Building an open innovation capability Presentation - Professor Stephen Roper
Building an open innovation
• The Enterprise Research Centre (ERC) is an independent research centre which conducts
policy relevant research on SME growth and development. The ERC is being led by Professor
Stephen Roper (Warwick) and Professor Mark Hart (Aston).
• The ERC is a partnership between Warwick Business School, Aston Business School, Imperial
College Business School, Strathclyde Business School, Birmingham Business School and De
• Funding is being provided by the Economic and Social Research Council, the UK government
Department for Business, Innovation and Skills, the British Bankers’ Association and the
Technology Strategy Board.
• Research within ERC focuses on entrepreneurial ambition and inclination, leadership
capabilities in the management teams of SMEs, the impact of diversity on SME start-up and
growth, the financing of growth companies, innovation and exporting in SMEs and the role of
SMEs in UK jobs growth.
• Alongside its research activities the ERC aims to act as a focal point for SMEs and the SME
research and policy communities in the UK, facilitating knowledge exchange.
Developing an open innovation centre
for Northern Ireland
Professor Stephen Roper (Warwick)
Professor Nola Hewitt-Dundas
Study addresses three key
1. Does NI need an open innovation centre?
– What is open innovation?
– What are the benefits – firm and regional level?
– Where does NI stand relative to other areas?
– So what should we do?
2. What would an open innovation centre look like?
3. What would be the benefits of an open
Does NI need an open innovation
Open innovation (OI) is ….
• Innovation can be thought of as firms’ introduction of
new products, services or ways of doing business
• And open innovation is ‘… the use of purposive inflows
and outflows of knowledge to accelerate internal
innovation, and expand the markets for external use of
• Typically, open innovation involves innovation
partnerships between firms and/or between firms and
other organisations such as customers, suppliers,
universities or consultants.
Firm level benefits of OI
• Evidence suggests that OI
benefits firms by:
– Stimulating creativity
– Reducing risk
– Accelerating innovation
– Improving innovation quality
– Helping increase sales from
– Helping access new
• But the benefits differ for
smaller and larger firms
0 1 2 3 4 5 6 7 8
Breadth of linkages (0-8)
Small Medium and large
OI also has other wider
• Increased innovation externalities - openness may increase levels of
innovative activity in the region which may themselves generate
– For example, under-priced quality improvements -> productivity gains
– Demonstration effects
– Sustainability or clustering effects
• Externalities of openness – regardless of the impact on firms’
innovation, openness itself may generate positive externalities by
increasing levels of organisational interaction and knowledge
• These wider social benefits (and the associated market and system
failures) provide a clear rationale for public intervention to support
Benchmarking OI in NI compared to
• Source: UK Innovation Survey
NI lags all other UK regions –
i.e. levels of open innovation
are lowest here
1. NI firms are not
benefitting from OI and its
potential contribution to
2. More broadly NI is missing
out on potential regional
Benchmarking OI in NI compared to
• Source: UK Innovation Survey
And most of NI’s problem is with
smaller firms – larger firms lag but not
by too much
Openness appears particularly limited
among smaller firms in Northern
Ireland and those in services.
Comparing firms’ connectivity to
individual types of external partner –
suggests that connectivity to each type
of partner is lower in NI than other UK
This suggests the generality of the
openness deficit in Northern Ireland
rather than this deficit being due to
any particular type of innovation
So does NI need an OI
• Northern Ireland certainly needs more OI which would
benefit innovation, productivity etc.
• The evidence suggests that existing organisations have not
delivered on OI in Northern Ireland – the region lags other
• Something else needs to be done to support OI (and
innovation) across sectors but perhaps particularly
targeting smaller firms
• So we think the answer to the question is “Yes”. And that
there is a strong case for intervention in this area.
Possible roles of an OI
• Building Awareness - an OI centre could play a valuable role in increasing the awareness of the benefits of
collaborative and open-innovation. Such activities could be events or network based, involve broadcast and other
media and the compilation and publication of case-study evidence.
• Advocacy – an OI centre could work as a champion or advocate for OI within a regional innovation system,
supporting and encouraging the development of policy measures which strengthen collaboration.
• Capability building – an OI centre might be to help firms develop OI capabilities for managing external
relationships or collaborative innovation. This is essentially a staff or management training activity which is likely
to be particularly important for smaller firms.
