Innovation via Cooperation

Innovation Management

Providing mankind with sustainable medicine, food, and energy is an immense challenge. To meet this, industry and governments are increasingly relying on “open innovation.” At Bayer, Bayer Technology Services is coordinating the funding activities.

Open for business. Today’s R&D departments are more open – and exchanging their knowledge.

Anyone who can make high quality plastics from carbon dioxide has killed at least two birds with one stone. For one thing, this means using a raw material that would otherwise end up in the atmosphere as a greenhouse gas damaging the climate. For another, it saves on a raw material traditionally used for plastics: crude oil. And that is a limited resource.

What sounds visionary is also a task that ultimately no one player can manage alone. And so it comes as no surprise that important breakthroughs achieved on the way to turning CO2 into a useable resource were accomplished through teamwork. Among those involved in this collaboration were Bayer MaterialScience, Bayer Technology Services, the RWTH Aachen University, CAT Catalytic Center Aachen (a joint project run by RWTH and Bayer), and RWE. Each of these partners brought an area of expertise to the table that contributed to the success of the project. For example, the teams from CAT and from Bayer Technology Services further developed an important catalyst. It was only with its help that the use of CO2 molecules in manufacturing polyol is possible, while only producing negligible by-products and also saving energy. For its part, Bayer MaterialScience provided the expertise for the synthesizing of the polyols and their conversion to polymers. And RWE developed a method of treating the waste gases from coal-fired power plants such that they provide ample amounts of the desired raw material in a quality sufficient for industrial-scale production. 

“External research collaborationsare an integral part of our innovation strategy.”

Kemal Malik

Board member for innovation, Bayer AG

The German Federal Ministry of Education and Research (BMBF) also played a significant role in this success. The BMBF now supports a whole series of interconnected group research projects on the use of CO2 with grants. Thomas Görgen stresses that although this public support was generally small in comparison to the total financial expenditure of the industrial partners, the outside involvement was important: “There are many research subjects that are risky from a business point of view; for example, because the chances of success are still too uncertain,” explains the chemist. “Often this risk must be shared by many shoulders if visionary projects are to be attempted at all. The public sector forms a safety net for such projects and promotes the formation and cohesion of such research alliances.”

Görgen heads the public funding group at Bayer Technology Services, a kind of interface between the company’s research departments and the external government boards that promote research projects. “For one thing, we help the government to direct its focus on supporting those issues that industry can actually handle,” Görgen adds. “For another, we are an important contact point for our own researchers, when, for example, it is a question of if and where Bayer research overlaps with that being subsidized from outside. Meaning ultimately, where applications for funding make sense.”

Currently, Bayer has over 100 research projects in Germany alone that are being supported by public funding. In 2013, the total sum of these subsidies amounted to some eight million euros. Ten years earlier, the number was just two million euros. As important as these public-private partnerships are for individual research projects, Görgen is quick to stress that it is the company that pays the lion’s share of its own research and development. Bayer spends around three billion euros annually on it, with three and a half billion planned for the current year.

A new concept of funding has been put into practice in the form of the Innovative Medicines Initiative (IMI). The European Commission and the association representing the European pharmaceutical industry, the EFPIA, have joined forces in the IMI to promote the development of new medical drugs. Both parties are contributing one billion euros each to the initiative. The Commission’s contribution of fifty percent is exclusively earmarked for academic partners.

You need partners if you want to use CO<sub>2</sub> for synthesis. One to develop the catalysts (left), and one to extract the CO<sub>2</sub> from waste gases (right).

The approach taken by the IMI means that Bayer Health- Care is carrying out research together with such companies as Novartis, Roche, AstraZeneca, and Pfizer. All of whom are competitors. But this is not about concrete product development, which continues to take place within the companies themselves. IMI handles more the general issues that all the players are dealing with and that make working together worthwhile,” explains Görgen.

An example would be the toxicological assessment of potential pharmaceutical substances. Every manufacturer that wants to bring a new substance onto the market must substantiate its safety and compatibility. As part of the IMI project eTOX, experts from a number of pharmaceutical companies are jointly investigating whether a suitable computer model can reduce the amount of experimentation involved. “If they succeed, both producer and patient will benefit, because then innovative drugs can be developed more quickly,” according to Görgen. This is also in line with Bayer’s overall mission statement, “Science For A Better Life,” according to which, research, and the products resulting from it, are intended to improve people’s lives.

