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Open Innovation     2012     Information     Society and     Media
EUROPEAN COMMISSION            Open Innovation                 20122012   Directorate-General for the Information Society ...
Europe Direct is a service to help you find answers                                           to your questions about the E...
ContentsFOREWORD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....
4   O P E N   I N N O V A T I O N    2 0 1 2    Dear colleagues and partners in service innovation!    Experimentation (EA...
5IntroductionWelcome to a very exciting issue of the OISPG Open      governments has become more and more impor-Innovation...
6   O P E N    I N N O V A T I O N      2 0 1 2    We should consider how Europe can be a leader in    harnessing and crea...
7AcknowledgementsLast name        First name Company/organisation                                   E-mailAlmirall        ...
8   O P E N    I N N O V A T I O N      2 0 1 2Executive summary    The Open Innovation 2012 follows the Service          ...
9CHAPTER IPolicy development1.1 Services innovation: complexity, openness, modularity, and structureAs is evidenced by vol...
10   O P E N   I N N O V A T I O N     2 0 1 2     to accomplish the exchange. When the service             participants i...
11Like product components, services can be developed      while reducing its dependence on in-house tech-into standardised...
12   O P E N   I N N O V A T I O N     2 0 1 2     platforms that can easily be configured for individ-      Contact     ua...
131.2 The drivers for new societal fabric: why active measures for the new    societal dialogue are needed for creativity ...
14   O P E N       I N N O V A T I O N     2 0 1 2                     Fundamental change – a revolution!     Figure 2.   ...
15We need to be much more active in focusing policy             embedded knowledge. The ‘Maslow pyramid formeasures toward...
16   O P E N    I N N O V A T I O N            2 0 1 2     Figure 5. The universal values by Schwarz create an interesting...
17Figure 6. What does the average value profile of a social entrepreneur look like? [6]                                    ...
18   O P E N   I N N O V A T I O N     2 0 1 2     mash-up of societal drivers, value drivers and          References     ...
191.3 Unlocking the digital future through open innovationNeelie Kroes, Vice-President of the European             this ca...
20   O P E N   I N N O V A T I O N     2 0 1 2     control panels therefore ensure cooperation and         eHealth policym...
21in the public sector. The eGovernment action plan,      collaboration between industries, academia, andthus, complements...
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The Open Innovation 2012 follows the Service Innovation Yearbook 2009–10 and the Service Innovation Yearbook 2010–11. All these yearbooks have three complementary parts: the first on policy development, the second on trends and weak signals in service innovation, and the third on cases and open innovation development in countries and regions. From this very rich content of the innovation yearbook, one can clearly see that open innovation is knowledge society’s approach to well-being and sustainable development, both societally and economically. Open innovation can be very relevant when seeking and verifying the applicability of disruptive innovation outcomes in the society. These insights from a variety of views to service innovation are hopefully very stimulating to the reader who wishes to enter the new mainstream

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  1. 1. Open Innovation 2012 Information Society and Media
  2. 2. EUROPEAN COMMISSION Open Innovation 20122012 Directorate-General for the Information Society and Media
  3. 3. Europe Direct is a service to help you find answers to your questions about the European Union Freephone number (*): 00 800 6 7 8 9 10 11 (*) Certain mobile telephone operators do not allow access to 00 800 numbers or these calls may be billed.LEGAL NOTICEBy the European Commission, Directorate-General for the Information Society and MediaNeither the European Commission nor any person acting on its behalf is responsible for the use which might be made ofthe information contained in the present publication. The European Commission is not responsible for the external websitesreferred to in the present publication.Disclaimer: This report represents the views of the authors, and is not the official position of the EuropeanCommission services.This work is licensed under a creative commons Attribution-Noncommercial-Share Alike 3.0 Unported licence, available atwww.creativecommons.org.You are free to Share — to copy, distribute and transmit the work, and to Remix — to adapt the work, under the followingconditions:Attribution — You must attribute this work to the author, but not in any way that suggests that they endorse you or your useof the work.Non-Commercial — You may not use this work for commercial purposes.Share Alike — If you alter, transform or build upon this work, you may distribute the resulting work only under the same orsimilar licence to this one. a link to this web page.More information on the European Union is available on the Internet (http://europa.eu).Cataloguing data can be found at the end of this publication.Luxembourg: Publications Office of the European Union, 2012ISBN 978-92-79-21461-5doi:10.2759/67300© European Union, 2012Reproduction is authorised provided the source is acknowledged.Printed in Luxembourg
