You are on page 1of 124

Technological Educational Institute (TEI) of Serres (Ellas)

Innovation and technology management


Handouts
Nikolaos Karanassios Assistant Professor Of the Business Administration Department

07

Innovation and Technology Management

Innovation and technology management

Competencies for innovation.................................................................. 7 1.1. Organizational competencies......................................................... 7 1.1.1. Managerial innovation mindset (culture).................................... 9 1.1.2. Managerial tools for innovation............................................... 12 1.1.3. Brain storming..................................................................... 12 1.1.4. Innovation group meetings (think tank).................................. 15 1.1.5. Innovation coaching............................................................. 16 1.1.6. External Innovators.............................................................. 17 1.1.7. Innovation Management Style................................................ 17 1.1.8. Innovation Oriented Leadership.............................................. 19 1.1.9. Innovation Orientation of the Staff.......................................... 20 1.1.10. Innovation Motivation of Employees...................................... 21 1.1.11. Training employees for innovation initiatives.......................... 22 1.1.12. Managing ideas.................................................................. 22 1.1.13. Managing creativity............................................................ 24 1.1.14. Research and innovation..................................................... 26 1.1.15. Collaborating with Universities and Research centers............... 28 1.2. Managing people in innovative organizations................................. 30 Organizational essentials......................................................................30 General ......................................................................................... 30 Programming.................................................................................. 31 1.2.1. Targets............................................................................... 31

Nikolaos Karanassios

Page 2

Innovation and Technology Management 1.2.2. Procedure Analysis............................................................... 31 1.2.3. Assignments........................................................................ 31 1.2.4. Allocation of resources.......................................................... 32 1.2.5. Budgets.............................................................................. 32 1.2.6. Schedule............................................................................. 32 Controlling..................................................................................... 32 1.2.7. Organization........................................................................ 33 1.2.8. Observation......................................................................... 35 Internal Regulation............................................................................. 39 Decision Making.............................................................................. 40 1.2.9. Managerial Decisions............................................................ 40 1.2.10. Administrative Decisions...................................................... 41 1.3. Marketing competencies............................................................. 44 Market Segmentation....................................................................... 46 1.4. Collaborative research and innovation clustering............................ 55 1.5. Conflicts of interest.................................................................... 59 Services innovation............................................................................. 61 1.6. Innovating services.................................................................... 64 1.7. Managing services creativity........................................................ 66 1.8. Internal and external services innovation...................................... 67 1.9. Lean Services management......................................................... 68 Technological foresights....................................................................... 70 1.10. Transforming discoveries into products or services....................... 76 1.11. Evolution scenarios.................................................................. 77 1.12. Technological trends................................................................. 81 1.12.1. Biotechnology.................................................................... 82

Nikolaos Karanassios

Page 3

Innovation and Technology Management 1.12.2. Nanotechnology................................................................. 83 1.12.3. Giga to Nano..................................................................... 85 1.12.4. Technology of materials...................................................... 85 1.12.5. Mechatronics - robotics....................................................... 86 1.12.6. Metrology.......................................................................... 86 1.12.7. Biomedical Technology........................................................ 86 1.12.8. Green Energy..................................................................... 86 1.1.1.1. Cell Fuel........................................................................... 87 1.1.1.2. Cold Fusion....................................................................... 87 1.1.1.3. Solar Energy..................................................................... 87 1.1.1.4. Geothermal Energy............................................................ 87 1.1.1.5. Wind Energy..................................................................... 87 1.12.8.1. Waves Energy................................................................. 87 1.12.8.2. Thunder Energy............................................................... 87 1.1.1.6. Hybrid Energy Sources....................................................... 88 1.12.8.3. Waste management......................................................... 88 1.12.9. Information and Communication Technology (ICT).................. 88 1.12.10. Economics....................................................................... 88 1.12.11. Management.................................................................... 88 1.12.12. Education & Training......................................................... 88 1.12.13. Chemistry........................................................................ 89 1.12.14. Environment.................................................................... 89 1.12.15. Space & Aviation.............................................................. 89 1.12.16. Logistics.......................................................................... 89 1.13. Fashion.................................................................................. 90 1.14. Tourism.................................................................................. 90

Nikolaos Karanassios

Page 4

Innovation and Technology Management 1.15. Agriculture Forestry and Fisheries............................................ 90 1.16. Food...................................................................................... 91 Innovation networks............................................................................92 1.17. Global and regional aspects of innovation.................................... 93 1.18. Technology transfer networks.................................................... 94 1.18.1. The EC-BIC Network (EBN).................................................. 95 1.18.2. IRC................................................................................... 97 1.18.3. Incubators....................................................................... 101 1.18.4. Technology Parks.............................................................. 104 1.18.5. B2Europe........................................................................ 105 1.18.6. Euro-Info Centers............................................................. 106 1.18.7. Gate2Growth................................................................... 106 1.18.8. Pro Inno-Europe............................................................... 107 1.18.9. Brokers........................................................................... 107 1.18.10. URENIO......................................................................... 108 Managing risks with technology........................................................... 110 1.19. Risk of failure........................................................................ 113 1.20. Risk of non- acceptance.......................................................... 114 1.21. Risk of deployment................................................................. 115 1.22. Risk of non profitability........................................................... 115 1.23. Risk of cash break funding.................................................... 115 1.24. Risk of supply chain break....................................................... 116 1.25. Risk of non marketability...................................................... 116 1.26. Risk of innovation addiction..................................................... 117 Risk management with technology.......................................................117 Innovation strategy in small organizations............................................ 118

Nikolaos Karanassios

Page 5

Innovation and Technology Management 1.27. Creativity.............................................................................. 119 1.28. Reward and Motivation............................................................ 119 1.29. Secrecy and confidentiality (non disclosure)............................... 120 1.30. Patents and Intellectual Property.............................................. 120 1.31. Academic Spin Off............................................................... 122 1.32. Academic Spin In................................................................ 123

Nikolaos Karanassios

Page 6

Innovation and Technology Management

Competencies for innovation


One established idea is that innovation boosts the enterprise development, each one separately and the economy as a whole. When it comes to an enterprise, hesitation prevails and innovative actions are being left back, while the desire for business expansion becomes weaker in front of the desire for secure profits. Innovation, when seen as a breakthrough, remains at the level of good thoughts, while people have to do what others have not done before and as a result, all the involved parties; the entrepreneurs, the staff members and the workers, are facing two important issues: risk of failure and hard planning and implementation work. Most of the enterprises are organized to perform specific tasks and make predictable profits. This leaves little or no space at all to innovation. The enterprises which are innovation oriented, include in their organization, at all managerial and executive levels, the quest of seeking, accepting and promoting innovation. This organizational parameter is usually overseen, when routine operations of the enterprise are becoming stressful. The more successful the business is, the less the management is searching for innovation, after thinking that this would put at stake the success. Incremental Innovation or Radical Innovation? This is a question to be answered by the whole of the enterprise, if innovation is adopted as a strategic tool. All enterprise is meant to be involved. Managers, staff members, external consultants and workers alike, have to work together, thinking, trying, designing and attempting innovation.

1.1.Organizational competencies
Organization may be defined as a viable system of co-operating and competing systems, which are viable themselves. This leads to the necessity of defining the system; it is a Greek word which means staying side by side. It obviously insinuates that a system consists of several components. Each one may be a system of its own. The viability of the system is the result of the systems it consists of, are able to stay together, both when they collaborate and when they compete. The main concern of the organization, when thought as a viable system, is to keep it alive, under any circumstances. It is determined to die anyhow, but organization has to keep it alive as longer as possible.

Nikolaos Karanassios

Page 7

Innovation and Technology Management In every organization (or organism, it is the same) there are internal and external influences, some sustaining viability, others preventing it. The same way that organisms evolve, organizations have to take into consideration two main (among others) directions; on one hand (if they want to keep alive), they have to react to the external changes and on the other they have to predict changes and prevail. Humans survived dinosaurs because they adapted to the climatic changes. Not only; they also put their brains to work and used the physical phenomena to their benefit, before they occurred. They developed competencies, despite the reactions of their leaders, in two ways; revolution and innovation. They both can be interpreted as breakthroughs. They are both competencies. One person alone is unable to change the world (the myth of Prometheus is a mere myth). No revolution would have been possible without a number of determined people. No breakthrough would have been possible without team work. Organization is teamwork, in which different people with different skills work together for the same purpose. It is not enough to choose what skills are needed in an organization, so that the organization can fulfill its purpose. The persons within the organization have to: Believe in the purpose of the organization. Communicate with the other persons, who have different background and skills. Control their initiatives, in order to maintain the solidity of the organization. Channel their creativity in the organizations mainstream. Work within the plans of the organization. Work by the rules of the organization. Follow the leadership. There is an apparent contradiction. The persons within the organization have to obey the rules and in the same time they should have initiatives. They have to be conservative, while they seek the organizations purposes fulfillment and be revolutionary, while they have to be creative and innovative. On the other hand, the enterprise that they are working for, has to be profitable, due to satisfy the shareholders, rational, due to be in line with the public opinion and innovative, in its effort to cope-up with the competitors.

Nikolaos Karanassios

Page 8

Innovation and Technology Management Contradictions do not end here. Organization is related to discipline. Discipline seems to be a synonym to obedience, order and hierarchy. In the same time, people within the organization have to propose and work for a breakthrough, not only on the level of products and production procedures, but also on the management procedures. On the bottom line, organization competencies are those bridging routine with change. Under this perspective, organization competencies that are aiming to innovation have to balance ordinary performance with subversive thinking. They have to ponder Knowledge Management, which is using the accumulation of the scientific published and documented findings, as well as the enterprise experience, with new, unknown and undocumented implementation of combinations, with no previous experience.

1.1.1.Managerial innovation mindset (culture)


Innovation needs the proper environment to flourish. This environment runs through the whole enterprise, but it is in the hands of the management team. It is not just their responsibility; it is also a way of standing between: Shareholders expectations Social stakeholders attitude Financial operators speculations Staff members ambitions Low rank workers inspirations Intermediaries aspirations Clients acceptance

There is no scientific or empirical guideline for a good practice. All evaluations are based on the results achieved. Failures have not been monitored, so only successes are being examined. Who remembers of sir Ian Sinclair (microdrive QL inventor)? Who remembers of Stanley Pons (controlled hydrogen fusion)? All papers and studies refer to successful cases. It is normal that people want to succeed, but it is failure that feeds success. Bad practices are more useful than good practices, in training and planning as well. People and especially educated people, tend to believe that luck does not exist. Well if it does not, but unknown circumstances occur in every success and failure, while we are not even aware of them. We do not know what changes occur in the competitors, because of the confidentiality of their firms, which in many cases (for example when their shares are listed at the stock exchange market) it is a felony to reveal inside information and

Nikolaos Karanassios

Page 9

Innovation and Technology Management the company risks to be expelled from the stock exchange market. In the same time, startups do not give information (or at least accurate) about their future business, wishing to improvise their competitors and the consumers and get early-adopters of novelties. The fiscal system and the banks are confidential by definition, so only information about general information is published and too late to be useful. The state statistics may reveal some deeper information, but they are published so late that they are obsolete. European statistics, as well as OECD, world bank and UN, are so generalists and Macroeconomics oriented, that may be useful only to governmental agencies and other policy markets, activists, researchers and world market speculators. Questionnaires, directly addressed to the enterprises, even when they are answered, contain fantastic information at an extend that surveyors think that the questions themselves were hard to understand, if they are answered at all. With so little significant information, everyone is thinking that innovation is extremely risky. One may also think that innovators are mere risk seekers, a kind of bungee jumpers! They just innovate for the fun of feeling the risk, because they like vivere pericolosamente (I live risky, just like gamblers)! We tend o oversee that management and engineering have a major difference; the one of feeling the environment. This is a natural talent that many engineers have, as well other professionals do. They sense information that is not public and act before others consider them. Success or failure does not limit its origins in information (or feelings of evolution) is handled and used. The team of governing managers (or a single person) develops a general attitude towards trusting his instinct without having any significant information and thereafter elaborating plans, based on these assumptions. This is often confused with optimism, which is a different aptitude, which is often driving to failures. It is easy to define an innovation favoring culture of the company, starting of course from the management team. It is a very hard job to break it into components, especially because culture is a set of aptitudes that are expressed by separate individuals when they are seen as a whole and not just beliefs but practices. Examining the managerial culture we risk confusing innovation culture with loose management and the opposite which is vigorous management. Innovation favoring management may well co-exist with rigorous management style and even conservative decision making, or, as stated before, even the lack of any research and development expenditure. Surveying managers does not help to identify this culture, while they may personally respond honestly, they cannot describe the collective mind of a board or committee.

Nikolaos Karanassios

Page 10

Innovation and Technology Management It is also risky to confuse innovation favoring mindset or culture, with the easiness with which proposals of change, any change, are being adopted. It is usual to see a company with continuous changes, while all of them are considered good practice and repetition of what others have already done successfully, without adopting anything totally new, revolutionary, or different from what other companies have done or revealed that they did successfully. The management mindset or culture forwards innovation is characterized by the facilitation of creativity of internal and even external people of organization with the scope to select sound ideas among them end proceed to planning and finally their implementation, rewarding in an appropriate form, the idea creators. Under this perspective, culture may be described as: Ideas seeking Creativity facilitating Ideas examining-selecting-assessing, adopting and implementing Rewarding the idea creators.

It has to be said that it is impossible to have a company running successfully for a long time if it is adopting and implementing all the good innovative ideas. Innovation is a quantum leap in the future, but in order to make these leaps the company must exploit a solid body of activities in a profitable way, so that it does not loose the confidence of the clients and its own human resources. The same mentality is, or has to be, diffused among all of the persons working in or for the organization. All those people co divide the same values; Current profitability, through disciplinary and quality oriented performance and organized expression of creativity channeled to overcoming the competitors in terms of customer satisfaction and performance, in the future. Research, either basic or applied, may be a past of the activities, together with proprietary or collaborative forms, but in every case it needs devotion of resources and concession of future profits. It is only when management has a clear orientation to the innovation creation, that we can call it a mindset or culture, independently from profitability fluctuations or other temporarily appearing difficulties.

Nikolaos Karanassios

Page 11

Innovation and Technology Management

1.1.2.Managerial tools for innovation


The management team with an innovation mindset and culture is using several tools, in order to foster innovation and creativity and arrive to new products, new production methods, new market approaches, new financial methods, new management, even new methods of innovation creation.

1.1.3.Brain storming
The most frequently used method is brainstorming. Such a procedure does not lead to decisions. It is only meant to find new ideas or approaches to known problems or spot out hidden opportunities. Groups formed of different managerial ranks, education background level, tasks, age and sex, within the organization, gather in an informal meeting, in order to contribute with new ideas, however absurd they may be considered, for innovation creation. Brainstorming is by far the most widely used tool to stimulate creative thinking. It was developed in the 1940s by the American advertising executive Alex Osborn who believed that anyone could learn to generate creative solutions for a wide variety of problems. Following Osborns beliefs, below are some tips that will help you have brainstorming sessions that generate results. The brainstorming session is the most popular group creativity exercise in business. It is quick, easy and it works. But many organizations have become frustrated with brainstorms and have stopped using them. They say this group ideation technique is old-fashioned and no longer effective. But the real reason for their frustration is typically that the brainstorming meetings are not facilitated properly. A well-run brainstorming meeting is fun and energetic. It will generate plenty of good ideas. But a poor session can be frustrating and de-motivating. Lets look at some simple ways to ruin your next brainstorm meeting so people understand what practices one should avoid. 1. Having no clear objectives A brainstorming session with a vague or unclear purpose will wander and lose its way. So be sure set a clear objective for your meeting. The purpose of the brainstorming session is to generate many creative ideas to answer a specific goal. It is best to express the goal as a question. A general objective is not helpful. For example, How can we do better? is not as good as How can we double sales in the next 12 months? However, the question should not be too detailed, or it may close out lateral possibilities. To follow our previous example, How can we double sales, through existing channels and

Nikolaos Karanassios

Page 12

Innovation and Technology Management with the current product set? is probably too constrained. Once the question has been agreed it is written up clearly for all to see. It is worth setting objectives for the number of ideas to be generated and the time to be spent. We are looking to generate 60 ideas in the next 20 minutes. Then we will whittle them down to 4 or 5 really good ones. For best results, your brainstorming session should not be too long between 25 and 35 minutes is generally best. 2. Homogeneity of a group If everyone is from the same department, then creativity can be inhibited and you may get group think. Choose the members of your group carefully; the best size is somewhere between six and twelve people. Too few people and there are not enough diverse inputs. Too many people and it is hard to control and retain everyones commitment. Sprinkle the group with a few outsiders from other areas or even from outside the business - people who can bring some different perspectives and wacky ideas. A good mix of people - varied ages, men and women, works best. 3. Letting the boss act as facilitator Beware of having an autocratic boss with his or her team. He or she can inhibit or shape the discussion in undesirable ways, and can often inhibit the groups creativity. If the boss is present then it is better to have a good independent facilitator -- someone who can encourage input from everyone and stop one person from dominating. The worst formula for a brainstorming session is generally the department manager leading the team and acting as scribe and censor at the same time. 4. Allowing early criticism The most important rule of brainstorming is to suspend judgment. In order to encourage a wealth of wacky ideas, it is essential that no one is critical, negative or judgmental about an idea. Any idea that is uttered - no matter how stupid - must be written down. The rule about suspending judgment during the idea generation phase is so important that it is worth enforcing rigorously. A good technique is to issue water pistols; anyone who is critical gets squirted. 5. Settling for a few ideas Dont get a handful of ideas and then start analyzing. Quantity is great. The more ideas the better it is. Brainstorming is one the few activities in life where quantity improves quality. Think of it as a Darwinian process. The more separate ideas that are generated the greater the chance that some will be fit enough to survive. You need stacks of energy and buzz driving lots of wacky ideas. Crazy thoughts that are completely unworkable are often the springboards for other ideas that can be adapted into great new solutions. So

Nikolaos Karanassios

Page 13

Innovation and Technology Management keep the crazy ideas coming - you have to kiss a lot of frogs to find one prince! 6. No closure or follow through Dont stop the meeting after generating lots of ideas with a vague promise to follow up. If people see no real outcomes they will become frustrated with the process and lose faith. You should quickly analyze the ideas at the meeting. One of the best ways is to divide the proposals into three categories - promising interesting or reject. If any of the promising ideas are real nobrainers - so good that they should be implemented immediately, then give them to someone as an action item immediately. You should categorize and collect the ideas. On a separate flipchart, write all the promising and interesting ideas which are marketing ideas, on another chart all the sales ideas, etc. This process of rearranging the ideas can help you see new combinations and possibilities. Some people use Post-It notes at this stage so that they can easily move ideas around. If you are pressed for time, then an alternative method of selecting the best ideas is to give everyone five points. They can allocate points to their favourite ideas in any way that they want. They can give one point to five separate ideas or all five to one idea. After everyone has voted, total the points and select the best for further action. Close the meeting by thanking everyone for their input. Mention again one of two of the best, most inventive or funniest ideas. Then see which ideas you can implement -- even if they are small things. People enjoy short, high-energy brainstorms that lead to actions. These meetings can motivate people, improve efficiency and drive innovation. At this point a series of questions need to be faced (no answers are possibly considered as impartially correct): Is there a method to evaluate (or assess) creativity? What if conservative mindset is the majority? What if personal interests speculate on personal rewarding system preservation? What if an establishment of groups of interests is using the group meetings for just the show of conformity with the management inspirations, only to justify their remuneration? Are all parties involved able to understand logical procedures, other than the classic inductive and abduction reasoning? What about imprecise determination, known as Fuzzy Logic?

Nikolaos Karanassios

Page 14

Innovation and Technology Management Are all people ready to face improvisation? How many managers are ready to improvise without hesitation?

1.1.4.Innovation group meetings (think tank)


Such meetings are totally different than brainstorming, in the formation of the group, the expected results and the discussion agenda. While brainstorming sessions involve different persons and is based on the lack of homogeneity (it is effective when there is no agenda, represents all categories of the personnel and there is no concrete expected result), group meetings are formal and are meant to find solutions to well defined problems or identify opportunities through a rigorous procedure. Group meetings have to follow an agenda, so that discussion either leads to specific and applicable decisions or postpones any decision. Such decisions go with an allocation of financial means, managerial work force, a time plan, calculations of the impact on profitability and cash flow. Some argue that there is no such a thing as innovation meetings, because innovation coincides with creativity and the creation of novelties cannot be collective. Such meetings are expected to accept personally sourced ideas, by those who will implement those ideas. Such meetings have a series of drawbacks, based on: Personal antagonisms; each manager is trying to under evaluate any proposal of any other manager. Group positioning; in most of the enterprises there are groups of managers exchanging votes, in spite of the value of the proposals. This is a human tendency to belong in a group, so it is almost inevitable to avoid a teaming up decision making, damaging the innovating process. Risk taking hesitation; most of the managers think that they are only judged by their failures and many of them suggest that if they do not participate in a change they secure their position. It is true that in most cases they are right! Participating in a formal meeting, where every proposal and vote is being registered, is thought to be compromising. Inability to understand new approaches, especially when managers are of advanced age, something usual because decision makers are on the top of the hierarchy and they have been promoted because of their conservative aptitude, which permitted the enterprise to get along with possibly futile activities. Other meetings are focusing on Design thinking. The participants of such meetings are mainly engineers, architects included. The purpose of their

Nikolaos Karanassios

Page 15

Innovation and Technology Management meetings is to match the external appearance with the internal mechanics or electronics, so that it will be both aesthetically and functionally attractive, in order to sell. But selling is not just a matter of a functional item which is also attractive. Marketers, logistics specialists, economists, sales persons, accountants and human resources managers, they are all aiming to profitability through sales, from a different point of view each one. In such sessions, the main role is being played by the architects, graphic artists, painters, editors, advertisers and other people who are art oriented. Each one of them is seeking the maximization of his reward by arguing that the contribution of the art he or she is representing, is the main rivalry of the persons involved. The unanswered question remains; what information should be written and how, on the package of a product? Is it a matter of how it is printed (like fond, size, typeface, color, shape, or the accompanying image).

1.1.5.Innovation coaching
Innovation is the fruit of an internal environment which is well cultivated by the top management, but this is not enough to trigger creativeness of the staff members. The personal development of the staff members is partly given to their capabilities to convince and communicate, something generally referred to as leadership. But this theoretical quality only rarely meets the requirements of promotion to the high ranks of an enterprise, never mind another quality, the one referred to as creativeness. In reality, the high rank staff members have been selected for this kind of positions because they have proved that they are good in having the job done. With such a group of persons who are discipline based it in not easy to have a creative think tank, at least without a coach to inspire them and train them to face the challenges from their opposite side, concurrently with their routine job. The task of the coach is usually executed by a member of the board. Keeping in mind that such a manager is representing his personal ability to convince the other members, who reflect the willingness of the shareholders to have increasing dividends, together with their wish to see their shares gain value and so increase their market price, as well as the ability to drive the same team of persons to work differently when they make operative decisions and differently when they undertake the task of creating novelties. There is a question mark here. Is such a person the best fitting to the coach position? Is the president of a football team the best coach? On the other hand, is the best retired football player the best coach? There are several consultants who claim to be innovation coaches, some of them make lots of money out of it. Coaching is one more attempt to teach old dogs, new tricks. It is a top to bottom style, which is usually calling innovation whatever concerns minor

Nikolaos Karanassios

Page 16

Innovation and Technology Management and risk free changes, either of the products, the production methods or the distribution. There are glamorous failures of well known enterprises, who had their own research departments and developed innovations far above their competitors, far earlier than the rest of the market and well setup. They failed to implement these innovations because of the inability to change the organization inertia.

