Open InnovationOpen Innovation in the Europe Marketplace in the Europe Marketplace

for Mutual Growthfor Mutual Growth

Meeting withFrancesco Nachira

BU29 2/84European Commission DG-INFSO Unit D5 "ICT for Enterprise Networking"

Objective

Discuss approaches for working with the EU Commission via the Digital Ecosystem (DES) to enhance the adoption of European talent, technology and ideas to create global winning innovation with SMEs

Joachim vonHeimburg, Director, P&GMilan Jevtitch, Associate Director, P&GFrancis Bealin, Section Head, P&G

• Brussels, Belgium• Pescara, Pomezia, Italy• Newcastle, UK• Reading, UK • Rusham Park, UK• Schwalbach, Germany• Darmstadt, Germany • Kronberg, Germany

P&G R&D Innovation Centers in EuropeA strong engine for growth

• P&G invests > €1.6 Billion (3.4% of Sales) in R&D• At least a third is invested in Europe (~ 3000 scientists)

• This is matched by at least €1.5 Billion in holistic innovation spending (e.g. design, consumer research, modeling, eng., etc.)

P&G – An Innovation and Brand Leader

2004 #1 Brand Building Company - Forbes2004 #1 Global Innovator - Fortune2005 #2 Global Innovator - Fortune2006 #7 Most Innovative Companies- Business Week

2005 Collaborate with European Union on Open Innovation (Nabil Sakkab at Mr. Busquin’s EU Workshop)

2006 Sharing with Leading Companies at Open Innovation Select Event July Meeting with Commissioner Potočnik

• Ahlstrom• BASF• BMW• BP• BT• Cadbury

• Degussa• DSM• Nokia• Oetker• Philips• Shell

VisionBecome a premier global network based company

GoalsIn-Source 50% of Innovation

2000 20062002 2004

“…52% of our project establishments and in-market initiatives have a significant C+D component!”

– L.A. Huston

Tide Stainbrush

Kandoo Wipes

Mr. Clean Magic Eraser

Swiffer Duster

Mr. Clean Autodry

Olay Regenerist

SK-II Airtouch Foundation

Prilosec OTC

PuR Furnace Filters

C+D Milestone Reached

1

Innovation Mandate

Growth!

Must create growth equivalent to a $4 Billioncompany every year

Importance of Networks

• The economy is no longer a market economy but a network economy.

• Companies are increasingly embedded in networks of alliances. Indeed, networks have become so dominant in the modern society that they have become an organizational form in their own right.

Quote – Pieter De Man (Prof. Org Science – Eindhoven University of Technology, Holland)

Build Innovation Networks

4 Billion/yrNew NOS Generation

9,000 P&G R&D

People

P&G’s Global Innovation Network

China Low Cost Innovation

EuropeNew Product Concepts + Disruptive Technology + Low Cost Innovation (EE)

India Intellectual Capital

JapanHolistic Product Concepts + Execution Excellence

North America

Disruptive Concepts + Technology + Entrepreneurship

Examples of Europe Connections

New foam

Skin wrinkling improvement

P&G has R&D programs with top chemical companies and top Euro university networks (e.g. BASF, Leuven University, etc.)

Novel Enzyme

New Perfume

New Polymer

Open Networks Brokers and e-R&D Channels

NineSigma

AlibabaInnovation Relay Center

YourEncore

•Mutual growth opportunities

•Faster, more cost efficient innovation

• Increased innovation productivity

•Access to the right experts

•Gets to the right solution faster

SynergyA Web-based Network for Innovating with Suppliers

“….we have seen a 30% increase in innovation projects with participating suppliers….”

Benefits to Supplier-Partners

P&G

• Suppliers see more of P&G’s toughest problems

• Suppliers gain additional opportunities to solve our needs

• Suppliers can identify new opportunities for business growth

• Synergy establishes a common language

• Suppliers can submit unsolicited ideas

Theme For Action(Commissioner Potočnik discussion July 6th 2006)

.

Create a state of the art Pan European Network capability to identify talents, technologies and ideas to support innovation. P&G is prepared to partner and take an active role with the EU commission and like minded Euro companies.

• Current EU fragmentation is a barrier to effective connectivity. (How to reach effectively all Euro assets?)

• Where networks have been built, we have seen an increase in successful connections.

• Such network should cover mid-size companies, innovation clusters as well as SMEs.

Opportunities for P&G Participation

in EU Digital Business Eco-systemDiscussion

– How does P&G create a presence in the DBE Portal on which we describe our needs for new innovations and innovation expertise?

– How can P&G leverage the existing transactions and services for matching needs with providers?

– What’s the most natural way to include the EU DBE in our standard Connect+Develop work processes?

Opportunities for P&G Participation in EU Digital Business Eco-system

P&G needs:– Ability to find companies with specific expertise– Matchmaker/Broker functions to link our needs

with qualified providers• Technology• Personal Networking