of substances. At the request of the Flemish Environment Agency (VMM), VITO together with thet Belgian Building Research Institute (BBRI) developed a GIS model that charts substance flows of heavy metals from building materials. In a new VMM study, VITO and the Research Institute for Nature and Forest (INBO) demonstrated that hormone-disrupting substances are widely distributed in Flemish surface water and that these have a measurable effect on the fish population. The research centre assisted the federal government in applying the RoHS directive (Restriction of Hazardous Substances) by testing a quick screening method for the presence of dangerous substances in electronic devices. VITO’s
SUCCESS & INNOVATION INDICATORS VITO is home to 500 highly qualifi ed employees from diverse specialisations and it works together with sectoral federations and their research centres, universities, colleges and European research institutes. The research centre is located in Mol, with satellite offi ces in Berchem and Ostend. VITO is active in: • Energy saving, new sources of energy and climate policy • Environment and health • Water quality and savings • Business solutions for industry • Earth observation and remote sensing • International policy issues
innovative methodology for soil characterisation is nothing short of revolutionary and has already attracted the interest of the petrochemical industry. Umicore chose VITO as technology partner to assess the applicability of on-site metal precipitation for its sites contaminated with heavy metals.
VITO LAUNCHES NEW KNOWLEDGE CENTRE FOR ALTERNATIVE TESTS VITO has been working for a number of years on developing and validating alternatives for tests on animals. VITO is now also putting this expertise at the service of industry and government via CARDAM, the Centre for Advanced Research & Development on Alternative Methods. CARDAM aims to develop into the European expertise centre for research, development and validation of industrial applicable alternative methods to evaluate the safety of chemicals. More information can be found at www.cardam.eu
ENERGY EFFICIENCY: INNOVATIVE SOLUTIONS FOR POLICY AND INDUSTRY At the request of the European Commission, VITO conducted various preparatory studies within the framework of the new Ecodesign directive. Via the Premia project, it developed a support framework for biofuels together with four other European partners. At the request of sector organisation essenscia, VITO examined energy efficient technologies for the chemical industry. Starting in 2008, the research
“vIto, developing technology for the future.” centre will be commercially marketing its expertise in developing ultra-capacity modules for particular applications via a specific entity Better-E.
VITO GOES INTERNATIONAL WITH OBJECTIVE ENVIRONMENTAL POLICY ADVICE VITO is a well-established actor on the international research scene thanks to its expertise in the area of energy and Best Available Techniques. VITO contributes to solutions to international policy issues such as climate and sustainable development via preparatory studies, opinions, recommendations and research projects. At the request of the European Commission, VITO advised revising the European IPPC Directive. VITO’s expertise with air monitoring should help improve the air quality in Chinese cities over time.
MORE BUSINESS THANKS TO NEW TECHNOLOGIES VITO’s research, tests, audits and recommendations help companies create more business and added value. VITO is using its expertise with porous structures in concrete applications in the medical and automotive industry. At the request of Noble International Ghent, the research institution is
testing the industrial possibilities of laser plasma welding of form components. The company OmniChem asked VITO to scale up the production process for a cosmetic component and to adapt it for industrial application. At the request of SGS Belgium, VITO developed and validated a new and innovative multi-component measurement method for soil and groundwater. Together with Fluxys, VITO is studying the ground in Northeast Limburg with a view toward using this area for underground gas storage.
PRODEM REACHES MORE THAN 300 SME’S AND EXPANDS SERVICE PORTFOLIO VITO’s PROmotion and DEMonstration Centre for environmentally and energyfriendly technology (PRODEM) helps SME’s in the selection of feasible and sustainable technology. Based on feasibility studies, lab programmes, research at pilot scale or tests in the company, PRODEM searches for the most appropriate solution to a specific situation. VITO will be strengthening its SME programme on two fronts in 2008: in addition to the existing environmental technological services, it is now also offering services in the area of energy-friendly technologies and secondary raw materials. Plus VITO guarantees the budget friendliness of this programme by keeping the research affordable to the SME.
COLLABORATIVE EFFORTS AROUND AND COMMERCIALISATION OF MARKET RIPE TECHNOLOGIES The development, implementation and application of knowledge: this strong combination is VITO’s trademark. Several VITO technologies made the step to adulthood during the past year. Atmospheric plasma, a new technology for activating surfaces, is gaining momentum worldwide. In 2007, after years of research and industrial collaboration projects, VITO concluded an agreement with German AFS to market the coatings and equipment developed by VITO. Together with Agfa, VITO launches Zirfon Perl® membranes for the large-scale production of high-quality hydrogen. To market its modular diff usive sampler for volatile organic compounds (VOS), VITO called upon the services of global player Gradko International Ltd. The research institution set up an international company to market its pioneering process for sustainable biodiesel.
IMPRESSIVE RESEARCH PLATFORMS, VITO’S EXPERTISE IN BLACK AND WHITE VITO has a range of large, high-tech research infrastructure at its disposal. Its Geodata platform offers information products tailored to the end user. VITO is also investing in the development of state-of-the-art high-resolution sensors for earth observation. In 2007, the foundation stone was laid for the Belissima ecological recovery system.
Marc Van Sande Trends in metals and materials
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Marc Van Sande CTO Umicore
After years of little recognition for companies that are active in the development and sales of materials based on metals, the sector today enjoys a real revival. Indeed, progress in many areas such as telecommunications, automotive, energy, etc… is only possible if innovation in materials is successful. The economic boom in the Asian part of the world has led to a rapid increase in demand for all types of materials, resulting in exploding prices specifically for the scarce resources such as precious and specialty metals. This puts an emphasis on the availability of materials to support growth and triggers new innovations in reduction of consumption and recycling-technology. The impact will be much bigger than anticipated with very interesting opportunities for companies active in this field. The key is to react and adapt fast enough and to focus the available financial and human resources on a limited numbers of topics, where we can make the difference. Because we don’t have major natural material resources in Europe and specifically in Belgium, we should emphasize knowledge based activities resulting in more innovation. In most cases innovation requires in the first place a long term view. Specifically, in the underlying basic activities, such as material science, innovation is not happening overnight. Most new developments take 7 to 10 years, which means relatively high risk and uncertainty. In this transition from a creative idea to a real innovation, incentives can play an important role. All studies have shown that indeed this phase is the key for success. But many companies are hesitating because of the risks and the need for a long term commitment. Competition is in most cases very hard with new countries entering the market place. Information is circulating extremely fast and is accessible for a growing numbers of people. As a consequence, a good idea or a new trend is picked up very fast by many players increasing the need for speed of execution. However, some of the bigger trends in society are becoming clear, which will help to develop longer term visions. The scarcity of natural resource became very apparent in many areas, ranging from energy, special metals, water, etc…to food for the growing world population. This supports a large number of actions from
governments and international organizations. It also opens major opportunities for innovation and new businesses. We have seen a real take off of the solar energy sector after decades of patience and struggle to survive. Large production capacity is being built and a number of new technologies are developed to reduce the cost of electricity from solar installations. At the same time the need for energy storage is increasing resulting in an acceleration of the production and the development of more efficient batteries and other devices to accumulate energy. These efforts are going in parallel with new concepts in reduced energy consumption, such as improved electricity grid management systems, low energy lightning devices, energy transport solutions with reduced losses, etc…again many areas of high innovation potential. Innovation is above all a matter of personal behavior, interaction between people and more general the culture of a company or a society. Because all of this is highly subjective, the only way to measure, recognize and propagate innovation, is to show and explain examples. Indeed, innovation has to be concrete
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Textiles
“however, some of the bigger trends in society are becoming clear, which will help to develop longer term visions.” and should lead to measurable results enhancing the value of an organization. It is part of our daily life and in addition to creativity, it has a tangible impact. In a business environment, this should result in new products, improved processes, lower cost prices, etc… As a general conclusion, the combination of these human aspects, the long term scope and the speed of change is the real challenge for the years to come. General solutions are not available but attracting the right people is certainly one of the key components.
The textiles industry in Belgium is possibly the least attractive sector to operate in today. The news is almost uniformly negative. Exports are declining, production is declining, companies are closing down and jobs are being lost. Ironically, however, there are several innovative companies who are putting the Belgian textiles sector back on the map as a world leader in technical and multifunctional textiles. Take companies like Sioen and Seyntex, specialists in protection textiles (textiles with protective properties for professional clothing, like fireproof clothing, bulletproof vests, reflective clothing for roadworks). Or Bekaert Textiles, with its multifunctional textiles for mattress manufacturers (see profile page 131). Or Helioscreen, a company that is active worldwide in sun protection, mainly as a weaver of sunscreen material, but also as a supplier of complete sunscreen systems. Important also are the leaders in artificial grass (synthetic turf )— this is the high-tech product of the Flemish carpet industry. Desso, Domo and Lano are world leaders in this area. Many worldclass football teams play their matches on Belgian synthetic turf. Let us take a closer look at Sioen to see how such companies are doing it. Sioen is a vertically integrated textiles company, they make yarn, they weave, they make finished products (clothing), they’ve even moved into coatings—something new for this textiles company—because it fits in their product portfolio, geared toward
solving their customers’ problems. Here’s a textiles company that has set its strategy to go after growth and high margins, economic factors that are distinctly uncharacteristic to the textiles industry. It accomplishes this by pursuing a product leadership position in its market segments. Also, it has chosen its products and markets carefully, according to its ability to add value via technology. That is technical textiles, in Sioen’s case. For example, textiles that absorb sound for the office furniture market. PVC coated technical textiles for truck side curtains, tarpaulins and tents. And multi-functional yarns for apparel, which is combined with quick-drying, anti-microbial and deodorant functions. And fire fighters clothing, flotation suits and life jackets, forestry clothing, body armour jackets. Sioen closely monitors its own performance in product development, making sure that a significant percentage of turnover is earned from new products. Not only an innovative product strategy is important but just as fundamental is the management of its value chain, its manufacturing and distribution operation that is spread around the world. Here, both speed and flexibility are key to their success. Sioen is innovative not only in the way it constantly comes up with new technical textiles but also in the way it manages a vertically integrated manufacturing company that is spread around the world, in the way it is able to diversify its markets to meet common production assets and diversify its product range to gain share-ofwallet in specific market segments. Owning the value chain allows it to respond quickly to market opportunities, but owning the value chain takes state-of-art (international) management capabilities.
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Chris Moris Food industry innovation is different
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Chris Moris General Director FEVIA
Innovation ensures the industry’s future Those who sift through Belgium’s macroeconomic statistics will notice something surprising: for fixed prices, industry’s gross domestic product share has remained constant since 1980, but for current prices this share has dropped from 26 % to 20 %. Add the pressure of increasing labour costs and rise of subcontracting and you see the industry’s real share in overall employment drop from 25% to 16%. The reason for this surprising phenomenon is the “streamlining” of industrial production. Industry is indeed succeeding in producing more and more under increasingly cheaper conditions. On the other hand, an increase in productivity is harder to achieve in the service sector. Because of this, services are becoming more expensive. This is reflected in a sharper rate of increase in current prices which also increasingly plays a role in terms of added value. Some doom-mongers jump to the conclusion that the industry has no future in Belgium. Not in the slightest! The industry is currently producing more and better products than ever before. There is, however, one important lesson: unlike in the service sectors, economic growth requires offering new products with higher added value. The conclusion is clear: innovation is the key to the industry’s future. It is therefore logical that the Belgian government is focusing on more innovation within the industry through a favourable fiscal climate for researchers and entrepreneurs through more investments in futureoriented scientific research through better cooperation between companies and universities
Food industry Innovation is different FEVIA, the food industry federation, also got into action and had its sector examined. What did this teach us? It taught us at least one thing: food industry innovation is different. Much more than in other sectors, the success of innovative food products depends on consumer acceptance. Thanks
to new technology, the food industry is developing products that enable us to live longer, better and healthier. However, this requires consumer confidence in the new products on offer and the necessary selfdiscipline for a healthy lifestyle. But, no matter how clear, studies alone won’t get you to the top of the knowledge economy. These studies must also be converted into policy, as this policy can open the door to innovation for companies who cannot do this on their own because of their limited size. However, large, multinational businesses can also benefit from this policy in order to gear their investments to local innovation possibilities. This can only benefit employment. As a food federation, FEVIA cannot yet take on the innovation challenge itself. The last thing a professional federation can and should do is interfere in the market game of competition. This is because innovation takes place in companies which use it to strengthen their market position vis-à-vis the competition. FEVIA is the ideal partner for the government and the academic world to improve basic conditions for company innovations. This is why innovation partnership is the Belgian food industry’s key to success. With this in mind, FEVIA worked hard on the establishment of food industry innovation centres. And these efforts have been rewarded with success! Food industry innovation is alive – Flanders’ FOOD and Wagralim Over the past few years, both Flanders’ FOOD and Wagralim were given the go-ahead by the Flemish and Walloon governments. They were founded on the initiative of regional subsidiary organisations of the FEVIA with the support of the regional government in question. Their mission is simple: increasing the competitiveness of food industry companies through targeted stimulation and implementation of INNOVATION. Both organisations are accessible to SMEs as well as to larger companies with a production unit and/or a R&D centre in Flanders or Wallonia. They form a platform between food industry companies and knowledge centres (universities, colleges and other centres). They are also information centres for the food industry that all companies can turn to with their specific (scientific and technological) questions and needs. The
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“some doom-mongers jump to the conclusion that the industry has no future in belgium. not in the slightest!“
R&D at Sioen is a “state of mind.” Yes there is an R&D team but everybody in the company is involved in the innovation process. All, from sales to production, have to think in terms of continuous improvement. Sales people especially are asked to think creatively with customers about new products, new solutions. R&D mainly has a coordinating role at Sioen. It is they who organise monthly product development meetings with people from the various business units. R&D has a central HQ here in Belgium but each plant around the world has its own lab too. The Sioen case is classical in the area of technical textiles but there appear to be other ways out of the commodity trap too. Take Santens, known for their bath towels. This company is able to compete from a cost perspective because their production is almost entirely automated. In addition they managed to build a brand, a reputation for quality, and thus demand higher prices.
general objective is strengthening, widening and deepening the food sector’s innovation process, by means of the following specific tasks: a. Development of knowledge: starting up demand-based research projects, based on the innovative needs of companies, in national and international centres (universities, colleges and other centres). b. Spreading knowledge: making knowledge widely accessible through supportive and advisory services (specific studies, follow-up of scientific and technological developments and evaluating consumer behaviour). c. Valorisation of knowledge and expertise: applying existing and newly acquired knowledge as widely as possible. With Flanders’ FOOD and Wagralim, the food industry’s future is in good hands. This is shown by the data of the European Confederation of the Food and Drink Industries, CIAA. According to this data, Belgium, together with Sweden and France, is one of the top three most innovative member states when it comes to food.
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ECOVER Single-minded focus on ecology and added value
126 ECOVER
Industrieweg 3 B-2390 MALLE Belgium T: + 32 (0)3 312 88 50 F: + 32 (0)3 311 72 70 www.ecover.com • Science & Technology • Business Model & Process Innovation • Design & Creativity
Ecover is a pioneering company producing ecological cleaning products for domestic and professional use. Ecover’s focus on the environment and sustainability goes far beyond its products. The company’s corporate responsibility has led it to prioritise sustainability as a key element of all its activities. Ecover was founded in 1980, in Malle, near Antwerp. Up to 1992, the company sold a niche product in a niche market. Products were distributed through natural product and health food shops. After 1992, under new ownership, the company took major steps to diversify and expand the business. It broadened the product range, revamped production, adapted pricing and sought out new mainstream distribution channels (although it also maintained its health food store distribution channel). This strategic move coincided with an upsurge in the market for “green” products and a new awareness around environmental and social responsibilities. While the operations have changed radically in scale, its principles of business remain crystal clear: as a company, Ecover sees the economy and the environment as being intertwined. It works to minimize any negative impact of its products and production on the environment by stimulating and conducting research on new technologies and raw materials. Ecover is now the world’s largest producer of ecological cleaning products. The company has locations in Belgium, France, Germany, U.S., UK and Switzerland. Its products are marketed in more than 22 countries.
