Open Innovation in China —
Is it Possible?

Live Audio-Session with:
	Roger Nagel [BIO] Harvey Wagner Professor and Sr. Fellow, CSE and Enterprise Systems Center Lehigh University
	John Tao [BIO] Corporate Director, Technology Partnerships Air Products & Chemicals, Inc.
	Bobby Chen [BIO] Technology Director Asia Air Products & Chemicals, Inc.

As companies push to accelerate innovation, many are pursuing the new open model where ideas are sought and exchanged externally. Through partnerships and other arrangements, companies can generate a steady stream of innovative new products while keeping internal R&D costs under control. At the same time, many firms also turn to Asia for low labor cost – typically for the design and/or manufacture of commodity products.

But now China is emerging as a powerful source of innovation, not just cost control, and R&D executives are asking:

• Can we do more than outsource non-core tasks to China?

• Do we trust that innovation will be two-way?

• Is it possible to jointly create new ideas, technologies and products with partners whose intellectual property practices and culture are so different from our own?

• Is ‘open innovation’ possible in China?

According to a recent survey*, two thirds of Asian executives are set to boost R&D budgets over the next three years to reflect the critical importance of innovation. In addition, 48.15% state that China will have the biggest share of R&D spend, ahead of India (24.07%), US (21.69%) and Europe (20.99%).

Clearly the potential for low-cost innovation in China is growing – though concerns about intellectual property and reciprocal idea-sharing remain.

MRT’s exclusive new audio-session, “Open Innovation in China: Is it Possible?,” will explore the current realities of partnership and innovation opportunities in China as well as the legal, strategic and operational actions you can take to protect IP.

This session features Roger Nagel of Lehigh University, who has helped orchestrate numerous Chinese-US collaborations, Dr. John C. Tao, Corporate Director, Technology Partnerships, Air Products & Chemicals, Inc. (based in the US) and Bobby Chen, Technology Director, Asia, Air Products & Chemicals, Inc. (based in Asia).

Brief presentations will be followed by a Q&A panel in which the following issues will be covered:

• How do you decide whether to jointly create a new product with Asian partners? When does the potential opportunity outweigh the risk?

• If quality has been a concern when outsourcing to China, how can we even think about innovation?

• How do you select ethical, reputable business partners? How do you assess the potential for co-innovation? What’s the best way to conduct due diligence?

• How do you effectively monitor partnerships – especially with geographical, time and language differences?

• What about monitoring individual workers (often the company is trustable but individuals are not)

• What if your idea or patent has already been "stolen?" What are the realities of patent enforcement; are the laws really changing?

Your specific questions and challenges will also be addressed. If you and your team are doing R&D with partners in China – or considering it - this important discussion is not to be missed.

Overall it is an excellent opportunity to listen with others from your organization. Not only will you learn what others are doing, you will have the chance to ask questions and receive advice about your unique challenges.

Invite your whole team to join you - the fee is the same as long as it's on one phone line, just put it on speakerphone!

*Survey conducted by Economist Intelligence Unit for Thomson Scientific polled 165 senior executives in Asia-Pacific (including 37% from China) and was conducted in April-May 2006.

Roger Nagel
Harvey Wagner Professor and
Sr. Fellow, CSE and
Enterprise Systems Center
Lehigh University

Roger N. Nagel is a Senior Fellow in the Enterprise Systems Center at Lehigh University. He is also the Harvey Wagner Professor in the CSE department and the former CEO and Executive Director of the Iacocca Institute. He has been cited by Business Week, Forbes, and Fortune magazine for his visionary efforts as the father of the virtual corporation concept. He is co-author of the widely influential business book, “Agile Competitors and Virtual Organizations: Strategies for Enriching the Customer” and the more recent book “Cooperate to Compete: Building Agile Business Relationships.”

Nagel’s current research centers on the concept of smart business networks and innovation networks, including extensive work with Chinese business leaders as they seek to be world class competitors and participate in global partnerships. He is an honorary professor at Jiaotong University in Xian and teaches in the executive MBA program. On the domestic side, he is collaborating with Henry Chesbrough on the development and application of open Innovation concepts for US companies. He is currently working with Chesbrough to develop executive level and semester long courses for business executives on how to collaborate through open innovation networks.
 

John Tao
Corporate Director,
Technology Partnerships
Air Products & Chemicals, Inc.

Dr. John C. Tao joined Air Products and Chemicals, Inc. in 1974 in the research department of the company's Process Systems Group. He subsequently moved into the engineering area where he assumed program responsibility for some of the company's early energy projects. In 1980 Dr. Tao became general manager of engineering for the company's International Coal Refining Company—a former Air Products joint venture. He subsequently was named director of planning and business development for Stearns-Catalytic World Corporation—a former engineering services subsidiary of Air Products—and in 1986 joined the Corporate Science and Technology Center as a venture manager. Dr. Tao was named director of research and commercial development for the advanced separations department in 1989 and was appointed director of the department in 1991. He became corporate director of environmental, health and safety assurance in 1992 and assumed his current position in December 1994. His responsibilities include management of the corporate Intellectual Asset Management process, Licensing, and external technology, including being the L.P. of a Venture Capital Fund.

Dr. Tao received a B.S. degree in chemical engineering from the Carnegie Institute of Technology; an M.S. degree in chemical engineering from the University of Delaware; and a Ph.D. in chemical engineering from Carnegie-Mellon University. He has authored over 50 papers and holds nine U.S. patents.

H. C. Bobby Chen
Technology Director Asia
Air Products & Chemicals, Inc.

Bobby Chen is Technology Director, Asia, at Air Products and Chemicals, Inc. based in China. Previously he was Group Manager, Advanced Molecules, Corporate Technology and Science Center. Other past experience includes engineering and R&D positions at Occidental Chemical Corporation, Chung-Shan Institute of Science and Technology (Taiwan), and Far Eastern Textile Corporation.

Chen holds a Ph.D. in Chemical Engineering from the University of Rochester (New York) and a B.S. in Industrial Chemistry from National Tsing-Hua University (Taiwan). He is the author of 16 publications and 11 U.S. patents. Recipients of “Publication of the Year”, “Inventor of the Year” and “Most Valuable Professional” awards at Occidental Chemical Corporation.