1.1.6.External Innovators
Many people are working hard to create novelties, wishing to sell their work to the businesses, either as a patent, or as a means to get enrolled in the enterprise at a well paid working position. External innovators are technology oriented persons who believe that their technological achievements are useful to the enterprises and that there is a market for them, thus profits for an enterprise. Those persons belong in two main categories; those who are trying to resolve market needs with new technologies and those who are trying to find a market for their research results. There is a long lasting discussion about the patents and the intellectual property, especially when Universities are involved in research and the motivation of the researchers. The problem with these external innovators is that they have to keep their intellectual product secret and sell it in the same time. If the technology is revealed, there in nothing to sell any more! If the technology is kept secret, there in nobody willing to pay for it! Intermediates are bridging the differences between external innovators and their potential clients. They are usually acting as technology brokers with a reputation in businesses and trust from behalf of the researchers.

1.1.7.Innovation Management Style


Sometimes great ideas appear at once. But more often they are the result of collaboration. Consider: someone has a good idea. Without enterprise idea management, that idea might still reach management who, impressed with the idea, implement it. Once the idea is implemented across the enterprise, others complain that the idea could have been more effective with some small changes. Management is forced to either leave the idea implemented as is or to invest in reworking the idea.

Nikolaos Karanassios

Page 17

Innovation and Technology Management However, if the enterprise has an idea management system that permits collaboration on ideas, discussion can take place before the idea is implemented. As a result, the idea is more likely to be effectively implemented from the beginning. An added benefit, is that in a large enterprise, many people have similar ideas. If there is a means of submitting ideas to management, but no means of collaboration, management will probably find many people contributing similar ideas. If, however, open collaboration is allowed, the idea is more likely to be submitted once. Other people with similar ideas add their comments to the idea. The result: a more thoroughly considered and developed idea. As processes become integrated across the entire enterprise, changes more directly affect every division of the enterprise. Hence, someone in one division may well have ideas that could benefit another division. For example, sales people, who are out meeting customers, often have ideas about how to improve products, customer service, logistics and more. And accountants, who are preparing invoices may well have ideas about how sales people can operate more efficiently. Moreover, people from outside a particular division see the activities of that division from another perspective - and so can often contribute exciting new ideas. Enterprise idea management, which allows enterprise-wide idea contribution and collaboration maximises the number and quality of ideas an enterprise can expect. Of course customers certainly have ideas about how businesses can serve them better and, as business partners become more integrated, they too have ideas. In many cases, it can be extremely effective to get customers and partners involved in the idea development process. Of course, not every idea is a good one and many good ones will not bring value to the enterprise. Hence, any idea management system must have a means of evaluating ideas, to determine whether or not they would meet the enterprises specific needs. Actually, evaluation should be a two part process. The first part should be a structured evaluation comparing an idea to a set of criteria that reflects the enterprises needs for the particular idea. Determining how well the idea meets these criteria is a very good indicator of the value the idea will add to the firm.

Nikolaos Karanassios

Page 18

Innovation and Technology Management For ideas which will have significant implementation costs or affects on the enterprise, an open meeting including experts should be held in order to consider issues that may not have been covered by the criteria chosen for the initial evaluation. Alternatively other traditional evaluation methods, such as market surveys, preparation of a business case or cost-benefit analysis may be used. This is one of the potential innovation oriented management style. Managers are not expected to create innovations; they are just expected to put keen eyes and ears everywhere in their enterprise and facilitate people to express their ideas, without hesitation. Listening to the ideas is not enough. If management omits a rewarding system for ideas coming from any part of the enterprise, the business risks to be used as a test market for a creative employee. If he or she is not adequately rewarded, may go to a competitor or open his business across the street.

1.1.8.Innovation Oriented Leadership


If leadership may be defined as the ability of a person to inspire other people to follow his or her ideas, is a very long discussion of a whole science1 without a clear outcome. It is certain that the discussion will never end because new aspects of leadership appear as the enterprises change, trying to adapt to the ever changing environment. It may be easy to provide an abstracted description of a leader but it is very difficult to call a specific person a leader, unless a posteriori, after he or she has been given the opportunity. We have to remember that most of the leaders have a legacy to the ownership of a part or the whole of the enterprise, even in the cases when he or she started the enterprise. Continuing this discussion exceeds the purposes of this reading, so we remain to the innovation side of leadership. An innovation oriented leader has to provide the appropriate environment, so that the creativity of all the persons in an organization is channeled to production of new goods or services, or new organization structures. Factors that facilitate or enhance organizational creativity: Time Competence of staff Space/resources to pursue ideas
1

Human Resources Management is one, among Organizational Behavior, Change Management, Process Management and other.

Nikolaos Karanassios

Page 19

Innovation and Technology Management Open communication and full information sharing Supportive organizational structure Personal authority to initiate change / Individual empowerment Creative leadership targeted to entry level employees Motivation of staff Clear organizational goals Appropriate reward Appropriate investment (, time, resources etc) Appropriate tools and technology Allowance for mistakes Diversity Organizational desire to learn from previous mistakes Creativity recognized / taken seriously Balance between risk and opportunity Skilled delegation Removing uncreative people Organizational life force

1.1.9.Innovation Orientation of the Staff


A common way to state challenges is to start with the phrase, How might we? This provides a prompt for open-ended idea generation. For instance, consider an objective of generating ideas for new floor-care products. It first is necessary to de-construct the challenge into its parts, simply by asking basic questions: What is involved in cleaning floors? What do people dislike about it? How often should floors be cleaned? In what ways are current floor-care products ineffective?

Nikolaos Karanassios

Page 20

Innovation and Technology Management The answers to these and similar questions then can be used as triggers for specific challenge statements. For instance, answers to the above questions might lead to challenges such as: How might we: make it easier to dispense floor cleaning products? reduce the amount of effort involved in scrubbing a floor? make floor cleaning more convenient? reduce the frequency with which floors need to be cleaned? Increase the sanitizing effect of floor cleaning?

Staff members have to realize that innovation derives from unusual questions asked to their subordinates and this is a part of their job. They still have to create a continuous value to the enterprise, though their routine and devote time to innovation, so as to create the future prosperous routine.

1.1.10.Innovation Motivation of Employees


Just because someone is technically competent doesnt mean that are all capable of producing new and creative ideas. Some people are simply not competent or confident to do so. It is beyond their capability. The fact is, almost all of the research in this field shows that anyone with normal intelligence is capable of doing some degree of creative work. Creativity depends on a number of things: experience, including knowledge and technical skills; talent; an ability to think in new ways; and the capacity to push through uncreative dry spells. Intrinsic motivation - people who are turned on by their work often work creatively - is especially critical. Over the past years, organizations have paid more attention to creativity and innovation than at any other time. Most people aren't anywhere near to realizing their creative potential, in part because they're laboring in environments that impede intrinsic motivation. Most managers believe that the only possible motivation is a rewarding system. Research findings do not verify such a mindset. Most of the successful innovations came out of employees who were certain that their bosses will appreciate their creativity and acknowledge their contribution to the company success. Financial rewards are only verifying the acknowledgement, but it is not the primary moving force.

Nikolaos Karanassios

Page 21

Innovation and Technology Management

1.1.11.Training employees for innovation initiatives


Knowledge based enterprises are concentrated in Life Long Learning process, in order to keep the personnel knowledge updated, develop new skills required to the implementation of new technologies. What is also required to all levels of management is the development of the appropriate skills that are necessary to generate novelties, implement revolutionary activities and adopt changes without fearing the impact on their career. Fear has the origin in darkness and the unknown. Unveiling the expected impact on the career of the employees, is the fruit of training and the expected outcome is the change of the mindset, from conservative to innovation oriented.

1.1.12.Managing ideas
In medium to large organizations, idea flow is critical to innovation. Every firm has a number of highly creative individuals and many more moderately creative individuals. With optimal idea flow, their good ideas will be recognized and implemented relatively quickly and cost efficiently. With lousy idea flow, those ideas will mostly be lost. The quality of idea flow in most companies, of course, falls somewhere in the middle. In order to best envision idea flow, it is useful to think about motion in dimensional space.

Zero dimensional idea flow is the worst kind of idea flow. Zero dimensions, as you will recall, is a single point from which there can be no motion. Likewise, in highly hierarchical companies that are not open to receiving ideas from staff, ideas do not go anywhere. If one of the staff has an idea, might discuss it with the colleagues in a Wouldn't it be great if our company were to... sort of, way. But the idea goes no further. Only when a decision maker usually the CEO - has an idea is it implemented.

One dimensional idea flow is better. One dimensional space is linear and comprises points along a line. In firms which have begun to respect ideas, idea flow becomes linear. When an employee has an idea, is invited to share it with someone responsible for ideas, such as her superior or an innovation manager. If the idea seems promising, the innovation manager may discuss it with the originator, send it to an expert for evaluation or send it to her

Nikolaos Karanassios

Page 22

Innovation and Technology Management superior for approval. Each of these people can be seen as points on the line of idea flow. The more easily ideas move back and forth along the line; and the more lines of idea flow there are, the more innovative a company is likely to be. Surprisingly, a number of companies providing idea management solutions, base their solutions on one dimensional idea flow. This is a pity, because once a company gets locked into a tool that pushes them into one dimensional idea flow, it is hard to expand into two or three dimensions.

Two dimension defines a plane or flat surface. Two dimensional idea flow means that ideas flow in all directions across the organization. Anyone can see what ideas other people are proposing, propose their own ideas and collaborate on other people's ideas. Likewise, when ideas are implemented, they are done so transparently, for the entire enterprise to monitor. Two dimensional idea flow is clearly a big step up from one dimensional idea flow. Everyone participates at every level; collaboration builds upon good ideas, turning them into great ideas and transparent communication from management shows support for innovation which encourages further innovation.

Three dimensions define a cube or space as we know it. Three dimensional idea flow goes beyond the firm and brings in your customers, suppliers, consultants and business partners; perhaps even the general public in some instances. These people all have ideas about how an organization can improve their products, services and image. In particular, products for which customers have strong emotional attachments will certainly attract well thought out ideas from customers. By bringing everyone from employees to suppliers to customers into the idea flow, an organization is truly maximizing its potential to innovate as well as demonstrating to everyone in the supply, production and distribution chains the value the organization places in innovation.

Nikolaos Karanassios

Page 23

Innovation and Technology Management Of course bringing outsiders into the idea flow is trickier than bringing employees in. For competitive reasons, most companies need to keep information, particularly about innovative new products and services, confidential during the development phase. Moreover, unscrupulous people (such as angry customers or nasty competitors) could attempt to sabotage the idea flow by introducing bad ideas into the system. Hence structures need to be built to allow different levels of idea flow between different parts of the three dimensional space. This becomes even more risky, when research institutions and Universities bring in ideas originating in the personal research ambitions of the academia, either as an institution or on a personal basis.

1.1.13.Managing creativity
Creativity is generally viewed as an individual pursuit, and of course, it can be, but groups can produce things which one person can hardly imagine. Spacecraft, cathedrals, good schools, parks, medicines and computers all result from group or collective creativity. Plays, exhibitions and concerts are enabled by individual creativity, but they are made manifest by the creativity of a group. A well-conducted orchestra produces music more thrilling than the sum of the individual skills of its musicians. Collective creativity is needed at all levels of society. As Representative George Brown says: We need to build bridges between science and the rest of society and help direct change in government. A new form of cooperation between industry, government and universities is needed. We need cooperative processes for problem solving. Several people have said, Managing creativity? Isnt that an oxymoron? The answer is - obviously - No! In fact the ability to manage creativity is the key to future prosperity for organizations, companies and governments. Only through group creativity we can combine the wisdom to leach us of our ill. Creativity goes well beyond craft and cleverness, with which it is often confused.... creativity is the ability to join unrelated elements together to form something new (Coates and Jarratt, Creativity). Creativity is easily recognized in the worlds of art and science. But creativity is needed everywhere. Todays world is moving at an ever faster pace. Business is increasingly competitive. Wall Street needs new products every three or four years. New products give a pricing advantage. Once they become common, or even well known, they become mere commodities and dont have the high payoffs and high compensation to executives. Wall Street lives by inventions. Today a peacock, tomorrow a feather duster is a Wall Street saying (Demisch).

Nikolaos Karanassios

Page 24

Innovation and Technology Management According to David Fagiano in Preparing for Creativity, quoted by Joseph Coates and Jennifer Jarratt in Creativity in the Workforce: Future Directions, corporations are using at least four approaches to embrace creativity: 1. Teaching and training creativity 2. Using creativity tools, 3. Setting up creative units that are isolated from the mainstream, and 4. Establishing a creative environment in the entire organization. Individuals and organizations are being prepared by changes in society to accept and support creativity, but organizations are going to have to change their practices in order to take full advantage of the creativity of their people. Group creativity begins with an ideathe vision of a single person. Usually a creation is built around a mental template, structured from experience or training; pure creation occurs rarely, if it exists at all. The best individual creations arent spontaneous eruptions of an idea. They result from often frustrating trials that ingeniously combine known concepts and things into original forms. In other words, creativity is hard work of brilliant minds. In groups, visions are shaped and structured into reality through a series of processes that consciously or unconsciously use tools, resources and people in complementary or competing ways. Toynbee, and then Bronowski and Eisler, extended this concept to all of human history. The growth of a civilization lies in the hands of a creative minority. This elite must have the power not only to cope successfully with the challenges to which their society is exposed, but also to carry along with them the majority of uncreative people.... In societies in the process of civilization...creative personalities... command a following because they are pioneers on the road towards the common goal of human endeavors.... A society ..thus directed forward towards the future...is in dynamic motion along a course of change and growth (Toynbee).

Nikolaos Karanassios

Page 25

Among the multitude of animals which scamper, fly, burrow and swim around us, man is the only one who is not locked into his environment. His imagination, his reason, his emotional subtlety and toughness, make it possible for him not to accept the environment but to change it. And that series of inventions, by which man from age to age has remade his environment, is a different kind of evolutionnot biological, but cultural evolution (Bronowski). ...the people of Cretewho built viaducts, paved roads, designed architecturally complex palaces, and had indoor plumbing, a flourishing trade, and a great deal of knowledge about navigationmust...have made extensive use of left-brain as well as right-brain thinking. In these prehistoric partnership societies technological advances were used primarily to make life more pleasurable rather than to dominate and destroy...(Eisler) Margaret Wheatley takes this theme a step further. She sees group interconnectedness through the medium of information as key to group creativity. In fact, she defines information as the creative energy of the universe. She links the free flow of information in organizations to the field concept (like gravity fields and electromagnetic fields in space) in physics. Wheatley tries to extend a physics modelthat of allowing information to organize itself through chaotic processesto organizations. There are some valuable concepts here. But I think the model that best supports the chaotic process is Life, which by definition, organizes information. The stuff of the basic molecules of life is chemically organized information. The information that makes a bacterium or a human a faithful copy of its progenitors is organized by processes that can be applied to organizations. And the high efficiency of these processes allows the organization or organism to compete successfully. An organization that can structure its processes to enhance and amplify individual creativity, and then manage the chaos this creativity produces, will succeed.

1.1.14.Research and innovation


As it has been mentioned several times in this reading, the most usual source of innovation is research. Some enterprises (IBM, Microsoft, RIM, SyBase etc) have their own research mechanisms. Other businesses relay on third party research, either as a call and response way, or using different other ways, many of them innovative themselves2. The general idea is based on the assumption that the enterprises seek a better way to provide value to their customers and increase their number, increase the revenue coming from each one of them and sustain a market share, if not increase it over time.

Karanassios et al. Innovative methods of innovation NHIE

So, as a general condition, it is the market which drives the enterprises to innovation, viewed as a whole, comprising competitors, clients, managers, employees, shareholders, public authorities, state and international policy makers, action groups etc.

On the other hand stay the researchers, with their willingness to be rewarded with something more than academic recognition, who are trying to transform their research results into viable products, services, organization etc.

They all need a common vision. It is the enterprise strategic management the one setting the agenda.

1.1.15.Collaborating with Universities and Research centers


Innovation is a product of human activity. It is brainpower and knowledge that permit its creation, while dreaming of it is the real generating procedure. Being a product it has a commercial value, its commercialization means risk to lose the invested time and effort together with the money needed to finance expenses of going into detail, write proposals, meet the potential investors (or receivers) or obtain a patent and risk taking means expecting profits. A bottoms-up approach of innovation creation may start from the fact that innovation is a product, so producers are the offer side, while investors are the demand side. This is applicable in all cases, from company employees to public servants, from politicians to academic researchers, from students to company managers and from housewives to academic teachers. Traditional methods of innovation creation and implementation may need a revision using the same procedures, which are being used for the creation of innovative products and / or innovative production and marketing methods. Innovation as a result of creativity is now the major concern of management. In the traditional authoritative approach, it is the managers ability to promote the innovation concept among the people working under his guidance. It is his responsibility to assess the innovative ideas and adopt or drop them. Creativity and innovative orientation is then a result of leadership, effective in some extend. Innovative business ideas need their own marketplace, which cannot be simply invented. The market rules derive from bridging the conflicting interests of the offer and demand sides. The demand side is always in search of better offers, while the offer side is advertising, in order to convince the demand side to buy, highlighting the most convincing characteristics of their product or service. Both sides are trying to make a profit out of these transactions. Sellers are trying to establish long-term maximum margins, while buyers are trying to maximize their long-term margins with optimal provisions. Although the marketplace operates under formal and ethical rules, agreements that satisfy both the giver and the receiver sides are eligible, whatever their content. Public authorities and non profit organizations, as well as enterprises, have to create a marketplace of innovation. The creation itself of this marketplace may be considered as an innovation. If it will be limited by bridging offer and demand, then innovation vanishes after its creation. Looking back at the innovation creation procedures of the enterprises, it would be rather a continuous innovation creation if the same methods were used, instead of a static act, even if it is a breakthrough. Innovation, when examined as a product, has consumed human effort and money, put at a risky venture with the hope of a corresponding profit. Procedures that bring to surface and thus make evident the potential opportunities for the prospective receivers the creativity results of the individuals need the participation of the interested parties, givers and receivers, in order to adapt to the ever-changing expectations.

Brainstorming is an example of such a way of usage of the methods of innovation creation, which may lead to innovative procedures. Research is another way of obtaining similar results. Steering committees are used by social organizations and local authorities as an instrument of determination of development strategy. They may be used as the organizers of brainstorming and research about the procedures of creating innovation in development actions. Firms should be aware of the value of the procedures of innovation creation, without confusing technology and development with it, just because in many cases technology is needed in order to apply it.

1.2.Managing people in innovative organizations


Before undertaking the task of managing people in an innovative organization, it is important to understand a couple of things about the organization and the operating systems. It is also important to understand your own organization. To do so, you have to see what kind of innovation the organization is in; is it innovating the organization system (like work flow, process architecture, continuous reengineering, Information Technology driven changing, etc), product ideation and development, services assembling and manifesting, holistic innovation, research and development results exploitation, creative copying, benchmarking etc.

Organizational essentials
You are about to run a company, so before you start anything you have to organize your business. Here is how to start and how to proceed.

General
Organization is putting persons to work together, co-coordinating the company facilities and other means, so that they all go to the same direction. There are several theories dating at least two centuries, but the essence remains the same; putting people to work together means that they share the same goals, the same means, the same values and the same objectives. It is obviously impossible to have (or make) people that will put the organization (and your company) in precedence of their personal desires, ambitions and even beliefs. People compete for power, admiration by others and money, being (as we all are) lazy by nature, so they prefer obtaining it all without effort. A company can me run without a formal organization. In such a case a strong leader (gifted by nature) is able to transmit his goals and values and mobilize people working for him. It only lasts a little. What we need is a formal organization which is clear to everyone, different from company to company, making people work for the same purpose, either they believe in it or not. To do so, there is a little bureaucracy to tolerate, a little power to loose, but in the end, the formal organization makes the company to last and be profitable. People need a program to work and control, so that they know that they have to do the job they are assigned. Here is how:

Programming
Programming means have written the future action in advance, so that everyone knows what has to be done and when. A program consists of the following:

1.2.1.Targets
A program has to declare a target to achieve, which everyone involved knows and remembers, so: The target has to be brief, so that everyone remembers it. It has to be tangible; using numbers and dates. It has to be coherent and in accordance to the Strategy of the company, to the tactics of the Board of Directors and the policy of the company, in respect of every field of action. It has to be feasible, otherwise people abandon it.

Reminder: Use less than 18 words to declare the target.

1.2.2.Procedure Analysis
To reach the targets you need several procedures to be executed; others simultaneously and others sequentially. The procedures analysis is a very difficult task, if you are about to write an overall program for your company. It becomes much easier if you break down the functions of your company and write a separate program for each function, even if dont have separate units for each. For example, you can write different programs for sales and production (when applicable), although production depends on sales. Writing the programs you will realize that you can declare the targets in conjunction to one another, i.e. production of orders within 20 days, means that you have to write a new program for each new order.

1.2.3.Assignments
Every procedure is assigned to a work position (not the person working in this position) because he / she may be absent or replaced, during the program. Assignments have to balance the work load to the working positions. You will be tempted to assign many procedures to the most skilful and productive workers and less to the untrustworthy. This way you risk losing your best people. Even if they dont dismiss themselves, they will change attitude. Reminder:

Never accept this work is not among my duties. Employees are learning quickly that they have to do what they are assigned and do it well. Exercise every possible way you think to convince them, but never retreat.

1.2.4.Allocation of resources
Your resources are not infinite. You may just have one truck and it is needed both for the transportation of raw material to your company, the transportation of the sold goods to your clients and for the transportation of spare parts that the maintenance of your equipment need. You have to allocate the means to the working positions, according to their assignments. If you dont allocate resources, you have to expect an excuse for not doing their tasks. Do not expect your employees to ask for the means they need. If you have to assign tasks to external parties, assign the task to monitor the progress that this third party is doing. If you omit this, you risk finding this third party having forgotten you, creating a delay and disorder.

1.2.5.Budgets
Break down a budget, so that each procedure has enough money to be executed. Adding the particular budgets, you know the overall budget of your program. Subcontracting and external services must be trusted for payments to the person who will receive and control the deliverables of this third party.