INNOVATION ACHIEVEMENTS From the start, Ecover has been a pioneering company. The fi rst product offered was a phosphate-free washing powder, followed shortly after by a washing-up liquid. These products were introduced before phosphates were generally known to be a problem. In its product ranges, Ecover avoids petrochemical surfactants (detergent), which come from non-renewable sources and often biodegrade poorly, leaving toxins and chemicals behind in the water system. Plant-based and mineral ingredients from sustainable sources are used. However, the company also pays attention to environmental issues with these resources. For example, the exploitation of certain exotic plant oils can have an effect on the local ecology where they are sourced. Some ingredients can include petrochemicals in their manufacturing processes.
”an ecological and sustainable approach to business is absolutely central to the company and permeates all its activities. It is also an ongoing learning process.” Transportation must be considered as well. And while Ecover tries to use local ingredients as much as possible, it must balance this use against demand in the food chain. Ecover is addressing these issues by developing a new class of biosurfactant that is produced naturally by bacteria, where both the surfactant itself and any waste products are fully biodegradable. The company also places a strong emphasis on reducing the environmental impact of all its production activities. The premises in Belgium include the world’s first ecological factory, built in 1992. In 2007, Ecover opened its second ecological factory in Boulogne-sur-Mer, France, in Landacres Park, the first business park in Europe to have earned the ISO 14001 certification for environmental management.
SUCCESS & INNOVATION INDICATORS • Average annual growth of 20% since 2000 • International focus from the start: currently 95% of production is exported • R&D budget 3-5% of turnover • Awards include UN Global Roll of Honour in 1993 and Most Sustainable Enterprise in Flanders in 2007 Ecover invested more than 10 million euros, which is perfectly aligned with Ecover’s ecological and sustainability principles. Ecological and recycled materials were selected for the factory’s construction. Rainwater is used for the toilets and washing up rooms, and for maintaining the buildings and machines. Both factories, in Belgium and France, have green roofs that act as effective and efficient temperature-regulators and noise-dampening insulators. Apart from a few workspots, the buildings require no air conditioning or heating throughout the year. In packaging, as well, Ecover takes a lead, both in its own operations and with its customers. It follows a policy of “re-use before recycle”. At the factories, cardboard boxes are flattened and returned to suppliers to be used again.
At the consumer level, all Ecover bottles are made from 100% recyclable polyethylene. In the company’s health food channel, it offers a refill scheme for customers to reuse their original Ecover bottles. Ecover is also launching a bag-in-box program for the health food channel, using 100% recyclable cardboard.
INNOVATION MANAGEMENT An ecological and sustainable approach to business is absolutely central to the company and permeates all its activities. It is also an ongoing learning process A crucial element to keeping the company on track is the “Concept Manager”. The Concept Manager’s role is to question everything about the company and its activities, to make sure it fits in with the core philosophy and offers added value. In addition, he or she deals with issues that arise with both customers and suppliers, ensuring the end-customers that not only the products themselves, but the entire process chain of sourcing, production, distribution and development, meet the sustainability criteria they expect from the brand. Finally, he or she plays an important role in the company’s innovation plans, which are geared toward new product development. Innovation teams are made up of people from various disciplines (science, marketing, production, the Concept Manager, etc).
Besides the ecological angle, innovation is guided by the criterion of ‘added value.’ The company will only invest in new products where it sees an opportunity to add real value. For example, while dishwashing salts may fit in a brand portfolio of cleaning products, Ecover to date has not invested in salts because it finds no way to add value from an ecological perspective. This is crucial—all new product ideas are assessed according to their potential for Ecover to add value via R&D and ecological business practices. Ecover is ISO 14001 certified, the International Organisation Standardisation for environmental management systems audited by external experts. This requires the company to maintain an ongoing learning process, with feedback loops.
VISION Ecover is committed to creating and introducing ecological products that are efficient and meet market demands. New product areas for the company are personal care, home fragrances and car wash products. At the same time, the company will continue to invest in its core business, and develop innovative ways to produce effective and ecological washing and cleaning products for people all over the world.
Alex Van Breedam Innovation in logistics
128
Alex Van Breedam Director, Flanders Institute for Logistics
Many people call up images of technological fireworks when talking about innovation. This is also one of the reasons why the word “innovation” sometimes drags along a high taboo content in the business world, especially in the service industry. This distorted picture is strongly connected to a too narrow definition of what “innovation” is. In my opinion “innovation” can best be described as each process or product renovation which significantly influences the business model of a company. The impact on the business model of a company as criteria shows much better the use and the importance of the innovation for the business than only the technological content of the invention. After all, the impact of an innovation on the business model of a company is not necessarily linked to the technological content of the innovations. The introduction of the use of RF tags (intelligent tags), to follow up goods of a large production company, can have a lesser impact on the business model than a small haulage contractor who has decided to go and exchange his cargo with his competitor and as such adopt new logistics. In the example of the small haulage contractor hardly any technology is involved, whilst the impact on the business model of the company is that much greater. The innovation story in the logistics sector remains difficult in any case. Research has shown that companies in the larger sectors, such as the pharmaceutical and petrochemical industries, use about 10 % of their research and development funds for collective innovation research. Many logistics companies, especially companies which limit themselves to operational activities of transport and storage, simply do not have the possibility to set aside a research and development budget. After all, because of strong competition, the profit margins are mostly very small. However, many companies manage to innovate on various levels.
“the so-called horizontal collaborations, will probably be one of the greatest challenges” As logistics is a service-rendering sector, although with many interfaces with industry, the innovations are first of all process innovations, with or without a technological component. It also applies in logistics that technology is an enabler, a means. Technological innovations in logistics are associated, among others, with the information flow which is necessary for better management of the movement of goods. RF tags, the so-called electronic tags, are a beautiful example of a technological innovation which can be used to follow-up on goods. Follow-up and monitoring systems of goods inside and outside the company have been for years the object of innovation. Innovations in transhipment systems between different transport modes are also listed high on the innovation agenda. The attention to this shall possibly be increased as co-modality, the combined use of different transport modes, is important when striving for a more durable logistics. All these technological innovations have to, however, be embedded in the business processes for them to be implemented. Here the innovations in the vehicle technology, the eco-efficiency, are worth mentioning. Apart from innovations with a technological slant, there are also process innovations on a totally different level. Establishing partnerships and clustering of activities can also be innovative. Especially the establishment of partnerships with companies which have a similar position in the supply chain, the so-called horizontal collaborations, will probably be one of the greatest challenges of the logistics sector in the years to come. Notwithstanding all the instruments and technologies, it is confidence and culture which is crucial here. These collaborations shall however be necessary in the future to make logistics more sustainable, efficient and effective. Thus, being innovative demands more than ever a mental shift of the companies to indeed make the step to thorough and creative rethinking of their processes and products.
continued from p. 125
Further in the branding route is a company like Andres, which has its roots in the manufacturing of clothing but today is thriving mainly due to the strength of its two high-street fashion brands, Xandres and Hampton Bays. The company still does some its manufacturing but their main innovation has been to tweak the business model from efficient manufacturing toward design, branding and retail. Caroline Bis is another company that has managed to build a brand for itself. Yet others have branched off into niche sectors, like Onik Onik and San Martino for gala wear. In children clothing too, there are companies like Red & Blu. In lingerie, there’s Van de Velde and, more controversially, La Fille d’O. Murielle Scherre, the entrepreneur behind La Fille d’O, has a unique, playful and highly personalized approach to building her brand. In many ways, she is her brand. Fighting the demons of our industrial world, the lack of depth, of meaning and morality, she anchors herself at one end to the craftsmanship of earlier times and at another end to a unique and distinctly progressive form of self expression. Read her own story on page 136.
continued on p. 137
BEKAERT TEXTILES Intelligent fabrics for the future
130 BEK AERT TE X TILES
Deerlijkseweg 22 B-8790 Waregem Belgium T: + 32 (0)56 62 41 11 F: + 32 (0)56 62 41 13 www.bekaerttextiles.com • Science & Technology • Business Model & Process Innovation • Design & Creativity
In today’s stressed-out world, a good night’s sleep has become increasingly important, but increasingly rare. Bekaert Textiles has realised that quality of life depends on quality of sleep. This manufacturer of superior textiles has now moved into a new market model - engineering sleep comfort. Bekaert Textiles was founded in Belgium in 1892 by Ivo Bekaert. The company has evolved from a family textile group that exported worldwide, into a progressive multinational with premises in the USA, Mexico, Argentina, China, Australia, Germany, the Czech Republic, Turkey and Belgium. Bekaert Textiles has a deep respect for the cultural diversities and the local flavour in all the countries where it operates. Today this company has become a global leader in intelligent textile materials. In 2006, the company embarked on a groundbreaking new strategy - to become an expert in sleep comfort, and to provide innovative solutions that help normal people to sleep better, healthier, and more restfully. Product development has taken place at a rapid rate, and in the last two years the research and development department has tripled in size. The company has established the Bekaert Academy, a competence centre for sleep, sleeping comfort and bedding. It has formed partnerships with other manufacturers and universities, and worked together with customers to produce tailormade solutions. Since 2006, Bekaert Textiles has applied for a new patent every year, and has won the Interzum Design Award for intelligent material and design.
“at bekaert textiles, innovation is not a department, it is a mindset” Bekaert Textiles produces an incredible variety of mattress textiles. These products are beautifully designed with a luxurious feel, and most importantly, each offers a solution to a particular problem. Imagine a bed that smells clean and fresh every day? A mattress with Scensic freshness technology will neutralise all the everyday odours that creep into fabric. What about a thermal bed that provides an ideal buffer against temperature swings? New, thermally adaptive Outlast textiles that were used by astronauts in space and researchers in
Antarctica have now been incorporated into the ticking of this mattress. How about bedding that stays luxuriously dry? Microdenier technology from Secoluxe has created a breathable, moisture-absorbent fabric that remains silky soft and dry. Imagine a mattress that has its own natural defenses against bacteria, against mosquitos and fleas, or against the dreaded bed bugs? Innovative, high-performance materials from Bekaert Textiles now make all these possible, minimising the risk of allergies and discomfort, and allowing customers to enjoy a trouble-free sleep. Bekaert Textiles offers training and marketing advice to the customers who purchase these quality products. Retail training sessions are also given to salespeople, so that they understand the innovative concepts and designs and can explain the benefits to the end users. At Bekaert Textiles, innovation is not a department, it is a mindset that has become part of the company ethic and is embraced by every person from top management to the workers on the factory floor. A company newsletter communicates strategies and spreads the exciting news about the latest innovations. Idea boxes provide collection points for new insights. Suggestions for future products are welcomed from staff and their families. The best concepts are developed into new products, and the originators win prizes and awards for their creativity. Today, over 20% of the company’s turnover is produced from new products. This represents a massive increase, because as recently as 2005, new products totaled just 5% of turnover. By registering high-value patents on products and manufacturing techniques, and establishing licensing agreements with leading textile brands, Bekaert Textiles is aiming for new products to represent 35% of turnover in the future. Every day, Bekaert Textiles is working tirelessly to ensure that their customers can rest better each night. The company is headed towards a future bright with new technology and innovation, where increasing numbers of people will be able to enjoy the peaceful, problem-free sleep that they deserve.
SUCCESS & INNOVATION INDICATORS • World leader in intelligent textiles • 20% of turnover from new products
TRIBÙ Luxuriously simple outdoor furniture
132 TRIBÙ Langendijkstraat 5A Zutendaal B-3690 Belgium T +32 (0)89 61 27 50 F +32 (0)89 61 31 15 www.tribu.be info@tribu.be • Design & Creativity • Science & Technology • Business Model & Process Innovation
Tribù designs and sells contemporary, attractive, high quality outdoor furniture. Working with designers to add form to the functional, Tribù creates simple and refined leisure furniture which looks as good inside as it does outside. The brand consists of two collections: Tribù, which is clean and elegant, and Versus, which has a more Mediterranean feel. Tribù was founded in 1966 by Henri De Cock as an importer and agent of garden furniture for the Belgian market. In 1987 his son Lode De Cock took over the management of the company and created his own brand of “innovative outdoor furniture with an exclusive, but familiar, uniform and timeless design”. In 1998 he changed the name from De Cock to Tribù and concentrated on creating harmony between sober function and exquisite form, targeting the niche market of the modern, luxury villa. Tribù has been innovative in its vision, use of materials and collaboration with designers. “Tribù was the fi rst company to see the terrace as an extension of the house, not as something that stands apart from it,” says Lode De Cock. “Tribù brought the cosiness, design and quality of the indoor furniture outdoors and created the concept of ‘outdoor furniture’”. Moving away from the traditional and uninspired plastic and old-fashioned teak garden furniture of the mid-1990s, Tribù worked with designers to create a brand of contemporary, attractive, high quality leisure furniture. More austere lines combined with warm materials were used to fashion simple and timeless quality furniture which can be summed in the words “discrete luxury”. Recognition soon followed. Wim Segers, Tribù’s fi rst designer, won a coveted Henry van der Velde design award for his Natal light chair in 1999. Tribù was also the fi rst outdoor furniture company to be admitted into the prestigious “design hall” of the Salone del mobile in Milan. Segers now takes on the role of art director of the Tribù brand, working with internationally-respected designers like Belgian architect Vincent Van Duysen and Italian designer Piergiorgio Cazzaniga. For the brand “Versus by Tribù”, De Cock has brought in young designers Bram Bollen and Inge Van Gheel. All the designers receive clear guidelines before they start their
creations to ensure a similarity of spirit of the Tribù and Versus brands whilst allowing for individual interpretation.
“taking calculated risks hopefully leads to success, but if not then failure is a learning process” Imaginative and pioneering use of materials has helped to build Tribù’s success. In the late 1990s, the company capitalised on the minimalist trend popular in international design circles, bringing in inox frames to create more austere lines in the furniture. This sobriety was balanced with warm materials for the backs and seating. De Cock says that “Tribù is constantly looking for new, innovative materials to stay one step ahead of the market” and has an ongoing strategy of investing in product development, particularly in the area of materials. One notable success in this regard has been the use of canax®, which consists of a polyester core covered with hemp which has a very natural look and feel. Canax® is extremely environmentally friendly since it is a C0²-positive product and is completely recyclable. For Tribù, innovation means being trendsetting in the use of materials and especially in design while always remaining faithful to the
Success & innovation indicators • 300% growth in turnover from 1998 to 2007 (€3.7 million to €12.5 million) • >50% of sales from EU and beyond • Distribution in 44 countries • Henry van de Velde design award in 1999 for the Wim Segers-designed Natal light chair • First outdoor furniture company admitted to the Salone del Mobile design hall in Milan Tribù spirit of simple exclusivity or timeless luxury. Managing this innovation also requires hard work and is a team effort. Father and sons are still very much involved in the strategy and the day-to-day planning of this family business, which makes it easier to take decisions and implement new ideas. The philosophy of providing input and “thinking out of the box” also extends throughout the company — from designers to suppliers. De Cock’s vision of success is one of continually striving for technical perfection and ongoing improvement and not being afraid to balance on the fine line between success and failure. “Taking calculated risks hopefully leads to success, but if not then failure is a learning process,” he adds philosophically.
ARTE Pressing the limits in design innovation
134 ARTE Industriezone ‘De Waerde’ Senator A. Jeurissenlaan 1210 B-3520 Zonhoven Belgium T: + 32 (0)11 81 93 10 T: + 32 (0)11 81 93 11 www.arte-international.com sales.export@arte-international.com • Design & Creativity • Business Model & Process Innovation • Science & Technology
Milan, Paris, New York…these are wellknown centres of style and design. But Belgium, too, has its place in its list, and Arte --a world leader in top-end interior wallcoverings and fabrics --is no small part of this. Arte brings together creativity and process innovation to originate a new, Belgian style. Founded early in the fashion-conscious 1980s, Arte has always focused on innovation and trend-setting in order to create products of the highest quality. It isn’t the biggest player in the interiors market, nor does it wish to be. Its mission is to offer exclusive, luxurious collections, without being elitist. Arte’s products are true works of art, available only through interior designers and top retail channels. The company recently launched its second brand, HookedOnWalls, which offers a top-end collection targeted to the retail sector. In this way, Arte can take advantage of its high-end design and production competencies to address additional market segments. The company’s 120 full-time employees concentrate on three areas of activity: Converting: designing products and collections. The designers find inspiration from exhibitions, media and travel. They analyse trends, but always keeping in mind the company’s role as a trendsetter. Arte will also
“arte’s products are true works of art” work with top outside designers for certain collections. Production: about 50% of production is done in-house, ensuring the protection of Arte’s know-how and expertise, as well as complete quality control. Distribution: Arte distributes to more than 60 countries around the world. In Belgium, the Netherlands, France and Germany, products are distributed directly to the retail channels. Elsewhere, Arte works with select agents and importers.
