Academic journal article Research-Technology Management

Open Innovation: Where We've Been and Where We're Going: The Father of Open Innovation Offers His Assessment of the History and Future of the Model

Academic journal article Research-Technology Management

Open Innovation: Where We've Been and Where We're Going: The Father of Open Innovation Offers His Assessment of the History and Future of the Model

Article excerpt

The editors of RTM have offered me the chance to reflect upon the progress of open innovation since its inception in 2003 with the publication of my book Open Innovation. I truly appreciate the opportunity.

There has been an explosion of interest in academic circles and especially in the innovation functions of many, many companies since then. When I wrote Open Innovation in 2003, I did a Google search on the term "open innovation," and I got about 200 links that said "company X opened its innovation office at location Y." The two words together really had no meaning. When I conducted a search on that same term last week, I found 483 million links, most of which were about this new model of innovation. There have been hundreds of academic articles written on the open innovation approach, along with a number of industry conferences on the topic. There is even an annual PhD conference that trains dozens of new scholars each year, all of whom are writing dissertations on aspects of open innovation.

What follows is a personal view of this phenomenon, which must inevitably be selective, highly incomplete, and partial in its consideration.

Defining Open Innovation

Just as Eskimos have dozens of words for "snow," the term "open innovation" has acquired multiple meanings. In my own view, the open innovation paradigm can be understood as the antithesis of the traditional vertical integration model in which internal innovation activities lead to internally developed products and services that are then distributed by the firm. The vertically integrated model is what I term a closed innovation model. Put into a single sentence, open innovation is "the use of purposive inflows and outflows of knowledge to accelerate internal innovation and expand the markets for external use of innovation" (Chesbrough 2006, 1).

This is the future of open innovation, a future that will be more extensive, more collaborative, and more engaging with a wider variety of participants. As the future unfolds, I expect universities to become more welcoming of this trend. Public polities will be adapted to support this movement. And the innovation capabilities of organizations around the world will no longer stop at the boundaries of the organization. Instead, open innovation practices will extend to suppliers, customers, partners, third parties, and the general community as a whole (see Chesbrough, Vanhaverbeke, and West 2006). However, my definition is not universally accepted, a point I will return to below.

Open innovation has become a new paradigm for organizing innovation. It assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as they look to advance their innovations. Open innovation processes combine internal and external ideas together into platforms, architectures, and systems. Open innovation processes utilize business models to define the requirements for these architectures and systems. These business models access both external and internal ideas to create value while defining internal mechanisms to claim some portion of that value.

There are two important kinds of open innovation: outside-in and inside-out. The outside-in part of open innovation involves opening up a company's innovation processes to many kinds of external inputs and contributions. It is this aspect of open innovation that has received the greatest attention, both in academic research and in industry practice. Inside-out open innovation requires organizations to allow unused and underutilized ideas to go outside the organization for others to use in their businesses and business models. In contrast to the outside-in branch, this portion of the model is less explored and hence less well understood, both in academic research and also in industry practice.

A Schism in Open Innovation Definitions

There is another definition of open innovation out there, one that builds on the concept of open-source software. …

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