1.2.6.Schedule
Writing in a calendar the procedures, the assignments, the deadlines for deliverables, the allocation of resources and the payments, you have the whole picture of your program and you can control it. Putting all these information in a table (using the Gantt table is very helpful) you can also have the payments for each time unit (week, month etc). Reminder: Distribute assignments in written to all working positions and seek a receipt in duplicate, headed by the program target declaration.

Controlling
However your programs are well done, if you dont control the business, all you have to expect is excuses. The control consists of organization and observation. It sounds oxymoron, but all your programs need an organization which facilitates reaching the targets and observation of what people are doing and how.

1.2.7.Organization
An organized company is the one where every employee known what and how to do, how to ask and report, as well as his / her higher and lower positions. From whom to get directives and who to guide.

The Organizational Goals


The company is an organization. The company has been founded for a specific purpose or more than one purposes. These purposes include the way they can be fulfilled through competitive advantages. The goals of the organization are those leading to the route to success in the purposes fulfillment. For example, if the company purpose is to produce innovative products, the organizational goal may be to promote research. If the company purpose is to satisfy the clients servicing, the organizational goal may be to improve customer treatment. The whole system is affected by the organizational goals, because through the communication of these goals to all parties involved, they all know what the priorities are and act accordingly.

Co-ordination
Co-ordination is achieved with: A clear hierarchy. Unique and clear formal communication. Distinction between Line and Staff members (working positions). Hierarchy shows who is the boss in every unit, having the right to give orders and makes decisions and to whom all subordinates report or revert to for guidance, or even ask for something (for example the permission to leave). Formal Communication is distinguished into Vertical (order and report) and Horizontal (information of the same hierarchical level of other working positions). Line members are those operating in segmented working positions (sales, production etc), while Staff members are those working for the whole of the company (marketing, accounting, research etc.). All the above is usually represented in the Organization Chart.

Reminder: The lines of the Organization communication route. Chart show the unique formal

Authority
Every working position must have a clear and written authorization to perform tasks. The authority concerns the right to give orders (describing also the kind of eligible orders and the limit to give orders) and the authority to handle items (goods, equipment, tools etc.) For example, the Sales Manager may be authorized to send sales persons to a trip for visiting clients but he cannot arrange their meals. He may be authorized to make photocopies of the price lists, but not to change the prices etc.

Responsibility
Authority is connected to responsibility. There is no responsibility without authority, while there is responsibility for every authority. If, in the previous example, the Sales Manager is authorized to send sales persons for a visiting trip, he / she is responsible for having the visits done and that the sales persons are equipped with enough price lists. If the authority to make copies of the price lists belongs to the sales persons, then they must be responsible for being provided with, before they leave.

Delegation
Concentration of authority to the top management creates bottlenecks, while all decisions have to be taken by the same persons and their working time is limited, never mind their ability and skills to resolve every case. Keeping all decisions to the top management will result to employees waiting in a cue and losing their time, while this discourages them from taking any initiative, thus to lack of progress. Authority and responsibility is distributed with a formal written delegation, not to persons, but to working positions (the boxes of the organization chart).

Span of Control
As it has been said in the previous section, it is impossible to have under control an extended number of working positions. The same stands for the space extension. It is impossible to control vast spaces or dispersed company facilities. Space and working positions of the control alleged to every working position must be well defined.

Unity of Management
Delegating authority, defining responsibility, describing the span of control, may result to undesired results. You must examine again all of the above sections, to verify that:

Subordinates do not have more authority and responsibilities than their superiors. Subordinate positions do not take orders by more than one superiors. A working position does not require multiple skills (engineering together with Legal and Computer programming). You may meet such persons, but even if you do, do not describe a working position based on such a rarity. Skills required must be homogeneous.

Duties / definition
For every working position there must be produced a small book of instructions. In this manual you must describe: What the person occupying the working position is expected to do daily and how to do it. What this working position is expected to execute periodically (every week, every month, every year). How to handle security (his security and security of the others). What to do in cases of emergency (working accident, physical catastrophes, external or internal attack, health hazards and similar). Preparing all these books for every working position needs much work and efforts, but it is quite rewarding, because your company will perform well, both in achieving goals and keeping the employees satisfaction high.

1.2.8.Observation
The previous chapter was paperwork with working positions. This chapter is about people working in your company. Although the title of this chapter is observation, you will find out that there is no physical observation. Knowing that nobody wants to be watched (we tend to make all the mistakes while we are being watched) and keeping in mind that what you want is performance (quantity and quality), you have to create transparent procedures for your human Resources.

Selection
You already have described the skills and qualifications for every working position, now you have to select the best fitting persons. Set the procedures for selection and communicate them to the candidates. Reminder 1:

Work experience is not always a qualification. It may be indispensable for managerial positions, but for entry level positions it may bring in bad habits from the previous position. Reminder 2: Persons selected because they are recommended by relatives, politicians or other obligations, will make you loose control. Reminder 3: Very high academic records are only needed for research positions. The ambition of such persons is to hold an academic position.

Training
Life Long Learning (LLL) is a universal tool for personal development and also the evolution of the enterprises and, as a consequence, the society. Companies are considered to be the main lever for development and in the same time the field of action for ambitious persons. As a result, the enterprises are the most fertile ground for LLL, being considered as learning organizations and characterized by Knowledge Management. In fact, every company is different from any other. A new comer must know his /her environment, the colleagues, the managerial style, the locations, the premises, the equipment and their use, the manuals about his working position and the general Internal Regulation about his / her service. As a result, the company needs to train every newly hired person. The same necessity is evident whenever the company is either equipped with new machinery, adopts new techniques or reengineers the whole management. The company must train the employees again. Whenever the technological or socio-economic environment (even the competitive environment) changes, the company must train its employees, so they are prepared to face the changes. Companies change work positions of the Staff Members, especially when they are designated to occupy high rank positions, which need a wider view of the company and a deeper knowledge of its operations. Before they move to another position, in addition to getting the necessary acquaintances with their new working environment, they need training, so that they are able to understand the difficulties of the tasks they will assign to others and know if they are real or just excuses for non-action. Reminder: Professionals will try to convince you, offering a part of European funding of LLL, to hire them as training bodies. Close your ears to the sirens. If you listen to them, you will end up with getting involved in fraud together with your employees, who become accomplices. One time sinners; what do you have to expect? Will you able to ask them an honest behavior?

Academics will make you believe that they are the most appropriate trainers for your personnel. Before accepting them, ask them to show you how they can operate in your technological / cultural / educational / procedural environment. Without such an examination, you risk making your employees lose their morale, while they will be shown every new scientific achievement, just because it is important. You have to create an internal education system, as well as an external, facilitating your employees to bring in external knowledge. The internal education system is the one permitting the employees to change positions, adapt to technological changes in the company and improve their skills.

Monitoring
Supervising personnel is both costly (the supervisor does not produce income for the company) and ineffective. When an employee decides to pretend working, he will. Even if he really works, he will produce bad quality. Our days are not all the same. The best employee, for personal or even no reason at all, may not be in good mood and perform less than usual. If this causes a bad judgment, he will be discouraged to cope up with the company expectations. A fine tuned organization records the production of each employee in a regular basis both in quantity and quality. Rushing production (or sales, or services) and measuring only the quantity, you risk destroying material and other resources and even damage your company image. Concentrated only in quality, you risk incrementing your costs and staying out of the market. The most desired combination is to have the best quality at the maximum quantity, but such an occurrence is very rare. There are many ways to control quality. You should replace supervision with quality control and record keeping of the productivity of each employee.

Evaluation
If you just record productivity (or efficiency, or effectiveness), you already have done a step forward. If you evaluate each worker in every period (no less than a month at a time) using a system that he knows (for example you may use an average as normal and compare it with the individual average performance) in advance, your employees will increase their contribution in the revenue making process. It is mandatory that the evaluating system is clear to all employees and it is different from working position to working position. It is also important to have a simple statistical tool in hand, so that you avoid arbitrary or circumstantial evaluations.

Motivation
In 1980 scientists started expressing doubts about the wage increment related motivation. Now most of them believe that monetary motivation does not really work. Rewarding productivity (efficiency, effectiveness) is much more important for the workers when it is related to social recognition. There is no pattern for this, social recognition is different from society to society, even in neighboring places. Let your imagination work! Participation at the distribution of profits may be strongly motivating, if on individual basis and not collective. It is not a matter of justice, but merely common sense. If an employee can enjoy additional earnings independently from his contribution, he will not be motivated at all. Promotion is commonly used as an incentive for the best performers. It certainly is, but a promotion without a salary rise seems ridiculous and does not last for long. As it has already been explained, it may also put the wrong persons in the wrong positions. You can invents other systems, like creating many stages with titles and a rise of wages, without really assigning administrative duties that are often incompatible with a well performing employee. Selecting the head of employees is not a reward for performance. He or she must lead people and not tune machines or treat customers, while he or she must make fast, accurate and profitable decisions, taking the risk to fail. A systematic knowledge and analysis of the desires of the employees will give you ideas of motivation. An incentive that you think is plausible, may not be interesting at all to your employees and other (to you irrelevant) things may be strong incentives (for example, paid excursion with the family, may result a wrong incentive, while the expedition to a trade fair alone, may be a strong incentive). Let us see the most common reasons why companies fail, as most writers agree: 1. Discordance between partners. 2. Cash difficulties. 3. Easy money attracted by. 4. Overexpansion. 5. Lack of preparation for expansion. 6. Favoritism. 7. Fraud. 8. Suspicions of fraud. 9. Underestimation of costs.

10.Overestimation of the Market niche. 11.Overinvestment in equipment and other assets. 12.Too much in social relations. 13.Too much in partners luxury. 14.Too much power to hired managers. 15.Too little attention to government controls. 16.Too little attention to bureaucracy. 17.Too much confidence in the product / service superiority. 18.Too much dependence on massive buyers (distribution chains) 19.Dependence on the Public procurements. 20.Dependence on subsidies. These common reasons of company failures are all connected with the people in an enterprise, as they are organized. The organization is put in a paper, as follows:

Internal Regulation
The Internal Regulation is a contract as it is the Statute. For the big companies whose shares are traded at the stock exchange market (listed), there is a European Directive which is commonly being called Corporate Governance, while all OECD member States have agreed to promote the relative regulation. The Corporate Governance is meant to protect the anonymous shareholders from fraudulent actions of the Management of the companies they become shareholders. This does not concern the Small and Medium Size (SMEs) companies, especially the new once. What makes it a useful tool to such companies, is that it also regulates the way a company is managed, as Business Ethics are best thought to be served. In this section, the ethical issues are avoided, while we concentrate our efforts to what makes a company avoid the most common mistakes. The Internal Regulation may be an amendment to the Statute, so it may be also registered. This means that temporary majorities cannot change it, unless it becomes a new amendment. This gives enough time to examine the regulation as a long lasting document. It is better to assign the task of the preparation of such a regulation to professionals (i.e. your consultant), while your Lawyer must see it in the end, for possible legal infringements.

The Internal Regulation is adding bureaucracy to the Management and Administration of the company. In the same time, following the procedures set in it, saves the company from a possible crash.

Decision Making
Both managerial and administrative decisions should be coherent, so that the company proceeds prosperously. It is thought that these decisions are being taken in favor of the company; but what if they are being taken in favor of one partner or a group of executives? What if a democratic (majoritary) decision is made on a difference of information among the decision making board or committee? Management and Administration have to make decisions on an equal information basis. They also have the time to reflect, or even get external advice, if they think that they need it. Managerial and Administrative decisions are not the same.

1.2.9.Managerial Decisions
Managerial Decisions are the once concerning the company as a legal entity. As such, it is responsive to all third party interested institutions (Fiscal Authorities, Banks, Government authorities of all levels and nature, insurance institutions, European or Public funding and the alike). Such decisions should be taken under an agenda, timely communicated to the members, as all the legal systems set. Such formalities are usually followed. The decisions are being taken informally, while evident majority participants meet and prepare their vote, not in respect of the companys benefit, but as a distribution of personal benefits, even if those benefits are not relative to the personal profits. A well regulated system should set that: Together with the agenda, a proposal is also communicated. The proposal, as communicated, has been approved as being beneficiary to the company, by either internal (specialized staff members) or external (consultants) as appropriate, together with their comments. There in an adequate time span for submitting different proposals and that there is enough time for the members to study them before the meeting. A proposal, for example, to extend the manufacturing equipment, should be delivered three weeks before the meeting, leaving two weeks to the members to prepare a different proposal and deliver it to all the members, so they all have one week to study them both. This is not a Law, but just a functional system, as we think of it. No discussion of proposals is possible unless all the participants received them at least an adequate time in anticipation of the meeting (one week?). The members may agree to postpone the decision, until all proposals have been communicated to all of the members. Only one time is possible to postpone a decision. The proposing member may ask a staff member to present his proposal.

All proposals are registered in the Verbal. All the members explain their vote. The discussion is not registered in the Verbal. A vote with hesitation is a vote against a proposal. The secretary (the one who is registering the verbal), is not present during the discussion. The Secretary is not a voting member of the decision making board.

The verbals are registered in three levels; the public, the internal and the restricted. All decisions have the same classification; A restricted decision contains all of the proposals, while the same decision, without any argumentation, may be communicated (i.e. it may become public that the company decided to merge with another company, internal in regard to what this company is, restricted in regard to how such an event is assessed).

1.2.10.Administrative Decisions
Administrative decisions are usually taken by one person, not a committee or a board, as they have been delegated the authority to do so. For example, the legal representative may have been given the authority to take a bank loan, a member of the board may have been delegated to contract an external selling agent, an executive to approve discounts to clients etc. Such decisions do not change the shape of the company, as managerial decisions do. It is everyday operations that need fast decision making and, most of all, personal responsibility of the person in charge. While democratic management is quite widespread (making decisions in meetings), responsibility is lost. There is a tendency to go back to consultative management, where one person decides and other persons responsible for other activities are discussing the impact of a decision to their sectors of responsibility. When the company grows enough to assign responsibilities to staff members, instead of partners, it is wise to distribute authority of decision making, because the board is not bound to previously taken decisions and is free to change policy and even the staff members. The usual decisions that create dispute and discordance, are described bellow.

Hiring Every immediate superior has to be assigned the right to hire the persons he / she considers most appropriate. For example, staff members must be assumed by the board of directors, while they will be placed in responsible positions, answering to the board (as board we mean the partners or their representatives). Simple employees should be hired by those who will be working for. The internal Regulation has to be very strict in hiring, by prohibiting the enrolment of relatives up to second degree, to all levels, with one and only exception; if these persons are already in the Articles of Association as indicated to succeed a partner. The hiring procedure has to delegate absolute power, restricted only by hiring relatives, to the person they will work for. For example, the Sales Manager must select his sales people, without the interference of anyone else, the head of the transportation unit must select the drivers himself, not his boss; the Sales Manager in this case. The hiring procedures must be very flexible. There must be suggestions about advertising open positions, about the usage of external services (a specialized company) or else, but the person who is going to be the immediate boss of an employee must be free to grab an unemployed person that he thinks will best work for him, so he will perform better and present better results to his superiors. Reminder 1: Hiring is the main cause of trouble in most companies. Reminder 2: However a procedure of hiring is scientifically important (for example the use psychologists) every person, assuming responsibilities, has his / her own style and there is no method to predict conformity with this style. Reminder 3: As a partner, you may be tempted to impose hiring of persons, as a favor to politicians, friends, important clients and any kind of others. Remember that, after you have satisfied their petition, they forget it, until their next petition! Firing Every immediate superior to an employee has to be assigned the power to fire. This power must be restricted by: A yearly percentage of possible firing. A written statement of the causes that occurred, signed by the dismissed person, to verify that he / she knows the reasons claimed by his superior (not that he / she agrees).

A hearing from the firing persons superior, so that the dismissed employees point of view is heard. Reminder 1: Never fire an employee without the appropriate compensation, not even for theft. He will go to the Court of Justice and you will pay it in the end, while he / she (may?) sue you for calumniation! He / she will have a Lawyer anyway! Reminder 2: The decision of firing belongs to the immediate boss. It is irrevocable, even if after the hearing you are convinced that the firing reasons were obviously different, or even illicit! If you are convinced that one of your trusted responsible persons is using his delegated power for either personal reasons (sexual included) or as an excuse for failure, you may fire him! Reminder 3: Never admit, being a partner or legal representative, that there is such a thing as immoral administration in your company. Reminder 4: Incompatibility is the reason of every person fired, for everyone, whatever the real cause. Reminder 5: Sexual harassment in the working environment exists. There is no gender discrimination. It exists even between persons of the same gender and has been evidence even in the Bible! Never admit it exists! Never accept it as an excuse for firing someone, unless there are other behavioral discrepancies that can justify such an action (for example, there is an evidence of molesting, which is a criminal action). Do not forget that you are running a business, not a Court of Justice. Reminder 6: When you fire someone you must replace him / her. You may be suggested to fire someone, for any reason, because there is an unemployed person waiting for the same position. Reminder 7: Never listen to someone who is telling you what his / her co-workers are doing (or even saying). He / she is waiting for a benefit, usually to get the salary without really working! Promotions

There is no typical system of evaluation. You have to describe one in your Internal Regulation. It will only be functional and long lasting if your system is based on recording performance of your employees and then the evaluation comes as the result of an examination of the records. Reminder 1: Nobody is perfect. People make mistakes. Unless there is a damage to your company, do not give importance to the mistakes. Employees who make mistakes, are risk taking persons and in most cases are better for higher positions. Reminder 2: An effective worker may be a very bad director. You may promote such workers, giving the title and the salary, but not really assign them with leading duties. Subcontracting Subcontracting is one of the major fields of fraud or suspicion for fraud. You have to describe the procedures of subcontracting. Reminder 1: A subcontracting action is never urgent. A random committee can assign it, so that the organization is sure that there is no personal interest involved. Reminder 2: Set a limit of the annual budget to the managers for services that do not really affect your business, like painting the office, repairing a photocopying machine and such. Although innovation and R&D activities cannot have a measurable expected outcome, because the result is not the effect of working time and efforts, as it is with production, or even sales, it is imperative to keep all those rules of managing people or be managed.

1.3.Marketing competencies
Innovation is being created in order to obtain a competitive advantage. It is not enough to create the perfect and most innovative product or service, in order to sell with a profit. You have to address it to the right persons at the right time asking the right price, deliver it properly and service the client after the sale. Whatever is the assignments of your work in an innovative organization, if you are involved in innovation, you have to have some skills of Marketing, otherwise you risk to be innovative and only increase the expenses, if it does not sell. The American Marketing Association suggests that 'Marketing is "an organizational function and a set of processes for creating, communicating

and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders." Another definition, perhaps simpler and more universal, is the process of moving people closer to making a decision to purchase or repurchase a company's products. Simply, if it doesn't facilitate a "sale" then it's not marketing. Perhaps the simplest Western definition of all was that summarized by Philip Kotler in his earlier books as: "Marketing is human activity directed at satisfying needs and wants through exchange processes." On the other hand, Christian Grnroos, in the context of a move to relationship marketing, summarized a rather different European view in his definition: "Marketing is to establish, maintain and enhance long-term customer relationships at a profit, so that the objectives of the parties involved are met. This is done by mutual exchange and fulfillment of promises." My practical experiences lead me to define marketing as this: its purpose is to create the opportunity to sell. It is not about making the sale; it's simply about preparing the sales process, by providing the tools necessary to allow the "conversation" with your prospective clients to begin. "Marketing" is the collective term for these tools, which include activities such as branding, special offers, advertisement and distribution. If the purpose of marketing is to support the sales process, it makes the planning of a promotion campaign much simpler. All you need to do is to map out the sales process relevant to your business. One of the basic principles good marketers employ to do this is the concept of the "customer buying decision process". This is the path a potential customer takes from "discovering" a company or product, through to actually making a "purchase" decision. Defining this path will provide a structure for you to select which marketing tools to use, and at which stage of the process to use them. The marketing concept rests on the importance of customers to a firm and states that: 1. ALL company policies and activities should be aimed at satisfying customer needs, and 2. PROFITABLE sales volume is a better company goal than maximum sales volume. To use the marketing concept, a small business should: * Determine the needs of their customers (Market Research); * Analyze their competitive advantages (Market Strategy); * Select specific markets to serve (Target Marketing); and * Determine how to satisfy those needs (Market Mix).

Market Segmentation
Consumers place differing degrees of importance on the individual elements of the marketing mix. They differ not only in the price they will pay, but in a wide range of benefits they expect from the product and its method of delivery. As a result, the market becomes split into several segments. For example, the market for electronic calculators is made up of a number of segments including a "scientific users" segment, an "office" segment and a "general public" segment. Each segment will not only place a different emphasis on price when deciding what to buy but will also consider the features and benefits of differing products - the scientific segment requiring advanced functions, the office segment wanting durability, the student segment requiring compact dimensions and the general public looking for simplicity of operation. The distribution channels used to reach each segment will probably vary in this example, as will the advertising message and choice of media used to communicate with them. Understanding the concept of segmentation is central to marketing because each different customer group will require a different marketing mix strategy. Furthermore, each segment will offer differing growth and profit opportunities so the trick is to deliver the best offer to the best segment. How to Segment Your Market If the universe of all potential buyers is your "market," then the market can be divided up into sections or "segments" based on any number of factors. For example, you might divide up your customers by age group and find that you sell most of your products to people aged 18 to 34. You might divide them up by family size and find that you sell most of your products to married couples with young children. You might divide them up by economic status and find that you sell most products to people with an annual income of upper high revenues. You might divide them up by geographic location and find that you sell most of your products to people living within two specific zip codes with a higher education literate. Many small businesses stop there, thinking they have enough information to be able to identify and communicate with their most likely customers. However, larger companies will attempt to push on further and find out even more information about their customers' lifestyles, values, life stage, etc. Defining some terms:

Demographics refers to age, sex, income, education, race, martial status, size of household, geographic location, size of city, and profession. Psychographics refers to personality and emotionally based behavior linked to purchase choices; for example, whether customers are risk-takers or risk-avoiders, impulsive buyers, etc.

Lifestyle refers to the collective choice of hobbies, recreational pursuits, entertainment, vacations, and other non-work time pursuits Belief and value systems includes religious, political, nationalistic, and cultural beliefs and values. Life stage refers to chronological benchmarking of people's lives at different ages (e.g., pre-teens, teenagers, singles, etc.). How can you find out more about your customers? Through market research, of course. Larger companies segment their markets by conducting extensive market research projects, consisting of several rounds of exploratory research:
1. Customer and product data collection: Researchers gather data from users of similar products on:

number and timing of brand purchases reasons for purchases consumers' attitudes about various product attributes importance of the product to the lifestyle of consumer category user information (demographics, psychographics, media habits, etc.)