INNOVATION ACHIEVEMENTS The key to Arte’s success is constant innovation in design, print methods and materials. While most wallpaper companies focus either on pattern drawing or on printing, Arte looks at them together, in a combined way. Arte takes calculated risks – the mark of a true trend-setter -- in trying out both new design
concepts and new techniques. Arte was one of the first companies to bring collections to the wallpaper market, rather than simply individual designs. The collections create ‘stories’ and provide a certain depth to design—this is design that has been thought through, that is grounded in deeper, underlying trends. While pure printing companies must focus on filling their production capacity, working within strict limits of design, colour and material, Arte is free to experiment with print methods, elements and techniques. It now works with a large range of interior substrates: wallpapers, vinyl wallcoverings, non-woven wallcoverings and metallic foil wallcoverings as well as fabrics, such as sheers, in-betweens, curtain fabrics and upholstery fabrics, and is always exploring new possibilities. The Arte brand competes with many topend suppliers, but none have a comparable range. Six to eight collections are offered at any time, and sold in customised cutlengths, instead of rolls. This tailored approach reflects the strong importance Arte places on service. As a result of its integrated approach and single-minded focus on superior design, Arte today is recognised as one the world’s leading players in the top-end of the wallcoverings market. To illustrate the respect it enjoys, Arte’s designs are now used by the most important supplier to the global hotel industry. This customer prints Arte’s designs onto more durable materials (wallcoverings in hotels need to be more robust than residential wallcoverings) to fill demand for the “design hotel” movement.
Innovation management Early on, Arte opened its own design studio: A.D.D. (ARTE Design and Development). The studio assures continuity and guarantees Arte a place among the world’s finest interior design companies. Importantly, Arte also maintains enough in-house production capacity to experiment with new techniques and to produce the more complex items. This gives the company total freedom to try out new, unusual and unexpected concepts. The studio and production work closely together for development. The designers seek to define new style trends, developing initial rough drawings. They bring their
Success & innovation indicators • 120 employees, 40 of whom joined in last 5 years • Growing rapidly • Doubled production in last six months • Launched second brand: HookedOnWalls
ideas into the studio to convert them into usable designs. The designers then collaborate hand-in-hand with production to work the initial rough drawings with different materials. This opens up almost unlimited possibilities for each design. Once everyone is satisfied with the results, the designs are redrawn in their final form for production. By creating an infrastructure that encourages and supports creativity, Arte has become a reference in the top-end interior design, and a benchmark for competitors at exhibitions.
Vision Arte’s vision is to create the most beautiful interiors in the world. To achieve this, Arte will continue to focus on the top end of the market, concentrating on design and quality, not on volume production.
Murielle Scherre Your pleasure is my business
136
Murielle Scherre Founder la fille d’0
“Your pleasure is my business.” This was the first one liner I wanted to link to my homemade brand of lingerie. It was on my business card. And it had a spelling mistake. And so far only one person pointed that out to me. And that makes me happy. My business is about content. My pleasure is about the shape it is wrapped in. Someone once asked me whether it was hard for a woman to start her own lingerie business. Until this day I am not sure if this question was a joke. It sure sounds like one to me. 5 years. That’s how long it’s been. It has been hard indeed but no tougher than doing an unfulfilling 9-to-5. I am 30 years old now. I am my own boss and I do as I please. And a pleaser I sure am. I had my education in fashion and the more I got to know this wicked world, the more I wanted to step out of it. I feel I can not change the rules if I do not master them first. I learn every day how other brands handle their work. That is the perfect example of
how-not-to for me. My longing to please comes from the heart. I long to make my own brand like the brands I want to find when shopping myself. The face behind the brand should be someone I want to invest my money in. I refuse to buy IKEA and H&M. they ruin everything I stand for as a brand. With la fille d’O I aim for the long lasting effect of decent quality and design. Like a lover you have known for a long time but who does not fail to surprise you time and time again. When designing I think of all the adventures these women wearing ‘O will get involved in. I am not thinking of the effect it will have on my wallet. I want to liberate women from negative self-fulfilling prophecies. I want them to be able to slip into my collection in the morning and be open to all the options that will come their way that day. Or night. No awkward blushing. Only intended red cheeks. During these five years of experimenting with the rules of the fashion industry I find more and more people around me refusing to walk in line any longer. They show great disbelief that big companies
contiued from p. 129
Left: collection: cake cats and curiousity - © Cameron Smith below: california here i come © Murielle Scherre
not try and ask for the chef’s specialties. Every brand tastes just like the rest. Big brands try to create a product that seems commercially interesting but is far from something we all have been waiting for. Thus they need to create the demand synthetically. A demand that can not be stretched further then 5 months. That is when the bond snaps and makes room for the mayhem of sales. Shops are frantically trying to get rid of the same objects that were coveted only months earlier. No wonder clever customers just wait till the storm cools down before they go shopping.
“during these five years of experimenting with the rules of the fashion industry I find more and more people around me refusing to walk in line any longer.” still take them for retards instead of assets of inspiration. They are fed up with the modern safe play of design when all they crave is daring novelty. They have a hungry identity that is dying to be fed but all their different cravings can only be pleased one trend at a time, for there is no room for different dishes at fashion’s table these days. The cake of mediocrity is big enough for “all” of us but one must
This whole manmade circus is forced upon you when you decide to jump into the weird world of fashion. I feel only contre-courant from a professional angle. Leaders don’t know how to handle this brand of mine that refuses to walk in line but enjoys the view as it pleases. That motivates me. That and the crazy feedback I get from the women actually wearing my collection. They share good and bad with me. That shows me I need to fi nd the energy to fight this revolution on a daily basis. We are constantly evolving into what seems to be a better society. Why not create one that helps us instead of being slaves of the structure overpowering us. There is no use in waiting till help will come from above. Like a fashionable deus ex machina. This is a change we can make ourselves, and we can start it right about now. Even when that revolution starts between your legs, even on a small scale the result can be rather impressive. Lingerie might have been considered the unmentionables of fashion, if you make it with heart, it will be the word on everyone’s lips. Dim the lights. We have work to d’O.
Construction Components and Furniture – the Power of Industrial Design Technical innovation is being applied to great effect by some key players in the ‘house & home’ sectors. Take Recticel Bedding, the manufacturer of the “Lattoflex” bedframe system, which has become somewhat of a household name. Or Unilin Flooring, producer of “Quick-Step” laminated flooring. Their ‘click’ system has been patented worldwide. A number of other successful companies in these sectors tell a design story however. Key examples are companies like Extremis and Tribu (see page 132), both important creators of design garden furniture. In wall coverings, Arte is an absolute world player in the top segment of the market (see page 134). In lighting, Modular Lighting Instruments has captured an important position in the top end of the market. Probably the most respected design-orientated company in Belgium is JAGA, a manufacturer of radiators with a world-wide reputation. According to JAGA CEO Kenneth Van De Velde, innovation is an abused term. Everybody claims to innovate. But in a company like JAGA innovation is not simply something that is done in the product development department. For JAGA, innovation is about passion, something that the entire organisation lives and breathes. Innovation is an absolutely central element in JAGA’s strategy. As a result, JAGA has become an example to others in the way they manage their innovation process—in fact, they’ve innovated the innovation process. Key here is the way they open the idea funnel as wide as possible, to staff, to customers and to a broader community of consumers they have developed around the concept of uchronia. While the creative phase is truly unique at JAGA, they too need to balance creativity with control and discipline once the process moves beyond the idea selection phase. Ideas are screened using well-worked out risk and product portfolio models, product prototypes are developed rapidly and finalised products are brought to market as fast as possible to optimise returns. This is no easy task. While JAGA at one end offers a highly stimulating, open ‘design’ environment (with images of young folk building weird and wonderful constructions in the Arizona desert) one needs to recall that JAGA is also a hardnosed manufacturing company—it builds radiators. To read the full story see Van De Velde’s article on page 172.
Creative Industries Placing Belgium on the map The creative industries—music, film, book publishing, theatre, design services, architecture, fashion, etc—as the name implies are supposed to be creative, which for some is synonymous with innovation. In fact, it isn’t. Creativity is the development of new ideas that have the potential to solve problems, to create value. But innovation goes further to encompass the execution of those ideas, to deliver value, improved efficiency and effectiveness. Thus, some sectors in the creative industries are instrumental in innovation, if they support other industries in their value creation. Yet others are innovative themselves, in the way they create value via successful art or entertainment. In Flanders at least, the creative industries are growing rapidly (according to a 2006 FlandersDC/Vlerick study) but apparently do lack a degree of entrepreneurship, innovation and internationalisation. That is the bigger picture. It is the individual success stories, however, that are putting Belgium on the map internationally.
continued at p. 141
Axel Enthoven & Alain Denis Put the user first
140
Axel Enthoven & Alain Denis Partners, Enthoven Associates
The 21st century started as the century of creativity. In Europe, young people are attracted by creativity and every year tens of thousands begin studies in a domain linked to a creative profession, from fashion design over graphic design to industrial design. Managers and their gurus have identified creativity as the next buzzword and look at ways to better harness its potential to create value and business success. Creativity has many faces. If you want to be inspired do not forget the user as a source of creative ideas and real innovations.
create value by hiring an anthropologist who challenged many of the preconceptions inside the company by looking at the user from a different angle. Often it is not necessarily the education that makes me a good translator of user needs; it is a combination of education, training and attitude. Psychologists and anthropologists are the obvious choice, but in general persons involved in qualitative market research and those trying out original research techniques bring the highest value. These could as well be economists or sociologists. Listen and observe
People-centred Whether you call them users, customers, or persons, those who actually consume or use your product or service are an essential source of information. Peoplecentred and user-centred design have become the latest trend for industrial and product designers. The qualitative market research community is diversifying its offer and developing new combinations of techniques to respond to demands from industry. , whereby the user is not only the end-user but also the one who pays, who stocks, moves, installs, maintains, etc. People have aspirations which transcend their needs. Products that are developed technologically or via an R&D process typically lead to incremental changes, exceptionally to real breakthroughs. Finding creative ideas through a true understanding of people’s aspirations can make the difference and lead to real innovations. Hire specialists There is no simple solution to understanding the user. Success comes from a combination of techniques and expertise. The ideal innovation team will have a good mix of profiles (not everybody needs to be creative in an innovation team, good ‘finishers and ‘do-ers’ are also needed) and a good mix of expertise. Industrial and product designers increasingly play a coordinating role in this process as they have the capacity to create the bridge between R&D and marketing. One should, however, also look at ‘specialists’ among the users. Again, product designers are well placed: they are trained to think as a user when they develop a new product. But there are other professions that can play a role. Microsoft managed to
Use all the techniques available and feasible to understand the user. This means off course listening to the user and trying to understand what is meant by the words and the non-verbal communication. It also means looking at the people. People do things with your product which they will never tell you. Observation combined with listening will help to understand what people really do, think or feel. The challenge with observation techniques is the balance between cost and value. As with many qualitative techniques, you know what you are going to spend but you do not know in advance whether something useful and operational will come out. The key to productivity in this respect is linked to a combination of factors. In the choice of the user, it is sometimes better to focus on certain types of users (heavy user, very critical, very creative) rather than an average user. As regards the models used for interpretation, a combination of techniques (listening) and the expertise of those interpreting will be critical. Try it out The sooner you try things out yourself, the better. The design team should be hands on, should try out solutions and not only count on what others are saying. Again, experience adds depth to the understanding of what users will tell. A key implication is the importance of investing in prototypes. Listening, observing and experiencing will help to generate ‘insights’ which will in turn offer opportunities to generate real innovations. When it comes to harnessing the potential of creativity, don’t forget to put the user first!
continued from p. 138
“Listening, observing and experiencing will help to generate ‘insights’ which will in turn offer opportunities to generate real innovations.”
In Fashion, Belgium, or more specifically Antwerp, gained worldwide fame via the Antwerp six, a group of influential fashion designers who graduated from the now famed Antwerp Royal Academy of Fine Arts in the early 80s. Designers like Walter Van Beirendonck, Ann Demeulemeester, and Dries van Noten remain important and innovative designers in the international fashion scene. Since then the fashion sector has seen an absolute explosion of creativity, centred mainly around the Antwerp fashion school. Other, more recent designers of international repute are people like Ann Huybens, Raf Simons, Bruno Pieters, Christophe Coppens and Erik Verdonck. We have looked at the manufacturers who use design to add value to their products. The people who help them in this are the designers themselves, people like Axel Enthoven from Enthoven Associates and Arne Quinze
continued at p. 145
Nazooka Bringing the power of to the consumer
142 NA ZOOK A Baron d’Hanislaan 11 B 2000 Antwerp Belgium T: +32 (0)3 297 18 85 F: +32 (0)3 297 18 86 www.nazooka.com info@nazooka.com • Design & Creativity • Science & Technology • Business Model & Process Innovation
BUSINESS DESCRIPTION AND HISTORY Nazooka started as a small company by 3D animation pioneer Rudy Verbeeck and his wife Natascha Heddendorp. Out of the long-time experience of computer animation production for the advertising, music and film industries a new insight in a next generation animation tool emerged. V-Stage combines the ease of use, real-time interaction whilst retaining the traditional cartoon animation quality. Today V-Stage technology is licensed as the V-Box product, a unique combination of hardware, software and content, to TV stations, producers and live event producers. Nazooka is also pursuing other markets for the use of its technology. The company established itself as a player in the niche market of security communication and training in airports. Another exciting area that Nazooka started to approach is the theme park industry, but V-Stage also allows for exciting applications in education, advertising, online & mobile applications, training, point of sales, special effects, and many more. The use of V-Stage real-time animation technology opens up new markets and enables companies to communicate in new ways with their customers and partners.
INTERNATIONAL PRESENCE Nazooka is dramatically increasing its international presence and is attending major industry tradeshows such as MIPTV, MIPCOM, Siggraph, IBC and more. Today Nazooka is realizing close to 90% of its turnover outside Belgium and the company is actively looking for partners in different industries in worldwide territories. Turnover is expected to double in the next year, thanks to international expansion.
INNOVATION AT NAZOOKA Innovation is key to the company and is the driving force behind the team. The company is unique in combining a top creative team with a world class research and development team. It is this merger of left and right brain specialists that lets the company produce unique products and formats. The Nazooka team is striving to revolutionize the way computer animated content is being produced and used. In order to
achieve its goals Nazooka needs to fi nd new ways of letting people interact and use computer generated images and has developed short-term, mid-term and long-term R&D programs. The company is also constantly looking to attract new talent, both to complement the creative team as well as the research and development team. V-Stage products allow for real-time computer animation formats in all media. For the fi rst time the integration of virtual characters, life images, ease of use are combined seamlessly into one product enabling the company as well as its customers to create innovative content formats. Nazooka continues to increase its R&D efforts and has attracted extra investments to be able to start developing the next generation technologies V-Stage 2 and NM8. To achieve its ambitions the company has
SUCCESS & INNOVATION INDICATORS • 90% of turnover international • 200% growth in turnover • R&D spend increased to 50% of turnover Recent major breakthroughs for the company include: • V-Stage being used for live events for such artists as Marco Borsato, Praga Kahn and the Elements of Life world tour of DJ Tiësto. • A joint venture with Major League Baseball Advanced Media based around a new animated mascot called Jack, who is a smooth talking donkey hosting live talk shows and presenting other entertainment programs, all made possible through the use of V-Stage technology. • The Loveland TV format was developed in collaboration with one of the world’s authorities in TV formats, Tom Gutteridge, Nazooka developed a ground breaking TV-format that has been picked as a prime time TV show by Sky TV UK as well as Fox TV USA. • Airport security movies for over 50 European airports. • Computer animated training movies for all European Securitas Airport Security divisions. • Set-up of the international Anygma R&D team, developing the next generation NM8 technology.
animation chosen to take an ambitious path and has succeeded in attracting a team of international experts, ranging from ex Microsoft Graphics Research head Conal Elliott to experts from the U.K. and Australia.
