Musings on R&D and the biggest bang for the buck

Below are some of my musings of R&D which is a mash-up of an i4j discussion with 3 leading thinkers on innovation and the future of work over the past week :- David Bray, Steve Denning and Curt Carlson 

The importance of R&D to survive 

“The best way to predict the future is to invent it”

quote ascribed to Alan Kay

Many firms are not doing enough to deal with the tsunami of disruption - and unless they address those risks and opportunities more assertively, they won’t be around much longer. 

What should an organisation focus on - what R&D should they be doing..... 

If one focuses on the customer and you do things that matter to the customer — that is all you should focus on  — exclusively — whether it is a big or small innovation.  

Should firm only focus on quick wins - or also focus on longer term efforts, and maybe the odd very long shots? 

Curt Carlson - founder SRI - which developed SIRI talks about the 3 Agile tools  of R&D : 

customers, small teams, and networks.

So what is the goal of R&D ?

“It is to deliver meaningful value   to selected stakeholders  - the customer . “

It is not just  to do projects or experiments or agile  “that involves science!”

It is not just about projects and experiments  - they are just tools for creating value. 

So, how can we best create value?  

Value creation is about learning and creating -

Below are the 6 base ingredients  of value creation with r&d and active learning :- 

• Focus on the  customer 

• Focus on the market opportunities,

• Create a framework with the available resources, risks and possible benefits? 

• Ensure a methodology  to collect and sift  the data  - to be moulded collaboratively to create solutions 

• Share the data and work in teams - this is more powerful than working alone

• Rinse and repeat 

 

We are at an exciting stage as we enter “the Nexttech revolution” 

As a consequence of the ubiquitous use of the Internet and Telecoms and R&D - the diffusion of information is happenning faster and cheaper (Murphy’s law ) .

Specifically, the Internet now allows rapid dissemination of ideas and insights globally. 

Knowledge is now a commodity 

This includes scientific papers as well as direct emails, chats, and videos with researchers and organisations. 

Ideas are no longer as geographically bounded as in the past.

What cost a fortune in the past is now available free, fast and in abundance 

An example of the speed of Adoption 

• It took more than 25 years for 50% of US households to adopt the washing machine. 
• Personal computers took about 18 years to be adopted by 50% of households. 
• Cell phones took about 10 years. 
• Tablet devices took about 6 years. 
• Investment in the 4th Revolution 

R&D is not for the faint hearted - and you need deep pockets 

The success of R&D both at a national and organisational level is based on multiple “learning through experimentation” trials – otherwise known as learning from failure – and the result of basic research funding and the strategic patience of R&D spending supported by Governments, Universities and the Private Sector...... and there has been significant investment in R&D by both China $554 billion  the USA $582 billion (in 2018). 

Huawei’s technological capability and the significant investment in 5G - seems to be a “spot on focus” as it is the technology that will drive IoT, Data, VR, AI , 3D printing and self driven cars!!! ie the future !!!  This investment has put Huawei in a strategic position on the word stage - and significant investment is being made in USA to “catch - up”. 

This R&D will increasingly define geopolitical standing.

Government Support in Australia 

Governments have the opportunity via grants and incentives to reward organisations who invest in activities that will enhance the growth and well being of their society.

There are 2 main grants and incentives that are available in Australia - which has hadfantastic success - and which BSI has been helping organisations access over the past 25 years.

⁃ the EMDG programme - the “export market development grant” - that rewards companies who exports by reimbursing 50pc of their overseas marketing spend up to $150k each year. - the Grant has resulted in a 12X ROI - for every $ of Grant made - there has been 12X export revenue from the programme.

⁃ The R&D tax incentive - a tax and cash incentive provided to Organizations who perform R&D -  a company can potentially get up to 40% of the R&D spend back in cash !! the definition has been adjusted over the years to focus on what the government wants to fund.

People will focus on what is being rewarded! 

If it’s core science and base R&D 

- which is what the current definition is - that’s where the energy will be focussed .....

And this is what I want to write about....

Thr biggest bang for the buck and value for Australia and its constituents in my view is to focus on “applied innovation” 

Over the past few years - the current definition “effectively excludes applied innovation including software development and collaborative application of the science.” This is where the bulk of private R&D spending (78%) is - in other words, aimed at commercial success in a two- to three-year timeframe - much of which is excluded by the current definition. 

A great Australian Export - Steve Denning - currently living in the USA and writing for Forbes Magazine and author of “the age of agile” suggests that applied innovation  is more urgent and important than the R&D definition. 

The goal is to create value and enhance organisational capacity in both the public and private sectors  - and turn risk into real opportunity generating massive gains. 

So how  should Australia government support Australian Organisations to enhance value creation? 

How can Australia continue to “punch above its weight?

Clearly by supporting “applied innovation” and including this in the R&D definition. 

 Australian Organisations can compete globally by innovating and collaborating with the relevant institutions - and utilise these technologies to build relevant commercial models - to build customer value and advance our society forward. 

Australia has been known as the most prolific “early adopters of technology” . That is what our skillset is and maybe  that is what  Governments should encourage organisations in the private sector to focus on .

It’s about remixing new device and existing R&D and come up with something better and faster !!

Where is the biggest bang for the buck for Government to invest in organisations with a view to provide best value for its stakeholders? 

Is it better to “partner” with those spending trillions on R&D .... and doing deals for Australia to help commercialise and test these technologies? 

Is it wise to ostracise Chinese 5G because of politics? 

Action points

• Identify what should be rewarded based on value to the nation that creates jobs, increases profits, and uplifts people and communities.

• How do we get the brightest and best to come to Oz

• Develop research alliances across nations with shared values, focus, and professionalism for its research community members .... no need to reinvent the wheel !