2. Factor and cluster analysis: Researchers analyze the data collected in (1) to find correlations between product purchases and other factors, as a basis for identifying actionable consumer target "clusters." Clusters are defined as "niche markets," where there are identifiable numbers of buyers or users who share the same characteristics and who thus can be reached by adept advertising and promotion. 3. Cluster identification and importance ranking: Researchers then determine whether clusters are large and viable enough to spend marketing (and promotional) funds on them whether potential marketing niche clusters fit strategic company objectives; i.e., does marketing to this group fit your existing image and long-term goals

What can smaller companies do to segment their markets? 1. Smaller companies can research secondary data sources and conduct individual interviews with key trade buyers and consumers or end users of their products and services (qualitative research). Often qualitative research can be accomplished for free or little expense. 2. Smaller companies can also conduct informal factor and cluster analysis by:

watching key competitors' marketing efforts and copying them

talking to key trade buyers about new product introductions conducting needs analyses from qualitative research with individuals and groups

3. In many cases, smaller companies have access to the same databases as large companies for estimating the sizes of market segment clusters and their importance. Some low-cost sources of external secondary data include: trade and association publications and experts basic research publications external measurement services, that specialized firms do for different sectors or even groups of products and / or services government publications

4. Smaller companies can segment markets by geography, distribution, price, packaging, sizes, product life, and other tangible factors in addition to demographics and lifestyle and psychographic clustering. From segments to needs You can look at customer data in just about every way imaginable. But first of all make sure you've got the time and the resources to do justice to the exercise. It's much better if you can complete a small exercise, as opposed to stalling half-way through a more complicated study. The minimum Take a half day with colleagues to go through this process with each customer group:

What do customers want from us? Are they getting it now? Can we give them what they want? Would meeting customers' needs be profitable on the current business model?

The hate list Another way to understand the problems customers may have with you and your services is to write a 'hate list'. What do customers hate about you? And what do they love about you? Give this to as many people in your business as possible. Barriers to success What you are looking for are the benefit barriers - also known as purchase barriers. They are part of the following trio: 1. Desired behavior (what you want people to do) 2. Benefit barrier (the belief that's stopping the customer)

3. Insight (the thought or fact that overcomes this barrier) Once you have a long-list of 'hates' and ideal solutions, decide which 'hates' to fix and which to ignore. To do this, work out how important they are to consumers. Then calculate the benefit to your business - against the cost of changing things for the better. The aim is to improve towards the ideal customer solution rather than to deliver it regardless of the cost. Running the exercise again, looking at 'hates' that apply to your competitors can show you where you are stronger and also reveal what their product development or service priorities are likely to be. Niche Marketing Most marketers know that "20 percent of buyers consume 80 percent of product volume." If you could identify that key 20 percent and find others like them, you could sell much more product with much less effort. The "heavy users" of your product can be thought of as a market "niche" that you should attempt to dominate. Niche marketing today means targeting, communicating with, selling, and obtaining feedback on the heaviest users of your business's products or services. Picking the right segment of the market is important to achieving sufficiently large sales volume and profitability to survive and prosper as a company. Picking the right market segment means that it is:

measurable in quantitative terms substantial enough to generate planned sales volume accessible to your company's distribution methods sensitive to planned/affordable marketing/promotional spending events

It is also important to examine other factors that could affect your company's success: strength of competitors to attract your niche buyers away from your products similarity of competitive products in the buyers' minds rate of new product introductions by competitors ease of entry/protectability in the market for your niche

Perhaps the driving force behind "niche" marketing, or "segmentation" is the need to satisfy and keep those consumers who really love your products or services. Consumers become increasingly more sophisticated and demanding. And product choices continue to expand with prosperity and world market competition. Even large companies have embraced niche marketing, continuing to refine and target their product offerings to different buyer groups. It is

also important to be able to identify and estimate the size of your target market, particularly if you're thinking about a new venture, so that you can tell if the customer base is large enough to support your business or new product idea. Remember that it's not enough that people like your business concept. There must be enough target buyers on a frequentenough basis to sustain your company sales, spending, and profits from year to year. For example, selling a product or service that people may need only once in a lifetime (e.g., an indestructible toothbrush) may not be a sustainable business, unless a large number of people need it at any given time, or everyone needs it eventually (e.g., funeral services). Buyer Identification and Behavior Do you know who your buyers are? Do you understand why they buy your products or services? Assuming that other factors in making the product available (distribution) and known to the buyer (advertising and promotion) are in effect, influences on the buyer may be catalogued by: culture demographics lifestyle psychology of wants and needs

If your target buyer is also the end user of your products and services, then demographic, lifestyle, and other target buyer identification and classification are appropriate. However, if intermediate buyers are involved prior to products reaching the end user, other influences may be important. For example, consumer packaged goods such as food, health, and beauty aids and household products may be initially purchased in large amounts by a master distributor, who sells to local/regional distributors. These local distributors often sell to a wholesale buyer representing a chain of stores. Finally, individual store managers decide to buy and stock the product before the consumer ever has a chance to buy the product. Other buyer influences may be at work under these circumstances:

Profitability of the item: The higher the margin and money profit per item vs. competitive category products, the more likely the trade will accept it, regardless of product quality. Discount deals available: They can increase margin, volume, and velocity of the item. For example, 10 percent to 25 percent off invoice each quarter for all purchases during the period are typical discounts for grocery and drug retailers. Advertising and promotion support programs: Multi-media TV, radio, print and PR support, plus heavy consumer couponing, lotteries, and contests are typical consumer packaged goods programs that may be run one to four times/year.

Other cash deals: For example, payment to obtain shelve space in a Super Market chain. Free goods available: For example, one case per store is common for new grocery item distribution. Personal buyer/seller relationships: There will always be personal relationships influencing buying decisions as long as there are people selling to people. That's why you hire good sales people! Sales incentive programs: These programs may spur salespeople on to greater productivity and sales of a particular item or offering.

For example, grocery buyers of consumer packaged goods may have strict profit margin guidelines (e.g., minimum 25 percent on discount retail price programs), and minimum discount thresholds that they will accept (e.g., at least 10 percent off invoice). Buyers are also heavily influenced by brand advertising and promotion support programs (e.g., coupons in local newspapers on the promoted brand). For new products, cash payments to the stores for each new item (e.g., 500 to over 25,000 per item) and free case goods on each new item for each store are common for larger chains. The more exact the identification of your target buyer, the more efficient your marketing programs will be in generating sales from regular or heavy users. For our purposes, we will divide target buyers into two groups:

end users who are the ultimate consumers or users of the product or service channel buyers who are intermediary buyers between the company and the ultimate consumer/user

End Users If your customers are primarily the ultimate consumers or end users of your product or service, identification is generally done in terms of demographic and lifestyle factors. Demographics are tangible, measurable facts that distinguish one group of people from another. For example:

ethnic background age income education sex location occupation number of people/family children's ages

Lifestyle analysis is more concerned with the "intangibles:"


cultural background religious beliefs political beliefs value systems recreation and hobbies

music preferences literature preferences food preferences/menu planning restaurant preferences entertainment preferences travel preferences social interaction patterns media habits

For example, heavy coffee, liquor, and tobacco users are not easily identified with demographic information. They may be found in any age group or socio-economic category. However, lifestyle analysis shows high correlation with certain characteristics, including media habits, recreational pursuits, social interaction patterns, music, and other attributes. If you can identify these, you can make your promotions or advertising more appealing to these target buyers. In some product categories, such as alcoholic beverages, there are several distinct segments representing different age groups, demographic characteristics, and lifestyle patterns:

an 18-to-30 age group, primarily male heavy beer drinkers, with subsegments differentiated by choices of country and western music, rock music, contemporary/jazz, and sports interests a 39-to-55 age group including both males and females, with an urban skew and subsegments with wine and hard liquor, differentiated by classical, jazz, new age, and soft rock music, with interests in reading, movies, heavy video rentals, more expensive vacations, and both younger and older children

Channel Buyers If you sell to other businesses, who turn around and resell your products and services, your buyers are predominantly channel buyers. Examples of channel buyers from the grocery and drug industry are:

total country master distributors local/regional distributors chain store wholesaler buyers individual retail store buyers free lance wholesalers

Influences on channel buyers may include non-target identification attributes such as the item's margin and profitability, discounts, free goods, cash fees, and personal relationships. Channel buyers may be subdivided into: 1. business-to-business markets 2. government 3. consumer markets Business-to-business buyers. Business-to-business buyers are subject to many different influences than buyers of consumer goods:

fewer buyers larger business transactions regional concentration of buyers defined sales relationships dependent upon end-user buying patterns and demand an inelastic market, meaning that the demand for goods and services is not significantly affected by a significant change in price

Business buyers take many factors into account when contemplating buying decisions:

macroeconomic trends, nationally and internationally long-term material supply trends and inventory needs delivery rates, timing, and reliability plant capacities suppliers' financial resources

Consumer-goods buyers. Consumer-goods buyers are subject to different influences when compared with business-to-business buyers:

there may be many buyers at multiple levels in the same company small to large transactions national, regional, and local buyer concentration direct company sales to buyers, or relationships directly dependent upon end-user buying patterns end users influenced by company advertising and promotion spending an elastic market, meaning that the demand for goods and services is easily affected by slight changes in price.

Channel buying decision influences. Channel buyers may or may not directly purchase company products and services. There are many different roles in the buying process for a large supplier's customers:

purchasing department personnel buying committees department advisors consultants management head buyers and assistants store managers department managers

It is not uncommon for a new item, survey to be conducted throughout a majority of a chain's stores, with purchase intent/store/quantity indicated by store managers. The new item may be reviewed by all those listed above to ensure margins, store policies, technology, distribution systems, warehousing, shelf life, retail pricing, promotion programs, and profit goals and standards are being met by the company supplier, EDI

(electronic data interchange) and quality certification (ISO, HACCP) required. Reminder: It is impossible to sell to heavy users and end users in the same time and in the same region, because you are competing yourself!

1.4.Collaborative research and innovation clustering


The conclusions of the Conference in Lefkada about SMEs development and Economic Growth, included a statement that in spite of all policies, new and especially innovative enterprises tent to concentrate in places where other similar businesses are already successful, rather than where important research is being done. This gave the idea to our team to browse through our previous surveys and plan and execute more surveys, in order to identify some important factors, which mainly influence the creation of innovation and start-ups. It is well known that Europe has still a grate difference in levels of development, especially if the levels and rates of development compare Regions and in-Region Provinces. Europe is also behind USA, Canada and Japan, a reason why the European Policy is promoting entrepreneurship in all levels of education. Researchers are continuously publishing correlations explaining the reasons why people do not take the risk of creating a new enterprise or why established companies do not innovate. Such correlations, based on surveys, have had little success, when policies were based on their results and explanations. Whatever Entrepreneurs, Academics, Researchers or students tick on a questionnaire, when it comes to the implementation of their intentions, there is an unknown mix of opposing and favoring influences, which affect their decisions and actions. The decisions made and the actions taken are a result of a thorough examination, much different than answering hypothetical questions, making surveys biased and their results nothing more than indicative. Each of the above groups involved in business creation and innovation implementation, has already decided to play a different, but specific role in the society and everyone in the group is expected to behave according the stereotypes defining this role. Even when they are convinced to modify the characteristics of this role, thus expressing their desires in a survey, their family and their social environment retain them from mixing their role with characteristics of another group. For example, a student is expected to follow a career as an employee, either in the industry or in the Academia, as Academics are expected to teach and produce results of basic research, researchers to produce patents and entrepreneurs to profitably exploit resources and opportunities. There are many persons, among each group, seeing a change in the definition of the role they have been involved with, called with different, but yet with the same meaning, names, such as globalization, knowledge based economy, new economy, interdisciplinary skills or other. Everyone has a different point of view. The Academic and Research point of view is expected to analyze the interactions of scientific, engineering, educational and economic factors. The student point of view is expected to be concentrated on acquiring demanded knowledge and skills. The entrepreneurs point of view is expected to be concentrated in the exploitation of opportunities.

The European policies, regarding entrepreneurship and innovation, are directed to a parallel system of targets. On one hand, they promote entrepreneurship in all Academic education and non vocational training systems and levels, on the other, they are aiming to motivate and help enterprises to invest in academically approved research. The results of such policies are slow, while they are expected to create positive changes in the next generation, with a high degree of uncertainty, not because they are poorly assessed, but because it was impossible to foresee all the changes in the global economy that will happen as a result of risky initiatives taken anywhere in the globe. Excellent ideas have appeared and are financing joint research, between Academic Institutes and Enterprises, but the results are limited to big companies and little innovation. This may be a reasonable result, while the brilliant minds are attracted by and Academic career, which bases recognition on an exhaustively documented procedure, meaning both laboratory and bibliographic foundations, while innovation may be defined as a breakthrough and as such is potentially profitable and surely risky. These conditions have influenced our perception of the socio-economic environment and have driven us to search for another perspective. Since the policies of motivating the enterprises to do some research, get closer to the Universities and the Research Institutes, recruit researchers, young graduates, on the one hand and educate and motivate students to startup enterprises, as well as Universities to exploit the research results, have not reached their goals, we assumed that all those activities are aiming to persuade people to take risks that they are not used to take. Entrepreneurs are not used in devoting funds to research, because they are not able to calculate the return on their investment. Academic and Research staff members, measure the research outcome by the papers and publications produced, not the market value of their research results, the later being the only understandable amount for the entrepreneurs. The students usually measure the outcome of their studies in terms of career and salaries, orienting themselves to the disciplines that appear to provide them with the most popular knowledge and skills. With these considerations, we found it interesting to examine a different approach and so we arrived at the risk sharing assumption. The mainstream Despite a series of public presentations of comparisons between faster than the European expanding and growing economies, in the form of awareness about the bureaucratic restraints of innovative initiatives and the respective enterprise creation and development, both business persons and researchers, still affect policymakers, in terms of scenarios based on assuming that the sum of public and private expenditure in research, functions as a lever of growth and development. This is true, since numeric calculations match, when examined in a closed economic environment. In a global economy with little or no barriers at all, new forms of comparison and assessment should emerge. Quantitative

methods are, nowadays, very accurate, but they still need a stable global environment, stated in Latin as ceteris paribus. What all social actors have considered as a description of the socioeconomic environment is that: Innovation is generated by researchers attracted by the remuneration, to be provided to them by the entrepreneurs, who will be convinced to exploit it. Innovative ideas originate knowledge and research. Universities are interested technology and innovation. from in technological and and scientific

producing

commercializing

SMEs are ready and capable to invest in early stage technology and new scientific discoveries. Subsidies and financial aid to SMEs will produce the desired results. Innovation concerns only the implementation of high technology.

The main initiatives that transform these mainstream perceptions, to name a few, are: Entrepreneurship Education Academic Spin-Off Incubators Technology Parks Technology transfer Venture Capital Start-up Capital Business Angels Promotion of joint and commissioned Research Risk Capital Benchmarking

The European experience of the implementation of such initiatives, have not been as successful as policymakers expected. We tend to believe that those initiatives, having been adopted after their success in the USA, did not take into consideration the special characteristics of the European conditions, in respect of the social values, occupation expectations, University governance and finance, social leadership, banking system and procedures, research funding and taxation systems and conditions, as well as bureaucracy.

Eurostat and Innobarometer present data that justify the change in European policy about entrepreneurship and innovation. Inverting the mainstream Our point of view is that entrepreneurs, since they know the business and the market, are the persons with business ideas. Whenever their ideas have a need of research, or simply the products or processes are science and knowledge intensive, all the available options, like hiring researchers or assigning research to Universities or Research Centers, they are reluctant for three main reasons: They cannot feel the risk, never mind calculate it, while they lack experience and relative knowledge. They cannot safeguard their investment in terms of secrecy. They believe that the members of Academia and the students alike deliver the assigned work in a scientific, rather than a business form.

This quite understandable tendency of the business persons has driven EU funding for Research and Development mostly to Medium than Small companies with previous experiences in how to handle research maters. Research oriented persons see almost the same obstacles from the opposite side: They cannot calculate the market risk, because they are not used in taking market risks. They fear that entrepreneurs will exploit them, by rewarding them with only a small fraction of what the value of their research results worth.

There have been some attempts of bridging this apparent conflict. The most usual will be presented at the following session. At this point it is necessary to redefine collaboration and clustering. It is true that the vast majority of the enterprises cannot afford to have their own Research & Development department, adequately equipped, appropriately staffed and with a sufficient budget. This is true because research costs and the outcome of researched cannot be foreseen. Research may demonstrate that an initial hypothesis is not valid, or, at least, cannot be commercially exploited. His is a valid research result and in reality creates value for the organization, because the result may protect the organization from highly risk taking. The point is that the cost may exceed the risk. The enterprises are competing one another, so they do not offer the same products or services to the same market niche. They innovate and they segment the market. What about sharing the same research results? Would that be a compromise on diversification or even innovation?

What about a presence in a different market at all? Say, a metallic fittings company of Bulgaria and one from Finland, are they really competitors? These questions, together with other once, are the core of the European policy makers, as it will be presented later. Those other questions are: 1. Can the academic institutes collaborate with the enterprises, to undertake and execute research together? 2. Is it possible to get other competing enterprises involved in the same group and for the same purpose, so that they create economies of scale? 3. Is there a way to convince the managers, of the enterprises, the research institutes and the academia, alike, to collaborate in order to arrive to a common result, distributing equal benefits to all parts? 4. Is it possible to put competitors together with a common objective; to create a common innovation and diversify before offering the product or service to the market? These questions are not answered, so the European Union, recognizing the inability of the majority of the enterprises to innovate alone, is financing such collaborative activities, so that they gain competitiveness over the rest of the world. "Knowledge is a key component of competitiveness" said European Science and Research Commissioner Janez Potonik. If our businesses are to be at the leading edge in the future, they need to invest in knowledge now. And governments need to put in place the appropriate measures to help them do so. "

1.5.Conflicts of interest
Trying to answer the previously put questions, it is inevitable to observe the conflicts of interest between all the parties involved. Seen as sets of binary conflicts, we can see the following conflicting interests: 1. Collaborating enterprises are trying to subtract the most of the research outcome. 2. Collaborating enterprises are trying to spend the less possible, despite the payments of their collaborators. 3. Collaborating enterprises are trying to benefit from the subsidies themselves, never mind the research and the expected outcome. 4. Researchers, whatever their origin (academia or research institutes) see the opportunity to obtain financial assistance in order to improve their career at the academic world, never mind the return on investment to the enterprises involved.

5. The institutions involved are trying to benefit from the intellectual property exploitation, racing the collaborating enterprises and the researchers, alike. 6. Managers proposing the research, seek the acknowledgement that it is them who have to get the merit, in search of a better position in the enterprise. 7. Financing authorities are trying to justify their selection of projects, leading them to select those who already have a result, proving their good judgment, never mind the research purpose, which is to find new things. 8. Bureaucrats are only examining the paperwork, despite the real outcomes. If reporting is as they think it is appropriate, the result has been achieved. If on a successful work a signature is omitted, there is no result! Accountants are only concerned with the correctness of the bookkeeping, never mind the necessity of an expense.

9.

10. Auditors are only concerned with the correspondence of an expense with the budget, never mind the urgency and the degree of predictability of a voice of the budget. 11. Lawyers are trying to protect their clients with clauses in the collaboration contracts which maximize the intellectual property rights, overseeing the potential use of the outcome and especially the fact that overprotected intellectual property complicates the implementation in the industrial world and discourages managers. It is a normal behavior, because their job is done, as legal consultants and they have to be limited in their profession 12. Marketers feel uneasy with innovative products, because they have to work on terra incognita, since they have no previous data about the consumer behavior and they can only speculate the sales volume or gamble on pricing. 13. Sales persons are trying to avoid innovative products because they have to study and learn them. They feel anxious about the questions they may be asked, especially if the new product is a technological breakthrough. 14. Senior officers, who are usually aged, boycott innovation, concerning either products or production methods, management, distribution, cashing, credit collection, or even training, because they feel threatened by the younger persons with more updated knowledge and modern skills. 15. Junior officers are reluctant to innovation, especially when it is a fruit of collaborative research, because they feel competing with analogous persons in other enterprises or academic researchers, fearing that the comparison will result to their replacement.

16. Technicians object, sometimes with bad manners, thinking that they are about to be replaced as obsolete3. 17. Simple workers object for the simple reason that they have to face new working conditions. 18. Bankers4 object and they show their objections by creating delays in approving the loans asked, fearing that they have better avoid taking the risk of a potential failure of the innovation, while they do not have a documentation of the possibility of success. 19. Financial authorities who are distributing subsidies, are hostile to innovation. They prefer to have a notion of innovation which is really routine. Although the subsidies destination has to prove the innovative character, they are limited to the implementation of the so called new technologies rather than real innovation. 20. Government authorities reject innovation because bureaucrats cannot find a reference in the past!

Services innovation
It is very difficult to distinguish services from products. The enterprises are offering customer satisfaction, which includes products and services. On the other hand, it is very difficult to spot out an enterprise which is offering services without the necessary goods going with them. For example, when we go to a mechanic, we do not buy the necessary spare parts (we dont know what is needed, if it is necessary, its name, of who is selling it). He buys and sells the spare parts to us. Is he really selling services? Another example is a hotel. You only have to imagine one to understand that it is selling food and even jewelry! The only pure service is the one dealing with finance; from a bank to a stock broker. With one exception; the Leasing banks. They buy equipment or real estate and leases it to its clients. In a diverse, highly connected, rapidly evolving, customer-centric and knowledge-driven world, our current management practices and organizational structures are not effective in serving our customers. We need to understand the R (relation) in CRM (Customer Relationship Management): The value created in the relationship is what drives loyalty. Companies need models (principles and practices) that enable and
3

A personal testimony would be helpful. When in 1985 I was working as an accountant for a company producing office furniture and the innovation to implement was the application of a wooden edge on the board of a desk, produced automatically by a computer driven machine, all three carpenters stated: this is not feasible. We object to implement it. We know how we can use wood. If you want to do it, find someone else!

4 For a banker we mean the directors of the bank branch. Only very big enterprises are dealing with the top management of a bank.

encourage diverse groups of people each with a shared sense of purpose to engage in new, effective ways of working together.

Image 1- Efficiency versus Relationship

A paradox: Customers value relationships over efficiency, yet service and support organizations are driven by efficiency. A solution: A junior manager is about integrating and aligning:

Chaos with natural patterns The whole experience with the whole person Personal and public Feminine and masculine traits/perspectives Collective purpose with the individuals purpose

This junior manager is:


Context sensitive Self-regulating -Control is inherent in the system Self-organizing, connections occur when they are relevant Self-optimizing, balance between efficiency and relationship Dynamic,pursuit of a steady state is futile

A vision: A dynamic, fractal system made up of holistic and scalable relationships that perpetually and dynamically adapt to the unimaginable changes in the environment. It is continuously tuned. It is in true alignment with the customer: the customer's context is the organizing force for this system. The organization described by this model focuses on creating services which are ready and able to perform a function within a particular customer business context. Service selling needs to satisfy clients. As it noted, products and services selling enterprises are usually selling both. With such a view, the practice of servicing the clients, either with pure services or with accompanying products, may be seen as a sphere of interconnections.