The future The next step for the company is to start building a web presence to offer a new technology that will enable the consumer to participate in the creative process of producing animated content. This NM8 technology will offer the creation and exchange of procedural content to the consumer enabling him or her to produce high quality animated movies without the knowledge of specialized software or animation skills. NM8 will be a tool that will truly boost anybodyâ&#x20AC;&#x2122;s creativity.
Arne Quinze A conversation with founder & art director Quinze & Milan
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Arne Quinze Founder Quinze & Milan
If images could carry words, the act of defining Arne Quinze’s work and its impact would be a lot easier. Not easy, but easier. Even in a humble attempt to omit superlatives, the trail-blazing, innovative, visually overwhelming and energetic projects that Quinze has been able to realize over the last few years grant the use of lavish words – in that respect, those fit the extravagant artist rather well. Capturing the personality of the founder and artistic director of Belgian design company Quinze & Milan - who simultaneously leads Studio Arne Quinze (architecture) and is branching out his conceptual creative outbursts under his own name, Arne Quinze (art) - in a few words is all but impossible. In just a few years, Quinze succeeded in building up an impressive oeuvre. Take only Quinze & Milan. Founded in ’99, Quinze & Milan is more than a design agency – it’s also a platform, a label that features the work of other designers and supports architects and designers in the realization of their ideas. As a result of its success, Quinze & Milan over the last few years saw itself multiplied in staff and output. In ’99, it was the now infamous PRIMARY POUF 01 that put Quinze & Milan on the design map, and Belgium with it. Since then, Quinze has realised a multitude of projects in his native country. From private houses to auditoria, an experience lab, exhibitions and installations to a brothel and outdoor works in public space: the broad scope of projects underlines how Quinze has not been restrained by any sort of limitation in communicating his visions. Probably most illustrative in typifying the artist’s work and approach is Cityscape, an immense temporary outdoor installation in Brussels Quartier Louise, intended, in his own words, ‘to get Brussels back on the map’. Cityscape - a joint operation with car
“Its immense size – 40 meter long and 25 meter wide – absorbs you.” brand MINI, who sponsored the art project - can be interpreted and explained in many ways. Just as the wooden structure holds many faces, changing in dynamics when it reacts upon the shift from day to night as much as it interacts with the constant flow of curious visitors, the mission or goal for Cityscape is multifaceted. Its (nocturnal) stillness gives rise to a place of silence, making it a contemporary version of a Buddhist temple. The transparent sculpture, mimicking a cloud on speed, provides a much needed intervention that opens up the capital’s emotional potential. Quinze adds, ‘Cityscape could have been built as
Left: Collection: Cake cats and curiousity - © Maarten Kinet Above: Collection: Basics - © Sonny Blabla Below: Collection : La Toille Vierge - © Maarten Kinet
easy in Berlin as in Brussels. But I really felt Brussels needed, and deserved it. Cityscape serves as the catalyst, a step in a new direction that will bring life to a city that has been asleep for half a century. I’ve lived in Brussels for ten years; it is sad to see that the city’s potential is not fully cultivated. Foremost, people need to start talking to each other again. With Cityscape, I hope to revive our capital by fostering human interactivity. With our high standards of living, we tend to live our life in an extremely solitary way.’ Sunrays play with the wooden beams; a game of light and shade creates ever-changing patterns. Its immense size – 40 meter long and 25 meter wide – absorbs you. Cityscape calls for instant reactions, it’s impossible not to feel anything. At first glance, Cityscape might appear chaotic. Not surprising, with 60 kilometers of beams that visually and literally crisscross into air. The 72 ton structure floats up to 15 meter in the sky, supported by 33 stilts. A
full-time team of ten people used 240,000 nails to bring the sculpture together. All wood is certified, making it a statement in favour, and not against the environment. If its body language undeniably holds a speed factor, the building process covered just six weeks. Quinze: ‘Cityscape resembles a frozen movement; speed caught in time.’ Movement, speed, dynamics, interaction: these are recurrent elements in the (futuristic) works of this edgy Belgian artist, elements that have been noticed beyond the country’s border. Quinze underlines the importance of doing projects with a worldwide impact in Belgium, emphasizing the power of collaboration with others to raise impact and awareness. A masterplan for Brussels is on the drawing table. ‘In Italy or the Netherlands, this is the most common thing, but over here we seem to lack chauvinism. We don’t seem to realise that we simply owe this to our heirs, the next generation.’
Koen Verhaert Innovation is hot
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Koen Verhaert CEO Verhaert masters in innovation
Resources (and hope) are being massively poured into innovation as an instrument to enable companies economically to make a difference. Because of this, increasing attention is –rightly- being paid to innovation management. How can we steer, orient, dose, measure and adjust innovation? The strange thing is that we also cripple a lot of innovation initiatives with current management. All too often it seems like innovation and management get in each others’ way. A disturbing thought, especially if you consider that innovation will have an increasingly prominent place in general management and vice versa. These kinds of doubts about the manageability of innovation will sound strange to those who know me. Why do I make this remark? To a large extent, product innovation is a learning process, proven during inversion. When you’re not learning you’re probably simply repeating and therefore copying. Moreover, product innovation starts with a great deal of uncertainties. Uncertainties about the extent and at which terms an idea will be appreciated by the user, how the market will respond and how the idea can be realised. The user’s appreciation of the product is the main question here. Successful innovation management therefore begins with the recognition of uncertainties and the inherent learning process.
“All too often it seems like innovation and management get in each others’ way.”
continued from p. 141
From this perspective the management question is how we can accelerate this learning process and how we can centralise the user in the development, in order to produce effective products with added value. This is in contrast with management practice, which too often focuses on certainties. Avoiding uncertainties and thus crippling innovation, or assuming that these risks will not have a substantial impact on the userâ&#x20AC;&#x2122;s appreciation of the product.
Music is a more recent phenomenon. While in the past we may have seen a Belgian artist on the charts every decade or so (remember Vaya Con Dios and Technotronic), since the 90s Belgian artists and bands like dEUS, Praga Kahn, Styrofoam, Goose, Hooverphonic and Soulwax have gained international recognition. Most commentators agree: something seems to be happening creatively.
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Johan Valcke My vision on design
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Johan Valcke Director Design Vlaanderen
How did I come to design? Why have I spent thirty years promoting this human activity? I studied archaeology at the University of Ghent and specialised in the prehistory of Africa. I wanted to research at what point our prehistoric ancestor took the first steps to humanity, to culture, to “civilisation,” at what point he first began reshaping his environment with new insights. From the very start of my professional career I have honoured this philosophy of renewal. This idea also fed my intense interest in contemporary art. As it stands, due to circumstances I never did realise this high ambition of locating the origin of the creative human being. Professionally I landed up not in Africa, but in Brussels at the Economic and Social Institute for the Self-Employed, where an art historian was needed to perform one of the Institute’s tasks, the promotion of contemporary art craft. Via my education in archaeology, trained in discovering the spirit of civilisation on the basis of its material residues, I managed to quickly work myself in this new role. I knew a great deal, albeit at a theoretical level, about traditional craft techniques in ceramics, glass, textile and precious metals. An archaeologist is immersed in these areas because he needs to be able to place the residues of objects found in excavations in their proper context. This knowledge facilitated my communication with designers from the worlds of ceramics, textile, precious metals, glass and wood.
I visited the studios of many contemporary artists and saw how they transformed raw materials in beautiful, often very functional objects - from sand to glass, from a lump of clay to a slender pot, from a rough piece of iron to a useful tool, from a sliver of silver or a small wire, pipe, bar or pebble of gold to a jewel. I did not only study the tools or techniques, but also the synthesis of spirit and hand, the creativity, or in a contemporary paraphrase “the non-technological renewal” that is the driving force behind these disciplines. This transformation of raw materials to finished, functional, aesthetic and groundbreaking objects made a persisting impression on me. Over time this too shaped my vision on design.
“This transformation of raw materials to finished, functional, aesthetic and groundbreaking objects made a persisting impression on me.” Within the complex entirety of design, where much human knowledge is contributed from areas such as ergonomics, materials, ecology, psychology, history, etc… there is one constantly recurring element, that in combination with the other elements determines the superior value of a product in comparison to its banal peer, and that element is beauty. Without beauty, without an aesthetic dimension, there is no design. Take it away from an object and the bleakness of being pushes through. It is true that beauty is difficult to define, that it has engaged humanity since its creation. The concept of Beauty is on the one hand something timeless and universal. On the other hand, it is something that needs to be understood in context of its culture and time. Our shiny, seamless, bright, linear, industrial products all emerged from the theories of modernism. In this period, situated mainly between the 1920’s and 1940’s, research was conducted by eminent architects and designers (think of Le Corbusier, or of Bauhaus with Gropius, Breuer, Moholy Nagz, Mies van de Rohe, or think of our own Henry van de Velde, or Frank Lloyd Wright, etc) with the goal of providing people, the masses even, improved and
continued from p. 147
more beautiful housing, better and more beautiful mobility and simply more beautiful and better objects so that people can feel good, can appreciate life. In other words, they strived for material liberation from the ugly, the banal mass product. This ideal, this desire for a better and more beautiful world, in my opinion is closely related to the ideals of the Enlightenment. Design is the child thereof. In 2007 we commissioned a study that strived to understand what people fi nd beautiful in design. The results were astonishing. On the one hand it emerged that people have a common longing for beauty, while on the other hand the motives for fi nding something beautiful vary dramatically and are in fact undeterminable. Beauty is like love. Everyone knows the phenomenon, everyone experiences it, but everyone has differing motivates and criteria for recognising love. The same applies to renewal. What is new? Litres of ink can flow over this, but all feel intuitively whether something is new. Technology but also philosophy, art and mechanics, in fact all human activity has the potential for being renewing. This is how our human society turns, since our prehistoric ancestors fi rst hit stone upon stone, or sharpened the fi rst stick and in this way manufactured tools, still by our eternal drive to improve our survival chances, to make our lives more agreeable. That is the essence of design: making our lives more agreeable, more enjoyable. But of all elements that shape design, it is renewal and beauty, two forces, which are at the base of much human activity and thought, which determine my thinking on design.
In the performing arts some phenomenal work is being done. Arts companies like ROSAS, Dragone, Ultima Vez, Troubleyn, Muziektheater Transparant, and others. At the recent theatre festival in Avignon, the Belgian artists were the absolute flavour of the town, lauded for their ‘free’ minds.
In film Belgians occasionally come up with good work in the art cinema category. However, the most striking and possibly most promising group to emerge recently are nWave, specialists in 3D animation film. They recently released the first pure 3D animated feature film (Fly me to the Moon), surprising the Hollywood folks who at the time were heralding the start of a new era in 3D film (but hadn’t actually made anything). Read founder Ben Stassen’s article on page 150.
Ben Stassen 3D cinema: an evolution or a revolution?
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Ben Stassen Founder & CEO nWave
I first became acquainted with computer animation in 1990. From the start, I was fascinated by the long term potential of this new production tool. A computer graphic workstation is a mini Hollywood studio on a desktop. You can create an entire movie with it, and now with high speed internet you can even distribute it worldwide using the same computer. From the start, we decided to build nWave Pictures as a mini studio using the CGI workstation as its foundation. We were not interested in work for hire assignments. We wanted to create our own content and distribute it worldwide ourselves. In the early 1990s, we focused on a few niche markets such as ride films, Imax films and 3D/4D films for theme parks and started to finance, develop and produce such films and release them worldwide on our own. We quickly established ourselves as the leading independent supplier of specialty films worldwide. Most of the initial productions were in 2D, but in 1997 we decided that everything we produced going forward would be in 3D. As far as making the transition to 3D feature film production is concerned, the turning point came with the release of Spy Kids III in 3D. Although the film was released in the “sub-standard” anaglyph format (red/blue), it was a huge hit worldwide. Hollywood started to take notice. But the real milestone, in my opinion, was the release of Polar Express in Imax 3D. The film grossed over $45 million in just 67 Imax 3D theaters in less than 2 months. That’s a staggering $700,000 per screen average. The feature film industry could no longer ignore the appeal of 3D. At the same time, the roll out of digital cinema started to take place; a prerequisite for the build-up of a large 3D theater network. Several hardware companies got involved in the development of quality digital 3D systems making it possible to convert digital cinemas to 3D at a reasonable cost. Seeing all the forces at play in the feature film business, we decided it was time to go for it and make the move from specialty films to 3D feature production. The search for a script that could be drastically enhanced by the 3D took almost 2 years. When I read Domonic Paris’ script “Fly Me to the Moon”, I knew it was perfect for us in terms of both content and
form. It is the story of three tweenage flies hitching a ride on the Apollo 11 mission to the Moon. Space lends itself really well to 3D (lots of floating objects). We were ready to embark on the production of the first full length 3D animated film. 3D cinema has been around since the early days of moving pictures, but the public’s enthusiasm for 3D films was never been more than a passing fad. We can pinpoint several issues that led to the decline of 3D cinema in the past such as the poor quality of the projection systems or the fact that the majority of the 3D films were low budget B-movies. But the key issue had to do with the fact that these films relied solely on the gimmicky aspect of 3D. The long term viability of 3D cinema will greatly depend on the feature film industry’s willingness to treat the 3rd dimension as a revolution, rather than a mere evolution. There have been several important evolutions in the history of cinema such as the transition from black and white to color. This type of change impacted the way movies were experienced by the public, but did not radically alter the way the movies were made. There has been only one major revolution in the past, namely the move from silent films to movies with sound. This not only affected the movie experience itself, it revolutionized the way films were made, from the writing to the casting, the directing and the editing. For 3D cinema to revolutionize the film industry, we need to drastically change the way films are made. The 3rd dimension brings about a new language of cinema. The writing, pacing, framing and lighting must be radically altered to achieve 3D immersion. From our experience in producing and exhibiting 3D films in special venues, it seems very clear that the real appeal of 3D cinema over the long run does not come from the gimmicky use of in your face effects, which are fun, but rather from the sensation of total immersion, whereby the audience no longer watches a film through a window (the screen) but is transported into the filmic space itself. We don’t bring the story to the viewer; we take the viewer into the story. You want the audience to forget there is even a frame around the picture. You want them to be part of the scene.
“This time around, I do believe 3D cinema is here to stay! But there are still challenges ahead.” There is a lot of trial and error involved as we all need to learn how to speak this new language. We have not even scratched the surface of what is possible. But that’s the fun part. When it works though, it’s magic! Making 3D films for special venues has been a great learning process. When you make a 3D film for a theme park for instance, it’s all about the immersion: more often then not you don’t even try to tell a story and if there is one, it is very simple. With “Fly Me to the Moon” on the other hand, it is all about the story and telling this story in a new and original way. You use the 3D immersion as way to position the viewers and take them along on a space adventure of the third kind… This time around, I do believe 3D cinema is here to stay! But there are still challenges ahead. Three conditions have to be met for 3D to have long-term appeal. The projection quality has to be top notch. The advent of digital projection hardware is clearly the answer. So I don’t see this as a real problem. Content is key. We need to see a steady supply of films designed and created in 3D for 3D only release. Every major studio seems to have 3D projects in the pipeline, so I don’t think this will be an issue. The biggest challenge though comes from the exhibition side of the business. The long term viability of the 3D out-of-home film exhibition will depend on our ability as filmmakers and exhibitors to deliver truly immersive 3D experiences. The design of the theater is the single most important factor in achieving full immersion. You need a wall to wall and floor to ceiling screen. The theater must have stadium seating with a steep rake; you want the viewer as close to the screen as possible, where everyone is seated in front of the screen. You don’t want anybody on the side or looking up at the screen.
A lot of the newer stadium seating theaters are already adequate for a good 3D experience, but in the long run I hope exhibitors will build specialty 3D venues with taller screens as the wide aspect ratio is not optimal for 3D. We don’t necessarily need giant screens to enjoy good 3D, but the right all around proportions and theater design are key.
