Open innovation can close productivity gap

Dr. Erik H. Volkerink,

Chief Technology Officer,

Flextronics

Product development teams are more and more challenged by the increasing complexity of their product designs, according to Dr. Erik H. Volkerink, CTO of Flextronics. They face a proliferation of diverse technologies—involving human-machine interfacing, sensors, actuators, low-power design, battery management, and connectivity. “It’s rapidly becoming very complex to innovate and be competitive,” he said.

To address the complexity, Dr. Volkerink recommends an open innovation platform approach, which was the focus of the Silicon Valley Open Innovation Summit held April 2 in conjunction with EE Live in San Jose. Founded and organized by Flextronics, the summit aimed to accelerate innovation for the smart connected world.

Dr. Volkerink’s keynote presentation at the summit was titled “Accelerating Product Innovation: Solving the Complexity and Productivity Gap.” He elaborated on key points in an interview after the event.

“Open innovation is about people partnering to develop new solutions across the supply chain,” he said. He described Flextronics as the leading end-to-end supply-chain solutions provider with $26 billion in revenue. In addition, he said, “We see an almost $100 billion cross section of the larger electronics industry so we have a lot of visibility into what the design and manufacturing challenges are. We have groups in medical, aerospace, defense, automotive, consumer, industrial, servers, and networking—across all industries.”

From that vantage point, Flextronics has recognized that traditionally the productivity improvements in tools available to develop products do not keep pace with the significant increase in design complexity. “There is a growing gap between the complexity of the product innovation and the productivity of the tools and methods that engineers are using,” he said. “That growing gap could stifle innovation so we are driving an industry-wide ecosystem where we create more of a building-block approach, or more of a platform-based design approach, where there is more reuse.”

The approach mirrors what has happened in the semiconductor industry, he said. In 1997, people recognized that chip complexity grew 60% per year, in accordance with Moore’s Law, but tool productivity was growing only 21% per year. “There was a call to action industrywide—in order for Moore’s Law to continue to scale, we needed to bridge the gap”—through reuse and core-based design and adherence to new IEEE standards. “The result,” he continued, “was the creation of an ecosystem where building blocks could be effectively leveraged from suppliers to customers. So if you go one level up right now with product innovation—not chips but full products—a very similar dynamic is going on.” The approach, he said, is similar to the reference flows of silicon foundries such as TSMC.

The Open Innovation Summit, he said, represents just the beginning of the initiative. “It’s an ongoing initiative that goes beyond this event.” The message seems to resonate. “We were hoping for 150 people, and we had 900 registrations,” he said, “so we see it really taking off.”

Dr. Volkerink commented that startups, big companies, research institutes, and universities all can contribute technologies to the open innovation ecosystem. “We want to create a standard around qualifying those technologies and turn them into building blocks so the ecosystem can leverage that,” he said. “If you are a provider of technology, you would want to design on the Flextronics open innovation platform because it has the broadest reach of customers.”

Flextronics’ customer base is receptive, he said, “especially now when you look at the trend toward smart products where the underlying technologies are so rapidly changing. We’ve seen that internally with many success stories where we’ve applied the methodology, and it really improves time to market and time to money. And think about companies that maybe are not at the forefront of technology—think about the technologies we can bring to the table for them, like voice recognition and gesture detection.”

Dr. Volkerink had raised the issue of smart products last July at the Test Vision 2020 Workshop held in conjunction with SEMICON West, where he said that if you pick a random noun and put “smart” in front of it, you’ll no doubt find that several startups are already working on a product.¹ When asked if his perception of “smart everything” had changed since then, he said, only to the extent that the uptake of smart devices is much faster than he had anticipated.

In conclusion, Dr. Volkerink said, “I would say the biggest paradigm shift going on in product innovation is from closed to open. Open innovation is essentially supply-chain management. We are a leading supply chain company in the world, so for us to drive open innovation makes a lot of sense.”