Image 2- The interactive "Betty" model

One question that has motivated research on innovation in services naturally concerns the differences vis--vis innovation in manufacturing. In fact, most of the traditional distinctions, such as incremental versus radical innovation; product versus process innovation; and so forth tend to implicitly refer to the latter. This raises the question; to what extent they are applicable to the case of service innovation? The paper by Bruce Tether hence empirically investigates how innovation by service firms differs from innovation in manufacturing firms, and argues that the currently dominant conceptual framework and empirical approaches need to be broadened to adequately capture innovation in services. A better understanding of how the two differ will not least contribute to our understanding of how the two might be related to each other within and across industries. Tether observes that because services do not generally produce technologically advanced artifacts, there has been a tendency to portray them as supplier-dominated recipients of technology. Rather than being passive and non-innovative, Tether's results suggest, however, that services tend to innovate differently from manufacturers, in the sense that innovation in services brings to the fore "softer" aspects of innovation, based in the skills of the workforce and inter-organizational cooperation practices. Importantly, Tether's analysis allows for the possibility of an innovation orientation towards "organizational changes", besides new products and new production processes. Service firms are shown to be much more likely to claim an orientation towards organizational innovation than are manufacturing firms. The relevance of services for productivity growth does not primarily rest in the fact that they constitute a (expanding) category of firms that can empirically be kept separate from manufacturing firms. Instead of conceiving services as a residual category, it is vital to focus on the complexity of the links among services and other types of economic activity, and on the organization of these links. This is particularly apparent in the context of knowledge-intensive business services (KIBS)-a

sub-set of services that has recently attracted much scholarly attention (Hertog, 2000). Its importance not least reflects the qualitative changes accompanying the asserted long-term expansion of the service sector, and underscores the need to analyze and rationalize it in relation to the increasing knowledge intensity of production more generally. Another paper by Aija Leiponen explores a set of hypotheses on innovation by firms in KIBS, and provides empirical evidence for a type of service that can be considered as central to understanding this relationship. Leiponen's paper complements Tether's paper by conducting an empirical study that tests whether individual or collective knowledge application proves most efficient. Supporting the claim that it is necessary not to see innovation in services in isolation but in an interactive perspective she concludes that collective strategies prove to be more efficient. Especially interesting is her finding that the external sourcing of knowledge, particularly from customers and competitors, is more conducive to new service introductions than local and incremental learning on the job.

1.6.Innovating services
Innovation of services starts from complaints. Everyone is complaining for bad services and is looking for an alternative way they are provided, so that they reach our satisfaction, as clients. Services may be automated, but in most cases there are persons behind them, who either provide the service itself (think of an electrician) or program a device to do so (think of an ATM that gives you the money you have deposited in a bank). Under such an examination, service providing enterprises are trying to offer better services to their clients, either they are explicitly wanted (see the possibility of a survey) or imagined by the providers as a newly appearing offer (an innovation, if this should be the defining term). On the bottom line, despite the arguing writers who support the opinion that innovation is a transformation of technological improvement and thus only applicable to production (products or methods), it is the services that attract innovation, much more than product creation, because services innovation is much an easier way of combining documented knowledge with consumer desires. The fundamental difference between product and service innovation is that the main source of product or production innovation is research, on the contrary services almost never come from research, but from studying the desires of the consumers and any other kind of clients (provision managers of other organizations), as well as the character of the personal and teamwork which is the contact of the client. The consortium for service innovation is proposing to see the services as a constantly evolving system, rather than problem solving, as it is traditionally being seen.

Image 3- Knowledge Centered Services

This approach is facilitating innovation, but does not mean that it is innovative or that it necessarily creates innovation. The aggressive character proposed is risking to transform the organizations adopting it, into soliciting and even harassing group of persons, damaging their organization, instead of adding value5. Thinking the value to the customer, the organization has to invent ways to adapt to the ever changing desires of the customers.

Image 4 - The Adaptive Organization (AO)

The core of all the models or other explicit proposals, is knowledge. Knowledge in not an indispensable component of services innovation; it is also necessary for products, production systems, management and any other kind of innovation creation, even political or social. We usually confuse knowledge with training and education and its documentation, certification and recognition by the market or academia. European Union is searching for a system of accreditation of prior learning. In fact, everyone is continuously learning throughout his or her

5 Think of the phone marketing promoting credit cards. They may sell credit cards, but it is enormously increasing the outstanding depts.

life. We have to see knowledge as a result of formal and non-formal learning6. This may be a result of: Formal Education. Vocational Training. Non Vocational Training. Work Experience7. Social8 or personal9 experience.

The above observations are leading to conclude that knowledge based services, under an Adaptive Organization perspective, in order to create novelties, have to foster creativity in a teamwork, using all kinds and forms of knowledge.

1.7.Managing services creativity


There is an old saying, of which many claim the origin, but it worth repeating: insanity is doing the same thing over and over again and is expecting different results. Combine this with Thomas Edison "Nobody ever came up with a great idea all by themselves." Services creativity is sheltered on the back side of the mind of every person within an organization. It is only being transformed into a possible innovation when it is revealed to other involved persons, studied, adopted, designed, programmed, scheduled, assessed, cross checked and communicated. Thinking of all these components (not stages, because it may be communicated before being assessed, so as to see if clients really like it) seems discouraging. Add the technological components, because services are using technological achievements as an improved and sometimes innovative service and it all seems so complicated that participants without a proper preparation prefer to withhold their creative ideas. Such a preparation includes: Some documentation of the ever changing desires of the clients. A brief presentation of the services of the competitors.

The Leonardo Da Vinci program is financing research, studies and demonstration projects, concerning all kinds of Life Long Learning. For more information: http://www.cedefop.europa.eu
7

Is a trained person more likely to become a successful client relationship manager than another with many years of experience?
8

Imagine the knowledge carried by a former Mayor How many Chefs are cooking school graduates, in comparison to amateur home cookers?

A brief list of the organizations technological infrastructure (both hardware and software). A short list of the vendors of potential hardware and software. A study of the training needs, for every vendors offer. Reassure all participants that their meeting may not come up with results, but also that innovation is necessary, if not imperative. Make sure that ideas will be recorded for a review, so that a next meeting will have a short list of ideas. Time matters, so put a time limit to the expression of new ideas; differently there is a risk of being trapped in a continuous loop to the starting point.

Every innovation has the risk to fail, either because it will prove to be worse than the established one, that it costs more than the revenue it generates, that it is boycotted by the personnel etc. Reminder:
Innovation = survival & evolution Innovation demands risk Risk is not a danger, it is a task to be managed .. and it can motivate (your customers, your team & you)

1.8.Internal and external services innovation


Clients are not limited to the buyers of goods and / or services of an organization. They well be internal. The accountant, for example, is providing his / her services almost to all other departments or processes of an enterprise, by informing them about the inventory, communicating the cost variances, invoicing, checking the credit line etc. From the other side, production management provides services to the provisions function, the financial function, the logistics function, so that they all plan timely and accurately. Thinking of internal clients the same way we are thinking of the external clients, the only difference we find is that internal clients are also affecting decision making and are influencing top management. This particularity is facilitating, instead of bothering innovation, because the clients may be present in the creativity sessions and be directly asked what they really desire and help. Our business structures and practices are obsolete - our traditional hierarchical structures and command and control practices have evolved over the past hundred years with the objective of efficiently producing tangible assets (products). While the source of value has shifted to intangible assets, we have not changed the business model. We continue to use a linear, manufacturing process model for the business of creating value based on intangible

assets (knowledge, trust and relationship) and the manufacturing model is proving to be far ineffective. There are some strong indications that our values as individuals and therefore as a society are shifting to a more holistic or ecological model; our sense of self and self worth now includes our knowledge and our relationships; it is our reputation as knowledgeable (particularly in areas that we care about) and our contribution to and influence with others that is valued. We are seeking to be known and valued as individuals. This becomes more important when we have to confront ourselves with other analogous operators within the same organization. Such considerations should be kept in mind, because managers of other functions or persons assigned with a process responsibility, still make decisions influenced also by their personal view of the world. Work efficiency is a subset of other issues, as shown in the following representation.

Image 5 - prioritized influences of service innovation

1.9.Lean Services management


The philosophy of lean production had made it possible to reach very high levels of efficiency to many of the magnitudes concerning production systems, in both industry and services. Lean thinking of services is a creative and innovating procedure of the overall services, either they are offered to the external or internal clients. Lean thinking and Lean Management are mainly thought to serve shortening the time between a communicated request of material and the disposability of the same or an equivalent, for production reasons. Lean Management enables organizations to re-think and radically redesign the way they deliver customer focused services which are responsive, efficient and effective. The approach combines people-based and processbased improvement techniques to create enhanced value and service for customers. It identifies and eliminates waste, manages demand and

streamlines work flows, ultimately resulting in a culture of continual challenge, learning and high performance. For service organisations Lean is based on five key steps: Defining service purpose from the perspective of the customer identifying the key service characteristics that add value. Mapping out current service value streams and optimising these by removing non-value adding activities. Streamlining the flow of work through service value streams. Developing flexible workstreams that respond to customer demand (pull.) Continually improving service design and performance by removing remaining non value adding activities and other forms of waste.

It is also an alternative to other forms of innovation, like radical, incremental etc. Keeping in mind that the most important component of services provision is promptness, time is the central value of the service, so waste of time elimination is a fertile field for innovation.

Technological foresights
Technology Foresight is the process for bringing together in partnership scientists, engineers, industrialists, Government officials and others to identify areas of strategic research and the emerging technologies likely to yield the greatest economic and social benefit and which in the long term will sustain industrial competitiveness. (Martin, 1995)10

Technology Foresight: the process involved in systematically attempting to look into the longerterm future of science, technology, the economy and society with the aim of identifying the areas of strategic research and the emerging generic technologies likely to yield the greatest economic and social benefits11. UNIDO, 2007) Smaller, Cheaper, Faster, and Smarter, is what scientists are searching for and they are succeeding somehow12. (Karanassios, 2006). Technology forecasting first came to prominence in the late 1950s in the United States defence sector and in work by consultants such as the RAND Corporation. The latter were responsible for developing some of the principal tools of technology forecasting, such as the Delphi questionnaire survey and scenario analysis. Large forecasting exercises were carried out during the 1960s by the United States Navy and the United States Air Force. Technology forecasting was also taken up by private companies (e.g., in the energy sector). However, the next developments, and the emergence of what we now term foresight, took place in Japan13.
10

Ben Martin. Technology Foresight 6: A Review of Recent Overseas Programmes. (1995). HMSO. Technology Foresight, United Nations Industrial Development Organization, Volume 1, 2007

11

12

Vasili Karanassios, Inventing the future of ICP-AES and ICP-MS, Plenary Lecture, Central Canada Spectroscopy meeting, Toronto, Ontario, Oct. 24, 2006.
13

UNIDO TECHNOLOGY FORESIGHT MANUAL Volume 1

Towards the end of the 1960s, Japan decided that technology forecasting represented a potentially useful policy tool and a team was sent to the United States to consult with experts. In 1970, the Science and Technology Agency (STA) undertook its first 30-year forecast of the future of S&T. The aim was to construct a holistic overview encompassing all S&T, thus providing decision makers in both public and private sectors with the background intelligence on long-term trends needed for broad direction setting. Several thousand experts from industry, universities and government organizations were surveyed (using a Delphi questionnaire) about possible innovations or technological developments, when they were likely to occur, their importance and the probable constraints on their realization. The results from the first round of the survey were synthesized and fed back to the same experts who in the second round of the Delphi exercise were given an opportunity to confirm or modify their views. These 30-year forecasts have since been repeated approximately every five years. The results from these surveys are seen as having two main uses: (a) compiling background data for research and development (R&D) planning, in particular providing an overview of longer-term technological trends and identifying important emerging technologies; and (b) monitoring current S&T, including the level of current Japanese R&D activities in relation to those in other countries, highlighting areas where there is an emerging need for international collaboration, and identifying factors constraining technological development. The results have formed one of the inputs to decisions by

In the Technology Foresight process the participants develop consensus on research priorities, creating a shared vision of the future they would like to achieve. The process is concerned with constructing a desirable but achievable long term future for the country and with identifying the critical strategic decisions which must be taken now to make the achievement of this vision more probable. Technology Foresight is ambitious. Ultimately, it is about creating a change in mindset regarding the way a country approaches the future. European Union, in its efforts to become a unified territory, is looking for a different technological foresight, including all the member states. One condition for the Lisbon agenda to be realised is the emergence of European centres of excellence with a high level of visibility, open at international level and which will attract the best researchers from all countries. This is essential to strengthen Europe's role on the world technology scene and in research initiatives on global issues. The Union must help to create such centers by boosting excellence through support for collaboration and competition at European level14. It is questionable if a task force on either a national or international level is able to determine the future technologies. The argumentation is based on the global character of technological and basic research, together with the globalization of the enterprises. For example, many US
the Council for Science and Technology of Japan on future government S&T policy. They also represent background intelligence for other government ministries and for industry. A few years ago, Japans National Institute of Science and Technology Policy (NISTEP) carried out a survey of companies to assess how much use they made of the results from the fourth Delphi exercise. Out of nearly 250 respondents, 59 per cent considered the results very important and a further 36 per cent judged them worthwhile. The main uses of the STA results include planning for R&D and business projects (72 per cent), analysing medium-term technological trends (61 per cent) and analysis of the specific content of the topics surveyed (60 per cent). NISTEP also assessed the accuracy of the results from the first Delphi survey in 1970. They found that 64 per cent of topics had been fully or partially realized in the intervening 20 years. Given the long time-horizon and the fact that this was the first Delphi survey in Japan, these figures are particularly encouraging. Where the forecasts had proved inaccurate, this was often not so much in relation to technological developments but as a result of subsequent political or social changes. Three points should be stressed regarding Japan. First, the Japanese recognize that the main value from foresight is often not so much the direct outputs (forecasts, and subsequent policies based upon them) but the process benefits of foresight. These process benefits can be summarized as the five Cscommunication, concentration on the longer term, coordination, consensus, and commitment. Second, the STA surveys constitute just one of a wide range of foresight activities in Japan. Third, most of the other foresight exercises use techniques other than Delphi surveys, such as expert panels, brainstorming, scenarios, commissioned studies from consultants and so on. For example, the Ministry of Economy, Trade and Industry (METI) periodically produces 10-year visions as well as organizing numerous other foresight efforts. At the next level down (meso-level foresight), industrial associations and informal ad hoc groupings of companies perform or commission a variety of foresight exercises for specific industrial or technological sectors. Finally, a lot of micro-level foresight is carried out within individual firms, with the major science-based companies devoting considerable effort to forecasts specific to particular product ranges or processes.

14

http://cordis.europa.eu/foresight/reports.htm

companies are outsourcing research to Indian universities and research institutes. A contrario, it is stressed that there must be research direction in each country, supported by the funds distribution, so that the sectors showing some degree of success, would be facilitated to improve itself. Others observe that such a technological foresight is only applicable to countries with large companies, either national or multinationals operating in them, because it is useless to support research which is not being transformed into national revenue, through the profits of the enterprises implementing the research results. There is still a question to be answered: Are small countries transferring money from their taxpayers, financing research which is not implemented on its territory, but in other countries where large corporations operate? Such an opinion is supported by the foresight implementation in countries like Japan, where it has first been attempted, because of the automotive industry, which expressed the necessity to compete with the European industries and start selling in the biggest markets of all, which is the United States and Canada. The result has been positive and now most of the cars sold in the US are Japanese. After the cold war and the associated star war, the US policy makers have turned to technology foresight as a method of channelling research from Universities to the industry, without passing through the defence funded research projects. Differently than in other countries, in US and Canada research is being funded directly by the industry and only by a marginal public contribution. In the European context we see a great difference between the North and the South, with exceptions only of France and Italy. It is not amazing that the same situation exists also in the Former Eastern European Countries. The Netherlands15, Sweden and UK, support such an opinion, because in
TF in the Netherlands has taken a different form from that in other European countries. Among its characteristics are a high degree of decentralization, the use of a range of methods (although not Delphi surveys), close integration with existing policy processes and structures, and a focus on specific fields (as opposed to the holistic foresight exercises of the three large European countries). Technology foresight also has a longer history in the Netherlands than in Germany or the United Kingdom. It had its origins in attempts during the 1970s to examine and strengthen the relationship between science and society. Since 1980, the sector councils (for agriculture, environment and health) have carried out various foresight activities. In the 1990s the foresight steering committee assumed responsibility for coordinating these activities. The Ministry of Economic Affairs began to carry out TF in 1990. Rather than looking at the whole of technology, these exercises were based on a few critical technologies. Three fields were analysed in 1990 (e.g. chip cards) and another three in 1992 (e.g. signal processing). The objectives were to produce an input to technology policy, to provide small and medium enterprises (SMEs) with an early warning of opportunities and threats, and to create networks. There were four main steps in the foresight process: (a) consultation to draw up a short list of technologies to be examined: (b) analysis to identify the key players, potential bottlenecks and opportunities: (c) a strategic conference to bring together the stakeholders, to test the preliminary results, to create consensus and to generate commitment to implementing the results; and (d) follow-up (e.g. launching a pilot project or creating a new institute). For each field, consultants produced reports on how the technology might be exploited, in particular by SMEs. A range of mechanisms was used to implement the results including the creation of networks, improvements to the knowledge infrastructure,
15

these countries we see both large corporations and multinationals (Philips in the Netherlands, Bofords and Volvo in Sweden, many to name in UK). The exception of France and Italy is probably given to the fact that they have a successful automotive industry, but not only; they are also hosting pharmaceutical multinational companies, they are the centre of cosmetics, home appliances, ICT equipment and several others, to encounter them among the G8. The miracle of Ireland is said to have two explanations: The first is that a strategic plan has patently been implemented, starting with education, moving to research, sending abroad the skilful scientists and researchers and only then starting to attract multinationals, thus bringing back the scientists to support them, with not just their academic but also work experience, while the second one is limited to the University and Research language, which is English. It is not just those who are not Irish who believe that their language is English. Even the Irish speak Gaelic only at home, in the shopping market and in the pubs16. In the countries of southern Europe, like Portugal, Spain and Greece, as well as the new member states, with a disruption of industrial development they were having around the beginning of the world war II, having an insisting different technological environment coincides with the political turbulences which occurred for about the same period. It is probably the common denominator, which is Democracy. The answer to the question; is it market economy to build solid democratic institutions or vice versa? This stays beyond the purposes of this lectures.
new training courses and publications. SMEs were the main target group, but the problem here is that the most innovative SMEs are generally already aware of the new technology, while less innovative ones tend not to be involved in the foresight process nor to be very influenced by the results. In order to evaluate the effectiveness of the first exercise, a questionnaire was sent two years later to participants. Of these, 75 per cent had found the information generated very valuable, and a similar number had made new contacts as a result of participating. In addition, 60 per cent had taken follow-up action (e.g. developing a new product). A number of lessons emerge from these exercises. First, they require much effort and the follow-up activities take a lot of time to organize, largely because of the need to identify a product champion responsible for implementing the results. Second, because SMEs are such an important component of Netherlands industry, it is vital to involve them, yet there are considerable difficulties in doing so because of the wide range in their technological and innovative capabilities. Third, the choice of foresight methodology depends on the objectivesan approach appropriate for identifying resource allocation priorities may be ineffective at stimulating companies to take advantage of the economic opportunities. The Ministry of Education and Science also became involved in foresight, setting up a foresight steering committee in 1992. It had two tasks: (a) to initiate, support and coordinate foresight exercises; and (b) to provide advice to the Ministry on options for S&T policy. Among the areas in which foresight exercises were initiated were chemistry, transport and infrastructure, agriculture, energy, nanotechnology, informatics, educational research, legal research, economic research, social sciences, and health. The methodology normally involved a preliminary selection of topics based on an overview of the committee members and requests from outside organizations.

16

This does not refer to Northern Ireland, which is a part of the United Kingdom and it is expected to speak English

John Nashbit17 seems to be the first to predict the future evolution of technology as a central component of the global economy. In fact he sets the evolution roots to the transportation and communication technologies development. Although Internet had not been invented yet, the author had quite a clear view about the future technological advancements. He truly had a vision and most of what he predicted have happened! What remained as a constant, after his own foresight, is the involvement of Information Technology in all other technologies, sciences and professions. It seems that this will never change! In the 90ies, the European Commission launched two programs resembling the Technological Foresight, the Regional Technology Plans and the Regional Innovation Strategy. Both gave little or no significant results at all, although the deliverables and the reports had been excellent. The problem with Technological Foresight or any similar activities, is that there must be a balanced distribution of power between public and private participants and also between researchers and industrialists. The question remains; is it the industrialists who show the research objectives, or the researchers to create the industrial awareness? Unfortunately, there is hardly any report on failure stories, only success is reported. Even failures are being disguised to successes! What is being discussed behind the publicity lights may be displayed as: Industries in less developed countries are following the mainstream set by the G8 industries and rarely innovate. Representatives from industry and research aim to increase public funding of research and innovation, acting rather as a lobby. The research community is oriented to basic, rather than applied research. Low tech research18 and applications are overseen by all parties involved. There is little or no cooperation between academia and business. Researchers are not participating in the industrial daily functions and the industry is not assigning tasks, be them research, design, study or prototyping.

A critical feature in setting up a Foresight process is to define the aim since this determines the nature of the linkage with the decision-making process. Six possible aims are :

17

Megatrends: Ten New Directions Transforming Our Lives, Grand Central Publishing, 1982

18

Fashion, education, management, tourism, agriculture and arts are the most commonly set aside sectors.

direction setting - broad guidelines in science policy and the development of an agenda of options; determining priorities - an important aim of Foresight and the driving force in many of the documented country exercises against a background of resources restraint and increasing demands from researchers; anticipatory intelligence - identification of emerging trends with major implications for future decision making; consensus generation - promotion of greater agreement among scientists, funding agencies and stakeholders on identified needs or opportunities; advocacy - promotion of policy decisions in line with preferences of specific stakeholders in the R&D system; communication and education promotion of internal communication within the scientific community, promotion of external communications with users of research and wider education of the general public, politicians and bureaucrats.

There are, thus a number of activities, that can be gathered up loosely under the term Foresight, some relatively old, others quite recent in origin. There has been a widespread view that the economic, institutional and cultural context of different countries should influence the choice between national approaches and thus different countries have favored different techniques. In tackling multi-country Foresight the challenge is to strike a balance between the differing needs, opportunities and capabilities of the countries involved. Technological Foresight has to be seen as a long term forecast of the future technology. This is only achievable if all parties involved in this futurology is overlapping with the others.

Image 6 Is such a combination possible?

If you can imagine of participants being significant shareholders of a technology driven company who belong to the academic staff of a University, they have a seat on the board of directors of a financial institute and they are influencing the policy of a governing party, it is not difficult to find many. Whoever they are, they are the only ones to have an unbiased view of the technological future. A couple of French researchers, after investigating 7.000 companies, concluded that most of the French technology driven companies avoid the vicinity to Universities and Research Centers! Is this comparable with Silicon Valley California?