The Belgian Innovation Formula
Are there some common lessons or useful principles to be learned from the Belgian innovators? Think back to Devgen, the biotech company that stepped in the market with an enabling technology that could have gone in any direction, but that quickly carved a market out for itself in crop protection and seed technology, not only on the basis of its R&D work but also on the basis of good strategic execution. And LMS International, who increased share-of-wallet by expanding its competencies from testing to simulation systems. And Bekaert, who builds R&D centres around the world, on the doorstep of their major customers. And Umicore and Alcatel-Lucent, who develop innovation “ecosystems” by forming links with other companies, SMEs, universities and cluster organisations. And Sioen, who manages a vertically integrated operation around the world, constantly putting new technical textiles on the market. And Bekaert Textiles, reconceptualising its focus from functional textiles to engineering sleep comfort. It seems inconceivable given the breadth and diversity of this economy, but there are some clear patterns to be observed here. To start with the cliché, most of
these companies are ‘niche’ players, they are active adjacent to the main categories in their market. They make the often invisible components in the products we as consumers experience. They often occupy a spot earlier on in the value chain, producing a component or supportive system that is required by another product, or a next phase of the value chain. This is no accident. Many of the managers we spoke to have a clearly outlined strategy in that regard. They have identified their category, their market segment, and their strategy is to dominate or lead that category worldwide, both from a technology and market (share) perspective. It is estimated that ICOS Vision Systems has 70% market share globally in its category. EVS, supplier of production systems for TV broadcasters, is the undisputable leader in this category. Melexis—your car is likely to have multiple components made by this company from Tessenderlo. nWave—world leader in 3D films screened on IMAX and theme-park screens worldwide. With the exception of companies like Porthus, which thrives on the back of strong network effects (its supply chain platform for the distribution), nearly all
continued at p. 153
Mick Bremans Managing innovation beyond R&D
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Mick Bremans CEO Ecover
A successful business story always starts off with an innovative idea. It could be about anything, like innovative technology, original marketing strategies, exceptional customer service, new manufacturing processes and/or a combination of all these things. Success happens because certain initiatives simply stand out. Too often, innovation is restricted to defining the work done by scientists or researchers who stun the world with their achievements, especially when it involves their lifetime work. Still, for every company wanting to succeed, ongoing innovation to products or services should be seen as essential. Innovation should no longer be steered by the R&D department alone, but from everyone in the organisation from the factory floor all the way up to executive level. Innovation is what brings dynamism and commitment to an organisation. Without it, there is just a flat organization. When I joined Ecover, now just over 15 years ago, it was primarily the research department that came up with new ideas of what the company should be doing and the direction it should be following. Over the years, we continuously increased investment in our research activities, but once everyone in the organisation started becoming involved in the innovation process we saw the company really take off. Everyone started playing a part in growing a business where sustainability would be central. In our administration new systems and procedures were created and implemented. The H.R. department developed a mobility plan that focussed on the environmental impact of how our staff commuted to work. They managed to implement this long before government agencies caught up. The marketing department developed fresh ideas, new products and promotional activities driven by sustainability. Company-wide objectives towards innovation became clearer and so did our commitment to continue developing better products that minimize environmental harm. Innovation became part of everyday decisions. Innovation must live and breathe throughout the modern organisation. This involves all levels – even factory workers. Besides, who understands flows, processes, machines and products better than the people working with them on a daily level? First hand experience shows
them opportunities for change and areas for improvement. Only if everyone is truly stimulated to join in the process of innovation can a company pursue constant change and improvement. Innovation should not be limited to the intellectual and scientific work of a few. In fact it is all about value creation and that is the task of everyone in an organisation. In today’s economy there is still too much focus on cost control and cost reductions. It creates a tunnel vision of which the exit becomes smaller and smaller as the tunnel gets longer. Innovation forces you to have broader spectrum and allows you to identify and recognize opportunities that you would only find by sheer luck when solely driven by cost awareness.
“Innovation must live and breathe throughout the modern organisation. This involves all levels – even factory workers.” Growing awareness for our environment and climate change, as well as the call for a more sustainable economy, creates a whole range of opportunities for innovation. It is an enormous chance for value creation if we are able to steer innovation by the criteria of sustainability. Today everybody is speaking about it. But it will not suffice to draft sustainability reports and organize fancy conferences about the subject. The move towards sustainability will affect every economic activity and will require us to change our views on our future. Renewable energy, biotechnology, recycling, ecological construction and waste treatment are perhaps the obvious and most visible areas of environment driven economic activities. However, the need for a more sustainable economy will require us to review and improve our supply chains, clustering of industrial and economic activities, distribution and retail. We have scientific institutions, researchers, pioneering companies and the necessary lack of natural resources that should push us to search for excellence in the field of sustainable development. Our economy has the chance to create this huge competitive advantage of becoming an expert in
continued from p. 150
these companies are truly global—but not necessarily very large (typically between 50 and 300 million Euro in turnover). The innovation strategy of these companies follows their corporate strategy. The goal, that is, worldwide technical leadership of their category, determines where and how they will invest in innovation. It is not necessary to invent it all oneself—acquisitions will do the job too.
sustainable development but we need to have the full commitment from all economic actors to pursue this goal. It is all about value creation and the valorisation of all production factors at the same time. Almost 30 years ago, we took a different outlook on our industry. We started to review the materials we used to manufacture our products and moved on next to our buildings and processes. Eventually this led us to investigate the sustainability of all of our activities. It is an ongoing process that is open ended. It is constant evolution, change and innovation. It is simply the future.
A second common characteristic that can be observed is the structure of their innovation process. If we conceptualise the innovation process as moving through three phases (Hansen & Birkinshaw, 2007): • idea generation (finding relevant ideas, both within and outside the organisation) to • idea development (screening and funding of new ideas, developing them into viable products or businesses) to • idea diffusion (‘selling’ the ideas to other business units, to distribution channels, to customers) What is remarkable at companies like ICOS Vision Systems, LMS, Bekaert, Umicore, but also smaller companies like Xenics and FOS&S, is that their innovation value chain is anchored at both ends to an innovation ‘ecosystem’, a web-like network of customers, universities, research institutes and suppliers, that feeds the chain with ideas on one end and ensures successful diffusion on the other end. There is no debate about ‘open innovation’—with the exception of perhaps one company we spoke to, all are avid proponents of an open approach to innovation. This is entirely in line with the data reported by the European Innovation Scoreboard, that Belgian companies are strong collaborators in their innovation activities. And it is an approach that is only likely to be pushed deeper in the economy, as the Marshall Plan competitiveness poles and the Flemish clusters begin to do their job. Working with universities and research centres is one thing, but it is also apparent how close these companies are working with their customers, such as setting up joint R&D projects. Though not at the scale of a typical multinational, many of these companies are still making the effort to set up offices all over the world. They maintain ‘service’ divisions, even though their revenues come from product sales. Also, many of these companies are vertically integrated, retaining significant manufacturing operations, even in the face
continued at p. 157
Filip Tack Build it and… they won’t come!
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Filip Tack CEO Aventiv
I admit this is a gloomy title, especially in the context of a thrilling book on innovation and design; but I’ve come to believe that it holds a key truth. So, let me share some of my personal thoughts and experiences with you. To create the proper perspective, let me first confess that I’m not an academic. Therefore, don’t (mis)take my musings as some scientific analysis. That is simply not my ambition. Rather, my entrepreneurial ways have allowed me to team-up with exceptional individuals and innovators, and their experiences, coupled with my own, have helped me see where many new business ventures go astray when trying to market innovative products and services. After all, history is littered with “amazing innovations” that simply couldn’t find an audience to amaze. True Confession My name is Filip Tack and I am addicted to innovation. I’ve been involved in the development and marketing of IT products and services for many years. In 2004 I cofounded Aventiv, a tech startup company that created NomaDesk, the world’s first Virtual Fileserver Network (VFN) for smallmedium business teams (we call them Nomadic Professionals.) NomaDesk is a file sharing solution that enables mobile business teams to intuitively manage, edit, share and synchronize their documents from everywhere - even when disconnected from the Internet. It is the first software solution ever built on the cutting-edge Enterprise 2.0 Virtual Fileserver Networking (VFN) architecture, and basically erases the distinction between “web” and “local” files. NomaDesk is clearly an innovation that I thought was so powerful, new users would simply flock in once it was launched. In truth, while Aventiv and NomaDesk are gaining a lot of traction today; it was not the “instant” success we all thought it would be. In fact, I discovered that, regardless of how disruptively innovative the product, real success is actually the result of a lot of “heavy lifting.” Following are three important lessons I learned that may help you strengthen your entrepreneurial muscles and better push your amazing idea into the winner’s circle.
Quality is secondary Many European designers still have a strong tendency to prioritize product quality over product marketing. This is quite different from our US counterparts. Probably this is because in Europe, innovation is still strongly tied to the academic world, where certainty and predictability are the desired “constants”. In the US, it’s foremost that entrepreneurs run an “innovation business” rather than simply have an innovative idea. In Europe, I often see new businesses grappling with the notion that - in the end - quality will prevail and in order to achieve success, they need to launch products at a highest quality level, e.g. the richest feature set. And, in a perfect world of unlimited resources and time, this may be true. But, in today’s real world of global competition and increasing market demands, an innovator must always ask: “Do I have the resources (i.e., time, money, people, etc.) to get to that end before I start?!” In the world of business innovation and development, there must be compromise. In the trade-off between product perfection and time-to-market, quality must come second. Don’t get me wrong, I’m not saying that quality doesn’t matter at all. For sure, every innovation needs to fulfill a baseline of functionality for which it was conceived, and it must do this in a wholly predictable and dependable way. No one wants to build (or buy) a crappy product. But there are miles of ground to cover between down-right crap and the highest featurerich quality. Unless you are working in a justifiably quality-regulated industry like healthcare or aviation, quality is not the most important requirement for a successful product launch, especially in early adopter markets. The software industry is the best example of this notion. Every user knows – maybe even expects – that the latest software release will have some (non-fatal) bugs. Yet, it will continue to be used as long as the resulting benefits outweigh the quality risk. So, if quality is still engraved into your brain as “Job #1”, consider refocusing your efforts at high-quality marketing rather than production. Take the time to really get to know the proverbial “pain” your innovation cures. Find out who is suffer-
ing, and how many there are, as quickly as possible. The secret is engaging in rapid prototyping (not a high quality premise) to perform relevant market research on the targeted end-users. With the omnipresence of the Internet, it has never been easier to do this kind of active market research, especially if you are a softwarebased product.
“realize that indirect channels will never provide you with the indispensable feedback which the innovator requires” At Aventiv, we continuously build updated versions of our NomaDesk software and “beta-test” them on a live audience. I never cease to be amazed by how receptive and responsive our early adopter beta-testers are. With the proper tracking systems installed, the results of beta-trials are sheer marketing gold. To summarize, lowering your priority on the quality does not imply that you should launch a crappy product. For your marketing research to be of most use, even beta-test prototypes definitely must cure the basic pain but without overwhelming side effects! Constructing innovations in close collaboration with your ultimate endusers ensures that if you build it they will stay… and even spread the word before the products is even finished! Innovating is not banking, don’t hedge your bets If you are serious about successfully launching an innovative product or service into the market place, never hedge your go-to-market-strategy. It is very tempting to pursue a conservative business strategy that includes every direct and indirect market channel, or all possible customer profiles (i.e., consumer, “pro-sumer,” small business, enterprise). This most often occurs because you simply don’t know which strategy is best – after all, business in not exact science and your innovation might not have a comparable benchmark product out there which could set the example. Or, you might be convinced to go along the multi-channel road by your investors (they are probably bankers; and you should expect them to act accordingly). Still, when
it comes down to launching innovations, it’s not a banker’s business. Hard-learned experience has taught me that hedging does not mitigate your business risk. In fact, it often creates more risk by reducing the effectiveness of your decisions. For instance, if you deal with a multichannel approach, it is clear that each channel imposes specific operational, financial and marketing demands. In most cases, the innovator is ill-equipped to meet these demands and the channels can become distracters. What seems to be a good hedge quickly turns into a juggling act, without any particular ball getting enough required attention to make it work. The net result is all of the balls hitting the floor! Which are preferred then, direct or indirect channels? From a pure marketing theory perspective, indirect channels exist to fulfill an existing demand. Indirect channels are rarely very good in creating demand. Indeed, you could argue that they are not about sales; they are purely about order intake and fulfillment. If that is true, it is definitely arguable whether indirect channels are appropriate to launch an innovation in an early adopter marketing, for which demand is still in the making. Furthermore, realize that indirect channels will never provide you with the indispensable feedback which the innovator requires to ultimately complete the highest quality product marketing and define the product roadmap. Still, if a multi-channel strategy seems the right way to market your innovation, prioritize and focus on one channel at the time – giving it all your attention for as long as its needed. With respect to the choice of the target customer profile, hedging is even more dramatic. Product innovations cannot be all things to all people. Communicating ambiguous messages into the market place will never be successful. From a sales process perspective, it’s also unfeasible because of the ways purchase decisions are made, which differ greatly between customer profiles. There’s a reason why niche strategies are often more successful. Remain cautiously opportunistic It is amazing how innovators, especially from the engineering disciplines - such as me – can get really entrenched by their original product vision. It’s not always easy to keep an open mind, even when
confronted with the results of market research that sometimes takes your innovation onto an entirely different road. Therefore, be reasonably opportunistic and always understand that we build innovations to a useful purpose, which may differ from what we originally envisaged. With this mind-set, you will be in good company: after inventing the phonograph, Thomas Edison believed its primary application was dictating business letters. Alexander Graham Bell viewed the telephone as a news and entertainment medium, with subscribers dialing in for access. And correct me if I’m wrong, but Viagra is no longer a cure for heart diseases right! I think it’s clear that these innovations went somewhat astray… to far greener pastures.
Bart Verhaeghe Story of an innovator
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Bart Verhaeghe Chairman Uplace
Everyone loves innovation. What is not to like? Like ‘happiness’, the word does not seem to have any negative connotations. Its importance and transformative powers are beyond dispute. Yet, innovation might be one of the most over-used and under-practiced concepts in business today. In reality, business pioneers face a host of obstacles every day ranging from apprehension to habit. Granted, a recipe for success does not need altering. If it works, why change? The answer is rooted in business sense. Often the only way forward is to move into unchartered territory.
“Innovation always starts with the question “why?”, immediately followed by “Why not?”” approach did become our industry’s standard. The moral of the story? As the old saying goes, “When life hands you lemons, you make lemonade.” If you make it the best lemonade in the business, you can turn necessity into triumph. Why? Why not?
I am a real estate person. The industry has formed my way of doing business and making decisions. Yet, in my career I have always found myself questioning the status quo, looking for better ways of doing business. It has never been easy, especially working in an industry that is averse to all things new such as real estate. However, my commitment to innovation has consistently paid off. Along the way, I learned that many factors need to come together for change to happen. When this perfect synergy does occur and real innovation happens, success is all but inevitable. The power of necessity When I started out in real estate, the customer was very much a non-factor. Developers designed and constructed a building and put it on the market. If people liked it, they rented or bought it. If they did not, there would be someone else. At the time, real estate seemed to be immune to innovation. The established modus operandi was rarely questioned. You were taught to do things the way they had always been done. However, I did not have the luxury of not listening to the customer. As a starting company, we had to sign up customers before construction. We simply did not have the financial resources to do it any other way. This meant going to customers, listening to their needs, wants and challenges and building accordingly. This customercentric approach was well-established in many industries. In real estate, it was revolutionary. Aannemingen Verelst was the first in Belgium to have people sign based on plans and schemes. What we did was not unique. Other entrepreneurs in other parts of the world came to the same conclusion. But the customer-centric
Innovation always starts with the question “why?”, immediately followed by “Why not?”. It is not about R&D departments or revolutionary new products. Innovation is a state of mind. An inquisitive personality, a habit of seeing possibilities rather than obstacles and the eagerness to do things better are its main drivers. Where some see a benchmark, others see room for improvement. However, questioning also involves listening. Observing the market, seeing the trends, knowing what people really need and aspire to will always lead to new and improved strategies, tactics and products. Aannemingen Verelst, Eurinpro and now Uplace, their growth can all be related back to our quest to be better. A little creativity goes a long way Of course, innovation is about thinking out of the box. I sometimes use the expression, “You have to run a different 100 meters.” Why run everyone else’s race? We were absolutely convinced a real estate company could be a strong brand. This idea was entirely foreign to real estate at the time. A real estate company comprised solely of its portfolio of buildings. With Eurinpro, we uncovered the power and value of a brand in real estate. The successful sale of Eurinpro was a direct result of its strength as a brand. Sometimes creativity and innovation do not mean a breakthrough or revolution. Sometimes it is a logical conclusion, an evolution rather than a major “aha-Erlebnis”. The results can be equally far-reaching.
