An article in The Economist (Oct 13th-19th, 2007 p.16-19) titled “The love-in: The move toward open innovation is beginning to transform entire industries” This article discusses the interesting dynamics of open innovation and how some industries embrace it, while others simply do not.
Henry Chesbrough, wrote “Open Innovation” and “Open Business Models” and is largely credited with popularizing the concept of open innovation. He is a professor at UC Berkeley, and the article states that he “observes with a smile that ‘this is the 40th anniversary of the Summer of Love’.” Berkeley, “at the very heart of the anti-establishment movement of the 1960s”…spawning “plently of radical thinkers”, seems a natural birthplace for concepts and ideas in relation to innovation.
Open innovation results in organizations sharing and gleaning ideas with individuals and organizations outside their own. Bright ideas are openly shared and used resulting in more agile corporate development. Fast failure and getting products to market more quickly, reduced internal R&D expeditures are potential benefits. Losing the proprietary technology necessary to mantaining a competitive edge is a possible downside.
Here are some surprising stats:
All in all it is a pretty interesting article and makes compelling arguements both for, and against, open innovation. You can read it here.
And the picture of the stethoscope at the top of the page is from Bang & Olufsen. I just like their design process. They collaborate with students and universities a lot. Smooth design.
October 28, 2007 at 5:21 pm |
The entire special report on Innovation in the recent Economist is worth the read. In the article you cite, “The Love-in…” I would be curious to read your critical assessments about the challenges facing management to even move slightly toward “open innovation”.
For example, it seems that one of the daunting issues facing management when contemplating such a move is to redefine the firm’s value proposition. I can illustrate one example from a recent conversation with a book author. He wrote his first book about 25 years ago and his most recent in 2004. He was lamenting that his most recent book can now be downloaded from several web sites. Aside from whether the availability of his book on these sites is legitimate, let’s assume that it is, to him it means that he is not being compensated for the consumption of his work product.
I think this is a relevant example because. as in open innovation, the value of his work has shifted from the physical representation of his work — the book — to something else. He could see this as a new opportunity to gain credibility as the expert he clearly is that will lead to other “value generating” activities (e.g., career enhancement, consulting engagements, etc.).
Perhaps this is a trivial example of open innovation, but I think the basics are there. For firms that move toward open innovation they clearly have to accept that “always invented here” meant they could patent their ideas and build a patent portfilio of some value of its own, while also generating profits from products and services flowing from the inventions/innovations. But if they are content to not own the inventions themselves, then a new value proposition needs to established to make it all worth the effort.
I don’t know the answer to this question. I suspect it varies by firm, product, service and industry – but I’m reasonably certain it’s a major question facing the prospectcs of open innovation.
Agree? Disagree? Thanks!
March 5, 2008 at 8:20 pm |
How much does that stethoscope cost?
March 5, 2008 at 9:11 pm |
Not too sure…