IAAPS Professor Chris Brace authors article for Automotive World exploring ways to accelerate innovation
One of the leading global automotive industry publications, Automotive World, invited IAAPS academic director, Professor Chris Brace, to look at ways of accelerating the pace of innovation. Chris chose collaboration, a subject at the heart of the IAAPS philosophy. The new IAAPS R&I facility will not only help to facilitate constructive relationships between big and small companies, it will also help to develop the tools needed for global collaboration of all types. The article is available to read here:
Small Innovators can help transform the fortunes of global suppliers, if the success rate can be increased dramatically
Improved techniques for collaboration between large corporations and small innovators will transform the rate at which new technologies can be brought into production, believes Professor Chris Brace. It’s a simple idea, but until now the reality has been rather more challenging.
“When something bad happens,” wrote the children’s author Dr Seus, “you have three choices: you can either let it define you, let it destroy you or you can let it strengthen you.” It’s easy to say, but as we come out of lockdown facing the prospect of an industry-wide recession, how do we resource the product innovations that will be needed to turn talk into reality?
Like the road to digital, an important element of this journey is already on the starting grid. Improved collaboration between the global corporations and the SME innovators is a trend that is underway, driven by uncertain technology roadmaps and the need for Tier 1s to slash in-house R&D costs. But there are too many casualties for this to be a robust strategy as it stands today: success rates must be greatly improved.
The theory is compelling. Take a team of brilliant innovators with astonishing depth of expertise in a potentially valuable new field but no idea how to bring it to a high volume market. Offer them the larger company’s customer relationships, expertise in validation, cost and production engineering, plus their global manufacturing resources and surely you have a perfect solution. So why does it so often fail?
If the corporate partner is simply using the SME as an extension to its own R&D, in a sector where it is already expert – for example, an established ADAS Tier 1 partnering with a range of LiDAR developers – they will usually have the understandings needed to partner effectively. The problems occur, with alarming frequency, when the larger company is using the partnership to transform its product portfolio, for example from transmissions to electrified propulsion. Yet it is these types of relationships that offer the greatest potential to accelerate a Tier 1 into an area of growing demand.
At the heart of the challenge is not just the different cultures of two very different types of business, but an inability to recognise and manage those differences. Innovative companies tend to be run by creative risk takers, always on the commercial edge as they strive passionately for what they believe. Corporate leaders tend to have one eye on the shareholders and the other on careers whose meteoric pace could be brought back to earth by backing the wrong solution. The starting point is an honest discussion of the strengths and weaknesses of both. Keeping them apart is not the solution. Don’t assume that given access to expertise and resources, either side can make it work on their own. The answer is deep collaboration, with a shared mission and genuine sharing of expertise. Each business must be honest about its weaknesses and they must work together at a senior level to create a complete skillset.
“SME’s must remember they are running a business, not an R&D project”
We also need to increase the number of SMEs that are attractive as partners. This doesn’t mean increasing the number of innovators – although that’s also important. The key here is for the innovator to structure its business and its R&D to make itself well suited to this type of collaboration and to not be so focussed on the big idea that it loses sight of the market. The stellar valuations given to some IT start-ups as they develop relationships with the established sector leaders proves the value that can be generated by collaboration. The lesson we need to learn is not how these companies make it work – the big players were often start-ups themselves not long ago, so the cultural challenges are less severe – but that it does work, often with spectacular results. Back on earth in the automotive technology sector, we need to learn that lesson and make it work for us too.