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No guts, no glory Being an innovator is a lonely occupation that requires a strong personality. You have work longer and harder than the rest, using all your creativity and power of persuasion because you cannot offer people a frame of reference, a safety net. You have to own your ideas, believe in them and stick by them. Even if you have done the research and the numbers add up, you have to be brave enough to jump into the unknown and strong enough to conquer the questions and obstacles. It is the risk the innovator takes. It takes bravery, perseverance, plain old stubbornness, business smarts and maybe some luck along the way. In the end, that is what being an entrepreneur is all about.
of high operating costs. All of this makes sense, though not in terms of the classic economic models, like economies of scale and competition on the basis of efficiency. These tactics make sense if one competes on the basis of knowledge and know-how, or on the basis of one’s ability to change, to always be at the forefront from a technological perspective, to always be developing new and better products, to respond faster and more effectively to changing market needs. Thirdly, there is the challenge of translating good ideas into feasible products or services—the second phase in the innovation value chain described above. Since much of the innovation described here is technical in nature, companies (and policy makers) have learned that technical innovators, the scientists and engineers, are rarely equipped to bring their technologies to the next level, ready for the market. This is where the most interesting lessons come from companies like Alcatel-Lucent, with its “boot-camp” for new venture teams. Or the Flemish Institute for Biotechnology (VIB), with its professional tech transfer unit that focuses on creating spin-off companies that develop into world-class companies. Or soil fertility specialist DCM, who has set up a research institute that is dedicated to applied research—bringing the world of science and academia closer to economic enterprise.
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Marc Voet A career in fiber optic sensing technology
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Marc Voet CEO, FOS&S Belgium
When I started 25 years ago with the development of fiber optic sensors, I never believed that this technology could go through such a rapid evolution, evolving in a wide range of practical sensing systems applied in the oil & gas industry, construction, aerospace, and many other industries. The discovery of all kinds of new principles for analyzing light signals passing through or reflecting in a fiber; the way this makes possible the measurement of single point physical parameters such as temperature, pressure and strain; and the development of quasidistributed and distributed sensing systems – all this has gone through an amazingly rapid evolution, especially in recent years. New applications are being discovered and developed in an ever broader range of industries. Most recently, for example, fiber optic sensors have been developed that are able to measure sound. The potential applications seem unlimited: think of gas pipelines that ‘hear’ a farmer’s tractor coming too close, or more frighteningly, the way entire buildings could be ‘wired’ with a listening network of optic fiber. Throughout this period I followed very closely the latest developments in optic fiber technology, attending all kinds of worldwide optical fiber sensor conferences. In the early 90s I became a member of the SPIE Optical Society and of the International Steering Committee of the world fiber optic sensor conference OFS. All this travel and interaction across disciplines resulted in numerous collaborative research projects throughout the world, leading to the development of new types of sensors which could be commercialized. I also spent several years working for German company Glötzl , one of the world’s key players in classic instrumentation and sensors for the civil engineering and mining industry. This was an ideal environment to begin applying fiber optic technology to the broader world of sensing technology, to begin applying the technology to real-world measurement problems. Looking back, this focus on problem solving has in fact been the key consistency in my career thus far. The rapid evolution in optic fiber sensing technology is driven largely by problem solving. My work at Glötzl and also today at my own firm FOS&S is largely a matter of problem
solving. Companies from a diverse range of industries approach us with specific measurement problems—in response we set up research projects to develop new types of sensors for new applications. In other words, it is a highly market-driven evolution in technology. It is also this R&D focus that today allows us to stay one step ahead of the competition. As the market begins to mature we encounter an increasing number of competitors around the world, also in China, and prices are declining. If we, as a reasonably small Belgian company, are to survive in this global industry then it is imperative that we excel in R&D, in R&D that is geared towards the solving of real-world problems. Furthermore, it is important to surround oneself with a group of excited engineers and young researchers. From the beginning in the 90s I worked closely with several universities, employing PhD students and supporting them with their theses.
“Looking back, this focus on problem solving has in fact been the key consistency in my career thus far” What I would recommend to my son if later on he would be willing to be the driving force behind the company is that he should always think in front of the existing technology and have an open mind to innovative ideas. Therefore having contact with researchers at universities around the world, this is critically important. Close contact with customers is also imperative, to understand their problems, to build trust and a solid working relationship. Innovate yes, but do it out in the world, focus on real practical problems and collaborate with both universities and your customers.
continued from p. 157
Clearly the role of individuals is fundamental to what in essence is entrepreneurship. Across the course of our interviews we met numerous remarkable individuals who fought against the odds to sell their ideas and drive forward their businesses or organisations. These are individuals who may or may not have come up with the original idea but who do serve as the essential ‘business brain’ in the venture, the individual who works out a feasible commercial plan, who manages to find capital, who facilitates productive cooperation between the technical and commercial sides of the business. This is no easy task in Belgium, we have to acknowledge. While much progress has been made in recent years to get universities and academics to open up to business, the worlds of science and business remain remarkably distinct from a cultural perspective. Finding the right people is one of the greatest challenges these company have today. Finding technical talent is one thing (and can be particularly daunting, especially in IT) but often even more challenging in this country is finding entrepreneurs and business developers. The multidisciplinary team at most of these companies seems to be the engine of the innovation process—this is where innovation is made or broken. Managing a diverse team of people, especially a mix of scientists and commercial individuals, is no easy task. As emphasised repeatedly in our interviews (and explained in several contributions from the innovators themselves), it is critical to get these different folks talking and cooperating smoothly with each other. Maintaining a good balance between different functions is one key element in this, making sure that no single department or individual begins to dominate the process, because this alienates the others. As a manager, it is essential to maintain one’s neutrality, so that one can serve as a facilitator in the dialogue between R&D or design, production, sales, marketing, etc.
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Jean Stéphenne Innovation, a vehicle for economic growth
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Jean Stéphenne President and General Manager of GSK Biologicals
Companies who take responsibility, not only for their own economic growth, but also for the environment in which they operate, need to rely on two fundamental drivers of growth: entrepreneurship and innovation. Today, however, companies both large and small also find themselves faced with globalisation and markets that are spread across Europe if not throughout the world.
As British economist John Maynard Keynes stated some years ago, “The difficulty lies, not in the new ideas, but in escaping from the old ones, which ramify, for those brought up as most of us have been, into every corner of our minds”. Innovation is very often about starting from simple ideas and subsequently turning them into products and services that offer added value for both customers and society more generally.
The enterprise and consequently “the entrepreneur” are at the heart of what makes a company successful, whether we are talking about a small enterprise, a family business or a multinational company. Now, more than ever, this notion is highly relevant. In our country, a large number of initiatives both private and public have seen the light to promote this spirit of enterprise with the young and not so young alike. There may be a long way to go to instil the entrepreneurial attitude in the genes of future generations, but continuing the efforts made is indispensible. More than ever, “old” Europe needs entrepreneurs, or in other words, people who dare to take risks, who have the desire and are capable of transforming an idea or invention into a successful innovation! Innovation distinguishes itself from invention and discovery in that it presupposes practical implementation resulting in effective use.
If I look at my own professional experience at GSK Biologicals, a company that conducts research into vaccines for health problems worldwide, it has to be said that technology and science stem from collaboration between people. It is of fundamental importance that innovation projects develop through internal cooperation within the company. The best innovations cut across and stand between a variety of different disciplines. Our strategy is to place technological tools at the service of projects that are led by multidisciplinary teams. In our field this encompasses fundamental and applied research, clinical experts, production and commercial services, all gathered around a single project. To ensure the perpetuity of this model it is imperative that a good balance is maintained between all these functions. That is to say that everyone can contribute and no department has dominance over the others.
Innovation clearly is an important subject, not only for the economy, but also for individual businesses and society more generally. Innovation is supposed to be the driving force in the economy. And more, it creates jobs. As a result, decision-makers will do everything in their power to strengthen innovation and its dissemination.
However, beyond this internal collaboration, the success of an innovative project also requires an opening up to the outside world. This is because it is impossible to keep a grasp on the speed of change and increasing technological complexity without collaboration.
“The companies that will survive tomorrow are those that are stimulating creativity and braving the international markets.” In Belgium, given our high cost structures, we need to differentiate ourselves by innovating. It is an essential vehicle for growth. Consequently, the economic growth of our country will need to rely on synergies, on cooperation, between a variety of complementary but nevertheless very different sectors: the academic world, large companies and SMEs. Innovation does not emanate solely from the R&D laboratories of large companies. In order to innovate, companies must cooperate with sources of external inspiration and knowledge, such as universities or specialised research centres, industrial clusters, SMEs and consultants. Such cooperation must occur both within Belgium but also further afield in the world. Moreover, such networking can lead to specialisation, which also encourages innovation. Lastly and most importantly of all, the promotion of innovation must be seen in a global context. If everything is done internally or at local level, there can be no diversification in R&D. To innovate, we need to prioritise skills and know how, and we need to go look for it where ever it is to be found. It is this exchange of skills and knowledge that renders continual innovation possible. Internationalisation also fulfils another objective, that of making Belgium more attractive to foreign multinationals. The various fiscal measures adopted by government authorities to encourage innovative companies have been justly appreciated by employers, but further efforts still need to be made. Additionally, Belgium and its regions must devote themselves to being competitive at a European and international level through its expertise (becoming a centre of excellence in some activity sectors for example) and through a competitive socioeconomic and financial environment. We have understood that innovation is a fundamental yet complex process which,
to be efficient, has to be integrated into a complete managerial model so that it can become a part of the company’s operational DNA. On this note and by way of conclusion, we can identify five essential success factors for company growth: • the capacity to make strategic choices, take risks and select priorities; • fostering a society of knowledge by maintaining a breeding ground for skills. Surrounding oneself with a qualified workforce that is open to the outside world; • opening up to international markets; • believing in the strength of partnerships; • and lastly, of course, innovating to provide added value. We cannot speak of a growing company without speaking of innovation, whatever the sector or activity. The companies that will survive tomorrow are those that are stimulating creativity and braving the international markets.
Bart Van Coppenolle The secret of our success
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Bart Van Coppenolle Founder, President & CEO Metris
At Metris we believe that there exists such a thing as “the secret of our success.” Although we refer to it as our secret, we don’t want to secretly hide it. We want to clearly articulate it and live it so we can become more successful. The secret of our success is called “Metris Company Values.” Our company values are the rules of the economic game we play on a daily basis. Although we understand there are many more dimensions in life than just the economic one, we particularly value the economic dimension of life to which we dedicate a considerable part of our time and creativity. After all, it allows us to develop ourselves and brings us recognition from a broader group of people such as colleagues, customers, shareholders and society in general. These company values are not externally reinforced, but internally projected and aimed at achieving certain mental attitudes that make us win the game. These mental attitudes are not in themselves particularly valuable. They are valuable because they actually work: they make us win the economic game. They help us to create value for our customers and shareholders and they bring us personal realization while connecting to other people. They make us a free and responsible part of society. Besides the core value, which is passion, we see two groups of three values that we cherish, each group having its own motive.1 The motive of the first group of three values is freedom (or also autonomy). These values help us shape our right brain hemisphere and nurture the entrepreneur within ourselves. The motive of the second group of three values is different: it is responsibility (or also group connectivity). They help us shape our left brain hemisphere and sharpen our managerial skills. The right brain hemisphere houses the seat of our creative, divergent, holistic, intuitive and individualistic thinking and behavior. 1 Since essentially virtues are internal mental strengths that are aimed towards reaching a certain value, a more correct terminology would replace throughout this text the word ‘motive’ with the word ‘value’ and the word ‘value’ with the word ‘virtue’. However I have chosen not to overload the text with this purism, since defining company virtues instead of values is a less generally accepted practice.
Similarly the left brain hemisphere houses our skillful, convergent, deductive, analytical, group oriented thoughts and behavior. Left and right brain hemisphere is a powerful metaphor which might turn out to be scientifically correct or not. 2 The right brain values can be associated with entrepreneurship while the left brain values can be associated with managerial skill. We believe there are no two distinctive groups of people in Metris: entrepreneurs and managers, we believe that everyone at Metris is entrepreneur and manager at the same time. Therefore the metaphor of two hemispheres being part of a single brain is well chosen, as each individual embodies both sets of attitudes. Right hemisphere
Left hemisphere
entrepreneur
manager
Analytical Deductive Convergent Diligence Discipline Team spirit
Holistic Intuitive Divergent Openness Honesty Boldness Passion
Figure 1: Metaphorically mapping the company values to the left and right brain hemisphere 2 Although I was inspired by a National Geographic documentary featuring the neuroscientist Prof Allen Snyder, right brain and left brain hemisphere should not necessarily be interpreted scientifically, but can also be interpreted purely metaphorically, such as Daniel Pink does in his book “A whole new mind”.
The core and central value is Passion. Passion for our customers and passion for our team drives the creation of value for our shareholders and prosperity for our families. Passion is much more than just a value; it’s the very engine of life, an engine that is fueled by our innate desire for social recognition, recognition that we get from people we meet in our daily life, particularly in the economic dimension. Passion is characterized by a certain duality: it not only includes desire but also fear, not only love but also death; therefore at Metris it also refers to failure not only to success. Passion means persistence after failure until we eventually succeed. As failure forms an integral part of freedom we encourage it. However responsibility commits us to success and therefore failure is ultimately not an option. That’s why we both love and hate failure at Metris. The entrepreneurial values aimed at shaping our right brain hemisphere are Openness, Honesty and Boldness. Openness makes us genuinely listen to other people’s ideas and opinions and therefore creates respect for people. It encourages us to perceive facts rather than our own expectations. Openness is about attempting to cross our own mental barriers, such as dogmas, blind spots, power reflexes and last but not least the biggest barrier of all: ‘No we can not”. Openness helps us break through the typical barrier of “No we can not” or “This is how we have always done it, so why should we do it differently now”. Change is always somewhat uncomfortable and is sometimes even perceived as immoral. The blind spot mental barrier means that great opportunities are potentially lost because we simply don’t see them, since we consequently follow the same thinking path, leaving regions in our mind untapped. We can see all right but actually are blind for a particular truth: that’s why we call it a blind spot. Playing the power game typically blinds us as well. Power is important in politics and politics are important in society, but not at Metris. Honesty is about personal integrity. Although we recognize that moral values may differ across all Metris’ worldwide geographic presence, we should never act against our own conscience. Never act against your own moral judgment. Honesty is also about being honest to
“Open your mind, perception and creativity to discover any imaginable thing” yourself, about having the courage to recognize the inconvenient truth, to look into the mirror and say: “This is not right!” After all we never know for sure whether a certain vision is true; however we can eliminate non-truth by using our own honesty to judge the difference. Boldness means daring to be open and honest. Speak frankly about your vision and judgment. If we have to choose between the risk of hurting people and to speak the truth, we should choose to speak. Going from frankness to boldness is putting your actions where your mouth and convictions are, always concerted with your own team, but not necessarily aligned with the outside market. As a little child we all did things our parents did not approve of. Let’s do that again, without breaching law, our own conscience or our corporate social responsibility. The managerial values aimed at shaping our left brain hemisphere are Diligence, Discipline and Team spirit.
Diligence: work hard when appropriate. Dedicate your time and effort, but also your perception and creativity: contribute transpiration and inspiration. Don’t be satisfied with less than sheer perfection. But stop just before the cliff of addiction to work and guilt for being imperfect. Use your honesty to recognize lack of quality and to eventually accept quality.
Passion, Openness, Honesty, Boldness, Diligence, Discipline and Team spirit are our company values. Mapping those seven values to the structure of the brain is as such not very essential to what we believe is the secret of our success. However aiming three values towards freedom and autonomy and another three towards responsibility and group connectivity is essential. Autonomy and freedom are key in enabling innovation and entrepreneurship. Being entrepreneurial is essentially being innovative. Being innovative presumes being different from the crowd. To some extend being innovative includes a form of individualistic and incorrect behavior. Thinking out of the box, going where no one has gone before is essentially unsocial behavior. This kind of behavior is necessary to define “the right thing to do” which by definition can’t be what everyone else does. Responsibility and group connectivity are essential to build a team in order to successfully execute and to integrate that team in society in order to truly succeed. Best practices, procedures, collaboration are aspects of socially preferred behavior very necessary to “do things right”, which
Discipline: follow structure. Use the right form and structure to work. Colleagues, management and the broader society offer structure in the form of agendas, directives, procedures, IT infrastructure, management programs, education, etc. Use the available structure to successfully execute, don’t reinvent the wheel, and welcome tradition. Team spirit: define yourself as your position in the team. Don’t seek your own personal success but empower your team. Don’t ask what the team can do for you, but ask what you can do for your team. To manage is to enable and support. To lead does not mean to rule but to serve. The moral concept of duty fits into this value: to do your duty is to take up your role.