  4. 4. ContentsFOREWORD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5ACKNOWLEDGEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7EXECUTIVE SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8CHAPTER IPOLICY DEVELOPMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 1.1 Services innovation: complexity, openness, modularity, and structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 1.2 The drivers for new societal fabric: why active measures for the new societal dialogue are needed for creativity and growth in the wisdom society . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13 1.3 Unlocking the digital future through open innovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19 1.4 Reflections on policy, regulation and governance for open innovation: towards a research and policy ‘enabling framework’ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32 1.5 Rights or limitations: an autopsy of business-model based copyright regulation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36 1.6 Socio-economic impact of open service innovation supporting the Digital Agenda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42 1.7 Pioneering regions and societal innovations as enablers for the Europe 2020 strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .48 1.8 New governance models towards a open Internet ecosystem for smart connected European cities and regions . . . . . . . . .62CHAPTER IITRENDS AND COUNTRY REPORTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 2.1 Innovative cross-border eSolutions and eServices development in the Danube eRegion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .72 . . . . . . . . . . . . .80 2.3 Managing innovation in the public sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .91 2.4 Innovation partnerships for next generation public services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .94CHAPTER IIIINTERESTING CASES AND EXAMPLES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98 3.1 Idea Crowdsourcing at Nokia — 12 months wiser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .98 3.2 How cloud computing can take service innovation to the next level . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103 3.3 SAP Research Living Labs — a perfect infrastructure to drive open innovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105 3.4 Promoting serendipity in research: semantic keyword analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109 3.5 The application of Open Innovation 2.0, engaged scholarship and design science research in the Innovation Value Institute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .114 3.6 Navigating intellectual capital of nations for service Innovation in the European Union . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118 3.7 Mapping the intellectual capital of post-Soviet states . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123 3.8 Dialogues Incubator: open service innovation in the financial sector. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130ANNEXOPEN INNOVATION STRATEGY AND POLICY GROUP OISPG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
  5. 5. 4 O P E N I N N O V A T I O N 2 0 1 2 Dear colleagues and partners in service innovation! Experimentation (EAR, Experimental and Applica- tion-oriented Research) has increasing importance It is a great pleasure for me to introduce you the for achieving scalable results more rapidly, as faster third edition of Open Innovation 2012. The year- innovation cycles are key success factors on which books have gained a good reputation describing Europe needs to build its future competitiveness. new developments and emerging ideas of open innovation in services domain. Co-creativity and user involvement are ingredients in professional services development in the new The first articles illustrate the most recent policy Internet era. We need to move from PPP (Public- developments and highlight some emerging trends. Private Partnership) to PPPP (Public-Private-People Moving forward in the yearbook, you can find a partnership) where scalability, reuse and functional good collection of insights to service innovation and semantic standardisation of the solutions are based on studies, real-world cases and practical essential. The open data concept is emerging with experience ranging from the national to regional its natural progress towards open standardised and company level. information, enabling mash-up of the data to meaningful applications and new services. Stand- The term ‘open innovation’ is used in many strat- ardisation of information will be as important egy documents in relation to the contribution of for the creation of the new web-based services openness to growth and jobs, and for sustainable industry in Europe as was the standardisation of societal development. The experience leads to a communications for the creation of a strong Euro- reflection on how new entrepreneurial forms of pean mobile communications