the full story

Is TNO the best-kept secret of the Netherlands?

The original concept of TNO was “to invest and implement innovation that would benefit society”, and it would seem – 80 odd years later – that that mission hasn’t changed much. Created in 1932 at another time of crisis, their importance and utility seems more necessary than ever, especially as the big issues we all face and the solutions required to tackle them become ever more challenging.

Solving the problems of tomorrow

We were given the chance to meet and speak with Arnold Stokking, the director of the Industrial Innovation unit. It is instantly clear that this is a man who is totally passionate about what he does, and why he does it. It’s also clear that he knows what he’s talking about. “Fundamentally,” he says, “I believe that innovation is becoming more expensive and more complex than in the past, and yet the challenges we face are bigger and will need joint industry research to solve them.”

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In the past, we could answer needs in a pretty straightforward way: a company wanted some research done and we did it. Today we do less and less of this contract research. We still occasionally do this type of work, but more often now we are involved in multi-company and joint industry research. We need to be, especially if we are to tackle the big projects of tomorrow, things like the energy crisis, cost of care (of older people), geopolitical issues, etc.”

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“Above all, we work to create an eco-system with people who share a certain question, and who might actually have different views on the question. It means working on a challenge together, and creating change – complex change – together. Let me give an example,” he explains: “take the case of energy storage. It’s an issue today’s society faces more and more: how can we store the excess electricity we generate? One solution is better batteries. Another is to pump water higher up a mountain (as they do in Norway and Austria). Yet another idea is to use chemistry and change smaller carbon molecules, like CO2, into larger, more complex chains, like methanol. Whatever the solution, and there’s no ‘best way’ as yet, it’s ridiculous to think that one company can address all the issues.

Grouping skills to promote industrial innovation

As the name of the division suggests, Stokking’s team of engineers and scientists create innovations for industry, with the ultimate aim of helping companies be more competitive. “It’s especially necessary in times of crisis,” he says. “It’s an anti-cyclical thing. We have to invest in change now, so that we can be ready for the future. Some,” he admits ruefully, “don’t ‘get’ change, while others use the crisis to get the changes done.”

TNO Enjoys Change TNO Enjoys Change

“Philips Electronics came to us with a big challenge about seven or eight years ago. It was the catalyst for our first multi-company project. At the time, Philips was half the size of Siemens and GE and just couldn’t afford to do all their research on their own. So they asked us, and IMEC from Leuven, to develop expertise in the field of OLED (organic) lighting for them. All these years later, we now have world-class expertise in this field, and more importantly we’ve come to understand how important it is to get companies working together. In fact forty companies from all over the world are now involved in this project.

“It was a long-term bet, and likely to be an expensive one, but as you’ll appreciate the stock market doesn’t reward long-term thinking, they just want short-term profitability! There was a condition attached, however. They wanted other companies to be involved, not only to share the load, but also to add their knowledge to the process. This was certainly an ‘all for one, one for all’ moment, and today every one of the companies involved can justifiably claim to have benefited from the collaboration. We now understand that doing projects like this on your own is not the best way. We can see that the quality of research, speed and scope of innovation is better when you move to open community working, and that’s where Vlerick comes in.”

Vlerick understands us very well

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Vlerick, it seems, is not the only business school that’s in touch with TNO, but they are – by their own admission – the one they feel most comfortable with. “There are other business schools that focus on other things, but Vlerick thinks about problems in a similar way to us”, adds Stokking. “Many of the same types of industry are present in both the Netherlands and Flanders: e.g. chemistry, automotive, maritime. We therefore often face the same type of engineering issues, and our offshore businesses, like dredging, are remarkably alike. In fact the two biggest companies in the dredging world come from our two countries. Vlerick has grown up in this environment, and so they can talk our language. They’ve got experience in the same issues we’re facing, and they can help us.