• Inbound provision of partner information – an OI centre might help local firms to identify potential innovation
partners either locally or externally.
• Outbound promotion of partner information– an OI centre might promote the capabilities of firms as potential
partners to organisations elsewhere. This is primarily a marketing and/or promotional activity.
• Facilitation or brokering of partnerships and collaboration – this type of brokering activity aims to work with
individual firms to establish innovation partnerships. The credibility of individual brokers is likely to be key to
success in this activity.
• Structuring of partnerships and collaboration – each individual innovation partnership is likely to raise different
issues relating to contracting, IP etc. This activity is aimed at assisting firms with the structuring of open
innovation relationships and is likely to require detailed work with the partners.
Linking activities and client groups
• Different OI centre
activities are going to be
relevant to different target
• Perhaps the greatest gains
in terms of innovation are
to be made in moving from
non-innovators to closed
innovators to open
• Capacity building, inbound
partnering and facilitation
may be particularly
important for smaller firms
OI organisations come in
four main types:
• Research organisations – which use OI as a commercialisation methodology. Examples are IMEC,
the Collective Research Centres in Belgium and the Holst Centre.
• Networked Incubators - closely related to the business incubator model. The emphasis here is on
technology-based start-up businesses and applying the principles of OI to commercialisation. Three
examples are Chalmers Innovation, Sweden, Normandie Incubation (France) and the Innovation
• Company based centres – larger companies have led the move to an OI model for innovation. Early
examples of OI were Proctor & Gamble (P&G) with their ‘Connect and Develop’ programme,
Unilever and IBM’s Collaborative Innovation Initiatives.
• Independent innovation Intermediaries – independent organisations formed to provide support to
broad groups of businesses to become more innovative through raising awareness of the need to
innovate alongside the development of collaborative networks. Examples of innovation
intermediaries include InnovationXchange and the Innovation University Enterprise Network
what would be the benefits of an
open innovation centre?
Developing a logic model for
an OI Centre…
To increase the level of effective open innovation in NI export oriented businessesVision
1. To increase the level of awareness of
open innovation and its potential benefits
among firms in the target groups
2. To ensure future policy development
supports extended open innovation
To increase the capacity
effective open innovation
among firms in the target
1. To encourage non-innovating firms to move to become open innovators
2. To encourage ‘closed’ innovators to move to become open innovators
3. To encourage ‘limited’ open innovators to extend their open innovation activity
Input to policy
reviews, visitors to
1. Number of attendees from target firms
2. Website hits/page statistics, media
3. No. of inputs to consultations/reviews
4. Local and international visitors
1. Awareness of OI among each of three
2. Perceived role of OI Centre as regional
‘Champion for OI’
3. Perceived changes in policy environment
for OI among target groups
Needs analyses, materials
courses or events
1. No. of training needs
2. Number of course
participants and firms
from each of target
1. Improvements in
managing inward OI by
2. Improvements in
managing outward OI by
External media and on-
line promotion of NI
local and international
partner search activities
Brokering of new
relationships, network or
Support for individual
of access to external
services (IP, legal etc.)
1. No. of external/internal partner searches
2. Number/investment value of instances of brokering new relationships, events etc.
3. Number/contract value of referrals to service providers for facilitation etc.
1. Proportion of each target group seeking to develop new innovation partnerships
2. Proportion of each target group which has developed new innovation partnerships
3. Proportion of each target group engaging with professional services to facilitate
1. Share of limited/intensive open innovators in NI
2. Proportions of non-innovators which have become open innovators
3. Proportions of closed innovators which have become open innovators
4. Proportion of limited open innovators which have become extensive open innovators
A Northern Ireland OI
• A broadly-based innovation intermediary targeting smaller non-innovators
or closed innovators. Perhaps 10-12 people.
• Navigate not duplicate - a ‘sat-nav’ organisation helping smaller firms find
and work with appropriate innovation partners (both in NI and outside)
• An opportunity for policy innovation – NI is leading the way in considering
the policy challenges of OI. An OI centre of this type would be a innovative
• Is this part of Invest NI? Probably not:
– Many of target groups outside INI’s existing clients
– Issues of independence and ‘honest broker’ seem important
• But would draw significantly on INI expertise, support and schemes and be
a long-term project
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