Nordic marine innovation - Øyvind Fylling-Jensen

Competition and Cooperation –
Innovation as a driver for competitiveness in the Nordic Marine Sector
Nordic Marine Innovation Conference - Oslo, January 25th 2012
Øyvind Fylling-Jensen, CEO Nofima AS

OPEN INNOVATION –
APPLICABLE IN THE SEAFOOD SECTOR? ©Gregory Colber

25.01. ©Nofima/ØF-J/2012/NICE 1

Agenda
• A few words on Nofima

• Some words on innovation

• Some words on open
innovation

• Some examples

• Answering the question: Is
open innovation applicable
in the seafood sector?


Nofima –
Norwegian Institute of Food, Fisheries and Aquaculture Research

• Established Jan 1 2008, with history dating back
to 1931

• Research, development and innovation
partner for the food, fisheries and aquaculture
industries with focus on industrial value
creation along the value chain

• Approx. 460 employees
– Approx. 220 researchers
• 75% with PhD
– 220 Scientific papers and more than 500
industry reports in 2011
– Modern R&D infrastructure
– Broad experience in EU projects

• Turnover of NOK 474 mill (2010) (approx. 61 mill)
(Non dividend policy)

• Owned 56.8 % by the Norwegian State, 43.2 % by
private-public interests

©Nofima/ØF-J/2012/NICE 3
25.01.

Innovation is needed in the seafood sector


Innovation is about creating new and
sustainable growth over time

Maturity

Stagnation
Growth
New growth

Start-up


Innovation drivers

Technology

Price
Market &
&
demand
Costs


There are many drivers for innovation in the seafood
sector…
• Profitability
– New entrants
– New products
– New packaging
– New channels
– New processes
– New technology

• Consumer trends
• Value chain power shifts
• Procurement directives

• Technology shifts

• Legislation
©ØF-J
• NGOs


Health Convenience

Indulgence
Environment
& taste


Innovation is coming from different sources
• Cost improvement • Other industries (meat,
• Productivity/Efficiency gains poultry, ingredient etc.)
• Process optimization • Cost reduction
• Incremental improvements • Process innovation
• Packaging

Company Suppliers

RTOs &
Customers Universitiy
R&D
• Market demand • State of the art R&D
• Product innovation • Disruptive technologies
• Packaging • Breakpoints
• Distribution
• Branding


Innovation takes place along the whole seafood
value chain, but….

Foto: EFF


The seafood industry is innovative!


A lot of focus is on product development…

Finance Process Product/Offering Delivery

Product
Business Core Enabling Product Customer
Network perform- Service Channel Brand
model process process system experience
ance

Volume of innovation
efforts over 10 years

Source: Doblin - On Innovation Effectiveness,
March 2005
03.02.2012 ©Nofima/ØF-J/2012/NICE 13
25.01.

…but this is not creating the greatest value”


Product
ance

Cumulative value creation
over 10 years

March 2005
03.02.2012 ©Nofima/ØF-J/2012/NICE 14
25.01.

Therefore, the analysis of innovation has to
include several dimensions:
Business model
& Service

Geography

Market Segment

Channel
Product
&
technology

Product
ance


- which sum up to four opportunities for
innovation

Finance

Product

Process Distribution

25.01. ©Nofima/ØF-J/2012/NICE 16 March 2005

Open Innovation


Open Innovation is an important tool in the
fragmented seafood industry

• Risk reduction
• Reduced cost of innovation
• Increased innovation speed
• Improved success rate
• Broader access to ideas
• Learning
• Capability building
• Competence sharing
• Solving grand challenges
together (i.e. salt, sugar, fat)
• etc..

