Month: January 2017

A few years ago we created six universial technology rules at TOP. In our office in Wageningen we placed them in a prominent place in our offices. Six simple rules that we all should take in the back of our mind when we run innovation projects. Page 1 in is Dutch, Page 2 in English.

The Technology Laws of TOP – De technologie wetten van TOP from TOP Technology Talks (TOP b.v.)

I was extremely tired when two students from Wageningen UR interview me a few years ago; but the questions and my answers are still relevant today. Of course the interview is too short and maybe sometimes a bit black and white. But now in the beginning of 2017 I realise that I must listen to my own advices from 2014 and act accordingly.

Interview (Englisch) with Wouter de Heij (CEO TOP b.v.) by students Wageningen UR from Wouter de Heij on Vimeo.

In the year 2010 I secretly recorded an fantastic presentation from Jonas Ridderstrale during the Food Valley Congress. His main message? The knowledge from an individuel person can only growth linear, while the collective knowledge of our mankind growth exponentially. The more knowledge we have, the more humble we must be. Our society is a complex adaptive system and not comparable with a welldefined ‘physic system’.

Jonas Ridderstrale – Food Valley congress 2010 from Wouter de Heij on Vimeo.

This is part two of a blog about innovation policy. Part 1 did provide a blueprint. Roughly eight years ago I did wrote this article in Dutch. I never updated or translated this into English. At that time I did use the term “Netherland Innovation country 3.0”. I unfortunally think that the Dutch situation has not improved, on the contrary I think the Dutch innovation Policy has been screwed up. Probably due to internal politics combined by no (practical and theoretical) experience in understanding what a good innovation policy needs.    

18 practical advices to create a modern innovation policy :