1.10.Transforming discoveries into products or services


Whatever the findings of research, if they are not transformed into products, services or methods, there is no sustainability of the system, while the interest will cease. To keep on doing so, a series of contributing entities should participate positively: There must be a distribution chain wishing to deliver it, a production unit wishing to manufacture it, a management unit to adopt it, financiers to put believe and put money in it, public authorities to accept it as a permitted item, trade union leaders to identify benefits, civil unions convinced not to oppose to it, journalists to promote it, other journalists to be tranquilized with their suspicions, political organizations (not the parties), Non Government Organizations (which NGO to mention first) and a company leadership to speculate in it. It all seems confusing, uncertain and complicated. Looking at it from another light source, what we see is that it is:

Simple, because each component has a clear and MEASURABLE reaction. Clear, because all components are bound by participating rules and so are their possible reactions. Not sophisticated, because there is a linear evolution of such influential forces. For example, the enterprises are adopting innovation when they can predict profits and they devote infrastructure and manpower, accordingly. Proving that the adoption of an innovation will create profits, using the routine procedures (a Business Plan may be one) and they will adopt it. Certain, especially because one enterprise will first adopt it, despite how many other will be contacted first.

The question still remains; if it is so, why some territories stay behind, while others develop? Dont they use the same tools? Most of them represent a good practice in this regard19. As a sublime mindset, technology potential is a superset of a network of systems, including, at the highest level, the Universities and Research Institutes, the Industries, the Financial Institutions and the policy makers, accompanied by an economically prosperous environment and democratically functioning institutions. The answer to the question if the technological evolution is predictable, is the same with a question to an oracle teller; his / her answer is probably the same with Pythia20: To war you will go, you will return not died in war!

1.11.Evolution scenarios
The same old story, over and over again. This generation will never learn! Everyone is expecting that whatever is known will continue evolving at the same pace to the same direction. Stock exchange speculators (not professional brokers, ordinary people who think that with a small amount of money and limited information will subtract money from the colossal trust funds who are dealing the cards) by simply thinking that the increment of the price of a share (or bond) will continue next day, until they see it falling and panic. Straight lines do not exist in the real world. A straight line is a human invention, so as to simplify human thinking. The cause effect correlation has been demonstrated as a fundament of logic and logical thinking. Mathematicians, later on, described the cause effect correlations as functions, initially as linear, then after as curves. As mathematics were

19

OECD presents Pakistan, UN represents Uganda and Mozambique; ever thought that they are technology and knowledge based economies?
20

Pythia was a virgin oracle teller at the Sanctuary of Apollo in Delphi. Sitting on a tripod she was inhaling earth vapors and probably dizzy or intoxicated, she was delivering ambiguous answers to banal questions.

facing more complicated problems, they started representing reality with curves. Yet, in order to test the integrity of their syllogisms, they examine the curves as tiny straight lines21. Trying to predict the future we are straightening the curves and so all the conditions are satisfied. There is still a wavy evolution while it may still be seen as many-to-many set of relations, while it can keep on The question should be concentrated to the needs and desires of people in the future, as consumers, citizens, workers, family members, financial operators and cultural promoters. The answers to the questions start with the demographic structure of the future, not just of country or a group of countries (like EU), but the whole of the globe. For example, the demographic structure of China and India, influence the relative structure of US and Canada. By simply observing the people in the streets of Toronto, one can understand that in such a future of 15-20 years ahead, the Chinese population of Canada is about to be in vast majority of Chinese origin. It is scientifically feasible to forecast the population pyramid of a future of 20-30 years. But what about the sociocultural environment? What is going to happen with religious movements? What king of families are going to form the future societies? How far will criminality tolerance affect the democratic institutions? What is going to be the criminality rate in a globalized future society? National pride? Ethnic aggressiveness? Terrorism? The political system? The freedom of trade? All those sociocultural elements are affecting the consumption habits in an unknown unpredictable direction, because it is many-to-many relation of an unpredictable number of independent variables, despite the finite number of the dependent and their precise description. Consumption is demand and the response to the demand is production of goods and services. The need of the enterprises to create products and services that satisfy the consumers (without overseeing the structure and management of the enterprises, in that matter) is creating the necessity for research for goods and services and is the driving force for basic or scientific research. Aesthetics is another hot issue which is affecting how we see beauty. Beauty is more important to life than we may thing about. The way people see beauty changes the pricing of goods and services at such an extent that goods and services satisfying the same desires, vary so much in price that they seem to be different products or services.

21

Professor Jacques Guenot of the Universita della Calabria, keeps on saying that mathematic science is a categorization of syllogisms, although professor Anastassios Baluktsis of the TEI of Serres, objects that mathematic is a tool of modeling the real world, my personal opinion is that they are both covering the issue; the first is open to a future world, as fruit of imagination and the second is the

On the other hand, we need a method of forecasting the technological development whatever the uncertainty of the outcome, which will produce a document as a strategic guidelines advisory instrument to every interested person or institution. There are two methods of work; scenarios and Delphi. Scenario writing: A process of creating future visions or constructing pictures of possible futures. The scenario writing method portrays a path away from the present to some hypothetical future state and generally results in options for policy. Delphi technique The Delphi method consists of a survey conducted in two or more rounds and provides the participants in the second round with the results of the first so that they can alter the original assessments if they want toor stick to their previous opinion. Nobody loses face because the survey is done anonymously using a questionnaire (the first Delphis were panels). It is commonly assumed that the method makes better use of group interaction (Rowe et. al., 1991, Hder/Hder 1995) whereby the questionnaire is the medium of interaction (Martino, 1983). The Delphi method is especially useful for long-range forecasting (20 to 30 years), as expert opinions are the only source of information available. Meanwhile, the communication effect of Delphi studies and therefore the value of the process as such is also acknowledged. During the last 10 years, the Delphi method was used more often especially for national science and technology foresight. Some modifications and methodological improvements have been made; nevertheless, one has to be aware of the strengths and weaknesses of the

method so that it cannot be applied in every case. It is useful foran assessment of new things to come and in cases that can be explained very shortly. This means for complex themes it is better to use other methodologies such as scenarios and to take into account what Delphi results can provide as single information pieces. Thus, Delphi studies were mainly applied in science, technology and educational contexts, but one can think of different occasions. Delphi studies are rather complex procedures and require some resources depending on the breadth of the study planned. Delphi studies are processes that include preparation, a survey in two or more rounds and some analyses and application (implementation) when the survey is finished. The Bayesian model is not a technique to facilitate the construction of future scenarios, but one which allows us to understand which of the possible future scenarios will become a reality, based on observed evidence. It is a powerful tool for anticipating tendencies in a specifically determined scenario. The technique serves as a deci-sion-making support tool that alerts us to what might occur in the future. The technique involves the following steps: 1. Formulate the possible scenarios in the established time horizon for the TF study. This is usually done verbally, with a description of what may occur. Such scenarios must be mutually exclusivethat is, the occurrence of one scenario necessarily implies non-occurrence of the other scenarios that have been introduced. The other requirement is exhaustivenessthat is, the formulated scenarios must conform to the spectrum of everything which might possibly happen; 2. Assign the a priori or initial probabilities of each scenario in relation to the information available at the time the exercise is initiated; 3. Register the events which start to occur, i.e. those events constituting observable evidence; 4. Adjust estimates of the probability of occurrence of each scenario, based on observed evidence. These are known as revised probabilities; 5. Graph the results obtained in order to visualize the tendencies of probability of occurrence in every one of the scenarios. Although the calculation of the revised probabilities involves rather complicated formulas, software tools actually make the application very simple. The formula for the calculation of the revised probabilities of each scenario is the following:

Technology foresight approaches are being developed which bridge the gap between high level national programs and discrete technology forecasting techniques. Carried out by companies in a project-team environment, such approaches assist in the formulation of make or buy strategy by helping to develop a better understanding of the impact of future technology.

1.12.Technological trends
It would really be irresponsible to make previsions about the future technologies, although there is a slight possibility to do so, if the current tendency continues. The influential framework is strongly governed by the industry finance of research in the American (US and Canadian) Universities, as well as the planned research expenses of the enterprises with proprietary research (like IBM, Microsoft, SAP etc.), at least as they have been made public. Keeping in mind that a similar picture showing the future trends in UK and Ireland, it is the Scandinavian counties to examine as a strong vector of research finance and achievements, while in Japan, Korea and the other Asian countries the situation is at a great degree following those of US, because both the enterprises and the Universities are in a close cooperation. The unknown parameter which may disturb any known tendency, as a projection of the past, as corrected by the industry and University

directions and financial background, comes from the very big markets of both consumers and financial potential, which are China and India, without forgetting Russia and Ukraine. There is not even a clue about the directions that the colossal financial institutions of these countries will show to the Universities, as an instrument to become successful in a market, whose evolution is still uncovered, while China is still a very new market for the international competition. Uncorrelated events, like the Olympic Games in Peking, may press the policy makers to open their market to the international competition or move to the opposite direction, bringing back the economic isolation. For such enormous countries any study about their future political situation is speculative because there no way to lead them to the desired position. They are so big and powerful that they may change the world as we know it, if they decide to participate the free trade agreements and start playing at the international Stock Markets. If they do, they are able to get the majority in each leading industry and change their orientations. Be it speculative or just an interpretation of published and personal observations, the expected technological future is attempted to be displayed, in the most common sectors, as most documents of different countries and the EU categorize. Some will be descriptive, some others just named. It would take too many pages, just to give a small fraction.

1.12.1.Biotechnology
In addition to the National Foresight Strategic Plans, an observation of the number of industries created or getting involve in, Biotechnology will continue to develop, especially as an exploitation of the cartography of the genome, not just the human.

Image 7 DNA cartography

The tendency is to move from drugs (ranging from pesticides to insulin) to genetic rehabilitation, in replacement of the genetic modification, so as to help health care and wealth increment. There is a lot of research, driven both by the interest of the researchers, the industries and the governments, to the following mainstream items: Bioprocessing Technology (think of bacteria extracting gold from minerals).

Monoclonal Antibodies (think of antibiotics replacement with the reproduction of the already existing antibodies in an organism, human, animal or even vegetable). Cell Culture (think of the regeneration of missing organs). Recombinant DNA Technology (think of rehabilitation degenerating genetic structure of a body). Cloning (think of a missing article regeneration). Protein Engineering (think of proteins as the elementary substance of every form of life). Biosensors (think of ways to know the condition not only the health of a living organism, as a diagnostic tool). Nanobiotechnology (think of downscaled biomaterial producing devices, introduced in living organisms). Microarrays (think of a set of combined technologies as collaborative components). of a

1.12.2.Nanotechnology
We think of nanotechnology as invisible by naked eye items. This may be the case of microbiology and other sciences who are working with a microscope. Nanotechnology refers to nanometer dimension human structures. Yes, they may be visible by through a strong (or electronic) microscope, but not every tiny existence is referred to as nano, just because its size. We are still using micro as an adjective of computers. This is because of the scale of the width of the lines on a printed circuit. Nowadays, this scale is moving to a nano-scale, this is why computers are becoming faster and faster. Think of it as an effect of Ohms law. Electric resistance is relative to the length of a wire (and the material it is made of). The shorter the distance the lower the resistance and thus the lower the heat produced, which in return increases resistance and so on.

Sometimes we do not even realize that something is nano technology, because the technology used to make it was not driven by nano-thinking, but a posteriori haves proven to belong to it22. Already from the times of Democritus, mankind is trying to tame the atoms and the molecules. Technology is not able to do it yet, but this is the direction nano-thinking is aiming towards23. Who knows if it is possible to really see an atom? On one hand it is impossible, because the structure of lenses is constituted by material and it is said that it is the limit, because even lenses are constituted by molecules (who are constituted by atoms), thus filtering the image. On the other hand, is it possible to predict an alternative to light method of seeing things? It only needs a vision of a researcher.

Images 8 -UAlbany: Teaching nanotechnology On the bottom line, nanotechnology is a technological thrive for instruments who will be able to act and be monitored on nanometer scales, more and more approaching the molecular size24. Nanotechnology is not just miniaturization. The physical behavior of substances change on such a small scale. Classical physics turn to quanta and photons, gravity is irrelevant and cannot be used as a quality of material.

22

Paschalis Alexandridis, Buffalo University Professor, in his interview by Kathimerini newspaper (June 17, 2007), says: ...car tyres, for example, are nanotechnology achievement, while carbon particles are homogeneously dispersed within rubber, on a nano scale. When they were created, there was no scientific means of understanding what was really created. It was enough to know that it was serving its purpose.
23

Charalabos (Harry) Efstathiadis, University of Albany, says: we are trying to take a walk around what we think an atom is, until we are able to see the real picture of it, by simulating the real image, through cause-effect tests. We are doing it successfully so far, but we have a very long way to go. For the moment we are just downscaling the sizes by up scaling knowledge, through experimentation
24

Vassili Karanassios, University of Waterloo, says: diminishing the scale of action is a thumbnail; reaction id our field of investigation, as a whole picture

Image 9 a chip size

Image 10 Institute Quantum Computing

of

Image 11 Welding with a microscope, in cold

1.12.3.Giga to Nano
During the last 5 years, another aspect of nanotechnology emerged. Scientists and engineers are trying to downscale big devices to a nano scale, serving various purposes, mostly medical. For example, there is a research team of nanotechnology scientists from around the globe, who are trying to make in inductively coupled plasma spectrometer fit in a pill a patient may swallow.

Image 12 - from big ICP to a pill size

1.12.4.Technology of materials
New material is becoming possible to develop, with qualities that have been desired for many years. This has been one more application of the nanotechnology. Think of liquid or even organic computer memory, argyle particles distributed in metallic crystals, carbon fibers, organic solar generators etc.

Image 13 -from design to execution of an organic solar panel

1.12.5.Mechatronics - robotics
In recent years, significant amounts in dollars, euro and yen have been invested, both nationally and internationally, in the development of increasingly advanced robots that can, independently or in interaction with humans, perform increasingly complex tasks and functions. Literature contains many fascinating stories about robots, and robots are often found on the front pages of newspapers and on television. Moving from 2 dimension to 3 dimension design and automated manufacturing, together with cognition and precision, the future inventions include nanotechnology as well.

1.12.6.Metrology
Concern about the standardization of quality, safety, homogeneity, precision and internationalization of measurements, are going to bring in new standards, organizations and certification of every other visionary scientific and business application.

1.12.7.Biomedical Technology
Bloodless surgery (laparoscopic instruments), artificial organs (from liver to vision and hearing devices), diagnostic tools and locomotion. Much of biomedical engineering is connected with nanotechnology and in its turn to Information and Communication Technology.

Image 14 - Is "bionic eye to become a reality?

1.12.8.Green Energy
The Greenhouse effect has moved the whole of the research society. Sustainable development, is also founded on the same principles. But this is not enough to move things forward. The industrialists coupled with the financiers, smell much money and invest in research; in many directions. Here are some:

1.1.1.1.Cell Fuel
The idea is to produce electric power directly from carbon and hydrogen containing substances. Still problematic, but in intensive research. A lot of questions, connected to the usage of hydrogen, concern a new pollution coming from atmospheric nitrogen (remember acid rain issues) and depositing hydrogen, since it passes through all metallic structures.

1.1.1.2.Cold Fusion
Stanley Pons mistakenly presented his invention of hydrogen atoms producing heat, by consuming heavy water, to the press, instead to a Scientific Conference or a sited journal. The scientific society banned the invention. When the dispute will be forgotten, the current research will float again. For the time being the continuation of the research is not being published, but it is going on! Just not in Universities, but in research institutions belonging to oil companies!

1.1.1.3.Solar Energy
Heat and electric power are the targets of the enterprises. Research is examining other possible exploitation of solar energy, like Ultraviolet Radiation, the chimney effect, desalination of sea water, refrigeration etc.

1.1.1.4.Geothermal Energy
In many places there is a crack in the earth surface, bridging the hot magma with the surface waters. The effect is hot water, which may be useful. Ongoing research is trying to make new uses of this energy. Buildings and greenhouses heating has still to face the continuity problem because of the salts blocking the tubes, after temperature is reduced. Another question of researchers is what if we drill when there is no natural crack?

1.1.1.5.Wind Energy
Seems to be a mature technology. Research is concentrated in producing devices with a higher yield degree and smaller dimensions.

1.12.8.1.Waves Energy
There is an enormous energy source, still under exploration. What about the objections of the ecologists?

1.12.8.2.Thunder Energy
Remember Frankenstein? Atmosphere is producing huge amounts of electric power. Researchers (especially in Israel) are looking for ways of bringing this power to a usable form. Knowing that such phenomena are in general unpredictable, the question is still on batteries.

1.1.1.6.Hybrid Energy Sources


Combining all the previously mentioned sources of energy, is another research sector.

1.12.8.3.Waste management
The word is: waste in contaminating. Let us find a way get rid of them. Researchers feel that waste is a source of raw material and energy.

1.12.9.Information and Communication Technology (ICT)


No comments. It is the most attractive for all researchers for cheaper, faster, more efficient and easier.

1.12.10.Economics
Mankind is always seeking to control the main three conflicting parameters: total occupation, high pro-capita revenue and monetary stability. From Karl Marx to Milton Friedman the only noticeable innovation belongs to Schumpeter. Policy and ideologies have driven research to either direction; document political opinions with historic references, or support a political party with scientifically correct interpretation of statistics. Economics are one of the hottest research issues. Most of all because ideological obsession is diminishing and the primary thinking of economics becomes attractive.

1.12.11.Management
Changes in management in the last decade have totally altered the shape of management. From a hierarchical system to a process oriented management, it was a long way, something that happened because of the evolution of the ICT. Enterprise engineering and reengineering will continue their course to exploit all possibilities of ICT, while, on the other hand, the human factor is again a research issue. The expected outcome of this research is to see future management to be more entrepreneurial than process oriented.

1.12.12.Education & Training


In the past it was foreseen that education and training would become personalized and home based. Well, these predictions failed. Research is now oriented to the education systems as human organizations. Radical changes in education will evolve at higher education, where multidisciplinary intercontinental approach is at the microscope of the researchers. The problem with the lack of laboratory tests is being substituted with pilot programs. There is already evidence of a mix of science and humanities. The tendency is not yet clear, but it seems that in the future we will see the abolition of faculties and their replacement with philosophy or market driven (or both) structures.

1.12.13.Chemistry
The most clear vision is in chemistry. Foresight started with chemistry and a clarity of the future has been achieved. Future chemistry will be a mix of physics, electronics and computers.

1.12.14.Environment
There are lots of scenarios about the environment, with predictions of deterioration, pollution and overheating of the earth. This is driving researchers to find ways of cleaning the environment, halt pollution and policy makers to enforce the scientific results. Although there is much research, it did not attract the business interest, yet. It is expected to be so in the future and see the governments as clients of the products of such businesses who will be selling antipollution devices and compounds. Nevertheless, earth is overpopulated and people need more and more energy and energy production is polluting.

1.12.15.Space & Aviation


Much of the pollution is given to airplanes. Much of the research is oriented to the replacement of jet engines with alternative motors. Jet technology is already obsolete. Research is expected to come up with engines using other than kerosene fuel, without risking safety. Space technology is oriented versus the telecommunication, while in the past it was the exploration of space. Most of the research is aiming to the durability of shuttles over time, because space is already a wasteland of old and useless satellites. The tendency is to invent reusable satellites and their common usage.

1.12.16.Logistics
Logistics is seen from many different points of research. The internationalization of the markets, consumer behavior and pollution, are the main routes. From one side, transporters are searching for combined transportation means, seeing in it a faster and cheaper movement of goods, with nodes (warehouses) that are smaller and intelligent. RFID 25 is thought to replace bar code. From another side, highways, ports, airports, railways, logistics centers and oil pipes are absorbing much of the taxpayers money regardless to the expected technological changes in the transportation means (vehicles, vessels etc). In the same time the producers of transportation means are bound by all these investments. In this respect, transportation is still primitive still considering the wheel and floating (on water or in the air) as inevitable. There is no much change expected, because even researchers are delimited by the primary assumption and there is no research finance for an innovative transportation, so there is not much to expect. From yet another side, business logistics absorb much of financed research, aiming to diminish

25

Radio Frequency Identification is still very expensive to be used in cheap products and detailed packaging. Researchers are looking for an alternative to silicon, so that it will become the product marking method of the future.

remaining stock at all participants in the distribution chain. It is much to expect and radical changes to see, in the distribution chain, mostly based on mathematics, statistics and computer controlled goods traceability. There is no revolutionary technology expected improvement of what the last decade invented. to develop. Just

1.13.Fashion
It is only seen as clothing. The past has been characterized by the visionary designers of both clothes and home used items. Next generation is expected to see fashion also in industrial equipment and medical devices, with a scientific (in replacement of spontaneous) use of aesthetics26.

1.14.Tourism
In addition to logistics concern, tourism is a subject of technological research. New technologies, expected to develop, are looking for devices that facilitate the usage of water and risky activities, safeguarding the participants (tourists) good health, maximizing entertainment. Leisure time is absorbing a continuously increasing proportion of the revenue of people. It is obvious that the invention of items that would make a venue more attractive, are absorbing a good part of the business funding of research.

1.15.Agriculture Forestry and Fisheries


Earth overpopulation could not be predicted in the past. Now it is a fact. All these people need to survive and their main source is agriculture, fishing and forestry. Fishing has already exceeded the capacity of the waters. Agriculture needs more water, which is at risk of extinction. More cultivation land is antagonizing the forests. What do we expect? The citizens of the most developed countries are afraid of the problems may appear from the cultivation of species (be them plants, animals, fishes or trees) who are genetically modified. Hungry populations of the less developed countries are expected to have a double effect; bring back the issue of genetically modified mechanics as a way to feed hungry population and in the same time to prove that genetic modification of foodstuff does not affect the humans. Even if the current technology is risky, next technology will be able to select the proper genetic modifications that are safe (or proved not to be, using the state of the art methods) for the consumers. Even if the contrary is ascertained, it is expected that such methods will be placed in action, because policy makers will see an imminent danger of new world wars.
26

Nikolaos Karanassios, Estetica del mercato, Cosenza, 30-4-1999

1.16.Food
Food safety technology is expected to cover all stages of the course of food from the primary producer to the end consumer. The technology under research is covering the quality control and certification. Overseeing the future technology trends, we may see: Interdisciplinary scientific work. Nano research instead of Neutonian routines. Energy concern. Pollution awareness. Business exploitation.

