1. “Beyond Open Innovation: Leveraging Social Capital” Transforming Lives & Services - Challenges of Living in a Digital World Mark Dames - BT Design David Robson - Scottish Enterprise Madeline Smith - Scottish Enterprise Tom Tumilty - Scottish Government

2. Contents Open innovation The role of technology in enabling open innovation Organising models for open innovation Policy implications for government, business & society Conclusions

3. The World is Flat

4. “... innovation is no longer individuals toiling in a laboratory, coming up with some great invention. It’s not an individual … Sam Palmisano, Chairman and CEO, IBM … It’s individuals... It’s multidisciplinary … It’s global … It’s collaborative.” Collaborate to Innovate

5. From Computer Networks to Social Networks

6. Transformation Built Around 3 Anchor Points

7. Technology Tools Social bookmarks combine individual bookmarks, making it possible to identify common interests that drive recommendations or relevancy. Examples: Yahoo/del.icio.us, digg, connotea.org, BlinkList, Outfoxed. Social tagging (folksonomies) lets users add metadata or labels to create more useful and natural classification schemes. Examples: Flickr, LibraryThing, del.icio.us, Last.fm. Content rating and reputation management lets participants rate other participants or content. Examples: Amazon, eBay, Epinions, Slashdot. Likes/dislikes (taste sharing) aggregate opinions that can also drive recommendations, relevancy and quality. Examples: StumbleUpon and Last.fm. Prediction markets reward individuals who bet correctly on future outcomes. Examples: consensuspoint, longbets. Conversational interactions using blogs and wikis to encourage contribution, unplanned contact, feedback and continuous refinement.

8. Technological Organisation of Social Software

9. Communities as the Core Innovation Competency

10. “Citadels” Uncertainty Complexity Relative Certainty Predictability Command & Control Hierarchy Empowered Networks Reference: Global Business Network  Familiar and comfortable  Experts, right answers, closure  Clarity of structures/roles  Advocacy; directives; power; control  Value chains; asset-oriented  Less familiar, less comfortable  Strategic conversation, self- organising  Knowledge-creation, dilemmas, openness  Organic, fluid systems, porous boundaries  Value webs, relationship oriented “Webs” Evolving Organisations – Building Capacity

11. CitadelsWebs Expertise triumphsDiversity trumps expertise What you know mattersWho you know matters Take no risks - copyright, patent & protect Judge the risk of releasing information against the return of gaining understanding The goal is to agreeThe goal is to tap into those who agree and disagree Improve ideas by applying more resources Improve ideas by sharing them Judge ideas by how they fitJudge ideas by how they differ Relationship hierarchiesRelationship networks Innovation managementInnovation cultivation Expertise Knowledge Intellectual Property Collaboration vs. competition Development Assessment Relationships Organising Barriers are Cognitive rather than Intellectual

12. Open Innov’n Web 2.0 ‘Long-tail’ Non R&D Innov’n Wiki- nomics You– tube User content Lead users Un-used Talents Web Com’ities Emerging technical and social trends Effective support to ‘new’ innovation communities e.g. ‘excluded’ groups ‘Lead users’ Patients groups Peer 2 Peer groups ‘Eco-concerned’ Social entrep’eurs Hidden Innov’n Democ- ratisation Crowd- sourcing Del.icio.us Folk- sonomies Semantic Web What are effective business models? How to interface with networks and communities? How to monetise open relationships? How to harvest commercial value? How to harvest social value? What new skills are needed? Innovation Realising new value to customers and citizens – e.g.... more opportunities... better products... better heath... better information... better communities... better future Policy ‘Gap’ Peer 2 Peer The Policy Challenge

13.  Technical skills are a given. The challenge is to nurture behaviours and business models that enable collective innovation. - focus on cognitive barriers not just intellectual.  Innovation and growth require an ability to collaborate that must be deeply embedded in the mindset, skillset and toolset of every organisation. - firms that rise to the challenge will thrive. Those that ignore it, or fail to grasp its implications, risk marginalisation and eventual extinction.  Accelerated by globalisation, innovation is increasingly an open, collaborative process involving users, suppliers & organisations of all size. - business and government need to develop new open innovation business models that leverage emerging social and technological trends to harvest the resources of competitors, suppliers, lead users, customers and citizens. Conclusions

14. Thank You mark.dames@bt.com