IBM faces three main dilemmas in managing innovation: balancing bottom-up and top-down approaches; focusing on long-term research versus short-term success; and determining how open to be with innovation versus developing proprietary intellectual property. Successfully navigating these tensions is key to innovation success. The document discusses IBM's efforts to balance these dilemmas through collaborative open innovation with partners while still generating patents and intellectual property.

1. © 2014 IBM Corporation
The Dilemmas of Innovation Management
Dr. Matthias Kaiserswerth
Vice President, Europe
IBM Research

2. © 2014 IBM Corporation© 2014 International Business Machines Corporation 2© 2014 International Business Machines Corporation
Brazil
T.J Watson
Almaden
Austin
Ireland
Zurich
Haifa
Africa
India
China Tokyo
Australia
The World is Our Lab
IBM invested
$6.2B on R&D
in 2013
More than 3,000
scientists and
engineers
World's largest
information technology
research organization

3. © 2014 IBM Corporation
IBM Research - Zurich: Big Data Analytics to Atoms
3
!
- 90 collaborative projects
with universities, industrial
partners and governments
- Ultramodern Nanotech
Center opened in 2011
!
- Nobel Prizes (1986/1987)
Big Data
Analytics
Atoms
Cognitive Computing &
Computational Sciences
Industry and Cloud
Solutions
Cloud & Computing
Infrastructure
Science & Technology

4. © 2014 IBM Corporation
Evolution of IBM Research
4
Isolated Research
’50s — ’90s ’90s — ’00s ’00s …
In-world Research,
Smarter Planet Research
Hardware
+ Software & Services + Smarter Planet
Propriety
Innovation
Corporate funding
for business profit
Select
Partnerships
Joint programs with
strategic allies
Client Partners
Partner with key
customers
Collaborative
Innovation
Knowledge-based
economy

5. © 2014 IBM Corporation5
Milestones of our Radical Collaboration with ETH Zurich
1956
1977
2001
2011
2009

6. © 2014 IBM Corporation
What is Innovation?
“Innovation resides at the intersection of
invention and insight, leading to the creation
of social and economic value.”
!
National Innovation Initiative
“Innovation has been and always will be all about
generating new real value. It has more to do with putting
deep insights into problems and challenges—be they
business, government, education, or societal—together
in a unique and facile manner with your knowledge and
technology to unlock hidden value.”
!
Nick Donofrio, IBM Fellow Emeritus

7. © 2014 IBM Corporation
Technology
Trends
Industry
Trends
Social
Trends
Idea
Prototype
Patents
Academic
Papers
Pilot
Deployment /
Productization
Experience Papers
IBM THINK Labs
Research Solution
Centers
Trend Scan
3-10 years out
Research
Acquisitions
Transfer
Licensing
Collaboration
How an Idea Becomes an Innovation at IBM
FOAK

8. © 2014 IBM Corporation
SuperMUC: How an Idea Becomes an Innovation at IBM
Idea
Prototype
Pilot
Deployment /
Productization
Collaboration
ResearchOct 2006
March 2008 - CeBIT
June 2009 -
ETH Zurich
June 2012 -
LRZ - 80M EURO
Supercomputer
FOAK

9. © 2014 IBM Corporation9
Strategic Decision MakersStrategic Decision Makers
Strategic Decision MakersGrass Roots Research Community
Dilemma #1: Top Down vs Bottom Up

10. © 2014 IBM Corporation10
vs.
Dilemma #2: Long-term research vs. short-term success

11. © 2014 IBM Corporation
NumberofPatents
0
1'000
2'000
3'000
4'000
5'000
6'000
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Dilemma #3: Open Innovation vs. Developing Intellectual Property
6,809

12. © 2014 IBM Corporation12
Summary
!
! Collaboration and Open Innovation are essential
! Treasure Wild Ducks
! Success relies on how well you can balance the
three innovation dilemmas
- Bottom Up vs Top Down
- Long Term Research vs Quarterly Profits
- Open Innovation vs Generating IP