Look for the right thing
Openness
Diligence
Do it
Recognize the right thing
Honesty
Dicipline
Do it right
Dare to do the right thing
Boldness
Team spirit
Do it together
Passion Freedom
Reponsibility Live
Figure 2: How the values can be interpreted as: “Do the right thing” and “Do things right”
continued from p. 159
by defi nition means not alone. Therefore an alternative way to express the two sets of three values is more than just a metaphor: “Do the right thing” and “Do things right”. In order to do the right thing we believe we have to be open, honest and bold. Open your mind, perception and creativity to discover any imaginable thing. Be honest so you can recognize the inconvenient truth that a certain thing is not right. Be frank to speak about things that are right (and wrong) and be bold to take actions according to your vision. Striving for these mental attitudes is what makes us believe we get to do the right thing. In order to do things right we believe we have to be diligent, disciplined and team oriented. Work hard when appropriate, do things without compromising quality. Discipline makes us do things in the right form and therefore makes us achieve our targets. Team spirit essentially makes us do it together, which is the key to success. By passionately doing the right thing right, we believe we positively and successfully participate in the very important dimension of life called economy. That’s how our values help us to create value. That’s the secret of our success!
So can we conclude that there is such a thing as a Belgian way, a Belgian approach to innovation? Rationally, it sounds ridiculous. Business is business, wherever one is, the same principles apply. On the other hand, looking at it historically, one could argue that the small size of the Belgian market and its lack of a strong national identity (and lack of a strong federal government), have led to the emergence of niche players. The argument is well known: a large home market enables the development of large companies, hence the prominence of so many large US companies on the world stage. Also, a strong (or chauvinistic) national government will do its best to help set up and protect large national enterprises (as France is perhaps best known for in recent years). Hence the approach of successful Belgian companies: keep a lower profile, do not create too much noise, focus on a niche where the crowd isn’t looking, work hard to offer quality, and work smoothly with others, be it your customers, your suppliers, whoever you need to work with. Chauvinism is not the Belgian way, unless you get us started on food. This is all very nice, in a way it makes us humble Belgians feel good about ourselves—Belgians know the argument well. But we need to be blunt and truthful—given our population size, given our resources in science, in talent, in location—shouldn’t we have spawned twice as many successful innovative companies and at least one or two innovative consumer brands, a Nokia, an Ericsson, a Philips?
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Kristof de Spiegeleer An entrepreneur in search of simplicity
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Kristof De Spiegeleer Founder and CEO Q-layer
A great mind once said: everything should be as simple as possible, but not one bit simpler. It was Einstein, one of the greatest innovators science has ever known. I am a great admirer of this genius, and I adhere to what he said in everything that I do. Innovation indeed is about finding elegant solutions. Solutions that are simple to use, but not simplistic.
They typically take one or two seats in the board, and through the board they provide feedback on new initiatives that we plan and they assist in refining the strategy. In Q-layer we have both Belgian VC’s (Big Bang Ventures), European VC’s (Wellington Partners from Germany) and US based VC’s (Partech in San Francisco). This helps us in launching our product across Europe and in the US as well.
In all companies that I founded, we try to develop an innovative product or service. Dedigate and Hostbasket, both founded in 2000, are highly successful hosting providers. Datacenter Technologies, now part of Symantec, built a revolutionary backup solution. Q-layer is the youngest venture, and specializes in virtualization software for datacenters.
The secret of being innovative, I believe, is in the ability to listen to potential customers, users, partners, investors and other entrepreneurs. Quite typically, there is no market yet for the product or service one wants to develop. This means that traditional market research is not effective and often too expensive for a start-up company. Listening and talking with people across the globe is the only way to validate your idea. On the other hand, being innovative also implies that sometimes you should not listen to your customers. Your solution should be disruptive, not simply a minor improvement to an existing solution. And a disruptive solution is typically not something existing customers are asking for...
“For me innovation means going back to the fundamentals of the problem you’re trying to solve” Now what is an innovative company? For me innovation means going back to the fundamentals of the problem you’re trying to solve. It means daring to question everything and looking for other ways to tackle a problem. I am amazed to see how many dogmas exist in the ICT world today. Each dogma, however, is an opportunity to innovate. And where to innovate but in a start-up company? A start-up is the ideal environment to bring life to new ideas. Although the start-up culture is not that common in Europe, I am very happy to see that our government provides many effective forms of support that have helped us to get from idea to being in business. The innovation subsidies from IWT, the loans from Vinnof and the support from FIT when launching an export strategy are just a few examples of tools that we were able to use in our companies. When speaking of financial support, one should not underestimate the importance of venture capital, available today in many flavours. Since 2000, I have worked closely with both Belgian and international venture capitalists. VC’s provide capital in turn for equity, and they help the further development of the company.
The obvious question then is, if the customer is not asking for your solution, how to get it sold? Timing is key. Bringing a new solution to the market too early will require you to do all the evangelism yourself. When you launch too late, the solution by itself is no longer innovative and the “first mover advantage” is lost. What we have seen in all our companies is that the presence of one or two competitors worldwide is the sign that the time is there to go to market. With Q-layer we are in this exciting phase, where the product that we worked on for several years is finally validated by customers in a “real life” environment. For the whole team it brings satisfaction and encourages us to improve the product further. I hope that in the coming years, even more people will take the step from employee to entrepreneur. I invite you to use your network, to get in touch with entrepreneurs across Belgium and abroad, and to be disruptive in your undertakings. I am sure we will meet soon!
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Where are the strategic innovators? So much for the niche players, the technical innovators—but what about the strategic innovators, the business model innovators? It seems clear that the Belgian innovation story, if we must simplify and summarise, is one that in the main is concerned with technical innovation. Numerous commentators make the point. We seem to lack the high-growth companies, the companies that are able to “upscale” their assets rapidly and globally. Also, the business model innovators are a rare species in Belgium. As Barend Van den Brande, CEO of appropriately named Big Bang Ventures makes clear (see page 172). According to Van den Brande, in Belgium we tend to associate innovation with men in white coats, pursuing highly technical innovations that in most cases have limited applications. Yes, they may create value and lead to successful sizable businesses, but where are the companies that are playing in the really big league? There are such major structural shifts happening globally in the music industry, in media, in travel. Even the financial sector seems to be at the brink of major change. Markets worth billions are evaporating to be claimed by new emerging business models. Jobs are being lost, but thousands more are being created. continued at p. 177
Kenneth Van de Velde Innovation Management at JAGA
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Kenneth Van de Velde CEO, Jaga N.V.
After a 7 year career in the marketing and development division of JAGA in Diepenbeek, I currently have the honour of leading this fascinating and dynamic company as CEO. This in itself is an interesting illustration of our innovation strategy. The fact that the Board of Directors appointed someone with a product-related background is an important signal to the firm’s stakeholders regarding the strategy we wish to follow. It also is logical that innovation must begin with - and be driven by – the company’s leadership. The exemplary function plays an important role here. JAGA is a medium-sized company active in the sales and production of heating, ventilation and cooling systems. I am convinced that JAGA today is recognised as an innovative company within its sector but also in the wider Belgian business world. For me, innovation is an important, if not the most important factor that enables the company to survive in this rapidly changing and globalising competitive environment.
“A second element in our innovation process pertains to the actual choices of new products. This is not simple to do, but essential.”
A well-balanced and sustainable future begins with a mission, a mission that is subsequently implemented via a strategy. This in essence is the starting point of all the processes in our business. Our strategy is clear: it concerns a differentiation strategy that is based on our products. Our ambition is simple and straightforward: “we want to offer the best products in the market, today and tomorrow…” A differentiation strategy is in my opinion the only feasible survival strategy for a company of our size, given the Belgian socio-economic context and the high wages handicap. For a cost-leadership strategy this company is too small and we simply do not have the right economic parameters. We therefore opt to innovate in our products, not in our processes.
A second essential point is the diffusion of this philosophy in all divisions of the company and its partners. It is a philosophy or culture that needs to be pushed through the entire supply chain, thus also at suppliers and customers. This is a crucial criterion for success and demands plenty of energy and commitment from management to deliver that message day after day. A machine operator on the production floor needs to understand, for example, that also his contribution is absolutely critical in the company’s strategy. A third point is the organisational structure. If our products are important, then our organisation needs to be set up to support that fact. If innovation is important, then our organisation needs to be built up so that innovation is given every possible chance to flourish. For these reasons JAGA is organised along a matrix structure whereby product specialists manage—or rather ‘coach’—product groups. De rest of the organisation is set up to optimally support those product groups. All important decisions emerge from the product divisions. A key consideration in these decisions is the future of our products, which translates itself to product development. This is where innovation is obviously crucial. The future of our products is logically the future of our company – hence this is where we must invest. Two aspects are important to product innovation. An innovative product must deliver a significant differentiation and it must in time prove an economic success. In order to focus on this, at JAGA we work with two systems. The initial stream of ideas for new products is purposely held as wide as possible. Several sources of new ideas are used for this. Next to the traditional internal sources such as engineering, marketing and sales, our external sources are becoming increasingly important. For example, on an annual basis we organise brainstorm sessions with our international customers. But the real breakthrough is the use of the internet and the digital platform that we created (www.uchronians.org). Uchronia can be defined as a platform where people can come together to create around a set of values. In essence it is an idea generator. A second element in our innovation process pertains to the actual choices of new products. This is not simple to do, but essential. Here we use the innovation matrix methodology whereby the new
product is evaluated along several key parameters. An important aspect here is the assessment of risk, both in a financial and a process sense. From this matrix we then distil a balanced mix for our product development portfolio. For example, it is unwise to invest only in high-risk products. Likewise, it does not make sense to eradicate risk all round because that will stifle innovation. A final aspect of the innovation process is to effectively bring new products on the market. Obviously this needs to happen with due focus on quality, but speed and flexibility also are critical. This is where the economic dimension of innovation must prove itself. The faster that a product is bought on the market, the faster the ROI kick offs. A delayed market introduction is often the key difference between success and failure (at least in an economic sense). A company that is able to respond rapidly to opportunities in the market and that has built up an organisation that is capable of introducing new products in a timely manner, is a company that is well-positioned for the future. At that level I am a convinced “Darwinist.” To conclude I want to focus on the importance of the company’s culture. Innovation emerges in teams, whereby various disciplines work together in an organic manner (designers, engineers, marketers, production, logistics, etc). Strict hierarchies and rigid structures are not conducive to creative work. Instead there must be room for initiative and opportunity to try out new ideas, but within clearly defined targets. As CEO I consider this to be my most important daily task. That is, to create the right context or environment where ‘entrepreneurship’ can be stimulated and rewarded. This means defining certain guidelines or policies wherein talented people are able to deliver their best. Within the innovation cells that emerge (and are organised) organically, all can learn from each other in a sustainable manner. This leads to an inherently anchored and robust innovation grade in the company. Finally, I conclude with the words of our creative director: “innovate or die!”
Barend Van den Brande Innovation Revisited
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Barend Van den Brande CEO Big Bang Ventures
About enriching our notion of disruptive innovation, the fixation on academia and… our love for comic novels. Barend Van den Brande, founder and Managing Partner, Big Bang Ventures, an emerging leader in venture capital funding. Innovation is hip. It seems like we’re all innovating like there’s no tomorrow. People may differ in opinion about all sorts of topics, but I’m still waiting for the first person to say innovation should be banned. Innovation is Good. For many, innovation is God. And while it’s enticing to believe that just about everything that can be invented, has (almost) already been invented, people have been fooled on this one before. The U.S. Commissioner of Patents is rumored to have said this in 1899! In fact, innovation is accelerating as we speak. And well into the future. Great. So, if innovation is wonderful and there’s plenty of it, then we’re all happy, right? Well, to start with, what exactly is innovation? European entrepreneurs, companies, government, venture capitalists and even the general public are throwing billions of euros at ‘innovation’, so it’s only fair to ask this seemingly benign question. Have we all optimized our efforts, or is there a ‘better’ way of innovating, perhaps so obvious and close that it’s almost biting us on the nose? I’d like to add my two cents to this debate as a privileged observer. Because I have worked in technology startups and venture capital, I’ve looked into more than a thousand or so companies that have innovation at the heart of their existence. Looking behind the scenes of so many companies, from fledgling to highly successful, is one thing, but I had the opportunity to do so for several years while living in the US startup arena, which is often rightfully credited with many accolades when it comes to innovation. On the surface, the world of ‘innovation’ seems to be going well. In the last quarter, we had over 100 enthusiastic entrepreneurs approaching us with their innovative ideas looking for money, network and advice. And we’re only focusing on one piece of the pie, i.e. technology and new media companies, and only between Amsterdam, Antwerp and Paris.
In general, European entrepreneurs are becoming savvier and more mature compared to a few years ago. They certainly have the scars to show. They’ve become less provincial and their ecosystem is growing up as well. Countries like Belgium, The Netherlands and France currently lead the way in government incentives to help foster innovation. There’s more money and experienced investors around to fill the gap. And as Europe’s boundaries are disappearing, we have a home market of early adopters trying new stuff from electronic payments, to ecommerce and mobile data applications. Finally, we have innovative technology companies thriving on this, conquering the world, including Skype, EVS, ASML, IlYad, MySQL and others, successfully competing head-on with US-based peers.
“In general, European entrepreneurs are becoming more savvy and mature than a few years ago. They certainly have the scars to show.” But we still tend to overlook huge opportunities in innovation, which I believe is due to people associating ‘innovation’ with ‘universities’ – laboratories, white coats and loads of patents. It is imperative to note that most of the innovation driving revenue and job creation today has very little to do with technology as such. Our research shows that, in the technology sector, only 10% of all success stories are related to academic and corporate spinoff and transfer programs. This should put our collective worshipping of technology in a different perspective. In fact, most spinoff programs around Europe are so antiquated, that they would be best rebuilt from the ground up. We can do better. Look at Myspace or Ebay, and more locally MySQL or Netlog. Technology is only an enabler. Forget patents. The real disruptive innovation happens at the level of business models and go-to-market strategies. In the process, such companies are creating revenues, brand power
and shareholder value that dwarf what is created by more traditional IP-driven technology companies. Innovation goes beyond new products. Most opportunities come from innovating business models (e.g. open source in IT), and new services (e.g. the Starbucks experience). And internet and mobile are such disruptive forces that they will be a catalyst for the majority of innovation in the next five years. There is a perception that we have already gone through the greatest phase of internet growth and that it therefore is no longer a viable starting place for innovation, but the revolution has only just begun. Internet and mobile have changed innovation dramatically, and we should encourage and help more people leverage these powers. Ironically, the type of innovation we are promoting is nothing new. It’s not the building of the first train that changed society forever, it’s the innovation in services around the railways that have created jobs and shareholder wealth. Unfortunately, we meet too many entrepreneurs who are looking in the wrong (techie) place for innovation. And media seem to stay focused on ‘invention’ innovation as well. Finally, government programs will serve the cause of innovation better by bringing its programs and focus out of the realms of academia. The much-quoted Lisbon goal is but a starting point for innovation. One final thought: did you notice how comic novels reduce innovation to inventions? Just think of the likes of Professor Zonnebloem (aka Tournesol and Calculus) in Kuifje (Tintin)? Think Gobelijn in Jommeke, or Professor Barabas in Suske and Wiske (aka Bob and Bobette). Perhaps our common fixation on laboratories, professors and invention, as it relates to innovation, started in those early days. Let’s widen the scope a bit and we’ll bump into plenty of innovation that we all will benefit from.
