The interface between the public and private sector is becoming more important in how countries innovate. A country’s wealth can be judged by natural and manmade resources, but also the intangible resources, as President and CEO of the Center for Strategic and International Studies Dr. John Hamre puts it. A sense of legitimacy of government, the quality of education and legal systems, and a feeling of common purpose are all unseen qualities that are held by the most wealthy and successful countries. Dr. Hamre stressed that these qualities are the products of good government and there is in fact a correlation between good government and wealth. It is because of this that governments should have a keen interest in helping the private sector and creating conditions for the growth of innovation and infrastructure.
Scott Miller, Senior Adviser and Scholl Chair in International Business at CSIS explained that innovation is more than product invention, it requires the “know how” of markets and consumers. Stanford McCoy, Assistant U.S. Trade Representative, talked about how trade policy can really make or break the economic success of a country. Every international economy wants to promote innovation and even more so, “out-innovate” the rest of the world. As long as a country is doing that, it maintains a place on the world stage. The United States has been a leader in bringing minds and ideas from all over the world in order to create a mecca of innovation. In order to keep this going in the United States, but also around the world it is essential to combat localization barriers to trade such as market access obstacles. There must also be regulation of theft of U.S. intellectual property. A new trade agreement must be established that will create conditions favorable to innovation, even if this means embracing secondary values, back up plans for how to market a product.
Three case studies presented how the relationship between public and private is critical to achieving success in innovation.
Gilead Sciences has developed a program for treating HIV in developing countries and emerging markets. Gilead has developed “the first complete HIV treatment regimen dosed in a single, once-daily tablet” that slowed the progression of HIV to AIDS. In the United States and Europe, 80 percent of patients use Gilead products. Since this innovation, Gilead has partnered with regional businesses to ensure access to a wider scope of those in need, especially for low-and middle-income countries and their citizens. This connection between public and private has given Gilead a connection to governments, which in turn gives the “know how” about regulations as well as “technical, medical, and marketing support. The next step was to solve obstacles concerning financing where Gilead turned to manufacturers to create a generic version of the pill. The key for Gilead is having created a sustainable product, one that funds itself and maintains room for growth. Gilead takes in royalties to support health system strengthening activities such as product registration, medical and clinical education, and collaborative research. Gilead’s partners are able to efficiently scale up production because they receive a “full technology transfer of the Gilead manufacturing process.” Gilead’s success because of innovation and critical partnerships is evident; its work towards generic licensing has reduced prices of the pill by 80 percent in 6 years.
Procter & Gamble faced an issue with their product because it had not established a commercial basis. The company created a water filtration system that comes in a small premeasured packet which, through an easy process, could filter and clean up to 10 liters of even the dirtiest water. The product was used in small market tests in Guatemala, the Philippines, Morocco, and Pakistan with some success, but the rewards did not match the work that had gone into its innovation. When moving from a profit based marketing to an approach based in social responsibility the numbers improved and to date 615 million packets have been distributed whereas only 3 million had been sold per the old model. When switching its view to a non-profit approach, P&G was able to accomplish efforts on a much wider scope. They launched a Children’s Safe Water Program, Nutrition Programs, and participated in emergency relief efforts all incorporating this innovative water filtration system. Partnering with UNICEF, IFRC, and CARE among others this product was implemented towards really making an impact.
A policy based obstacle was seen by UPS and its PharmaPort 360 a breakthrough technology in shipping pharmaceuticals around the world. This new technology allows for temperature controlled transport which is monitored by GPS/GSM technology which allows control of potential risks and “pre-defined contingency plans”. The obstacle UPS faces are not with the container itself but with moving it around the world. Countries interpret the World Customs Organization’s regulations differently and the container is oftentimes considered a product rather than a means of moving goods by international customs regulators. These customs issues lend themselves to technical issues with the PharmaPort 360 because there is a time limit on how long the pharmaceuticals and medical supplies inside can hold and remain safe for delivery. The customs process to let the container into a country is often longer than this time limit, jeopardizing the contents and more importantly its recipients. These barriers along with increased costs that occur when a country recognizes the container as a product limit its scope and success. UPS is working with customs administrations but navigating this process has been a lengthy process limiting the positive impact of the PharmaPort 360.
UPS’s motto “Innovation without action is not innovation at all” encapsulates the approach that must be taken in order for public and private sectors to work together to promote innovation and create an environment for its continuation. Innovation must be encouraged and incentivized. Keith Zook, retired P&G fellow in the Global Sustainability department, recalls that the water filtration packet started out as an idea contest where the most promising would get funding. PharmaPort360 was created out of a need and entered a sector of high growth, a growing older population and a need to do things better. Ideas are plenty, now innovation must meet with policy and business to go forward and begin a new era of change. If this is done and as the case studies show, it is possible, the future for positive change is really bright.
