Bioeconomy innovations: tough starting up
A German blog on innovations management estimates that between 175 and 3,000 ideas are needed to bring just one product or service to the market. Venture capitalists assume that only one out of ten investments pays, says expert Heinrich Cuypers. It seems that the benchmarks for creating a business are extremely tough. But they are not insurmountable.
For innovation managers and startup advisors it is clear: scientists and researchers are not business people. "Much is dependent on the personality of the founder. A pure scientist will not be able to proceed. Either he has an open horizon and is able to learn, or he joins with others," says Heinrich Cuypers, senior project manager at BioCon Valley, an initiative for life sciences and health economy in Greifswald, Germany.
Thus most business plans developed out of research need an extensive overhaul. "Business plans are very, very strong with regard to science and technology. But usually they abate in business and market economy, features which have to be supported and developed," says Thomas Frahm, director of project management at the cluster organisation LifeScienceNord in Hamburg, Germany. It is often difficult for an innovator who considers himself an expert to learn that his unique product is only the first step to making a living out of it.
Bioeconomy is one of the prominently supported areas in the current Horizon 2020 research programme of the European Commission. It comprises agriculture, aquaculture, forestry, food production, paper, as well as parts of the chemical, energy and biotechnology industries. The expectations are high. By 2025 the European bioeconomy market is expected to be worth 45 billion euros, creating around 130,000 jobs, according to a manifesto of the Dutch presidency.
But if a market for innovative products is non-existent, or difficult to create anew, then drafting a business plan is needless. For many bioeconomy products, demand is missing "because of lack of general awareness " says project coordinator Anne-Karen Beck, from the BioEconomy Cluster Management, a network and incubator organisation in Halle, Germany. And even if general awareness for some products is rising, she adds, the next hurdle are the higher prices when innovations start to slowly enter a market.
Still most innovations are research driven (researchers try to drive the market with their innovations instead of adapting to it) for the sake of science. Unfortunately most of them do not work in the market, as economist Eric von Hippel, professor at the MIT Sloan School of Management, pointed out as early as 1988 in his book "The Sources of Innovation". But a turnaround is already visible. "We have to look for the demands of the market and need to develop projects in that direction," says Beck.
This is in line with the Policy Brief no 3 on European bioeconomy challenges, issued by the European Forum on Forward Looking Activities of the European Commission. It criticised the bioeconomy research plans of the Horizon 2020 programme for being too focused on research driven innovation instead of market driven innovation. In other words, it should better consider possible future disruptive challenges, like changes in agricultural production in the face of climate change or geopolitical disturbances. The policy brief proposes that research policies concentrate more on systemic, solution oriented approaches.
The Finnish SME NaturVention, which started in 2011 with the development and marketing of the Naava smart green wall, used such a customer oriented approach. The green wall cleans indoor air in business buildings and hotel halls. Thanks to an intelligent composition of special bacteria in the potting soil and careful selected plants, it filters particles, harmful substances and odour.
"The biggest thing is to create something that helps people in their everyday life," says founder and CEO of NaturVention, Aki Soudunsaari. The company now has around 40 employees and is based in Jyväskylä, Finland. And, it already has subsidiaries in some of the Baltic Rim countries.
For Soudunsaari, marketing is the second biggest challenge for the growth of a young company. He recommends asking satisfied customers to spread the word. But in addition, he likes to tell a compelling personal story in which he describes his road from the first idea to the current expansion plans. The adventure tale starts with the fortuitous meeting between a microbiologist, who researched the purification ability of microbes, and a person suffering from indoor air quality…