© ABR Innova Oy, 2004 Gulliver in the land of giants? Internationalisation of the r&d of a small enterprise Markku Rajala President, ABR Innova Oy

© ABR Innova Oy, 2004 ABR Innova Oy is a company, which commercialises ideas related to ceramics materials and high-temperature technology. The ideas are developed to products or processes inside ABR and then spinned-off to new companies, who produce the final products. Three companies have been spinned-off and three are under the development stage. ABR Innova Oy

© ABR Innova Oy, 2004 For an innovative, small company the international r&d is the only way to achieve the critical knowledge-mass required for the growth ABR Innova Oy, like most small companies, have to find a niche- area, where the global market size is comparable to the companys revenue, so that the company can be a global market leader. The nicheness means that there are only few experts related to the specific technology area – globally. The company has to find these experts and co-operate with them.

© ABR Innova Oy, 2004 The key force driving the (international) r&d of a small company has to be short-term sales – unless the company is heavily funded. Time-to- market and time-to-profit need to be clearly defined. R&D –people tend to provide excellent technical quality – but seldom in schedule. Time-to-market means nothing to the research organisations – and time-to-profit even less! A small innovation-based company may use more than 30% of its revenue to r&d – and it needs to know that the investment pays back in short time. This is even more important in (more expensive) international r&d.

© ABR Innova Oy, 2004 The internationalisation process is complicated and requires an outstanding network and long- term relationships. Governmental organisations could do much better in helping the SMEs in this area. The organisations do not make the networks work – people do! Networks are created by face-to-face discussions developed by conference calls and organised by s. (International) co-operation is easy, if the motives are same – unfortunately this is seldom true between an SME and a research organisation. Linear process is replaced by parallel process.

© ABR Innova Oy, 2004 RESEARCH DEVELOPMENT PATENTING DESIGN PRODUCTION Happy Days are gone Finnish Academy Tekes Keksintösäätiö SALES Tekes Banks, Finnvera TE-center

© ABR Innova Oy, 2004 ? RESEARCH DEVELOPMENT PATENTING DESIGN PRODUCTION Bad New Days are here

© ABR Innova Oy, 2004 SME clusters can work extremely well in globalising r&d The members (SMEs) of the cluster(s) share the same motive – making business. Requires open, reliable co-operation between the cluster members. Mostly change of information – much silent knowledge.

© ABR Innova Oy, 2004 Multinational r&d programmes (like European programmes) are far too bureaucratic and slow for SMEs

© ABR Innova Oy, 2004 R&D co-operation between SMEs is easy and straightforward – leave the European research money to universities Italian SME Danish Co. US SME INNOVATION PATENTING CONTACTING PARTNERS FEASIBILITY STUDY R&D PILOT-PRODUCTION 6 months to $5-15M market

© ABR Innova Oy, 2004 Intellectual property rights (IPR) are a key issue to a knowledge-based SME. USAs patent policy is superior to the European system and also one of the reasons why US is an attractive place for placing r&d efforts. European patent – never ? Patenting in US is easy – and after filing the patent, co-operation in r&d is much safer.

© ABR Innova Oy, 2004 Thank you!