Photo Credit: Ian West (cc)
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The Interface of the Public and Private Sectors: Commercial Innovation
November 13, 2013
The interface between the public and private sector is becoming more important in how countries innovate. A country’s wealth can be judged by natural and manmade resources, but also the intangible resources, as President and CEO of the Center for Strategic and International Studies Dr. John Hamre puts it. A sense of legitimacy of government, the quality of education and legal systems, and a feeling of common purpose are all unseen qualities that are held by the most wealthy and successful countries. Dr. Hamre stressed that these qualities are the products of good government and there is in fact a correlation between good government and wealth. It is because of this that governments should have a keen interest in helping the private sector and creating conditions for the growth of innovation and infrastructure.
Scott Miller, Senior Adviser and Scholl Chair in International Business at CSIS explained that innovation is more than product invention, it requires the “know how” of markets and consumers. Stanford McCoy, Assistant U.S. Trade Representative, talked about how trade policy can really make or break the economic success of a country. Every international economy wants to promote innovation and even more so, “out-innovate” the rest of the world. As long as a country is doing that, it maintains a place on the world stage. The United States has been a leader in bringing minds and ideas from all over the world in order to create a mecca of innovation. In order to keep this going in the United States, but also around the world it is essential to combat localization barriers to trade such as market access obstacles. There must also be regulation of theft of U.S. intellectual property. A new trade agreement must be established that will create conditions favorable to innovation, even if this means embracing secondary values, back up plans for how to market a product.
Three case studies presented how the relationship between public and private is critical to achieving success in innovation.
Gilead Sciences has developed a program for treating HIV in developing countries and emerging markets. Gilead has developed “the first complete HIV treatment regimen dosed in a single, once-daily tablet” that slowed the progression of HIV to AIDS. In the United States and Europe, 80 percent of patients use Gilead products. Since this innovation, Gilead has partnered with regional businesses to ensure access to a wider scope of those in need, especially for low-and middle-income countries and their citizens. This connection between public and private has given Gilead a connection to governments, which in turn gives the “know how” about regulations as well as “technical, medical, and marketing support. The next step was to solve obstacles concerning financing where Gilead turned to manufacturers to create a generic version of the pill. The key for Gilead is having created a sustainable product, one that funds itself and maintains room for growth. Gilead takes in royalties to support health system strengthening activities such as product registration, medical and clinical education, and collaborative research. Gilead’s partners are able to efficiently scale up production because they receive a “full technology transfer of the Gilead manufacturing process.” Gilead’s success because of innovation and critical partnerships is evident; its work towards generic licensing has reduced prices of the pill by 80 percent in 6 years.
Procter & Gamble faced an issue with their product because it had not established a commercial basis. The company created a water filtration system that comes in a small premeasured packet which, through an easy process, could filter and clean up to 10 liters of even the dirtiest water. The product was used in small market tests in Guatemala, the Philippines, Morocco, and Pakistan with some success, but the rewards did not match the work that had gone into its innovation. When moving from a profit based marketing to an approach based in social responsibility the numbers improved and to date 615 million packets have been distributed whereas only 3 million had been sold per the old model. When switching its view to a non-profit approach, P&G was able to accomplish efforts on a much wider scope. They launched a Children’s Safe Water Program, Nutrition Programs, and participated in emergency relief efforts all incorporating this innovative water filtration system. Partnering with UNICEF, IFRC, and CARE among others this product was implemented towards really making an impact.
A policy based obstacle was seen by UPS and its PharmaPort 360 a breakthrough technology in shipping pharmaceuticals around the world. This new technology allows for temperature controlled transport which is monitored by GPS/GSM technology which allows control of potential risks and “pre-defined contingency plans”. The obstacle UPS faces are not with the container itself but with moving it around the world. Countries interpret the World Customs Organization’s regulations differently and the container is oftentimes considered a product rather than a means of moving goods by international customs regulators. These customs issues lend themselves to technical issues with the PharmaPort 360 because there is a time limit on how long the pharmaceuticals and medical supplies inside can hold and remain safe for delivery. The customs process to let the container into a country is often longer than this time limit, jeopardizing the contents and more importantly its recipients. These barriers along with increased costs that occur when a country recognizes the container as a product limit its scope and success. UPS is working with customs administrations but navigating this process has been a lengthy process limiting the positive impact of the PharmaPort 360.
UPS’s motto “Innovation without action is not innovation at all” encapsulates the approach that must be taken in order for public and private sectors to work together to promote innovation and create an environment for its continuation. Innovation must be encouraged and incentivized. Keith Zook, retired P&G fellow in the Global Sustainability department, recalls that the water filtration packet started out as an idea contest where the most promising would get funding. PharmaPort360 was created out of a need and entered a sector of high growth, a growing older population and a need to do things better. Ideas are plenty, now innovation must meet with policy and business to go forward and begin a new era of change. If this is done and as the case studies show, it is possible, the future for positive change is really bright.
Photo Credit: Ian West (cc)