industry some open innovation ecosystems can be fostered as 20 years ago. well as user engagement as creators giving value to open community-based innovation and user-centric Welcome to the community of service innovation! service development. I wish you an interesting and inspiring read! The new entrepreneurship ranging from micro- multinationals, new knowledge-intense local ser- vice providers and, for example, social enterprises, all taking advantage of next generation Internet and the societal transformation, are examples on how new service innovation can contribute to the Bror Salmelin growth, jobs and well-being. It is about creating a Adviser to the Directorate H favourable environment for letting ideas turn into European Commission products and services in real-world settings. Directorate-General for the Information Society and Media
  6. 6. 5IntroductionWelcome to a very exciting issue of the OISPG Open governments has become more and more impor-Innovation Yearbook 2012. Globally, we are seeing tant. In the 21st century, mastery of and improvingincreasingly more frequent and deeper levels of net- productivity of knowledge assets will be at least asworking and interaction between different organisa- important as mastery and improvement of physicaltions and new virtual innovation ecosystems being assets and resources. EU Digital Agenda Commis-established. Open Innovation 2.0 could be defined sioner Neelie Kroes recently said that ‘Data is theas the fusion of Henry Chesbrough’s open innova- new gold,’ as she spoke about the EU open datation concept and Henry Etzkowitz’s triple helix in- strategy meaning that public data, generated bynovation concept. Triple helix innovation is about many administrations can become the feedstockachieving structural innovation improvements for many new services and applications. Similarly,through proactive collaborations between industry, EU Research Commissioner Maire Geoghegan Quinnacademia and government. We are seeing more and said at her EU hearing prior to her appointment thatmore open innovation increasingly based on a ‘triple ‘knowledge is the crude oil of the 21st century,’ andhelix’ arrangement of industry, government and uni- thus our ability in Europe to leverage the collectiveversity interaction. The impact of this collaborative intelligence of the entire community can createinnovation goes well beyond the scope of what any great opportunities in our future knowledge society.organisation could achieve on their own. Intel’s an-nouncement of collaboration with Imperial College Two of the flagship initiatives of Europe 2020,London and University College London to create a Digit al Agenda and Innovation Union, have gainedsustainable and connected cities research institute increasing traction and are accelerating in progress.in London will go beyond this to include broader so- In parallel, there is a growing case for specific focusciety in a quadruple helix innovation arrangement. on, and enablement of, open innovation. The exist-Collaborating with citizens to understand what they ing seventh framework programmes and the fu-might want in a future sustainable and connected ture Horizon 2020 programme are key supportingcity maps very well to the idea of user-centric and mechanisms for open innovation but we need moredriven innovation which we discussed in previous research and education around open innovation.OISPG reports. The numerous research publications of the OISPG in the past year have made important contributionsIn a generative knowledge economy, industry is to this area. Bruno Hoyer’s report, ‘Unlocking theseen as the locus of production (product or ser- -vices), governments provide a stable and defined lectual Capital Approach’, provides a critical analy-regulatory environment, o en as well as invest- sis of open innovation as structural capital. In addi-ments and investment incentives, whilst the role tion, the report OSI: Socio-Economic Impact of Openof universities is changing from primarily providing Service Innovation, led by Logica in the Netherlandsa supply of trained people and education to also is an important contribution to defining the valueproviding primary knowledge for the innovation from open service innovation.process. One example of triple helix innovation isIntel’s network of Exascale Computing labs which In Europe, we need to emphasise high expectationhave been established in Belgium, Germany, Spain entrepreneurship as a mechanism for stimulat- ing jobs and sustainable growth. High expectationuniversities and national agencies to jointly perform entrepreneurship occurs when an emerging disrup-the research which will inform the design of the tive technology collides with high ambition and isExascale computer of the future as well as under- especially important as, according to the Global En-standing how best to take advantage of Exascale trepreneurship Monitor, high expectation entrepre-capabilities. neurs contribute up to 80 % of all jobs. Knowledge- based service industries are especially suitable asAs the information or knowledge intensity of prod- candidates for high expectation entrepreneurship.ucts and services increases, the creation, diffusion We should consider what we need to do to help theand utilisation of knowledge in industry and
