A Case Study Report on Harvard Business Schools Fraunhofer: Innovation in Germany

By Hardeep Ramesh, MS ISE

For Technology, Development and Implementation (ISE 545) Dr. Jerry Lockenour (Instructor) University of Southern California April 5, 2012

Hardeep Ramesh | ISE 545, Case Study Report on HBS Fraunhofer: Innovation in Germany

Introduction The Fraunhofer approach: Fraunhofers approach to create regional structures with a global effect resulted in the concept of innovation clusters. Linking skills and pooling resources are the right way to meet the challenges posed by globalization and the increasing dynamism of structural change. Knowledge-based industries, in particular, develop very successfully in regional clusters, which facilitate knowledge exchange and generate a critical mass of skills that complement one another. Geographical proximity between research organizations, investors and companies can produce networks that lead to new business ideas and the foundation of new enterprises. Regional innovation clusters bridge the gap between industry and scientific research. Successful clusters can stimulate the competition on the market, and at the same time create fruitful collaborations which ultimately benefit everyone involved. Impetus for regional development: A key element of the German governments high-tech strategy is therefore to promote cluster initiatives. In the Pact for Research and Innovation, the Fraunhofer-Gesellschaft has assumed the task of conceiving and implementing innovation clusters. Such collaborative ventures set themselves clear goals and define milestones for their development. The purpose of innovation clusters is to pool the strengths of a region and activate them to solve demanding tasks. In addition to industry and universities, the networks include local non-university research institutes that can make important contributions in relevant thematic areas. Through this initiative, the Fraunhofer-Gesellschaft is providing impetus for the further development of regional centers of excellence, and is supporting the regions skills and expertise. Innovation clusters will primarily serve as an instrument to help develop existing strengths. The

Hardeep Ramesh | ISE 545, Case Study Report on HBS Fraunhofer: Innovation in Germany

collaborations will generally be restricted to within one federal state. Another important factor is how much money the industrial partners and the state are willing to invest in new projects within a region in addition to current expenditure. Turning ideas into products: In the exploitation of research results, the Max Planck Society has maintained its fundamental principle, to promote basic research purposes, but look for opportunities to

apply systematically and use by the professional recycling through its subsidiary Max-PlanckInnovation GmbH (MPG). This MPG is a key objective of the Pact for Research and Innovation. The promotion of new enterprises with the know-how of the Fraunhofer institutes is a stated goal of the Fraunhofer-Gesellschaft. The Pact for Research and Innovation has set a further impetus. The care of these spin-offs assumes the Fraunhofer Venture Group. In 2006 it supported 38 new spin-off projects. In order to facilitate spin-offs and an "entrepreneurial culture" to be anchored more strongly, the Helmholtz Association has launched "Enterprise Helmholtzs own spin-off

initiative. Young entrepreneurs can get from the program in the startup phase of grants for staff costs and professional services. The program will be co-financed by the centers and of the Initiative and Networking Fund of the President, who was raised by funds from the pact. The utilization of research results and promotion of employees are spin-offs for the

Leibniz Association and its member institutions an integral part of the Institute's strategies. At the level of the sections, especially in the field of engineering and natural sciences, but also in the development of marketing enabled offerings the field of information of various scientific service number facilities,

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Hardeep Ramesh | ISE 545, Case Study Report on HBS Fraunhofer: Innovation in Germany

agreements with

businesses and research

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offerings implemented. Technology Transfer Strategies: The successful transfer of technologies is the main business of Fraunhofer. This Fraunhofer stands next to the project business, the possibilities of transfer of spin-offs and licensing agreements or the transfer of the results of the work in the knowledge of the staff available. A close integration of marketing channels is provided by the strategic discussions on the development of the individual subject areas. Fraunhofer research strategies: Professionalization of research planning: The Fraunhofer Institutes operate independently build and maintain their scientific expertise. For this purpose they have contacts to the scientific community and monitor the contract research market. To create the new institute strategies, instruments are used, among other things at the Fraunhofer-Gesellschaft customized planning process and an audit. The discussion with outside experts as part of an audit is to assess what value an institution in the scientific community and the economy. In this way the Institute is supported in its strategic direction. Therefore, in all institutions, the strategic planning and quality assurance audits are performed. Expansion of international networking: International engagement has become an essential factor to support the innovation of Fraunhofer. It is guided largely by Fraunhofers two motifs: the vast majority of the global
Hardeep Ramesh | ISE 545, Case Study Report on HBS Fraunhofer: Innovation in Germany 4

