What is open innovation? What are its advantages and disadvantages? Who uses it? How can you use it? In this article, we will explore this relatively new concept, but which already has a long and interesting history.
Definition of Open Innovation
The term “open innovation” was democratized by Henry Chesbrough in 2003 in his book “Open Innovation: The New Imperative for Creating and Profiting from Technology“. He defines open innovation as “a distributed innovation process based on the management of knowledge flows across organizational boundaries, using monetary and non-monetary mechanisms consistent with the organization’s business model”.
So yes, when you put it like that it doesn’t sound like a dream… But the concept is in fact simple, in other words, companies no longer focus solely on internal resources but also use external resources. A company will collaborate with other companies to develop new products and services. It will also be able to draw inspiration from the competitor or even buy a company in order to access their knowledge.
Companies did not wait for Chesbrough to practice open innovation, it has existed for a very long time.
Open Innovation according to Von Hippel
Before Chesbrough theorized about Open Innovation, Eric von Hippel, a professor at MIT, developed the leads users method. Here, it is the users of products and services who will participate in their design. The lead user will therefore have early access to a product or service and develop it while using it. The company can then appropriate the improvements proposed by the lead users. Often, it will offer them compensation for their contribution.
Why turn to Open Innovation?
Developing a new product or service can be long and costly. Large companies have a research and development department that allows them to constantly work on new concepts. For smaller companies, Open Innovation is an opportunity to compete without spending money that could jeopardize their future. Instead of developing a product from scratch, you can approach companies that master the technologies you need and offer them partnerships. You can also buy licenses to use their technology for the design of your product or services. This promotes the sharing of knowledge which will be a gas pedal of innovation.
Sharing your own inventions can also be beneficial, you can observe how other companies use them and in turn get inspired.
You can also take advantage of your users. Submit ideas to them and then propose them to participate in the design. You can for example propose a contest with a prize for the one who will propose the best concept. It can also be a recruitment method, you can hire the person who will propose the best concept so that he can participate in its design within your company.
The dangers of Open Innovation
Although it is recognized as an effective way to accelerate innovation, there are some traps to be aware of. Sharing your ideas, concepts or products and services is not without risk, you have to share them on your terms with clear and precise contracts and protect them through intellectual property. There are also different licenses that can allow you to share while protecting your products and services. You will find here a detailed article on the different existing licenses.
Putting Open Innovation into practice
To use external resources you can for example turn to the GitHub platform. You will find millions of open source software, including those of Tesla for example. You can take codes from a project and create your own by modifying and adapting the software to your desires. Your project can then be taken over by other developers as you did.
There are also solutions in Switzerland to participate in open innovation projects. For example, if you have an innovative idea in microtechnology but you don’t have enough resources to carry out your project, you can submit your idea on the Microtech Booster platform of Innosuisse. From this platform, if your idea is successful, you will be able to get in touch with potential partners and even obtain financing up to 20’000 Swiss francs.
If you are in need of ideas for new projects, you can also visit the platform to start a collaboration on another company’s project.
But Innosuisse also offers many other programs that will allow you to enter the world of open innovation.
There are more and more solutions to facilitate your arrival in the world of open innovation, so take advantage of these opportunities that will boost innovation within your company.
Examples of companies using Open Innovation
Tesla is an example of open innovation. It is part of an ecosystem of companies specialized in innovation like SpaceX or Solar City. This allows them to share their technologies. For example, the chassis of Tesla’s Model S is inspired by SpaceX’s Falcon rocket.
Tesla also makes its patents available to its competitors. The goal, a faster development of electric cars and infrastructure such as charging stations. This allows Tesla technology to become the standard in the electric car market. They can then adapt very quickly to new innovations which their technology is the source.
In 2008, Lego launched the “Lego Cuusoo” range which has since become “Lego Ideas”. Lego Ideas is a platform where everyone can create a lego thanks to a software containing all the existing parts. Each member can vote for his favorite constructions. If a proposal reaches 10’000 votes, it is examined by Lego who then decides whether or not the set will be produced. If it is commercialized, then the creator receives 1% of the sales amount.