If you have ever read the book “The Medici Effect” by Frans Johansson you know that transformative innovations often occur at the intersection of different fields and industries. Here is one to study with an open business model.
Our association executive friends in Australia are redefining what it means for associations to serve as incubators of business opportunity for their members. Using an open business model strategy the Australian Industry Group (AiGroup) has extended its member value proposition in a completely new way.
Ai Group’s mission taken from their website is as follows:
The Australian Industry Group (Ai Group) is Australia’s leading industry organisation representing 10,000 employers in manufacturing, construction, automotive, telecommunications, IT & call centres, transport, labour hire and other industries. Ai Group’s members operate businesses of all sizes throughout Australia and represent a broad and expanding range of sectors. We provide comprehensive advice and assistance to help members run their businesses more effectively and to become more competitive on a domestic and international level.
The last sentence in this mission offers a clue to its innovation.
AiGroup has established a knowledge exchange program that provides a secure, managed environment for the exchange of information, research and opportunities between firms, universities and government agencies within its member community.
Called InnovationXchange (IXC, a link to the site is located to right) is a commercially neutral, not-for-profit, global knowledge network delivering an Intermediary Service to business and research – a new way to find the connections among member companies. With the advent of the Internet and the free flow of people and ideas around the globe, Intellectual Property (IP) management is a central aspect of the innovation process. But IP laws can also be a barrier to collaborating or doing business.
IXC overcomes these barriers using a network of staff consultants who shuttle among its members operating under a strict code of ethics and confidentiality. Providing a safe environment for the exchange of ideas and cultivation of connections through a stepped disclosure process, their service allows them to safely approach member companies to mine potential partner opportunities within the AiGroup community. Member companies retain full control over when and how corporate proprietary information is shared. IXC facilitates high level, non-confidential connections through Leadership Luncheons, Blue Sky Forums and the Visiting International Fellows Program.
Business Model
IXC provides the following business development opportunities for member organizations:
- Identifies and facilitates new business opportunities
- Provides insight into what R&D, IP, inventions, intentions and technologies are available from other participating organizations to meet each participant’s need for business growth and development
- Avoids duplication of research and facilitates appropriate and cost effective collaboration
- Identifies opportunities in international markets
The knowledge exchange service is managed under strict rules so each organization’s IP and other confidential information is protected. When AiGroup intermediaries identify links between two or more parties who wish to enter into a commercial agreement, IXC uses a staged approach for negotiations so that the companies remain in control of the decision making process.
AiGroup Intermediaries are specially trained and placed within participating firms and public institutions in a particular field, for example biotechnology or ICT. They work to build an appreciation for a participating company member’s R&D, strategy, and new ventures. This uncovers the IP, R&D or business needs as well as any technical and resource capabilities desired.
The end game is to seek and create mutually beneficial commercial outcomes for members that might not otherwise occur on its own.
Example from IXC’s site of a typical service delivery
A pharmaceutical Client developed a new class of drugs which showed great promise in vitro, but encountered difficulties delivering the molecules into the cells. IXC identified a nanotechnology company on the other side of the world working on industrial polymers. An IXC Intermediary visited the company, signed their confidentiality agreement and validated the potential application to drug delivery. IXC Intermediaries facilitated a conference call and a Materials Transfer Agreement ensued. The process was quick, creative and secure. To quote the CEO of the pharma company, “It would be irresponsible to place a monetary value on this opportunity, but it saved us a year of development”.
Model Expands Internationally
The model for deploying IXC Intermediaries internationally is through the licensing of locally-sponsored, independent, not-for-profit IXC organizations forming the InnovationXchange Network. Under the IXC banner, these nationally-based IXCs are supported by IXC Australia with its associated ethics, methodologies and standards and provide unprecedented opportunities for international linkages.
AI Group recently launched an IXC UK (licensed to run through Birmingham University) to serve groups in Europe, South East Asia, North America, South America and the Pacific to grow the network. They claim strong interest for additional licensees in New Zealand, Chile, Canada, Denmark, Malaysia and the United States.
ROI
Within the first 12 months of the service (2004), AiGroup achieved:
- 20 new business opportunities identified
- 11 new business opportunities were delivered
- 28 further opportunities are under investigation
The pilot addresses a $1.5 billion AUD market opportunity according to Ai Group.
Service includes a pay-as-you-go access to its Global Trade Information Services (GTiS) database with 3.5 million suppliers and buyers.
Opportunity for You?
This open business model service adds new member value by connecting business opportunities faster, better and more cost effectively than can occur on one’s own. If you are searching for a means to build deeper member relationships and leverage your internal competencies or perhaps partner with those with such skills, this may be a model for you.