  7. 7. 6 O P E N I N N O V A T I O N 2 0 1 2 We should consider how Europe can be a leader in harnessing and creating value from the three mega trends I discussed in last year’s foreword (i.e. digital transformations, sustainability and mass collab- oration). With the accelerating confluence of these Prof. Martin Curley, three trends, I think, for Europe, opportunity knocks. Director, Intel Labs Europe Happy innovating! Chair, EU Open Innovation Strategy and Policy Group
  8. 8. 7AcknowledgementsLast name First name Company/organisation E-mailAlmirall Esteve ESADE Business School esteve.almirall@esade.eduAyvazyan Naira Center for Scientific Information Analysis taipan@ysu.am and Monitoring, Yerevan, ArmeniaBakici Tuba ESADE Business School tuba.bakici@alumni.esade.eduBlažina Igor Cave Postojnska jama Igor.Blazina@Postojnska-jama.siBratkovič Chamber of Commerce of Dolenjska and Bela KrajinaBria Imperial College London f.bria@imperial.ac.ukChesbrough Henry Garwood Center for Corporate Innovation and chesbrou@haas.berkeley.edu Haas School of Business, UC Berkeley and ESADE Business School, Ramon Llul University, SpainCurley Martin Intel Labs Europe and National Martin.G.Curley@Intel.com University of Ireland MaynoothDamaskopoulos Takis The European Institute of takis.damaskopoulos@eiir.org Interdisciplinary Research (EIIR)de Vos Henny Novay Henny.deVos@novay.nlDonnellan Brian Innovation Value Institute Brian.Donnellan@nuim.ieEdvinsson Leif Universal Networking, Intellectual leif.edvinsson@unic.net Capital, Norrtalje, SwedenErkinheimo Pia Nokia pia.erkinheimo@nokia.comGričar Jože University of Maribor -Mb.siGzoyan Edita Center for Scientific Information Analysis edita.gzoyan@edu.aua.am and Monitoring, Yerevan, ArmeniaHaaker Timber Novay Timber.Haaker@novay.nlHarjanne Karoliina Nokia karoliina.harjanne@nokia.fiHoyer Bruno European Commission, Directorate-General for brunohoyer15@googlemail.com the Information Society and Media (2010–11)Huuskonen Mikko Mikko.Huuskonen@tem.fi Directorate-General for the Information Society and Media, European Commission (10.2011–2.2012)Janssen Wil Novay Wil.Janssen@novay.nlKovačič Iztok Municipality of Šentrupert Iztok.Kovacic@Sentrupert.siKrauchenberg Georg Danube Region Strategy Georg.Krauchenberg@WKO.atKune Hank Educore hankkune@educore.nlLankhorts Marc Novay Marc.Lankhorst@novay.nlLee Melissa ESADE Business School melissajo.lee@alumni.esade.eduMarkkula Markku markku.markkula@aalto.fiMeijer Geleyn Amsterdam University of Applied Sciences (HvA) g.r.meijer@hva.nlMusacchio Saman Hypios sam@hypios.comPuschke Carsten SAP AG carsten.puschke@sap.comRoos Jaspar Dialogues Incubator Corporate jaspar.roos@dialoguesincubator.nl Venturing of ABN AMRO BankSadowska Anna The European Institute of anna.sadowska@eiir.org Interdisciplinary Research (EIIR)Salmelin Bror European Commission, Directorate-General bror.salmelin@ec.europa.eu for the Information Society and MediaSargsyan Gohar Logica gohar.sargsyan@logica.comStankovic Milan Hypios milstan@hypios.comTurkama Petra Aalto University, Center for Knowledge petra.turkama@aalto.fi and Innovation Research (CKIR)van Dorenmalen Harry IBM Europe http://www.ibm.comWareham Jonathan ESADE Business School jonathan.wareham@esade.eduYeh-Yun Lin Carol National Chengchi University, Taipei, Taiwan yehyunln@nccu.edu.twEdited by:Honka Anni European Commission, Directorate-General anni.honka@ec.europa.eu for the Information Society and Media
  9. 9. 8 O P E N I N N O V A T I O N 2 0 1 2Executive summary The Open Innovation 2012 follows the Service same time, the fair share of the developed value Innov ation Yearbook 2009–10 and the Service spills over back to the initiators. This, together with Innovation Yearbook 2010–11. All these yearbooks increased societal capital, enables better value have three complementary parts: the first on policy propositions for all stakeholders. development, the second on trends and weak sig- nals in service innovation, and the third on cases In the third part, the case descriptions and coun- and open innovation development in countries and try reports follow the recent development of open regions. innovation practices through cases, for example, in the context of Dutch or Danube region or in In the first part, new societal drives for service the cases presented by, for example, Nokia. Col- in novation merging from Maslow’s hierarchies of laboration partnerships between public and private needs and from Schwarz’s universal values are sectors are illustrated as well. In this context, it highlighted. The first part also covers the creation is important to analyse the different roles of the of innovation-friendly environments and the links stakeholders. Cloud computing seems to be one between the Digital Agenda and open innovation important tool which enables new types of interac- creating societal and structural capital for competi- tions needed for co-creativity and innovation. This tiveness and sustainable development. In addition, is illustrated in the articles by IBM and SAP. Articles discussions on the need for embedding open inno- about interesting approaches to semantic keyword vation into policy measures, including new openings analysis and open innovation models in practise in the legislation to foster