Taller, stronger, faster

Luis Solís Professor. IE Business School

4 May 2007

If Spain wants to enhance its competitiveness, its companies, government and universities will need to collaborate and come up with more efficient R&D models.

In science, R&D activities that focus on improving business competitiveness are of growing importance to economies that have to cope with globalisation. Behind this trend lies the growing impact of globalisation on corporate competitiveness and the increasing market segmentation that is emerging in response to the commoditisation of products and services. Not surprisingly, over the last three years, the areas of research, development and innovation have become among the top priorities of senior managers and heads of government.

In Spain, significant progress has been made in recent years to encourage R&D activities through an increase in resources and new research programmes aimed at enhancing the competitiveness of local companies. Nonetheless, the results of these moves have fallen short of market expectations, underscoring the need to continue exploring and developing new mechanisms for improving corporate performance.

Identifying the opportunities in Spain for fomenting corporate R&D requires a deep understanding of the market in which a company competes, not just today but also tomorrow. When carrying out research projects, it is important to remember that, from a business perspective, the market determines the terms and standards used for evaluating the efficiency of R&D activities.

In the Olympic Games of business, the time allowed for training and then winning a gold medal isn’t the four years of the Olympic Games of sports but rather a much shorter period—often as little as a few months or even weeks. That’s why it is vital to focus R&D efforts on the way research is carried out and not just on its results. Just as in the Olympic Games, where the best athlete is the fastest, the strongest or the best jumper, in R&D it is also necessary to be faster, more efficient (operate at a lower cost) and more effective if the odds for success are to improve.

To increase business use of R&D, some countries have devised new research models that envision greater collaboration between government, companies and universities or research centres. In Spain, successful initiatives exist in this area—namely, in the technology parks in the Basque Country. However, these models have not caught on elsewhere in the country.

A close look at the current models for R&D use shows that more effort is needed to generate all the potential benefits that these models offer. For example, collaboration isn’t efficient if the main players involved in these models do not speak the same language and each has his own goals and interests in the project. Often in business, a scientist’s performance is evaluated on the basis of his publications in specialised magazines, rather than on whether the project actually improved the competitiveness of the sector under study. In addition, the limited knowledge that some executives have of science doesn’t allow them to appreciate fully what is involved with R&D, hindering communication and, ultimately, collaboration with others on joint projects. This breakdown in cooperation eventually translates into delays, higher costs or disappointing results for the project. It also helps explain low levels of corporate investment in R&D.

Spain has a key asset to help it cope with this fourth revolution, known as the creativity revolution: talent. Without a doubt, the country has a wealth of scientific talent, as evidenced by its broad range of scientific fields. However, a lot still must be done to come up with the right applications for increasing corporate competitiveness—a challenge that opens up a wide array of opportunities. We know what needs to be done in R&D, and we have the talent that is required to do it. The challenge is defining how it should be done.

The demands of the global markets determine the parameters for these R&D models: They should be faster, cheaper and more effective. I often come across projects that use the classic research models for processes, resources and systems and, as a result, have failed to provide adequate solutions to the problems facing the company.

To encourage cooperation among corporations, government and universities, more than just economic resources are required. We also need shared interests and objectives; we need a common language and we need to find more competitive R&D models that guarantee speed, low costs and a strong impact on the market.

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