by Dr. Paul Stoffels, the company group chairman of pharmaceutical research and development at Johnson & Johnson

Collaborative innovation for the post-crisis world

LAST WEEK, world and business leaders converged at Davos to wrestle with the global economic crisis and discuss solutions for "Shaping the Post-Crisis World" in six areas, including economics, politics, innovation, science, technology, and new business models. As a physician, a pharmaceutical research and development business leader, and a global citizen, I see one major road to economic recovery and that is through innovation.

Not the innovation that we have all come to know, which is a closed activity conducted largely inside organizational walls. Closed innovation fosters a mind-set that is siloed and the dominance of individual institutions over ideas, technologies, and economies, with all the benefits and risks of an undiversified portfolio. But to economically succeed today, we must innovate innovation itself for the post-crisis world. Conducting innovation as an open activity enables us to harness the power of networked enterprise, multiplying investments and reducing risks because it includes varied experts, institutions, geographies, and resources.

Closed innovation isn't without value. The gains of the last two decades in reducing deaths from diseases such as HIV/AIDS and heart disease and extending life spans through novel cancer and HIV treatments are testaments to the power of past innovations in medical science. But, in spite of billion-dollar investments by the world's leading medical research companies, our collective research efforts have not, in recent years, yielded the anticipated fruits.

The recent shrinking of drug pipelines is in part a result of moving beyond key discoveries into more complex areas of human health. The sequencing of the human genome has given us reams of data and powerful new tools. But it also reveals how much more remains to be done, and the extraordinary new scale of collaboration that it will take.

Open innovation, however, is not some extraordinary ideal or concept. It is happening right now because today's information-empowered flat world makes for a ripe landscape.

At Johnson & Johnson, we are shifting our innovation ecosystem toward an open innovation model, tapping into both institutes of scientific excellence and our own research and development centers across the world.

Our scientists are taking a networked approach across internal organizational disciplines and geographies, including Asia and other emerging markets, and increasingly with external public and private partners to generate ideas and intellectual property. By working with experts at other companies, universities, and research institutes, we tap a wider range of expertise, capabilities, and resources. Together we share in both the benefits and costs of innovation that will yield more useful technologies and solutions that will contribute to new advances in healthcare.

Protection of intellectual property is critical to gaining new knowledge and economic benefits within the open innovation model. Sufficient intellectual property protection has been necessary for the private sector to justify investments in high-risk research. But in the landscape of open innovation, co-creation involves sharing the costs and benefits of innovation and the resulting intellectual property, in line with the relative contribution of the various parties, including royalties from the commercialization of new products. In this model, intellectual property rights can be ensured through appropriate and harmonized protection strategies that are agreed upon by all stakeholders.

We believe open innovation will fuel the intellectual entrepreneurship and novel collaborations across institutions and geographies needed to develop solutions to some of the world's most critical healthcare challenges and to directly address patient needs in both developed and emerging economies. In turn, these solutions will provide the economic entrepreneurship that will help spur recovery and, when combined with health diplomacy, will ensure that innovation delivers solutions for generations to come.

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