fair sharing as a basis for show both the problematics and the power of Open wealth creation, have arisen. Innovation 2.0. The first part reflects also the findings of the study The third part of the yearbook contains also inter- OSI: Socio-Economic Impact of Open Service Inno- esting follow-up to the last year’s edition: Intel- vation. This study was published earlier in the lectual and structural capital trends in several OISPG publication series, but its key findings are countries are analysed, with an interesting new also available in this yearbook. approach focusing on service innovation potential. The second part interlinks regional innovation with - the overall concept of open innovation ecosystems book, one can clearly see that open innovation is leading to new policy measures for the regions. knowledge society’s approach to well-being and To have a holistic range of actions supporting the sustainable development, both societally and eco- emerging innovation processes and ecosystems, nomically. Open innovation can be very relevant discussion on the governance models of the future when seeking and verifying the applicability of dis- Internet and its implementation to service society ruptive innovation outcomes in the society. These has arisen. Issues like privacy and trust are very insights from a variety of views to service inno- important in the open development processes. vation are hopefully very stimulating to the reader They ensure the business potential and, at the who wishes to enter the new mainstream.
  10. 10. 9CHAPTER IPolicy development1.1 Services innovation: complexity, openness, modularity, and structureAs is evidenced by volume, it is now well known that to treat services as peripheral to their core business.most leading economies in the world are increas- Now services are at the core of a new, larger, fasteringly dominated by services businesses. Yet we growing business for each of them.know surprisingly little about how such businessesadvance and improve over time. Most of what we Services can also strengthen a company’s competi-know about innovation comes from decades of tive position, making it harder to attack. Consider theresearch into the creation of new products and iPod, iPhone and iPad. Companies like Dell, Microso ,technologies. But services are not the same thing and Google have tried valiantly to unseat Apple inas products and technologies. They are not phys- the cell phone and personal music player markets. Toically tangible, they are usually consumed when date, though, their efforts have been unavailing, anddelivered, they cannot be inventoried, and theyo en require close interaction between the provider iPhone are no longer merely products. Instead, theyof the service and the consumer. If we are to con- are platforms for the distribution and delivery of atinue to advance innovation in the 21st century, we range of services that make Apple’s devices far moremust learn how to advance innovation in services valuable for their customers. So a competitor cannotbusinesses [1]. succeed in an attack against Apple on the basis of a better product alone. Instead, that competitor mustUnderstanding services innovation requires us to orchestrate an alternative array of services on therethink business in fundamental ways. Product- competitor’s device (a capability we explore below inbased businesses utilise artefacts to convey cus- Modularity and systems integration) that collectivelytomer requirements to suppliers and those same deliver a superior experience for users.artefacts help customers determine whether or notthe supplier has met their needs. In services busi- Here are four considerations that are vital tonesses without those artefacts, the relationship successful services innovation:with customers and suppliers changes. The com-pany cannot fully specify its needs in advance to 1. Complexitythe supplier, while the company cannot describe 2. Opennessfully its capabilities to meet the needs of its 3. Modularity and Systems Structurecustomers. 4. Organisational Structure.A services perspective also changes the competitive Complexitylandscape. Customers can become partners, as can The lack of a tangible product means that eachsuppliers. Competitors become collaborators. Stran- party in a transaction needs the other’s knowledgegers become important, even vital, to competitive in negotiating the exchange. On the one hand, thesuccess. Integrating these disparate inputs into new, provider lacks the contextual knowledge of the cus-coherent systems and architectures becomes a key tomer’s business and how the customer is going tosource of value in a world dominated by services. leverage the offering to compete more effectively in the market. At the same time, the customer doesAdopting a services innovation perspective requires not know the full capabilities of the provider’s tech-making significant changes, and such drastic nologies or its experience from other transactionschanges are costly, and time-consuming for compa- in assessing what will work best.nies. Yet many companies have profited from mak-ing the change. Consider IBM in enterprise comput- This contextual difficulty should not be carried tooing. Or Rolls-Royce and GE in aircra engines. Or far. The prevalence of services in advanced indus-Xerox in copiers and printers. Or Philips in electronics trial economies shows that suppliers and customersand (now) healthcare. Each of these companies used usually are able to exchange enough information