Over fifty IMI projects have already been initiated. Researchers from Bayer HealthCare are directly involved in twenty-four of these, and in five of them as project coordinators. With a total volume of around 540 million euros, these twenty-four projects account for more than a quarter of IMI’s overall budget. Among the projects headed by Bayer Health- Care is OncoTrack, which involves the search for bio markers suitable for customized tumor therapy for individual patients (see "Everyone is different").

Another project led by Bayer is EU Lead Factory, a joint European substance library. A number of pharmaceutical companies are making part of their own substance libraries available for everyone, along with their expertise, resulting in a common project in which direct competitors participate. This would have been unimaginable only a few years ago, highlighting the fact that this kind of open access marks a true paradigm shift in the approach to research and development. 

Professor Henry Chesbrough coined the term “open innovation” for the tearing down of the very walls that used to seal off the R&D divisions of one company from another. In 2003, the economist published his book, Open Innovation: The New Imperative for Creating and Profiting from Technology, a standard work in which he also gave the concept a philosophical foundation. According to Chesbrough, whoever wants to have successful innovations must open up to the outside world. After all, no one has a monopoly on knowledge, such that the open innovation principle is not merely limited to the pharmaceutical and chemical industries but rather holds true for practically every sector. 

Open Innovation also means that companies are allowing third parties access to some of their substance libraries
Open Innovation also means that companies are allowing third parties access to some of their substance libraries

Open Alliance for Sustainability

Whenever possible, produce raw materials and energy from renewable sources and use as efficiently as possible. Recycle waste. Close material cycles. With all these measures, the initiative Sustainable Process Industry through Resource and Energy Efficiency (SPIRE) aims to contribute to sustainable industrial processes in Europe. Close to forty companies (including Bayer) from eight sectors, twelve associations, as well as some forty-five academic institutions have joined this public-private partnership (see "Sustainability Alliance"). The president of SPIRE is Dr. Klaus Sommer, who is head of the Customer & Product Management division at Bayer Technology Services, as well as chair of SusChem, the European technology platform for sustainable chemistry.

The association has set itself a number of goals to be reached by 2030 – which convinced the European Commission to make SPIRE an integral part of the EU research program, Horizon 2020. In total, this initiative will receive funds amounting to around two billion euros.

Of course, there has been cooperation in research before now. But the difference here is that companies are systematically organizing their knowledge transfer across company borders. “The common goal of all partners must be to make the pie as large as possible,” says Görgen. “This makes an equal distribution easier, since the whole is often more than the sum of its parts.” It is a matter of give and take, and the bottom line is that progress should profit, and ultimately the general public, as well, as they are the beneficiaries of technical innovation, improved medicines, and sustainable products. 

There are currently very differing approaches to open innovation in research practice. The CO2 projects and the IMI program are examples of public-funded, cross-company cooperation. Moreover, for a science-based company like Bayer, direct networking with academic research is also important. “We maintain close relationships with a large number of universities, in Germany, the USA, and China, for example,” explains Görgen. Bayer Technology Services also supports the establishment of such networks within the Group. 

Bayer Technology Services maintains an especially close relationship with the Technical University Dortmund. In 2011, both partners founded a joint research center, INVITE, which has been working on future production processes (see technology solutions 1/2012). This research is also being carried out with partial funding from the public sector and in cooperation with such competitors as BASF and Evonik. 

The RWTH Aachen is another one of Bayer’s academic partners. RWTH scientists and researchers from Bayer are not only collaborating on projects at the CAT Catalytic Center mentioned earlier, but are also working side-by-side in the Joint Research Center on Computational Biomedicine that was established in 2013 by RWTH and Bayer Technology Services. Here, for example, they are working together on a computer model that allows the simulation of biological processes, with the aim of developing medicines and therapies even more efficiently. 

There are also similar partnerships on specific research topics, among others with the German Cancer Research Center (DKFZ) in Heidelberg, with the University of Beijing, and with the Broad Institute in Boston. “Collaborative research with external partners from academia and industry is an integral part of our innovation strategy,” says Kemal Malik, responsible for innovation on the Board of Management at Bayer AG, in explaining the importance of all these partnerships. 

“Naturally, no company is going to simply provide access to all of its intellectual property,” concedes Thomas Görgen from Bayer Technology Services, “but much can be achieved with the knowledge we make available to our partners along with their individual contributions.” After all, for some tasks you need a certain critical mass, namely enough colleagues, because you simply cannot manage it on your own. This is true of many IMI projects. Or you need the cross-sector expertise that no single company has at its disposal. As is the case with the use of CO2 as a raw material.

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