1. We’ll separate innovation (bringing something new successfully to the market) and research (analyzing how something is put together or works) again. Innovation is primarily a task for entrepreneurs and companies. To become a more innovative country private organizations and start-ups must also understand the difference between ‘research’ and ‘developing’, companies need creative developers and not scientists.
2. Economically speaking I’d rather live in an innovation country (that creates money and new jobs) than a knowledge land (that mainly costs money). Mind you, less than 5% of the knowledge in the world comes from The Netherlands. Jan Wouter Vasbinder rightfully mentions there are different arenas (his vision will be translated into English soon).
3. Rather search than research! Reinventing the wheel is (from a social as well as a business point of view) dumb. Less than 3% of the global knowledge is created in The Netherlands; you could also say: 97% of the ideas and knowledge can be found abroad. Go search abroad, travel, make smart alliances.
4. Universities stop working one-to-one with companies, hence I propose a third money stream funded research (in reality often poor development i.s.o. great research). First and second funding should grow. Universities just focus on (1) fundamental research, (2) excellent education. Universities close all advice, consultancy, design and developing departments and foundations they own. Hence, stop public-private constructions and let is be it 100% market or 100% private.
5. All fundamental research financed by society becomes 100% accessible to that society (and this in an open source way, a .pdf on the internet, but also the underlying raw data). No more secrecy agreements. This is part of the raw-data, open-data and open-source policy.
6. All (future) patents of universities and public research organizations will be auctioned in public domain (task of the ministry of Economical Affairs), 30% of the revenues of these auctions will return to the university, and the rest is for society. The revenues should 100% be used for new fundamental research. An alternative business model is that all Dutch -especially SME- companies receive a free license.
7. Knowledge institutes (like TNO, DLO) become 100% private WITHOUT basic government financing (excluding the parts with a 100% public function like for defense). Compare the situation of those institutes with the Dutch Public Media Broadcasting networks. We should promote the growth of private R&D&I initiatives like private broadcasting networks (RTL, SBS6, etc.) were founded many years ago
8. We will regard knowledge and innovation services as a normal “market” (except thus for our universities). Creating a level playing field amongst private R&D service providers is essential. Do read Commission Cohen “Market and Government”. Hybrid organizations are two-faced monsters in our real world. Current public research organizations mostly face an identity crises and due to that identity crisis they falsely compete with private initiatives but also use research budgets that should belong to universities.
9. Research assignments or needs are commissioned by the government using a public tender method (currently research is as yet excluded from European procurement rules, that is strange). And this includes all project requested by the Ministry of Agriculture or Economical affairs. In short, government is commissioning research and will act as launching customer or risk taking client. For example through SBIR-programs (if 100% according to USA model).
10. Every company (large or small or multinational it does not matter) gets a subsidy/grants limit of -for example- maximum 5 million Euro per year. I don’t mind about the exact amount, but I do mind there being a maximum. Compare it to the restrictions on mortgage interest tax relief for houses worth over X. Why should large organizations need more R&D grants?
11. I prefer a lot of small projects instead of a couple of large ones. Rather 10x 500K projects than a 1x 5,000K program. Sow a lot and some flowers will certainly grow. The mega FES-like projects are not always effective and innovation conducive.
12. More loans and less giving (= subsidy). A loan can always be converted to a gift as soon as the target objective is delivered. And please: specific, tangible targets (paper is (too) patient). But I’m again not against subsidy or grants.
13. Shortly, governments have to act more like (risk taking) launching customers (see also discussion on LinkedIn Innovation 2.0 – community of Talents – January 2009). The government can become a risk taking client for new innovations that promotes more sustainability or health.
14. The themes promoted by the large innovation platforms and such are always one step behind. Innovation is by definition an intangible and unmanageable process (compare it with biology and Darwin; “the best adapted survives”). The usual suspects are never capable of being flexible enough to change. History has thought us that the usual suspects rarely start and if they start they are mostly too late to be successful.
15. We use one central subsidy organization (in Holland : RVO, formally known as AgentschapNL). Holland is a small country (in fact only a large European region), however providing subsidies is a specialism. Municipalities and provinces have to stop these activities (or commission the total process to RVO/AgentschapNL). Lower governments can only determine the ‘theme’s’, they may allocate funds, and propose judges. But the procedures are developed by a centralized team of professionals.
16. We will realize that the knowledge is now in mostly available in the society. Experts nowadays often work at companies, and thus for a long time not exclusively at universities or knowledge institutes (see also discussion on LinkedIn #Cot). The majority of the great experienced engineers, PhD-students and other highly educated personnel works thus in society (check out the statistics). Use these professionals, and ask their advice!
17. Design Doing. Practice what you preach. And even better: you may only preach if you have practiced (with thanks to Harold van Garderen – StoryConnect). Successful innovations require professional to adjust the innovation policy. Professionals have a proven and practical track record. Hence, experience not only based on ‘text book knowledge’.
18. The situation of the knowledge and innovation sector is comparable to that of the public broadcasting channels. It looks nice and friendly on paper, but in practice it doesn’t work at all. We stop with PPS constructions, Universities should only focus on training and teaching and knowledge institutes have to choose : become private or obey modern rules.

Most people think that my largest hobby is food and health, and food technology. But it is not ;-). My real interest is innovation policy and innovation management. What is good entrepreneurial behavior. How do you stimulate good entrepreneurial spirit, what is the role of the government. In the care sector for example we in the Netherlands have a debate about ‘private’ vs ‘governmental’. What do these subjects have in common? It’s about daring to break down and build again, and it’s about fear of innovation (and sometimes lack of trust in the future) and it’s about power concentrations (oligopolies). In two parts I share some thought for a good innovation framework.

