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The road to new products and technologies is built on a constant stream of bright ideas and a project culture which pools employees' knowledge and skills effectively.

New products now account for approximately 30% of Novozymes' turnover, compared with only around 10% in 1999. This development shows there is a need to streamline the business so that the knowledge among our employees can be utilised more quickly than previously.

Moreover, in recent years Novozymes' strong focus on knowledge-sharing has helped to reduce the time it takes to develop a new product. Ten years ago it took around five years from discovery of a new enzyme to development of a new product; today it typically takes 12-14 months. One of the reasons for this is a high level of cross-functional knowledge-sharing. For example, all employees in Research must have knowledge of the market, and everyone in Sales and Marketing must be familiar with the research side, particularly as collaboration with customers is an important part of the innovation process, and ideas for new products are often developed with customers.

Knowledge and competence
The principal reason for Novozymes' good R&D results is access to the top expertise in biotechnology. It is vital to have talented and enquiring employees who are content and good at working together. This creates a stimulating environment with strong networks and good cross-functional interaction. High professional standards in our core technologies are maintained partly through collaboration with academia and by keeping constantly abreast of technological advances through conferences, networks, scientific literature and so on.

Management and creativity
Innovation requires a fine balance between managing resources efficiently and leaving space for the creativity which breeds new ideas. Novozymes has around 100 product candidates in research and development at any one time. The allocation of resources to individual projects is regularly reviewed as they advance through the pipeline from initial idea through research and on to actual product development. This ensures that only projects with good sales potential make it as far as the market. In the last five years we have launched between six and eight new enzymes a year.

Knowledge-sharing across the company
These projects draw on many different areas of expertise, and the longer a project goes on, the larger the financial investment becomes. Although a development project may have up to 50 different employees assigned to it at any one time, no more than a handful will be working on the project full-time. The others come and go as required, contributing leading-edge expertise in specific areas on the basis of a detailed project plan.

Effective management of these projects is therefore very important because they involve employees from many different departments and, often, very different geographical locations. Novozymes has R&D departments in Denmark, the USA, China and Japan which all contribute to the development of new products. The projects are managed through an intranet-based system which covers all of Novozymes' R&D employees.

Use of research resources
Novozymes invests 12-13% of turnover in R&D, equivalent to DKK 793 million in 2005. Approximately 10% of this was invested in activities outside the core business.

An active patenting strategy is very important to ensure that these investments in knowledge and product development benefit the company. At the end of 2005 Novozymes held a total of more than 4,500 granted or pending patents.

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Number of product launches in the last five years. Novozymes expects to launch between five and seven products in 2006.

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