Cooperation in areas where competition is of lesser importance


To create successful innovations you need
an innovative mindset
Courage to be Behaviour and Ability to synthesize and
innovative Attitude put into action

Ask questions

Observe and learn
Challenge the from others Think outside the Innovative business
”status quo” box opportunities
Build and use
Taking risks networks

Try and fail

Adapted from Christensen et al, The Innovators DNA

A process of opening and concentration

D
i
• Analysis
• Observations
v Analysis &
• Interviews e Analysis insight as Innova-
• Challenge the & basis for Business Selection tion
truth r Synthesis
Insight idea opportunities portfolio
• Look to other
industries g generation
• etc.
i
n
g

i
d
e
a
s

Open Innovation alters the borders of the firm
Closed Innovation Principles Open Innovation Principles

• The smart people in the field work for us • We need to work with smart people inside and
outside the company

• To profit from R&D, we must discover it, • External R&D can create significant value,
develop it and ship it ourselves internal R&D is needed to claim some portion of
that value
• If we discover it ourselves, we will get it to the
market first • We don’t have to originate the research to profit
from it
• The company that gets an innovation to the
market first will win • Building a better business model is better than
getting to the market first
• If we create the most and the best ideas in the
industry, we will win • If we make the best use of internal and external
ideas, we will win
• We should control our IP, so that our
competitors don’t profit from our ideas • We should profit from other’s use of our IP, and
we should buy others’ IP whenever it advances
our business model

Source: (Chesbrough, 2003)


Open Innovation is all about combining nine
dots with four lines without lifting the pen?


Important points to remember in the process

1. Know the decision
boundaries
2. Ask the right questions
3. Select the right people
4. Divide to smaller groups
5. Keep everybody informed
and aware of expectations
6. Narrow down the ideas ©ØF-J

7. Keep speed in the
following process
8. Know when to close for
own value creation


A systematic approach to value added seafood through
research, development and innovation (RDI)

Action points
•------------------
WS •------------------
Industry •------------------
Compile
•------------------
Pilot •------------------
&
WS Prioritize
•------------------
WS •------------------
R&D •------------------
•------------------
Trend workshops
•Researchers List RDI trends by
•Industry representatives • Probability Prioritize and implement
•Alone and toghether • Importance the RDI strategy


The seafood sector has to move from the
traditional development model….

The selected projects are
developed in own company

Some projects
are repositioned
from ”no-go” to
Creative phase Realization ”go”


… to a model were different strategies lead to
increased value creation

Existing, external companies
are developing the Innovation
project

Innovation projects are
developed within the
company

”Spin off” – projects are
developed with new players

Creative phase Realization


In the seafood sector open innovation is a good tool..
Large differences in RD&I capacity:
• Very few large corporations with
own R&D
• The industry is characterized by:
– Fragmented value chain
– SMEs with low R&D capability
– Low R&D spending
– Cooperative R&D financing
• High focus on product innovation,
but
– Nine out of ten introductions
fail in the market
• High focus on process innovation
as this historically renders more
value


Arcimboldo


Value chain comparisons

• What can producers of pelagic
fish learn from other value chains
for food?

• Comparison with chicken,
potatoes and coffee

• 4 competitors in the group

• Very different regarding
resources and position
– Different lessons learned


Learning from other industries –
The poultry industry


Nye bearbeidede produkter
Foto: Marine Harvest


Developing the sushi market for retail

• Sushi is a growing trend
– But still a restaurant phenomenon (at least in Norway)
• Starting a project to develop the retail market
– Along with producers, distributors, retailers


Competitor process benchmarking
• 1999-2000: comparing the
production processes of
two producers of frozen
fillet

• Very similar firms (from the
outside)

• Both equally convinced that
the competitor would have
the most to learn…

• Both had lessons to learn!


Technology innovation

NIR sorting of NIR sorting of salmon
household waste (fat & colour)


Thank you for your attention
Acknowledgements:
Norwegian Research Council
NICE
EU FWP 6&7
FFL
FHF
Contact address: Audun Iversen
Hilde S. Mortvedt
ofj@nofima.no Astrid Nilsson
Jens Petter Vold
Cell: +47 917 48 211


Nordic marine innovation - Øyvind Fylling-Jensen

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