Hugues Bultot The responsibilities of an entrepreneur
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Hugues Bultot Co-founder Kitozyme and Artelis
As the co-founder and Chief Executive Officer of two young innovative companies in the Life Sciences industry, innovation and creativity are in the heart of my business life. Nowadays, not only science has to be innovative but also general management. Marketing, Finance and Human Resources are experiencing a constant revolution which requires flexibility and creativity. Eventually, being an entrepreneur is a Life experience, if not Life in its essential nature. If you listen to stories of famous entrepreneurs, you will certainly notice how interlinked are the notions of, personal development, self accomplishment, Faith, spiritual quest… My first experience as a tech entrepreneur dated from 8 years ago when I started, with Carl Mestdagh’s support, Kitozyme, as a spin-off of the University of Liège. KitoZyme’s aim was to revolutionize the world of specialty ingredients by developing vegetal biopolymers that could be both innovative and environmentally friendly. All KitoZyme’s biopolymers would be designed for applications with a high added value. Their individual features would make them ideal for use in particular sectors and include slimming and anticholesterol properties (nutraceuticals); antimicrobial, moisturising and woundhealing functions (cosmetics); and many other areas. With a Degree in Law, in Criminology, in Management and a Degree in Tax Management and no industrial background I was not especially destined to be an entrepreneur in the chemical sector. The challenges I have faced during the last 8 years have been huge: • the chemical industry is highly capital intensive; • the development process took six years – which is an eternity for investors; • the company has to act globally from the very beginning; • there was no expertise in the sector in the near region;
Nevertheless, Kitozyme is now a well renowned and established actor in its industry, convincing customers and attracting partners and competitors. The products find their places in the different markets. More than 20m€ has been invested in the project and the team now comprises 45 individuals. It is perhaps too early to speak of it as a complete success –because the financial return will only come in the next two to three years but Kitozyme has certainly gained its place in the industry. Artelis, my second business activity in the Life Science Industry has also gained its place in the market. Based on the creative inventions of the co-founder of the company, José Castillo, who successfully managed to transform invention into business, Artelis was set up in August 2005 to provide the biotech industry with the missing link to the Plastic Factory concept: the single-use disposable bioreactor. Over 6 m€ of investment later, the Artelis team now comprises 19 individuals all of whom are highly experienced in cell culture and well aware of biotechnology companies’ needs. Artelis has six patents pending. Forgive me this long introduction but I think it was necessary to give credibility to my contribution to this book. Based on my experience, I believe that the future of the industry and certainly the future of Belgium in this industry will be based on: • a ten year investment horizon; • operated by multinational highly skilled teams; • requiring investments between 10 and 25 m €; • based on innovation and a constant search for quality and excellence; • embracing a global vision of society and the customer base; • conveying strong values.
This list could look like many others. Nevertheless, there are 2 important differences I would like to point out: • Ten years. It is a longer horizon than what is generally accepted by financial investors. But if they want to remain an actor in the innovative industries, venture capitalists will have to adapt their investment horizon. Another scenario is that only family, industrial or state-owned investors will be able to fuel the innovation process, which could affect the volume of innovations. Larger investments will certainly be necessary from scratch; • Conveying strong values. I strongly believe that the success of a project in the western countries in the next years will be also judged on the values it carries. Sustainable development, society issues and climate changes are issues which give our young people enough motivation to give the best of themselves. Concerning Belgium, I think that we can certainly perform in the top if there is a political consensus, from the public and the private sector, to work on our deficiency in terms of innovation financing and technical skills education. We can certainly leverage on our ability to innovate and to deliver quality and excellence. As entrepreneurs, it is our mission to transform a global vision of society and our customer base into specific projects. We have the responsibility to listen to the voice of customers, be they an individual, an industry, a country or even the world as a whole. As individuals and entrepreneurs, it is our responsibility to put our values at work and give people an environment where they can develop themselves according to values which have been collectively defined. I personally believe that the dreams or frustrations of our childhood can be extraordinary drivers for our innovation process. Having grown up during the 70’s in a coal mining region, surrounded by despair and discouragement, I had dreams of success, deals, innovation… and part of that has already become reality.
“dreams or frustrations of our childhood can be extraordinary drivers for our innovation process.”
Marc Van de Perre Marketing and innovation: to boldly do what no one has ever done before
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Marc Van de Perre Managing Partner Interface Marketing President Belgian Marketing Foundation
Innovation is not new. In fact, the basic principles of innovation are already centuries old and are in fact still the same. Why then has innovation been so high on the agenda of our marketing managers for the last few years? Entire congresses and trainings are spent on it and no occasion goes by without speaking on the topic of innovation. The reason is that people in marketing realise more and more that innovation is not only necessary to grow and survive, but that innovation allows them to define new markets and thereby play a dominant role in them. A beautiful example of that is Apple with the iPod and iTunes which gave an entirely new slant to the music industry. Not so much because Apple introduced a technology to the market that could not be developed by someone else, but because it did that in combination with an entirely new business model. The unique combination of technology and the way it can be utilised in a profitable manner offers Apple a competitive advantage which cannot be equalled today. Microsoft tried it with the Zune but without success. Is Apple, as a result, sailing on the wind now? Not at all. Acquiring the current leadership position was certainly not simple, maintaining that position will be a great deal more difficult. It shows that a blockbuster innovation is not a guarantee of permanent success.
â&#x20AC;&#x153;It shows that we should not consider the innovation process as an isolated activity but as ongoing and organisation wide.â&#x20AC;? For many organisations, innovation is something mysterious. Something that takes place in a think-tank of creative people and researchers, and something that is associated almost automatically with product development and technology. But innovation goes of course much further than that. It is the driving force for competitiveness, growth, profitability and permanent value creation and consequently it is a challenge for the entire organisation. However, innovation is neglected rapidly if economic circumstances are not good and the company focuses on the short term.
It shows that we should not consider the innovation process as an isolated activity but as ongoing and organisation wide. It is possibly, for this reason that marketing experts pay so much attention to innovation now. It provides them with an excellent opportunity to prove themselves within their organisation and gives them a role at the highest level. Increasingly marketing experts better understand what inspires and motivates their customers to do business with them. Precisely this knowledge is essential to successfully innovate. Renewed business models and technologies primarily count not on the R&D department but on a clear company vision and market knowledge. In most companies, we seldom see someone who is specifically responsible for innovation. Someone who has the task of developing an innovation strategy, who manages an innovation portfolio, who defines priorities on which investments and resources must be focused, and someone who, with a long term vision, knows what the company must offer to its customers. The role of the marketing expert is essential here. Innovation is, as a natural component of the marketing mix, available for the taking. And nevertheless we see that this does not happen frequently. Marketing experts have to have a certain amount of freedom within their organisation to be able to innovate, but we note that marketing experts seldom get that space. Still too frequently companies try to fit innovation within rigid business processes and as a result the chances of success are highly compromised. Innovation is therefore not an add-on activity for the different departments within an organisation. Something that is put on the agenda once in a blue moon then to come as quickly as possible - generally after one or more sessions in a green environment - with a number of proposals for the following day. No, innovation is a full business process with specific rules, techniques and discipline. Regardless of the interpretation you place on innovation whether it be the stimulation of creative ideas, developing new products, considering new business concepts, or the improvement of current daily activities, it is and remains an organisation wide process for which someone must take responsibility. Only this way can we guarantee the long term results of innovation.
continued from p. 169
Therefore, innovation as such certainly still has to change a lot in many companies. The objectives companies want to achieve and the way in which they consider how to go about it are determining factors. Moreover, this suggests that one must be able to evaluate progress and therefore also be able to measure it. It is precisely here that the shoe doesn’t quite fit. Failure to achieve successful innovation is still too frequently attributed to a lack of talent or the commitment of employees, but experience shows that the problem doesn’t lie there. Generally, it is not due to a lack of creative ideas, but a lack of a policy where good ideas are identified and are given the opportunity to be achieved. It leads to an impossible situation if an organisation does not provide the necessary opportunities for creativity to put in profitable activities. Too often creativity is stifled and focus placed on profit without innovation: it has proven to be a nightmare for a lot of entrepreneurs! For many of us innovating will mean, therefore, we will also have to change ourselves and not in the least our organisation. But it is absolutely necessary. If we want not only to maintain our position in the market but also to strengthen it, then the only reliable guarantee to realise this is to acquire the knowledge and the power to innovate better and for a longer time than the competition.
Van den Brande, as a venture capitalist, is looking for companies that recognise those shifts and figure out ways to ride those waves. Companies like Netlog, building a membership base of 30 million users. nWave is another company to watch, if the shift toward 3D media does occur then this is a company that will truly explode in the value it is able to create. These are not specifically technical innovators; instead, they tweak business models or combine existing technologies in new ways to create new user experiences. Muriel Scherre (La Fille d’O) is another entrepreneur to learn from, in the way she is creating an entirely unique user experience. We have a sense that many more such companies are emerging in the country, we just cannot recognise the winners yet. Entrepreneurship is increasingly ‘cool’, there is a tremendous well of creative and technical talent to draw on, and there is capital available. Admittedly, this is not a tidal wave of inspiration—the potential is much greater. But the energy, the creativity is recognisable, for the casual observer perhaps most obvious in music and the arts. Let the entrepreneurs now follow.
Geert Polleunis Opening up marketing databases
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Geert Polleunis Director Aconos
A conversation with Geert Polleunis, marketing wizard, on the future of marketing in today’s technologically driven world Traditionally marketing has been conceptualised as the marketing mix or ‘four P’s’ – product, place, price and promotion – and while this remains a useful guideline it neglects the fundamental changes that are occurring in business models and the technological advances of our time. Within the four P’s scope the customer is always a passive participant in the process, and while marketing research attempts to discover the desires and opinions of a target market so as to gain competitive advantage it is not an ongoing discussion. Once a product or service is launched based on calculated market trends, marketing often becomes a series of inflicted campaigns aimed at attracting new customers and retaining existing ones. Dialogue between company and consumer is limited. Yes, companies make use of call centres and market research—but they don’t tend to integrate information from different sources. Furthermore, information from the internet (the ‘uncontrolled feedback’) is often ignored. The result is that marketing retains an inside-out approach to consumers. Geert Polleunis, a marketing consultant who cut his teeth in the early web days, envisages a very different and far more exciting future for the profession. Essentially he criticises the traditional consumer database model, where large companies, retailers and service providers maintain proprietory databases on their customers. He predicts that database models will open up in a similar way to the recent trend in collaborative software development models. If this is achieved in such a way that the data from different companies is brought together while still protecting both the privacy of consumers and competitive issues, ‘then marketing will revolutionise’. The emergence of companies like Fifthplay, which are developing the technology to wire homes in a way that connects all of their devices to a home network, suggests that the opening up of databases is inevitable. In both the home and the workplace there will be an increasing number of devices which run on the internet and therefore a resultant convergence of data on a common platform.
The key challenge at this point and in the future of open data platforms will be the handling of ‘Big Brother issues’. The system would require stringent privacy control measures for the protection of both company and consumer. Geert suggests that the most likely approach would be that exemplified by Facebook, where users retain complete control and can adjust the privacy settings exactly as they wish. The most immediate obstruction is the current lack and cost of bandwidth – ‘obviously none of the new services will take off if the Telco bill goes sky-high’. Telcos and media companies need to take care that their tendency toward product bundling (e.g., bundling TV, internet, telephone and specific content packages in single products) and proprietary or exclusive channels does not put consumers off (remember AOL? Or WAP?). With technology at the ready and current trends indicating the inevitability of the revolution Geert predicts, the business of marketing is going to undergo fundamental changes. At present all marketing is framed in terms of campaigns, but there will be an inevitable shift to a more ongoing conversation with customers. Marketers are going to need to start thinking in radically different ways to the tried and trusted four P’s approach. Education in marketing is totally unprepared, and Polleunis suggests a thorough evaluation of current business models and an adaptation in the wake of change. How exactly marketing will look and evolve in the new environment is still not clear today, but one thing is for certain, there will be endless opportunities for creativity and innovation. Sectors that undergo change are fertile ground for innovation!
“The key challenge at this point and in the future of open data platforms will be the handling of ‘Big Brother issues’”
Tips for Policy Makers
Having spoken to a large number of Belgian innovators and having read a fair number of papers and commentary, we should be in a position to make a few suggestions for policy makers. Although we do this with the caveat that this exercise must not be seen as a formal policy evaluation. There are other sources that dig a great deal deeper in the policy issues. Our purpose here is to spark thinking and debate.
Science and research Science is our strength, but there is potential to adopt best practices more broadly across the country. Our inspiration comes mainly from the Flemish Institute of Biotechnology, in the way they have built scale (joining 8 research departments at 4 universities into a single virtual institute), in the way they have professionalised their research activities via performance management systems, in the way they maintain scientific/academic autonomy, and in the way have a professional tech transfer team that builds sustainable companies. We think there is room for additional VIBlike institutes in Belgium. Additionally, we think it opportune to set up multi-disciplinary institutes (for example, across biotech and microelectronics) and international institutes (for example, a joint Flemish-Dutch institute).
IT education and research The lack of IT graduates is unacceptable. IT is no ordinary discipline—it is the means by which all economic sectors are able to modernise and innovate. Also, its importance will only increase as industries become more knowledge intensive. Radical action needs to be taken to rectify this problem. Public communication campaigns and competitions (to stimulate an interest in IT among young people) is one element that could help. More importantly, we think, this country needs an IT research and training institute of world repute, be it via merging existing centres, by expanding the remit of organisations like the IBBT, by setting up a new centre, by involving IT companies, etc. Either way, it is reputation that will ‘pull’ (attract) students and researchers, both locally and from abroad, in the same way that our reputation in life sciences is attracting students to biological sciences.
Entrepreneurship Entrepreneurship is one the country’s biggest challenges. There are not enough young starters and there are not enough young companies capable of growing into large successful businesses. This needs to be tackled from various directions. There probably are sufficient communication campaigns and business plan
competitions (from the public and private sector) and these have been reasonably effective in making entrepreneurship ‘cool’. In early education it probably is possible to do more to instil entrepreneurial values. The most important pieces of the puzzle, however, are the fiscal environment and the subsidy instruments. While various instruments exist to make life palatable for large enterprise, it is the SME that typically misses the boat. There is consensus that adding more ‘patches’ (e.g. special fiscal exceptions, reductions) to the existing fiscal and subsidy ‘patchwork’ is ineffective—SMEs do not have the resources to navigate the complexity of the system. Instead, we need to simplify our system. While it is clear that subsidies are important, if not critical, for stimulating technical innovation (i.e. R&D investment) we need to recognise that innovation is not limited to R&D and not limited to the classic ‘hightech’ sectors. But ‘strategic innovation’ is not easy to support via subsidies. In fact, strategic innovation, and entrepreneurship more generally, is best stimulated by giving small companies the oxygen to grow and experiment, i.e. lower taxes on employment, more flexibility in variable pay, and a simplified company tax system (i.e. lower the tax rate while reducing the number of tax deductibles).
References
Conseil des Politique Scientifique (2006). Evaluation de la politique scientifique de la Région wallonne et de la Communauté française. Debruyne M. & Schoovaerts M. (2006). Innovation outside the lab: strategic innovation as the alternative. Flanders DC/ Vlerick Leuven Ghent Management School. De Grauwe, P. (2006). Waar gaat het naar toe met onze economie. Terra - Lannoo, Uitgeverij Devos, G., Van De Woestyne, M., Van den Broeck, H. (2007). Het Innovatieprocess in Grote Bedrijven en KMOs. Flanders DC/ Vlerick Leuven Ghent Management School. Hansen, T.H. & Birkinshaw, J. (2007). The Innovation Value Chain. Harvard Business Review, 1 June 2007. “Leuven, Knowledge Pearl.” Brochure from Leuven Charter 2010 OECD (2007). Economic Survey of Belgium. OECD. OECD (2007). Science, Technology and Industry Scoreboard. OECD (1997). OSLO manual: the measurement of scientific and technological activities proposed guidelines for collecting and interpreting technological innovation data. OECD/Eurostat. PRO INNO EUROPE (2007). European Innovation Scoreboard 2007. COMPARATIVE ANALYSIS OF INNOVATION PERFORMANCE. European Commission, Enterprise Directorate-General. Soete, L. (2007). Eindrapport: expertgroep voor de doorlichting van het Vlaams innovatie-instrumentarium. www.soete.nl Steunpunt O&O (2007). Vlaams Indicatorenboek 2007. Verganti, R. (2006). Innovating through design. Harvard Business Review, 1 December 2006.