Innovation networks
Innovation is seen as the only successful way to obtain competitive advantage. Global competition is pushing the enterprises to innovate and thus grow. The governments want to increase employment and the revenue of the workers. European Union, as an association of states and as a group of governments, is seeing a gap in total innovation, when compared to other competing countries, like Japan and the US. The European Union lags behind its main industrialized competitors, notably the US and Japan, in the innovation stakes. But the gap is closing, as the latest annual scoreboard demonstrates. That trend should continue this year as the Commission puts in place a nine-point action plan agreed last December to promote innovation throughout the Union, says the vice president of the EU Commission Gnter Verheugen. Two clear themes emerge from the sixth edition of the European Innovation Scoreboard. The first is that the innovation gap between the EU and the US has narrowed for the fourth year in succession. Secondly, national innovation performances within the Union are beginning to converge as new Member States move closer to the EU average. The trends suggest that the reforms within the Unions growth and jobs strategy are beginning to bear fruit as the European economy becomes more innovative. They also reflect the recent economic upturn the continent has enjoyed, which the Commission believes should be used as a further spur towards structural reforms. This snapshot of the state of play of innovation in the EU-25 last year emerges from an analysis of 25 different indicators ranging from the percentage of the population with tertiary education to the number of new patents registered. These are grouped into five main families: innovation drivers, knowledge creation, innovation and entrepreneurship, applications and intellectual property. There is a clear difference between Europe and its competitors and this is that European enterprises are mostly Small and Medium (SMEs), in comparison to the Japanese and US. Europe, in order to improve all these indicators and diminish the gap or even upturn it, as ambitions show, cannot do it by expecting innovation to come out of each and single SME. As a tool for improvement of the rate of innovation generation by SMEs, who for many reasons cannot cooperate, is networking. We limit the reasons to just one; they are competing one another. For more than 20 years the European policy is aiming to the creation of various networks, ranging from information dissemination, to joint research. This has created a problem of multitude and now the Commission is trying to lower the number of networks, in order to decrease their cost and increase their efficiency. Later in this presentation the main networks will be presented.

1.17.Global and regional aspects of innovation


The 2007 Index of Silicon Valley introduces the idea that The World is Spiked meaning that although the global competitive field is flattening1 regions still vary by their relative strengths and weaknesses from which regional specializations and comparative advantage emergecreating spikes in a flat world. The challenge for a region is to recognize their own strengths, identify other regional spikes based on their strengths, and then connects to those spikes for mutual benefit. In addition to a regions own technological and business capacities, its comparative advantage will be determined by its openness toward other regions. Although the openness created through global linkages increases exposure to the turmoil of globalization, it also speeds and expands learning by firms and institutions. The identification of spikes (shown in the above map of global regions) is based on relative rankings in three critical areas: employment in information technology per capita, patents per capita and venture capital per capita. These spikes represent important strengths in the knowledge based economy: talent, ideas and investment27.

The European view is formally expressed, as28:

Panagiotis Tsarchopoulos at 20 April 2007 in Innovative Cities & Regions, Regional Systems of Innovation
28

27

Brussels, 13.9.2006, COM(2006) 502

The main competence to foster innovation often lies at regional level. Regions should therefore be involved in the preparation and implementation of the National Reform Programs, including by developing their own regional innovation strategies. Additional efforts need to be undertaken to facilitate policy learning and the diffusion of good practice across borders. In this respect, the Pro INNO Europe will offer a platform that brings together regional and national policymakers with a view to facilitating trans-national cooperation in areas of common interest. Industrial clusters are an outstanding example of this. As a complementary initiative, the Commission will bring forward proposals to the Member States for a Regions for Economic Change initiative under the new cohesion policy programs. This initiative will bring regions together in networks to develop best practice in key areas such as research and innovation and to encourage the transfer of new ideas into projects to be supported under the programs. Finally, private stakeholders are a vital element of an efficient innovation system and therefore need to be fully involved in political priority setting. Member States are invited to foster, where appropriate, public-private partnerships to better engage the private sector into education, research and finance. There is a long lasting gap between research and technology innovators and the production world in Europe. Although much has been achieved so far, innovation is still an issue of the rather sizable companies, while SMEs the ones expected to innovate at a higher degree, seem to be reluctant. European policy and the alleged financial contribution to innovation creation and adoption improved the comparison with the competing countries, still the concentration in the Northern countries shows that this policy is missing a critical point; the one of brain draining both ways; towards US and Canada and from the South to the North. This may be given to the European tendency to invest on success. Although financial aid distribution, known as cohesion funds is addressed to the less developed regions, the outcome is still very poor. Many writers believe that such a curious effect is driven by the entrepreneurial culture towards innovation and risk taking, others claim that subsidies attract the attention of the entrepreneurs much more than expected profits and they see in subsidies secured revenue. My personal opinion is that the countries of the South have a shorter experience of Democracy and they are not yet ready for a local distribution of subsidies, because electors and candidates are confusing the public offices with favoritism. From a different viewpoint, new technology is being generated in all European member states. It has to be transferred from the place it has been generated to the place it will be used.

1.18.Technology transfer networks


Looking at the past attempts of technology transfer, we will see several bad practices that started with good ideas and ended because they hadnt see the necessity of a critical mass of interested businesses, together with the vital answer to the question what is in there for me?.

1.18.1.The EC-BIC Network (EBN)


What is a BIC? Date of creation: 1984

Support organization, public or private, for innovative small and medium sized businesses (SMEs) and entrepreneurs. Incubator/Business resource center dedicated to Innovation, officially recognized by the European Commission through a certification scheme . Contributing to regional and local economic development through the creation of new innovative SMEs and innovative projects in existing SMEs. Offering a range of integrated strategic guidance for innovative projects. Grouped together within and benefiting of common services and tools provided by EBN (The Association representing the European BIC Network).

What is EBN?

EBN - the European BIC Network - is a non profit making association based in Brussels. EBN offers services aiming at co-ordinating the activities of the BICs, developing and promoting the BIC concept within and outside the European Union. Since its creation in 1984, EBN has grown substantially and there are now 160 BICs (full members) in 21 countries in addition to 70 associate members who share the same objective of SME support and development.
Network of PartnersThere are 42 full and over 20 associate partners supporting the DETECT-it project. The full partners are split up into 7 main groups of partners.

DETECT-it is a European initiative which aims to stimulate the participation of Small and Medium-Sized Enterprises (SMEs) in Research and Technological Development (RTD) activities, in particular within the European Sixth Framework Programme (FP6). The project involves fortytwo partners from sixteen countries and over one thousand SMEs from across Europe. A particularly innovative element of DETECT-it is the participation and support of corporate leaders from the private sector.

DETECT-it is supported within the framework of the Stepping up Economic and Technological Intelligence actions of the Sixth Framework Programme of the European Commission. Objectives The overall objective of the DETECT-it project is to mobilise a network of 30 EC Business Innovation Centre (BIC) incubators to identify and encourage small and medium-sized enterprises (SMEs) to participate in FP6 (sixth framework programme) research. The BIC is the only ECaccredited model for supporting business creation and they also have a mandate to provide innovation services to existing SMEs. The longer term goal of the project is to put in place a sustainable dealflow mechanism to channel the SME clients of the BICs to the appropriate research opportunity using the intermediary mechanism of the relevant NCP. Improving NCP-BIC co-operation is seen as an important outcome of the project. Stimulating corporate-SME co-operation in the R&D area is one of the more innovative objectives of the project and DETECT-it aims to contribute to the development of new approaches in this area. Finally throughout the DETECT-it project, a particular emphasis is placed on the development of regional networking models for RTD support in the NAC countries. Through developing networking with FP6 experts, with corporate players, with financial support instruments and with NCPs and SME support instruments, DETECT-it aims to overcome many of the issues preventing SMEs in NACs and other European countries from participating in FP6 and will support the development of new high-tech start-ups using research results. Strategic sub-objectives Stimulation of an existing network of industrial incubators Establishment of ten clusters of SMEs the support of

- Transregional co-operation between SMEs with corporate mentors and financial support instruments -

Identification of opportunities for SME participation in FP6 Dissemination of results and contribution to policy development

Industry Sectors Targeted DETECT-it aims to stimulate SME participation in research activity in three target industry sectors: ICT Food Quality & Safety Sustainable Environment & Energy

1.18.2.IRC
Innovation Relay Centres (IRC) Date of creation: 1995 Number of countries centres: 71 in 33

Image 15 - The IRC Network

The services and mission of the IRCs is to support innovation and transnational technological co-operation in Europe with a range of specialised business support services. IRC services are primarily targeted at technology-oriented small and medium-sized enterprises (SMEs), but are also available to large companies, research institutes, universities,

technology centres and innovation agencies.


IRC services include:

assistance with technology acquisition and technology marketing; support in identifying suitable partners for technology cooperation; partner matching and technology brokerage events; technology audit and technology watch; help in negotiating technology partnership agreements; access to the results of projects funded through European and national programs, EUREKA and ESA; access to EU innovation financing and intellectual property rights support services. All IRCs are linked by an efficient internet based Business Bulletin System (BBS), so that Technology Offers or Requests can rapidly be conveyed across Europe. A scheme involving mandatory information templates ensures that all necessary details are given in order to facilitate a sensible appraisal of the technology. The system also ensures that only relevant organizations are approached when searching for partners and/or technologies.

EUREKA is a pan-European network for market-oriented, industrial R&D.. EUREKA is committed to enhancing the competitiveness of European industry through the promotion of cross-border, market-oriented innovation. This pan-European intergovernmental initiative was established in 1985 and now enables industry and research institutes from almost 40 countries to collaborate in a bottom-up approach to developing and exploiting innovative products, processes and services. Through its flexible and decentralized network, EUREKA offers project partners rapid access to a wealth of knowledge, skills and expertise across Europe and facilitates access to public and private funding schemes. Over 24 billion euro of public and private funding has been mobilized to support over 2,800 research and development projects involving 13,400 partners, of which 42% are small and medium-sized enterprises (SMEs). A new service within EUREKA is dedicated to research-performing SMEs seeking advice and assistance on private funding, as well as to potential investors wanting to find out more about the appeal of the EUREKA Initiative and its SMEs, with examples of successful projects which have received venture capital funding. The European Business Angel Network (EBAN) gathers at European level national federations of networks and regional networks at with the following objectives: promote the exchange of experiences and good practices promote the role of business angels and their networks near public authorities promote codes of conducts and the professionalization of the industry.

Business angels networks play a crucial role in the matching process between the demand for capital (entrepreneurs) and the offer of capital (business angels). It is a market place for these two economic actors. Business Angel Networks (BAN) can be active at national level, but in most European countries they are active at regional level. They source business angels and entrepreneurs in their regions, and match their projects with regional capital. Networks increasingly implement complementary services with high added value for business angels and entrepreneurs, such as: Business angel academies, aimed at increasing the confidence of potential/new angels in the risk capital market segment;

Investment Readiness programs, through which the quality of demand is enhanced (support for preparation or improvement of business plans, presentation of projects to different types of investors, etc.); Favouring the creation of angel syndicates, which allow to increase the amount invested in one deal to finance bigger projects, and to concentrate and capitalise the offer of management expertise and knowledge of markets; Creation and management of co-investment funds. EBAN is the European association headquartered in Brussels, Belgium. The IRE Network The Innovating Regions in Europe (IRE) network is the joint platform for collaboration and exchange of experience for regions that are developing or implementing regional innovation strategies and schemes. The aim of the network is to give member regions access to new tools, schemes and inter-regional learning opportunities on innovation promotion, in order to improve their ability to boost innovation and competitiveness among regional companies. The IRE network is open to all European regions that are committed to developing their regional innovation systems. The majority of the IRE member regions have undertaken Regional Innovation Strategy projects with support from the European Commission. The IRE network was originally established to support these regions in their work to enhance regional innovation. Through the IRE network, members also have the opportunity to collaborate on subjects of joint interest. ESA Technology Transfer Network (TTN) ESA's Technology Transfer and Promotion Office is supported by an international network of companies specialised in brokerage and in the provision of technical and commercial expertise for space technology exploitation.The initiative aims mainly at transferring technologies developed under the framework of space projects into the civil sector. Composed of 12 nodes, the ESA Technology Transfer Network (TTN) performs the key activities for the Technology Transfer Programme in all ESA member states including Canada. The task of these brokers is basically threefold: to identify technologies with potential for non-space applications of Business Angel Networks

to ascertain the technological needs and requirements of the nonspace sector to match available technologies with the non-space needs and subsequently provide assistance in the transfer process.

The relations between the ESA and IRC Networks have been established for a long time. In November 2002, an agreement was concluded between both networks in order to go deeper into the collaboration. The aim is to create a synergy between both networks, benefiting on the one hand from ESA's high-level technology profiles, and on the other hand from the close contacts with the companies and the high-quality services provided by the IRC Network. Today, the collaboration becomes concrete by transferring ESA TT network technology profiles into the IRC database, giving this way access to these technologies to the whole IRC Network and its customers. The next main steps of the collaboration will aim at automating the data transfer and workflow, and multiply common initiatives like brokerage events on the space theme.

The European Commission (EC) and ESA share a common aim: to strengthen Europe and benefit its citizens. The two organisations are linked by a strong and growing relationship and a Framework Agreement providing the legal basis for cooperation between the two institutions entered into force in May 2004, for a period of four years. ESA is an intergovernmental organisation with no formal organic link to the EC, indeed the two institutions have different Member States and are governed by different rules and procedures. However, in recent years the ties between the two institutions have been reinforced by the increasing role that space plays in strengthening Europes political and economic role, and in supporting European policies. To facilitate relations between the two organisations, ESA set up a liaison office in Brussels, the site of the EC. Raising political awareness The need to reinforce Europes capabilities in space is becoming ever more apparent as Europeans rely on satellites for communication, navigation, monitoring the environment, developing innovative technology and increasing scientific knowledge. Beyond the development of joint initiatives between the two institutions, the EC has a major role to play in heightening political

Image 16 -Guaranteeing European access to space

awareness of space and in ensuring a regulatory framework to support the development of space activities. Increasing cooperation Closer ties and an increase in cooperation between ESA and the EC will bring substantial benefits to Europe by guaranteeing Europes full and unrestricted access to services provided by space systems for its policies, and encouraging the increasing use of space to improve the lives of its citizens.
Image 17 -Galileo constellation

Recent joint initiatives include the European global navigation satellite system called Galileo, as well as the Global Monitoring for Environment and Security services, known as GMES, that was endorsed by ESAs December 2005 Ministerial Council in Berlin. New European dimension In May 2007, 29 European countries unveiled the new European Space Policy, unifying the approach of ESA with those of the individual European Union member states.

Jointly drafted by the European Commission and ESAs Director General, Jean-Jacques Dordain, the European Space Policy sets out a basic vision and strategy for the space sector, and tackles issues like security and defense, access to space and exploration. This approach will better equip Europe for space exploration and bring a new dimension to the EU's international relations. Through this document, the EU, ESA and its Member States all commit to increasing coordination of their activities and programs and to organizing their respective roles relating to space. The NAVOBS PLUS project aims to improve the participation of small and medium-sized enterprises in Research and Technology Development (RTD) activities related to the development of innovative services based on Space infrastructures. is focused in particular on supporting SME participation in RTD activities related to GALILEO, GMES and Space Telecom-based services which is one of the priority research areas of the seventh framework program of the European Commission (EC).
NAVOBS
PLUS

1.18.3.Incubators
An incubator is a building offering space to new, especially innovative, enterprises, who in return pay a relatively low rent, for the startup phase, as well as common services, covering: Guidance and coaching. Common Accounting services.

Common Secretarial services. Common Logistics services. Meeting and conference rooms. Training for entrepreneurs and workers.

When the enterprise becomes stably profitable, usually in three to five years, leaves the incubator and builds proprietary establishments, so that other startups may be hosted. Here are some examples: Hertfordshire (UK)

Bizcaya (ES) in the Bask Region

In Thessaloniki (EL)

collaboration by

GIN has seen rapid growth and many successes since it began. It is providing a vital focus for

supporting innovation encouraging market-led solutions connecting companies to new global markets.

By providing opportunities for partnership, GIN is building on this reputation, providing a route to commercial success. Already, hundreds of companies have joined GIN, where they can access extensive information, find support, and ultimately form a GIN Network.

The National Business Incubation Association (NBIA) is the world's leading organization advancing business incubation and entrepreneurship. It provides thousands of professionals with the information, education, advocacy and networking resources to bring excellence to the process of assisting early-stage companies worldwide. The association is composed primarily of incubator developers and managers, but technology commercialization specialists, educators and business assistance professionals are also well represented. Its mission is to provide training and a clearinghouse for information on incubator management and development issues and on tools for assisting start-up and fledgling firms. Throughout the year, NBIA offers development activities and specialized training to help business assistance professionals create and administer effective incubation programs. NBIA also conducts research, compiles statistics and produces publications that provide hands-on approaches to developing and managing effective programs. In addition, the association tracks relevant legislative initiatives and maintains a speakers' bureau and referral service. It creates partnerships with leading private-sector and public-sector entities to further the interests of the industry and its members. The National Business Incubation Association is a private, nonprofit 501(c)(3) membership organization based in Athens, Ohio (USA). An elected, 15-member voting board of directors representing the world's leading incubators governs the association. NBIA Objectives

Provide information, research and networking resources to help members develop and manage successful business incubation programs Monitor and disseminate information about industry developments, trends and best practices Inform and educate leaders, potential supporters and stakeholders of the significant benefits of business incubation Build public awareness of business incubation as a valuable business development tool Expand capacity to create valuable resources for members and our members members through partnerships Engage and represent all segments of the business incubation industry

1.18.4.Technology Parks

Patras Science Park (PSP) is an active organization established 15 years ago. Today, a remarkable number of new and strong enterprises are operating under the auspices of PSP, most of them are inventors, adepts and users of new technologies, and PSP deserves to look forward in the future with trust and optimism. The strategic target of PSP is to establish an Innovative Business Area in the Region of West Greece, which will be a development and guidance tool for this Region towards the rising innovative economic-productive frame by facilitating additively and alternatively- new economic, productive and business activities in the region. Thus, it aims at contributing essentially to the innovative area prominence.

The Centre for Research and Technology Hellas (CE.R.T.H.) was founded in March 2000, as a legal non-profit entity organized under private law, under the auspices of the General Secretariat for Research and Technology (GSRT), of the Greek Ministry of Development, sited in Thessaloniki Technology Park (TTP) and its structure includes the Central Directorate and five Research Institutes: Chemical Process Engineering Research Institute - C.P.E.R.I Informatics & Telematics Institute - I.T.I. Hellenic Institute of Transport - H.I.T. Institute of Agrobiotechnology - IN.A. Institute for Solid Fuels Technology & Applications - I.S.F.T.A.

CE.R.T.H. has the mission to carry out basic and applied technology-oriented research and to develop new products and services with industrial, economic and social impact, with special emphasis in exploiting research results and in providing services for the R&D support of production process and the financial and social development especially in the fields:

(a) (b)

Chemical & Physical process engineering Information, Telematics and Telecommunications

(c) Agrobiotechnology with emphasis on biotechnological application in the food production cycle and (d) Transportation

(e)

Technology for exploitation of solid fuels and their by-products

1.18.5.B2Europe
From November 24, 2005 SMEs will be able to find their way more easily through the jungle of European services. b2europe alliances, bringing together business support organizations to provide all-inclusive support services for SMEs are being agreed across the EU. Spearheaded by partnerships concluded between Euro Info Centres (EIC) and Innovation Relay Centres (IRC), which will increase cooperation between the two networks, b2europe will make it that much easier for SMEs to expand their business, obtain technologies, and find business partners or funding opportunities. b2europe helps to dispel any confusion among SMEs of where to turn to for assistance in their region. The new regional b2europe alliances will generate a better understanding between regional business support actors, and leverage their services more fully to the benefit of local companies through increased co-operation, sharing of experiences, information and good practice examples, and better targeted referral of clients. In a first wave of regions signing up to b2europe, EICs, IRCs and other organizations will sign a Charter that commits them in partnership to a Code of Conduct guaranteeing highly professional services and full transparency. The alliances will develop ways of making Europe easier for SMEs, for example by setting up regional web site portals consolidating access to all European services and organizing events to create greater awareness of the opportunities offered by the internal market and crossborder collaboration. The partnerships build on b2europe, the Commission initiative to rationalize and streamline EU business support networks. The new partnerships constitute a major step towards establishing an effective one-stop-shop approach to business support for European SMEs, which the Commission sees as essential in boosting grow. There is such an agreement between Sandanski and Serres.

The members are: Euro Info Centre BG806-Sandanski, Anni Simeonova, Manager Business Information and Consulting Centre Sandanski, Zhivko Ivanov, Manager Plenipotentiary European Innovation Centre Bulgaria, Angel Milev, Co-ordinator Chamber of Commerce and Industry Blagoevgrad, Romeo Shatev, President Municipality of Petrich, Velyo Iliev, Mayor. Municipality of Kresna, Valentin Stoichkov, Mayor Municipality of Sandanski, Anton Totev, Mayor. Municipality of Strumyani, Valentin Chilikov, Mayor. EC BIC of Serres, Nikolaos Karanassios, CEO

1.18.6.Euro-Info Centers
The Euro Info Centres provide up-to-date information on European Directives and Regulations, public sector contract opportunities, business opportunities, funding, research and development initiatives and much more. With direct access to the latest information, documents and databases, our specialists will give you all the help you need. Practical, high quality help is always available locally. In most places it was the initiative of the Chambers of Commerce to create the EIC and they all belong in the same network, so as to have a common policy and share information. Established in 1987 the network has over 250 centres across the whole of Europe. Its privileged relationship with the Commission via The Enterprise & Industry Directorate means it can add real value to a company, small or large. More business information is available on the DG Enterprise and Industry website. Being part of "b2Europe", EICs can put you in touch with other expert networks in specific fields.

1.18.7.Gate2Growth
The gate2growth.com portal website is managed and operated by Brabo Ventures of which the trademark is a registered by the European Commission. From 2001 to

2006 the Initiative was supported by the European Commission under its Innovation/SMEs programme. Still today, the online Gate2Growth.com portal aims to support innovative entrepreneurs in Europe as well as to assist Innovation Professionals to improve their capacity to assist entrepreneurs by fostering networking and the exchange of experience and good practice at European level. Among others, these include early stage technology venture capital investors, managers of technology incubators, managers of industrial liaison and technology transfer. Gate2Growth.com thus provides tools, infrastructure and support services directed to innovative entrepreneurs as well as to their supporters.

1.18.8.Pro Inno-Europe
The PRO INNO Europe initiative aims to become the focal point for innovation policy analysis, learning and development in Europe, with the view to learning from the best and contributing to the development of new and better innovation. It combines analysis and benchmarking of national and regional innovation policy performance with support for cooperation of national and regional innovation programs to facilitate transnational policy learning, and incentives for innovation agencies and other innovation stakeholders to implement joint actions. The Network of Innovating Regions in Europe (IRE) provides a platform for the development of Regional Innovation Strategies, the exchange of best practices for regional support to innovation and it develops methodologies to benchmark regional strategies.

