The Blog

To Remain Competitive, we Need to Innovate a new way of Doing Business

The traditional business model for the innovation, research and development of technology is no longer fit for the challenges of the 21st Century. To remain competitive in a world defined by rapid changes in geopolitical and economic landscapes, consumerism and the threat of terrorism, we must be more resourceful and creative than ever before.

The traditional business model for the innovation, research and development of technology is no longer fit for the challenges of the 21st Century. To remain competitive in a world defined by rapid changes in geopolitical and economic landscapes, consumerism and the threat of terrorism, we must be more resourceful and creative than ever before. That means understanding the need to look beyond the walls of our own companies and forge genuine and mutually beneficial relationships across industries, markets, SMEs and academia.

In the movie Duplicity, we enter a world of corporate espionage where the latest ideas are jealously guarded under lock and key. In the real world though, companies are taking a more considered approach to developing future capability by changing the way that they look at intellectual property.

Procter and Gamble is a company that has been a leader in innovation since the 19th Century, so when they developed their open innovation model called 'Connect and Develop' we certainly paid attention. As a result of the scheme, more than 50 per cent of the company's product initiatives now involve significant collaboration with outside innovators.

We regard 'Connect and Develop' as a benchmark for how BAE Systems can drive open innovation to remain world leading in the field of defence and accelerate the pace of delivery of new capability to our armed forces. The idea of simply giving away some of the knowledge, technology and skills that our own scientists have developed can be baffling to some. However we recognise that by providing access to enable engagement with academics and SMEs we can only add value to our own work and that ultimately makes good business sense.

By sharing our challenges, we accept that we are not going to own 100 per cent of the intellectual property going forward, but what is important is that we have access to something far more valuable created as a result of the collaboration. In that sense, it's illogical for a company to hold onto intellectual property with such jealousy that they are unable to fully realise its potential.

Apple is another company that has recognised the benefits of opening up their product development in order to remain at the forefront of consumer technology. They could retain ownership of every application downloaded to their iPads or iPhones if they wished. However, they would never have been able to think up and produce that vast range of content on their own and could never deliver new apps at the pace which they are now developed and offered. By opening up their platform to outside developers it has ultimately led to a more sought after product.

We've done much the same with our advanced autonomous technology development vehicle called Wildcat. After our scientists spent five years creating and developing it, we have now handed it over to Oxford University to use as a test bed for their continued research into robotics. Like Apple, we have provided the framework and architecture, but recognised that more could be gained more quickly from sharing it with external partners.

We've been investing in research and development at universities for several decades, but even just ten years ago the idea of forging this close a partnership with the intention of bringing new technologies to market together would have been unthinkable within our industry and indeed within any large company. We've watched and engaged with excitement in recent years as this way of thinking has taken hold with now increasing numbers of academics and SMEs jumping on-board to collaborate with us.

We've got the capabilities to understand the needs of our customers and so this gives academics the opportunity to research solutions to interesting and relevant challenges that have immediate application. It is this high degree of 'impact' that the UK's seven Research Councils look upon favourably when they are considering grants and it will also boost the job prospects of those students working on it.

There's no doubt that we live in challenging times, but if you need reassurance about the future of Britain just step foot inside one of our universities. There is a wealth of talent there waiting to be unleashed and I'm constantly in awe of the passion on display from undergraduate level all the way through to the professors guiding them. The young people there don't just represent our future. They are already building it through their pioneering research and development.

BAE Systems is responsible for developing and delivering some of the world's most complex and challenging engineering projects from submarines that can circumnavigate the planet undetected without surfacing to aircraft that can pilot themselves. The success of these projects, the safety of our armed forces that use them and ultimately the security of our nation depends on vital work that is carried out in partnership with academics in over 40 British universities, not to mention the numerous SMEs from across the country.

Open innovation therefore is not just a business model. It's a mindset that recognises that Britain cannot remain at the cutting edge of innovation without collaboration across industry and academia. There is a wealth of ideas in this country and to make the most of them we need to be mature in our approach and thinking and recognise that, even for a company the size of BAE Systems, it is simply no longer possible or desirable for a single company to work on them in isolation.

The challenges that we face are constantly evolving and so too must our response to them.