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Open Innovation and Closed Innovation (Open Innovation (OI strengths…
Open Innovation and Closed Innovation
Closed Innovation
everything happens inhouse
hidden assumptions
hire the best in industry
must discover new products first
Lead in R&D in order to lead in market
first to make discovery, first to market
first to market usually win
should control intellectual property so that competitors don't profit from ideas
still relevant today?
firms advised to move to open
erosion of closed innovation model
growing mobility of workers
you bring knowledge with you from one company to another
growing copmetence of the university reserch system
knowledge distributed more widely
diminished US domination in many leading technology fields
deregulation
enormous increase in venture capital
Open Innovation
Used by various indutryies 9charity, governemnts, companes
for projects in innovation, problem solving and research and development
OI leads to
external sources of knowledge becoming more evident
external channels to market
engaged customers and collaborators
a new paradigm for understanding industrial innovation
Two facets of OI
Outside In
external ideas and technologies are brought into the firms own innovation process
greater use of outside ideas
e.g. HP injections, P&G wrinkle creams, IBM and outside developers
Inside Out
under-utilized ideas and technologies in the firm are allowed to go outside to be incorporated into others' innovation processes
ideas and technologies used by others
e.g. Xerox - ethernet and GUI
Managing OI
nota traditional supply chain management
not exclusively user focused
features other actors such as universities and the pulic
participants are not actively or directly managed
accordingly collaboration and communications are critical management tools
OI strengths
visibility
cross platform communication
speed, diversity, flexibility
new knowledge pools
experimentation
marketing and innovation vehicle
more cost effective than hiring consultants
opportunities for co-creation with customers
Reasons for using OI
poor internal innovation progress
desire to engage more actors outside the ecosystem
grow the profile of the organisation
promote trasnparency
tax reasons
managing intellectual property efficiently
reduce operational overheads
Open Innovation in Organisations
Intel
Little investment in basic research
aggresive program to sponsor academic research
looks outside first before determining what internal reserach to perform
provides research grants
Inside-out at Intel
Opportunities and Problems
Opportunities
lure new actors into your ecosystem
change the external image of your organisation
drive iterative development (time to market)
reduce costs
OI interfaces with agility and other methods
Problems
intellectual property loss
losing staff to other organisations
cultural issues in collaboration
loss of hierarchical control
technical collaboration issue
competition issues / chinese walls
loss of strategies advantages
issues of scale
issues of complexity
Subsets/relatives of OI concept
Collaborative innovation
cyberteam with collective vision enabled by web
collective intelliegnce
broadly groups of individuals doing things collectively
co creation
generation of shared value/mutually valued outcome
Commons based peer production
large numbers of people work cooperatively in less rigid hierarchial structures
Inner source
works with OSS principles internally in large organisations
Living labs
high degree of user involvement in devlopment process
Crowdsourcing
The practive of obtaining needed services, ideas, or content by soliciting contributions from a large group of people and especially from the online community rather than from traditional employees or suppliers
Platforms
Indiegogo
kickstarted
managing crowds
madness of crowds (tulip bubble)
contrats against limiting the crowd too much
platform controls
access rights
people controls
admins/experts
process controls