  11. 11. 10 O P E N I N N O V A T I O N 2 0 1 2 to accomplish the exchange. When the service participants in the industry, more companies can provided is modest in complexity and repeatedly experiment in parallel with possible ways of utilis- provided over time (think of a haircut in a salon, ing and combining knowledge [4]. No single com- for example), the provider and customer need to pany can hope to compete with this external explo- exchange only limited amounts of information, and sion of potential offerings by relying entirely on its can do so over many repeated attempts, so that own internal knowledge. While internal knowledge errors at one exchange can be corrected in the next. and resources may be deep, they are necessarily limited in scope. Combination and experimentation When the complexity of the exchange becomes proceeds in series within the firm, rather than in very large, and when the exchange is repeated only parallel in the market. The only way forward is for seldom or not at all (think of installing and operat- firms to become integrators of both internal and ing an enterprise resource planning system for your external knowledge. company), the technical complexity and the lack of repeated experiences between the parties makes Performing the integration function effectively the full exchange of information vitally important requires a high degree of systems knowledge, of to achieve, yet daunting to accomplish. how the various elements of a system work, and how they might be combined together in useful As technical complexity rises, the services cus- tomer becomes a co-producer of a service innova- of the system without regard to the overarching tion, intimately involved in defining, shaping and system (and its further development), are at risk integrating the service into his organisation. The of falling into a ‘modularity trap’ [5]. In this trap, supplier of the service can extend an offer of what the design rules and interfaces that connect the is to be provided but, as we shall see below, it can- specific part of the system to the overall system not entirely specify the requirements of the service. evolve over time in ways that disadvantage firms Instead, the supplier designs its processes to elicit who have lost essential knowledge of the system’s this information from its customers, and modifies architectural evolution. the offering in response to customers’ needs before sale. In turn, customers select their service provider Modularity and systems integration on the basis of the capabilities they offer, and the By developing a standardised product design based extent to which the customer is able to shape those on modular components that can easily be config- capabilities to serve their particular needs. ured and reconfigured for a variety of customers needs, firms can combine the cost advantages of Openness high-volume production (components) with high In an open model of innovation [2], firms use in- flexibility or customisation of final product. The ternal and external sources of knowledge to turn interfaces linking components into a system can be new ideas into commercial products and services made compatible so that multiple components can that can have internal and external routes to mar- be specified, adjusted and integrated in various pre- - determined ways to the varying customer or mar- nies like the BBC face the challenge of successfully ket demand. Modularity provides a resolution to the responding to the proliferation of new digital media trade-off between price and customisation: offer- technologies and markets [3]. The BBC set up a kind ing the cost advantages of economies of scale and of open source community to engage with numer- scope in standardised component production, while ous external individuals and firms through a pro- providing a higher degree customisation of the final cess of open innovation experiments called ‘BBC product. Backstage’. External developers were encouraged to use its website established in May 2005 — of- Although the literature on modularity and plat- fering live news feeds, weather and TV listings — to forms is almost exclusively concerned with manu- create innovative applications. factured products, the industrial marketing litera- ture suggests that such approaches can be applied Openness allows organisations like the BBC to to combinations of product-service offerings [6]. focus on combining its internally generated con- The hardware or ‘product components’ are the tent with externally sourced content, to simulta- physical pieces of technology that form a specific neously create greater economies of scope for function in the overall system; and the so ware or its audience, and economies of scale for its con- ‘service components’ are the knowledge or intan- tent producers. A related benefit comes from the gible human efforts to solve customer’s problems participation of many more firms in the market. by performing activities to design, build, operate With the diffusion of more knowledge to more and maintain a product.