Grand designs and grand solutions to social problems don’t work anymore. In 1953 we could still make a Delta Plan to protect Holland to the violent Northsea, but our society has become too complex (think of care, traffic jams, ageing, bank crisis, etc. etc.). Yet I believe there are a few generic solutions to social challenges that are always successful. The ten solutions to create a good innovative society are:

1. Our society is very complex. That’s why too firm governmental intervention are inadvisable. The safe fail method – in which you pursue small DO-experiments in practice – is the recommended route to proceed. Governments determine only the social playing rules and politics indicate the social determination of will. Entrepreneurs however need to manage themselves.
2. Accept that in a grownup market (red ocean) due to scale-ups and mergers a mature market only leave room for a few players. This results in just three questions – or rather determinations of will – that need to be answered:
   1. When do we believe a market to have become ‘too large, with too few suppliers’, hence too g to fail? What’s the minimum amount of players to remain in order to maintain sufficient balance of powers, to prevent cartel formation?
   2. When is an organization or company in a grownup market ‘too big’ to fail? Obviously this also has to do with cartel laws in the EU as well.
   3. In case of a global market: which companies/sectors are of national interest to preserve them at any cost? And if so, what will we do to preserve these sectors?Examples: the retail market has now only four purchasing organizations left and Albert Heijn is (locally) often monopolist.
3. Grownup markets are called mature because the organization are grownups, and we shouldn’t give pocket money (subsidies) to grownup companies. In my opinion grownup companies and mature sectors can look after themselves. And we should never let grownup companies and sectors take us as society hostage (this situation happened during the bank crisis in 2008-2009 and in the USA with the car industry). Example: the ING bank really is too big for our Dutch society. We can’t cover the risks if problems occur at this bank.
4. Society should maintain clear and strict (additional) playing rules for all players in every mature market. These rules must be about environment, social aspects or for instance about animal welfare. In short, beside straight financial factors, also ‘soft’ and ‘quality’ requirements should be imposed within any mature market. Imposing these rules upon the players should be stricter in a mature market than in an immature market. Example: having permits for larger pig stalls are allowed in The Netherlands, providing they at least comply to 1 welfare star.
5. Mature markets always tend to ‘bulk’ (low opex, low quality, limited amount of SKU’s) and to camouflage it with marketing. However, innovation almost always develops from the bottom from small starting initiatives, since that’s where the urge for change (stress) is the largest. That’s why we as society should continue to stimulate this innovation initiatives. Examples: the pig farming sector, the dominance of Microsoft in computers (and of Apple in smartphones).
6. Society – read: government – has the duty to promote diversity together with all entrepreneurs. Diversity creates (a) more competition, (b) necessary innovation, (c) a thus more stable society. These three aspects are crucial to secure a comfortable and prosperous future. Knowledge institutions and universities provide good education of young talent (no more and no less). Example: 15 years ago Apple was on its last legs. Now their stock value exceeds Microsoft’s. The Dutch TomTom is only 15 years old.
7. A young or upcoming sector (still busy to create a blue ocean) can temporarily be helped by society. This can be done through subsidies or loans, but you can also help a young sector ‘in kind’ by temporarily easing the current playing rules. However help can never be structural. Help is only given during start-up stage. The goal is to become a grownup as soon as possible. Example: the market for meat substitutes; in The Netherlands there are about twenty producers and their turnover is less than a hundred million.
8. Diversity is created by (allowing) the start of many small initiatives. New initiatives are best placed outside existing organizations or institutes. Besides that, realizing an innovation is something you do with professionals. Starting a new initiative should never result in falsely compete with an ‘other’ new initiative (although disruptive competing with a large mature organization is allowed).
9. As a government you can sow diversity through open innovation programs. These programs may define central or general themes, but should never define the exact definition of the project. The assessment committee should judge based on (a) innovation and the possibility to create more diversity, (b) partnership (is there synergy amongst them), (c) sustainability and health and social improvements possibility, (d) the business case (does the project have growth potential), and in fact also on (e) experience and motivation of the team. Innovation programs should not be mixed up with fundamental science programs. Science is not the same as innovation!
10. To sow successfully you need, besides a good idea, especially intrinsic motivation of the team, lots creativity and strong leadership. Without perseverance a little idea will never become reality. Without real products or services no turnover. Without turnover no new jobs for people in the new sector. In short: Innovating is DOING in practice. And DOING is something for entrepreneurs NOT for universities or governments.

Use this mindset as a blueprint for all social challenges and together we will make our society more sustainable and eventually prettier and more pleasant.

P.S.: Let’s hope politicians and policy officials read along…