Thursday 23 September 2010
Open Innovation
Open
innovation is the process by which organisations use both internal and external
knowledge to drive and accelerate their internal innovation strategy in order
to fulfil existing market needs or to access new market opportunities.
The concept of open innovation implies that an organisation has the willingness and desire to source and utilise external knowledge, ideas, intellectual assets and technologies, in addition to its internal capabilities, to identify solutions to problems, capitalise on opportunities, develop new technologies, create new products and services, improve processes, or design new organisational systems and business models.
Henry Chesbrough has been a great advocate for open innovation in his book Open Innovation: The New Imperative for Creating And Profiting from Technology, which describes the difference between closed and open innovation. The key characteristics of closed and open innovation are compared and contrasted in the table below:
Open innovation is about collaboration with external organisations to co-create future opportunities, technologies and products that address existing or new markets for an organisation. A good example of an organisation practicing open innovation is Proctor & Gamble, where many of its products have been developed with external partners providing research, development and cross-licensing of intellectual property.
Open innovation is sometimes confused with the term ''open source''. Although the terms are not mutually exclusive, open source is defined as the practice of providing open access to a product's source material. For example, Wikipedia is an example of an open source platform where knowledge and information, including intellectual property, is shared and made available in the public domain. Open source is just one type of open innovation. Both entail multiple creators; but open source differs in that the rights to use it are public and frequently shared. Although open innovation is about collaboration between two or more parties, access to intellectual property may involve varying degrees, from confidential to publicly available. In contrast to open access, open innovation can involve private or exclusive participants, where intellectual property is protected or kept confidential.
Author: Dr John Kapeleris, Deputy CEO, Australian Institute for Commercialisation. To read more AIC-authored articles please click here.
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