Innovate or die. That’s a theme many senior executives support. How to keep ahead is the issue. With 2 billion new minds becoming innovation sources for our marketplaces between 1995 and 2010, no one company acting alone can hope to out-innovate every competitor, potential competitor, supplier or external knowledge source around the world.1
But there is hope. Strategically outsourcing innovation — using the most current technologies and management techniques — can put a company in a sustainable leadership position. Leading companies have lowered innovation costs and risks 60% to 90% while similarly decreasing cycle times and leveraging the impact of their internal investments by tens to hundreds of times.2 Strategic management of outsourcing is perhaps the most powerful tool in management, and outsourcing of innovation is its frontier.3
Thinking About Outsourcing
First, consider the pharmaceutical industry, where independent biotechnology research adds 100 gigabytes per day to the databases of the GenBank alone (the National Institutes of Health genetic sequence database, an annotated collection of all publicly available DNA sequences). No company can hope to keep ahead of such an outpouring by itself. Furthermore, at the applied research level, combinatory chemistry (designing, constructing and testing new compounds in vitro at the molecular level) has reduced experimental cycle times by more than... To read the complete article, login or sign-up using the form below.
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