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 EUCommission via the Digital Ecosystem (DES)to enhance the adoption of European talent,technology and ideas to create global winninginnovation 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 Leader2004 #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 premierglobal networkbased company

GoalsIn-Source 50% ofInnovation

2000 20062002 2004

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

– L.A. Huston

Tide Stainbrush

Kandoo Wipes

Mr. CleanMagicEraser

SwifferDuster

Mr. CleanAutodry

OlayRegenerist

SK-II AirtouchFoundation

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 innetworks of alliances. Indeed, networks havebecome so dominant in the modern societythat they have become an organizational formin 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

New Product Concepts + DisruptiveTechnology + Low Cost Innovation (EE)Europe

Disruptive Concepts + Technology +Entrepreneurship

NorthAmerica

Holistic Product Concepts + ExecutionExcellenceJapan

Intellectual CapitalIndia

Low Cost InnovationChina

Examples of Europe ConnectionsNew foam

Skin wrinkling improvement

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

Novel Enzyme

New Perfume

New Polymer

Open NetworksBrokers and e-R&D Channels

NineSigma

AlibabaInnovationRelay 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 innovationprojects with participating suppliers….”

Benefits to Supplier-Partners

P&G

• Suppliers see more of P&G’stoughest problems

• Suppliers gain additionalopportunities to solve ourneeds

• Suppliers can identify newopportunities for businessgrowth

• Synergy establishes acommon language

• Suppliers can submitunsolicited ideas

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

.

Create a state of the art Pan European Network capability to identifytalents, technologies and ideas to support innovation. P&G is preparedto partner and take an active role with the EU commission and likeminded 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 insuccessful connections.

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

Opportunities for P&G Participationin EU Digital Business Eco-system

Discussion– How does P&G create a presence in the DBE Portal

on which we describe our needs for new innovationsand innovation expertise?

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

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

Opportunities for P&G Participationin 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