“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”.
Under the concept of innovation that prevailed during most of the 20th century, companies attained competitive advantage by funding large research laboratories that developed technologies that formed the basis of new products that commanded high profit margins. This vertical form of the research meant that companies who could not afford this research were at a disadvantage.
The Open Innovation Model:
Rather than being held within the firm, under the concept of open Innovation, research results are able to traverse firm's boundaries.
 |
| Chesbrough, 2003 |
here are some advantages of Open Innovation:
- Faster time to market
- Reduced risk of innovation
- Less risk guessing what the market wants
- Let the market / community tell you what they want
- Integrated community innovation
- Innovation can come from anywhere and anyone
- Some of the best ideas are outside of your organization
- Some of the best solutions reside outside of your organization
- Lower R&D and operating costs
- Supplement to internal R&D
- Tapping into the virtual R&D community
- Creating brand evangelists out of your community
- Shared IP can create a formidable barrier to entry
Relevant Links to Open Innovation
Video of Henry Chesbrough Presenting Open innovation
Dr Henry Chesbrough Open Innovation
University of California, Berkeley