1.18.9.Brokers
Brokers appeared as reputable experts in both sides of a transaction, the producer or service provider, on one side and the client, on the other. Although the development of Internet tools tends to interconnect service providers to the clients, brokers are expanding as well. There are several visible reasons that make both sides to prefer the intermediation of a broker than contact directly the provider or the client, in spite of the commissions that increase the cost, for the client, or decrease the income for the seller. After a theoretical analysis of the aspects of brokerage development, considering only undocumented knowledge, we arrived at the conclusion that a survey is necessary. Our survey showed, when services are the brokers item, that some plausible convictions are not considered as important as they are thought to be, while the Small Business management sets quite different priorities. The brokers strategy should follow this first approach. A more extensive research is needed in order to identify the more refined elements of the tools needed as a means of expansion of their work. Internet tool

developers may invent new tools, when they will know better the needs of the users, in advance. While Internet is firmly seen as an intelligent communication system, the work of the brokers is adapting to its evolution, as much as, the tools offer and invention is adapting to the demand for innovative broker services. Globalization makes trade and investment easy around the glob, lifting any barriers. Investors from the other end of the world have to rely on local trusted brokers. Internationally reputable experts would offer services worldwide, but if they start traveling, their expertise becomes obsolete. Brokers are used as intermediaries who know people, faultless local procedures and experts. Internet is used as a communication link, networking investors, companies, traders, researchers and experts. The brokers business is trusted communication, up to the level of undertaking the authority of the contract guarantor without real liabilities, other than his reputation in the market. Maintaining this character, in conjunction with the internet evolution, is the result of our survey, so we propose it as a Strategy. The broker is either a private enterprise or a public entity. His service is to select the appropriate consultants for each one of his clients, in terms of efficiency, effectiveness, cost and availability and recommend. Technology brokers represent a pattern of investigation.

1.18.10.URENIO
The URBAN AND REGIONAL INNOVATION Research Unit (URENIO) is a university laboratory for the promotion of research and supply of scientific and technological services. URENIO is affiliated to the Department of Urban and Regional Planning and Development in the Faculty of Engineering, Aristotle University of Thessaloniki. URENIOs research focuses on territories that base their development on R&D, technological innovation, technologyintensive companies, technology infrastructure, and knowledge and information networks. Central research theme is the cities and regions of innovation including knowledge clusters, technopoles and science parks; regional innovation systems and strategies; digital innovation spaces and intelligent cities. A principal feature of these innovative regions is their capacity to create environments which facilitate innovative behavior by the organizations which are members of this milieu, turning knowledge into new products, disseminating information, building organizational learning, integrating skills, and in the end generating innovations. An intense development of innovative territories, under diverse conditions, is occurring all over the world: in the US technology districts, from Silicon Valley to Florida high-tech corridor, and media valley in New York; in western Europe, from Uusimaa in Finland, Stockholm and Kista in

Sweden, Noord-Brabant in the Netherlands, to Sophia-Antipolis and Rhone-Alpes in south France, Bayern and Baden-Wurttemberg in southern Germany; in the technopoles of Japan; in Asia, from Malaysia and Singapore to Bangalore in India. Such trajectories have rapidly gained ground, constituting the prevailing model of urban and regional development at the beginning of the 21st century, which more and more regions are trying to copy and implement.

Managing risks with technology


Three aspects of risk are examined here: 1. The intrinsic risk in technology and innovation. 2. The risk connected with innovative and technology based business. 3. The risk management, using technology and innovative methods. First of all, risk has to be defined. What is risk, after all? Innovative business ideas, thus becoming business activities after their adoption by the entrepreneurs, are mere hypothesis of: The ability an enterprise and its team of entrepreneurial keypersons (entrepreneurs, engineers, sales persons, technicians and financial managers) to offer a good or service (or a combination of both). That there are enough consumers (individuals or enterprises or distribution chains) convinced that such a good or service (or a combination of both) worth the sacrifice of their revenue, in order to obtain it at a price higher than its direct cost. That enough resources are allocated to the production, promotion, distribution, crediting the clients and collecting the credit. Such a hypothesis is at stake; it may or not verify. A series of questions arise: What is the data on which we can base out predictions? What if an innovation is so revolutionary that there not even an assimilation of previous knowledge or observation? What about the reactions of the competitors, especially those who are selling to the same market niche a similar service or product? It is normal that the same innovative ideas come up to business persons in about the same time. They are all observing the same market. It is most probable many come up with the same answers to the same questions. What if others do the same? Financial markets are trying to differentiate. What happens when other enterprises copy the same items assisted by a privileged financial back-up? These are some of the most common questions that the entrepreneurial team has to answer. More are still to be asked. There are still a series of matters that an entrepreneurial team is facing.

That the entrepreneurial team will dissolve, because of the disappointment, when results are not of the expected level. That the employees will not cope up with the new tasks connected with the innovative product, service or production / management method. That the financial resources allocated to the innovation will not be adequate, while unpredictable difficulties may need more money. That the external resources (technical, subcontracting, consulting, logistical etc.) will not be able to handle new concepts of the product, service, production, management or finance. That the legislative environment will change, as a reaction to the new concepts and the relative authorities enforce new prerequisites for the necessary permits. That there are hidden dangers in the novelty that will prohibit the innovation. That the trade unions will react, fearing that their working privileges are at stake. That the distribution networks will have unpredictable reactions, seeing or fearing that their income will change.

The strategic framework is also examining the following risks29: Quality control failure. Production abandonment. Workers Strike, participating in national revolts. Pricing competition of indirect competitors. Patent infringement. Technology imitation or copying. Design copying. Competitors Research and Development (R&D) advancements. Alternative products / services developed by the competitors. Management team changes, especially when competitors buy them out. Management team attitude versus shareholders.

29

Duke Investments (Atlanta Venture Capital)

Management team compensation motivation, especially when they see that they have to wait long times for a bonus as a proportion of the profits of innovation. Management team succession. It is often observed that the successors change whatever their ancestors started. This is more often observed when the ancestors ideated an innovation. Management team reluctance to acquire new knowledge connected to the innovative technologies. Aging management team. As the age of the management team advances, it is observed a conservative mentality which is justifiable because they see rather a secure pension than a future remuneration. Management response towards competition. When one enterprise presents an innovation or technological breakthrough, even a management style change, other enterprises competing on the same ground or losing market share, because the efficiency of the first enterprise increases, present apparently new approaches and changes, making the competition more fierce. This bears the reacting style to be either offensive or defensive. In either case the response towards the competitors is predictable by them, so they can calculate their own tactics. In the same time, this attitude is misleading, because the enterprise should concentrate in its own market niche and formulate a response each time its market share in the same niche is at stake. Differently, for example, there may start a war of prices, bonuses to the distributors, advertisement or promotion excess, that will damage the whole of the sector. Management response towards risk. This is not referring to the style but to the attitude. Managers tend to be risk takers or risk avoiders. The enterprise itself is a risk taking adventure, but the managers have to take one risk at a time, because differently this becomes a gambling party, rather than business. When, for example, a novelty becomes innovation, the enterprise can calculate the success when managers limit the risk to the innovation and do not add risks by changing the supply chain, the distribution network, the company image etc. by doing so, it is almost impossible to know the impact of the innovation, on one hand, or identify the causes of a failure and correct the parameter which created it.

Image 18 - Aframework to consider Risk and Innovation

The most common overall risks of innovation are presented as follows.

1.19.Risk of failure
Starting an innovation process it is not said that it will conclude by the introduction of the initially ideated product, service or procedure. There is always a possibility to discover that, either the competitors have already introduced something similar, or that the innovation would be better left without implementation, because it may damage the enterprise. This kind of risk is often seen as the risk of error. Whenever an innovation is considered, erroneous presumptions are only proved to be so, after the error has already produced its consequences.

Image 19 - Error treatment as a risk confrontation

Using the previously presented steps, error as a component of failure is treated in early stages, long before the effects of error become irreversible.

1.20.Risk of non- acceptance


An innovation is supposed to attract attention of the clients and obscure the offers of the competitors. While an innovation is expected to be accepted as an improvement of a product / service or management, this may not occur because:

Communication of the improvement may not be clear enough, although attentively prepared. The improvement may be too early (the classical example is Apple Lisa computer, equipped with windows like operation system and a mouse, in 1985!). There may not be an improvement at all, it is all in the imagination of the engineers. There is not such a need, as it has been imagined by the innovators, although the consumers have expressed a desire.

This kind of risk, as representing a probability, cannot be calculated because there are no previous observations.

1.21.Risk of deployment
Implementation of an innovation is risking not to be concluded. Again the probability cannot be estimated because, again, there are not any isolated variables to show the dependency of one variable to another. The reasons of non deployment vary from internal to the enterprise, to scarcity of skillful workers and from lending policy of the banking system, to booming demand of raw material.

1.22.Risk of non profitability


Innovation is aiming to increase profitability of an enterprise. This is not the only possible outcome of the implementation of an innovation. If the innovation is addressed to a different market niche or the changes of the socio-cultural environment move the consumers to different market niches, more resources will be needed to approach these market niches for the same turnover. This kind of risk can be estimated and it is a function of time. The more the introduction of an innovation delays, the more the possibility of radical changes of the environment increases. This risk is manageable.

1.23.Risk of cash break funding


Still another manageable risk is expected. This one is connected with cash break, when the management changes strategy because another product or service is losing market share and in the same time the sector it belongs is declining. Funding shortage is at stake when an innovation is planned to be announced and have as a result the issue of new shares, at least for the listed companies. Stock Exchange conditions, attractiveness of other shares, may prove the timing inappropriate for the new capital. Although risk calculation methods are concentrating at this kind of financial risks, they proved to be inadequate. They can only be fairly

capable of such accuracy in respect of the indices or a sector, not the shares of a particular company.

1.24.Risk of supply chain break


The supply chain is at least twofold. One side is provisions and the other side is delivery to the clients. Risks lurk along the entire length of supply chains, and are as diverse as political instability, exchange rates, carriage capacity, shelf life, and customer demand. Such risks aren't new. In fact, "the underpinnings of problems today started two decades ago," says Craig Holmes, director of business continuity planning for Aon Risk Consultants, Southfield, Mich. But the dangers associated with these risks are now in the forefront of managers' minds. Risk can be viewed as the product of frequency times consequence. That means a high-frequency/low-consequence event, such as the regular fluctuation of currency exchange rates, can be viewed as similar to a lowfrequency/high-consequence event, such as the sinking of a cargo ship laden with critical parts. But depending on the particular company's risk tolerance, such apparently similar risks can have vastly different qualitative effects. "At some level, severe events can lead to insolvency," Harris explains, "whereas low-severity events seldom do. Hence the need for insurance or other methods for transferring or mitigating catastrophic risks." "Slack" in the supply chain refers primarily to inventory. Traditionally, the easiest way of managing supply chain risk, has been through inventory. But "for numerous reasons, inventory became very expensive." Shorter product life cycles contribute to higher expenses, for example, in the personal computer market, where the cost of carrying inventory can run as much as 1 percent of the product's price per week. "The cost of obsolescence has gone up." Supply chain and risk managers regularly work with colleagues in purchasing, logistics, traffic, and other departments. But sorting out the issues involved in mitigating complex risks requires a greater degree of collaboration.

1.25.Risk of non marketability


This is not a frequent event, so that probability of its appearance cannot be calculated. But whatever the efforts and the careful preparation even after the exhaustion of all possible methods, an innovative product, service or method, may still not be marketable and not sell. Large enterprises know that and avoid innovation. When they are in seek of an innovation, they prefer to assign it to a smaller company. Such smaller companies may be spin outs of the same large enterprise, under the form of a team of engineers, marketers and managers who are assisted in creating their own company with the financial participation of the mother company. If the product proves to be non-marketable, this does not injure the mother companys brand names, especially to its resellers.

Another form of risk avoiding policy of the large firms is to assign their own innovation to a small company with the option to buy this company at a price in the future, if the product proves marketable. If it does not sell the large enterprise loses the cost of the development of the innovation and the mandatory small firm the costs of penetration to the market.

1.26.Risk of innovation addiction


Many times managers go too far. In their effort to present a pro innovation culture they tend to adopt without hesitation every idea for innovation. This addiction to innovation brings forward the researchers and some of them need the research for the money, others need patents never to be implemented, because of an aspired academic career and yet others are just too enthusiastic with whatever seems to be a good idea. Continuous innovation cannot build a brand name, because a brand name means stability of an offer, so that the clients know what to expect. Continuously changing products or services do not create faithful clients, the raw material of a brand name. The enterprises addicted to innovation risk to get out of business. Each innovation implementation needs a change of the structure. When changes occur very often, the working environment is obscure, clients do not have a firm point of reference and financiers become reluctant in financing more changes.

Risk management with technology


Modern technology permits risk management because: Information is becoming easily accessible. Information is becoming global, because of the multilingual portals. Information gathering is becoming human activity independent; think of software robots30. An increasing number of enterprises and public authorities is publishing information in the web. An increasing number of researchers is collecting data and publish it in Scientific Journals and the Proceedings of Conferences. Researchers are quantifying qualitative data, so that correlation between various events with qualitative characteristics is examined with effects on quantitative consequences. The power of the computers is increasing in speed, storage capacity and sophistication of software, making possible the research.

30

A robot or agent is a small program gathering information from web sites. Think of Google.

The center of the attention of the researchers and professionals, is at the Stock Exchange Markets. Financial tools are invented every day, from Hedge Funds, to Options, Structured Bonds and innovative intermediations. The idea is to calculate the risks inherent in the placement of institutional funds (like the pension funds, bank deposits etc), in comparison with the premiums, trends of prices, interest rates and the prices of the commodities. Although specialized software is being developed and implemented, the calculation of risk is almost the same by all stock and bond brokers, so that risk calculation became a component of the stock market. Risk calculation is based on data from the past: The frequency an event occurs. The cost of the event, or the impact on stock, securities and bond prices, or the interest rates.

The idea is to: Avoid risk. Reduce the risk. Mitigate risks, consequences. which is a plan to prevent the negative

Retention of risks, which is accepting the risk, after a being sure that if the negative outcome occurs, there is enough asset value to cover it. Transfer risk to another party, which is accepting the risk by paying a premium.

Innovation strategy in small organizations


Most of the literature is referring to large enterprises, usually Multinationals, with well established reputation (at least on the marketplace) with branded products and /or services, while little is being said about the Small and Medium Size Enterprises, not to mention the enterprises with fewer than 10 employees (VSEs). SMEs and VSEs cannot compete with large enterprises in research funding, unless they create clusters, networks, common centers, use the European Union financial opportunities31, collaborate with the 32 Universities and Research Centers and invent other forms of moving toward the Knowledge Economy.

31

Framework Program 7 is allocating EU funds to Research and Innovation for the period 2007-20013.

Here are some strategies an SME or VME can follow.

1.27.Creativity
In each enterprise a creativity unit can be formed, so that the imagination and the ambition of all participants; managers (or proprietors), staff members (if any), technicians and clever workers. This unit is possible in an SME but seems impossible in VSE. Yet, it is possible to create the unit as a time sharing activity. As it has been stated before, it is much easier to see innovations from SMEs and even VSEs, than from large enterprises. It is also difficult to control the creativity of the managers of an SME or the partners of a VME. After one successful innovation the pride of success is shadowing the risks and the entrepreneurs, instead of making money, are showing off their creativity. This facilitates the SMEs and VMEs to keep record of the ideas, but most important to carefully study the impact of the innovation on the overall plans and goals of the enterprise and, above all, to prepare the introduction in the marketplace, avoiding legal, financial, cash flow or other implications.

1.28.Reward and Motivation


The strategy should involve a coherent plan for remuneration of all the parties involved, on a balanced distribution of benefits and the allocation of resources and also the sense of justice. The formulators of the strategic plan (usually the owners) have to conciliate the competing categories involved in innovation creation and implementation and take into account their usual ambitions, by category. The most important categories are: Shareholders (if any), who are seeking increasing value of their shares and increasing dividends. Managers, who are seeking higher wages and social recognition. Employees who are seeking to improve their position, increase their salary and secure their work. External researchers, who are struggling for academic recognition and Patent claims. Collaborating enterprises in research and innovation, who are seeking privileges over their collaborators, either as the first to know the results of research and be the first to implement, or gain a dominating position and lead innovation to their own capacities of implementation.

32

In every University there is a Liaison Office, which can be used as the platform for contacts with University members (professors, researchers, even promising students).

Lawyers, who prepare the contracts in a way that they will end up in Court and so have a second chance to make money over the disputes. Intermediation entities, who want to report results and either rush a research and innovation process, before they are fully documented, in need of red tape to reporting purposes, rather than real results.

Under these conditions, there is no magic recipe to formulate a strategy. It depends on the knowledge of the aspirations of each part involved and assess it with caution.

1.29.Secrecy and confidentiality (non disclosure)


Innovation and the Research performed to this purpose, have to be kept secret, because when it proves promising, larger enterprises will be tempted to intervene for their own riskless profit. The contracts with the potential participants, be them internal to each participating enterprise, or other collaborating enterprises, or even researchers (internal, invited or external), facilitating entities, public authorities, etc, have to contain clauses regulating: The secrecy and confidentiality specifically enumerated. The kind of liability. Economic liability is almost impossible to be imposed, without a Court decision. This takes very long Court times and may even be seen as a cost component for whoever will take advantage of knowing early. Academic, financial and business consequences are much more preventive, while the violators would risk their future. The impartial committee, appointed in advance and formed by representatives of authorities and associations (not persons), who have the competencies to understand the infringement and who will definitely produce a verdict. The transferability of work in course, in case of a Merger or an Acquisition of one of the contributing parts. The owner of a possible patent and the relative Intellectual Property rights, as well as the incorporation of the research or innovation results in other patents. In case the agreement is NOT to go for a patent, it should be explicitly stated that the outcome is NOT public domain and it bounds the parties for a specific time span. There should be an implementation interim period not exceeding 7 years, in which the participating enterprises have the right to claim a commonly exploited patent or implement it without the permission of the collaborating enterprises.

1.30.Patents and Intellectual Property


This kind of issues are under a secular examination. The international society has organized an International Patent Office as a Universal tool for the protection of Intellectual Property, worldwide.

The vast majority of the enterprises and innovators thinks of patenting. For the SMEs, researchers or individual innovators, the intellectual property protection does not require or suggest a patent. Although the patent system is supposed to protect the copying or otherwise infringement of financial and brainpower resources devoted, especially when the interested part is weak (SME, VSE or individual innovator), it turned out to protect only the large enterprises. An SME or VME, unless in exceptions, should protect intellectual property using alternative ways, because: When a patent is replicated by someone in the other end of the world, there must be someone to discover it there. Such infringements are claimed in a Court of Justice, the patent owner should pay Lawyers worldwide to sue the alleged infringers. In cases a large company violates the patent, the owner has to face the Lawyers of such a gigantic corporation. The cost to obtain a global patent means the payment of the national offices in all countries, to examine if this patent already exist elsewhere. Not all countries have signed the agreement, so in some countries one may not even address the Court for infringement.

As an alternative to patenting Intellectual Property, SMEs and VSEs, or clusters, may: Discourage copying, by following the suggestions below: o o o Moderate profit margins, so that copying is not attractive. Base implementation on human skills, delaying the copying procedure for so long that it is not innovative any more. Be always ahead of the copying enterprises with a continuous renovation. In other words, do not implement all your innovative characteristics at one, but gradually, so that whoever in copying you, is always obsolete. Use aesthetics and design to differentiate from the copies. Use quality certification as a tool to safeguard copies from unregulated economies (especially those who have not signed the International Copyright).

o o

Create Economies of Scale, by involving heterogeneous parties (for example a cluster of manufacturers, together with distribution networks, advertisement agencies and raw material provisions) on a contractual ground.

Create a common brand name, an acronym or a trademark, so that copies are only addressed to the low end of consumers / customers. Complicate innovation by mixing management disruption with knowledge and skills, proprietary productive machinery or software, third party accreditation or other innovative cocktails. Advertise.

Using these tactics require a Strategy. Such a Strategy MUST be shared by all parties involved. To do so, all parties have to establish a rhythmical communication and negotiate, until the strategic goals become common.

1.31.Academic Spin Off


Innovators are thought to be Academic Researchers who have discovered a commercial application of their research results. More than 5.000 companies are being created by MIT researchers, even students participating in scientific research, every year and their number is increasing. An old story dating as far back as the 1920s at the Ezra Cornell University. This attitude influenced Harvard and then created the Silicon Valley, moving the west coast. Students, like Steven Jobbs, Steve Wosnieck, Michael (Bill) Gates, Michael Lazaridis and others, have created the contemporary dinosaur size companies, like Apple, Microsoft, Blackberry, etc and others in the Healthcare, too many to even attempt to mention some. An unknown number of professors or graduates involved in academic research, create their own enterprises, after they have tested the feasibility of their inspiration and the marketability of their outcome, when still under the academic institutional regulations. From 1985 the European Institutions are trying to transfer such possibilities to the European environment, with little or no success at all. Almost all of the policy makers of Europe argue that it is the Legislation and allocation of funds to review. Another point of view is that, what is bothering Academic Spin Off flourishing in the EU, may be summarized in: State controlled potential risk of capital, while it is usually accumulated by pension funds and is excusable because the governments protect the third age. Humanities orientation of the Universities in comparison to Engineering (seen as business implementation, either technology, or administrative, legal, even finance, oriented), orientation of analogous institutions in the competing economies (do not forget China), are in a privileged position because of their number (humanity students and their professors are more numerous than science and engineering).

Higher education is a major component of the political competition, especially in Southern Europe (with an exception of the new Balkan members). The orientation of all sides (parents, financial institutions, Universities, Public Authorities and NGOs) is toward the transparency of the operations and the conformity with the demanded red tape, never mind efficiency, effectiveness, profitability and performance. It is common sense that tax payers will take care of all expenses.

1.32.Academic Spin In
Professor Pierro Formica33 proposed34 this term to name the recruitment of academic researchers and assign them with research items while they are still in their academic environment, avoiding their academic bounds to publish the results or even obtain a permission. Obviously the Intellectual Property Rights belong to the financing enterprises, while the cost of the University disappears. Many different forms of cooperation can be invented, depending on the enterprises, their innovation intentions and the character of the Universities. Looking for an implementation of such activities under the guidance of Professor Jacques Guenot, in Southern Europe and North Africa, one thing came to light; there is a missing link between the Academic researchers and the enterprises, although as in a previous chapter, many institutions and networks operate in this sector. The Liaison Offices and the Research Institutes internal to the Universities, are too academic to speak the language of the enterprises. It is the persons to mobilize both sides, the entrepreneurs and the researchers, not the rules neither the institutions. Such persons have to be accepted by the entrepreneurs as: One of them, who is talking business collaboration, not one who is selling consulting or expertise. A negotiator who can represent the enterprise in the academia. A proxy, who does not express a personal view. A catalyst35 who can transform research into wealth producing innovation. A leader who is able to create teams of researchers and moderate their antagonisms.

On the other side, the researchers have to trust the same person, based on:
33

Professor Pierro Formica is the Dean of the University of Tallin and the one of Dubai.

34

Professor Nikos Komninos, from the University of Thessaloniki, seems to agree with such initiatives, as the most probable way to trigger the interest of the SMEs for research of low risk and high expected profit.
35

It is not surprising that an Innovation Network is being called CATALIST!

Her or his understanding of technology and science. Her or his distance from the teams of governing power (of the University). Her or his communication skills.

Would that person be you?