knowledge generated outside Germany; the Fraunhofer Society should submit an existential interest in working to develop this knowledge for their research and meeting their responsibilities for the co-operation with industry. On the other hand, the cooperation partners of the industry itself are increasingly operated internationally. They therefore expect the Fraunhofer knowledge of foreign market conditions and practices that can be detected only through its own research activities in foreign markets. Core instruments of international cooperation are the world's practice and project work with excellent research partners and companies. Fraunhofer's offices abroad provide contact with the main current and future scientific progress and economic development. In addition to focusing on Europe, USA and Asia, the Fraunhofer-Gesellschaft is also pursuing international activities in new growth areas, such as in South America. The core businesses of contract research are now more than 20% of the proceeds of the Fraunhofer-Institute of foreign origin, of which almost two-thirds is of Europe. This may reflect the large international experience, demonstrating the Fraunhofer Institute in its breadth and contribute to the cooperation with its industrial partners as a side effect of securing the foreign income a significant proportion of high-quality jobs at the Fraunhofer. Cooperation with USA: In the U.S., particularly for knowledge-extraction of the institutes under the umbrella of the subsidiaries' Fraunhofer USA, "a network of Fraunhofer Center maintained and developed through close cooperation with local, industrial and academic research partners. It also benefits the clients of the institutions of the knowledge generated abroad. 2010, the contributions of Fraunhofer USA to promising innovations with the "Innovation Award" of the North American Association of University Research Parks have been
Hardeep Ramesh | ISE 545, Case Study Report on HBS Fraunhofer: Innovation in Germany 5

awarded. Recent results of the Fraunhofer Center for Molecular Biotechnology CMB in Delaware make a major contribution to this recognition. The Fraunhofer Center has expanded its development and production methods for vaccines against the swine flu and avian influenza continue. It can now refer to a specialist area of plant biotechnology to develop vaccines for viral diseases in support of tens of millions of dollars from the Bill & Melinda Gates Foundation and contributes to Fraunhofer to solve global societal challenges in health. In September 2010, the first request of the FDA was granted. Thus, the developed vaccine candidates are being tested in clinical trials. Conclusion: Shared objectives lead to fruitful collaborations. Collaboration within the clusters should extend beyond that of a mere communication network. The clusters are built on mutual respect for one anothers strengths and are prepared to take on specific tasks in an end-to-end chain from the invention to the final product. It is important to work together towards a shared objective, which can best be achieved through concrete projects. That is why the Fraunhofer innovation clusters are, first and foremost, project clusters. This means that the funds provided are used for particularly attractive projects that can only be implemented within a given network. The distribution of tasks within each innovation landscape is maintained. While the public establishments create the basis for new products and services, the funds provided by industry are used to implement and market these innovations. This promotes collaboration in the development of concrete products. The positive effects of jointly achieved success on further cooperation are invaluable.

Hardeep Ramesh | ISE 545, Case Study Report on HBS Fraunhofer: Innovation in Germany

Joint, harmonized research and development at Fraunhofer Institutes, universities and in industry not only provides stimulation and helps to forge links within a cluster, but also has a financial leverage effect. Being able to mobilize equal funding from the regions and the industry involved is a prerequisite for setting up an innovation cluster, and ensures commitment on the part of all those concerned. References: 1. http://www.fraunhofer.de/de/institute-einrichtungen/international/nordsuedamerika/fraunhofer-USA.html 2. http://www.fraunhofer.de/en.html 3. http://www.bmbf.de/pub/forschung_und_innovation_fuer_deutschland_en.pdf 4. http://www.inmetro.gov.br/english/news/events/workshopinnovation/presentations/german-innovation-system-glance.pdf

Hardeep Ramesh | ISE 545, Case Study Report on HBS Fraunhofer: Innovation in Germany