“We are a knowledge institute,” says Stokking, “but that doesn’t mean we are open source. I’m a firm believer in protecting our knowledge. For me, open innovation is shared research and co-creation within the group of companies who are involved, and there’s a very big wall around that expertise. Everyone is competing against everyone else, and our main reason for existence is to help European industry be more competitive. We need to protect the goodies we have here. But before that, we have to convince these companies that they need to share their knowledge with others. For instance, by getting the materials and components suppliers to work together more closely, and getting the company with knowledge of the end user involved at an early stage. We have to make each one of them see that there’s a real advantage in working together.

On-going learning at Vlerick

In fact for the last 18 months Vlerick has been coaching the industrial scientists at TNO, as well as the know-how required to manage the multi-set of interests of this open innovation model. “I insist that when members of our research facility go on a course that they never go to the same one! My wish and hope is that they are taken out of their current comfort zone, and made to learn new things by meeting people they would normally never have met. The open innovation programmes at Vlerick, led by Professor Walter Van Dyck, are excellent for that. I want my people to see what the outside world wants and needs, and I want them to meet people from any other discipline than their own.”

“Professor Van Dyck helps us in our eco-system analysis. He works with us to identify whether or not TNO should be part of a particular project. It’s a question of digging deep and understanding one’s own strengths and weaknesses. It helps that he understands where we come from, and what the different businesses involved have to offer. It’s of considerable benefit too that we are able to use his experience of working on similar problems from adjacent industries.”

Tackling the big issues

Stokking goes on, “We have certainly earned our right to play in this field, and I believe that TNO can continue to have a long-term position and provide solutions for the grand challenges of tomorrow. For me though, the best example in working this way remains Germany, and they are unquestionably the benchmark. Germany is capable of identifying the big issues and then addressing them in a massive way. The government brings people together to form a public/private partnership (companies, universities and similar research organisations to TNO) and then they force them in a certain direction. It’s no surprise therefore that the German car industry is again best in class. And why are they again best in class? Well, it’s because they’ve put so much focus and investment into clean driving: it’s not an accident, it’s planning. Certainly, there are government incentives behind the work, but the companies talk to each other – and get things done. It’s not a surprise that they are the best-performing economy in Europe.

“We are continually telling this story in the Netherlands, but not always with the same success. Take the issue of clean energy again. We’ve got our own gas here – and because so many people are working in the industry, it’s actually put a brake on future development, so now we’ve stopped investing so much in renewables. We really don’t need to look too far for inspiration – we can actually learn valuable lessons from our Eastern neighbours.”

The big question: what is the best investment?

“Some might say the broad range of expertise within TNO is a weakness, whereas personally, I find it a strength,” Stokking exclaims. “The difficulty is in understanding where the focus of research should be, and that’s where Vlerick’s experience has been most useful. They see the technology-roadmaps from the outside, and leave sentiment and emotions at the door. They help us decide whether or not it makes sense; of course technically it almost always does, but economically, it’s not always the case. It means when Vlerick suggests stopping a programme that they’re not always the most popular people around. We know however that it’s absolutely necessary to make these choices, and in fact the parallel can be taken one step further. We can’t afford to invest our time and energy with many business schools; after all, we’ve got our work to do. We too have to focus our efforts, and right now we are enjoying the collaboration with Professor Van Dyck. Especially as I know that all this contact and working together only increases the understanding and respect we have for each other.”

A word from Vlerick

Walter Van Dyck: Companies like TNO play in the challenging field of emerging technologies. Primarily, they convert academic inventions into innovative industrial technologies and applications with often disruptive societal implications. So if, for example, it becomes possible to make concrete out of waste then TNO will design, often in collaboration with the industry, technology to make this happen. However, to accelerate the uptake of this disruptive technology they need to understand how the existing building ecosystem and the business models of its various players will be impacted.

Thereafter, open innovation business models and value propositions need to be designed to stimulate these ecosystem players to change their current way of thinking (and making concrete). This is the domain where TNO and Vlerick collaborate. Using action learning formats Vlerick makes TNO scientists and engineers business-savvy so they cannot only design disruptive technology but also the open innovation business models that should go with it to create a valuable economic and societal impact.

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