Open Innovation Co-creation of innovation

Open innovation ”Open innovation is a paradigm that assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as the firms look to advance their technology.” Chesbrough, H W (2003). Open Innovation: The new imperative for creating and profiting from technology 

Open innovation ”Open innovation is innovating in partnership with those outside your company by sharing the risks and rewards of the outcome and process.” http://www.100open.com/2011/03/open-innovation-defined/  

Open innovation ”Open innovation is the systematic encouragement and exploration of a wide range of internal and external sources for innovative opportunities, the integration of this exploration with firm capabilities and resources, and the exploitation of these opportunities through multiple channels.” West, J; Gallagher, S (2006). Challenges of open innovation: The paradox of firm investment in open-source software 

Over-lapping terms User innovation Cumulative innovation Know-how trading Distributed innovation Mass innovation

Inbound open innovation  Direction of innovation from outside the company in

Outbound open innovation Direction of innovation from inside the company out internal inventions not used in a company's business are utilized outside the company through licensing, spin-off companies or joint ventures

Closed Innovation Principles Open Innovation Principles The smart people in the field work for us. Not all the smart people in the field work for us. We need to work with smart people inside and outside the company. To profit from R&D, we must discover it, develop it, and ship it ourselves. External R&D can create significant value: internal R&D is needed to claim some portion of that value. If we discover it ourselves, we will get it to the market first. We don't have to originate the research to profit from it. If we create the most and the best ideas in the industry, we will win. If we make the best use of internal and external ideas, we will win. We should control our intellectual property (IP), so that our competitors don't profit from our ideas. We should profit from others' use of our intellectual property (IP), and we should buy others' intellectual property (IP) whenever it advances our business model. ]

Benefits of open innovation 1 Reducing the cost of R&D Synergies between internal and external innovation activities Improving in productivity in new product development

Benefits of open innovation 2 Incorporating future customers from the beginning of the development process Incorporating market research into development work Finding unanticipated new customer groups Initiating viral marketing

Benefits of open innovation 2 Incorporating future customers from the beginning of the development process Incorporating market research into development work Finding unanticipated new customer groups Initiating viral marketing

Viral marketing Marketing techniques using pre-existing social networking services Initiating self-replicating viral processes, analogous to the spread of viruses or computer viruses Aiming at increases in sales and product awareness E-mail message, text messages, video clips, images, web pages, interactive games, etc

Threats of open innovation Revealing information that is not intended for sharing Loosing competitive advantage to competitors as a result of competitors getting access to the company’s intellectual property (IP) Exposing the company’s strategies to external parties Loosing talented individuals to competitors

Challenges of open innovation 1 Managing the increased complexity of the innovation process Finding appropriate ways of sharing the rewards of the innovation process between all stakeholders Governing how various contributors can influence the project

Challenges of open innovation 2 Redesigning the strategies of the company in order to incorporate the benefits of external innovation Building a proactive system for identifying, assessing and utilizing external innovation

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