  12. 12. 11Like product components, services can be developed while reducing its dependence on in-house tech-into standardised, simplified and routinised methods nology by offering to design, integrate and supportof operation. Rather than being offered on an ad hoc a competing vendor’s products (e.g. HP, Microsobasis at the request of a each customer, services and Sun) if this was required to provide integratedcan be developed and ‘packaged’ into routines and solution to customer needs [9].performed as repeatable processes. However, aswith products, there are limits to standardisation As noted above, the customer must interact within highly complex service situations, because ser- the supplier at various points in the services processvices are o en individually designed and tailored without recourse to tangible artefacts like products.to a specific customer’s needs — such as an air- Product-based businesses leave it to the customerline, telecoms operator or railroad company — and to perform the final installation and integration ofuniquely provided to address phases in life of a spe- the item into the customer’s process. Service busi-cific product, such maintaining and support a fleet nesses deliver the benefit to the customer by takingof trains. over the integration of the item.Given the potential value in identifying, assem- Organisational structurebling, connecting, integrating and testing complex The above elements of services innovation thatservices, the evolution towards services is usher- we have identified, including the role of complex-ing in a new kind of value-added activity: systems ity, the value of openness, and the importance ofintegration. Those who provide this capability are systems integration, all have powerful implicationsresponsible for the overall system design, selection for organising services innovation. On the one hand,and coordination of product and service compo- organisations need to provide intimacy with the cus-nents supplied by a network of external suppliers, tomer, to enable the customer to co-create solutionsthe integration of components into a functioning to their specific needs. The organisation likely willsystem, and the continuing development of know- want to offer a broad services integration capabilityledge to keep pace with future generations of to its customers, enabling access for the customertechnology and system upgrades [7]. to a vast array of offerings through the organisa- tion. In this sense, the organisation will need to gen-In an industry characterised by outsourcing and erate substantial economies of scope in serving the‘open innovation’, systems integrators are uniquely many and diverse needs of its customers.positioned to link or couple upstream develop-ments in technology and products with down- New organisational structures are emerging tostream requirements of customers and rapidly provide customer-focused services and solutionschanging markets. The systems integrator model of based on a range of standardised and customisedindustrial organisation emphasises the advantages offerings. These new structures are designed toof specialisation at the systems and component resolve the trade-off between standardisation andlevels, based on modular components supplied by customisation. They are responsible for developingmany external companies, standardised interfaces, standardised ‘solutions-ready’ components, thatand an ability to integrate multi-vendor sources of can be combined and recombined at much lesstechnology, products and services [8]. cost than solutions comprised of entirely custom- ised components [10]. Each solution can be tailoredAn example of the emergence of a systems inte- to a customer’s unique requirements using stand-gration capability comes from IBM. The IBM ardised, reusable and easy-to-deploy modularSystem/360 was based on a modular design, but products and components.the so ware components and interfaces were pro-prietary. Once a customer had purchased an IBM Some large companies that have developed growingcomputer, the complex operating system made it services businesses — such as IBM, Sun Microsys-difficult to switch to another vendor’s system. The tems, ABB, Nokia and Ericsson — have reorganisedcustomer was locked in to IBM’s hardware, so ware to form ‘front-back’ structures designed for efficientand service support. By the 1980s, a new organisa- and repeatable solutions provision [11]. These busi-tional model challenged the traditional advantages nesses have formed ‘front-end’ customer-facingof vertical integration. Many specialised suppliers units to develop, package and deliver customisedof modular components began to challenge IBM’s solutions for individual clients across product anddominant position. Rather than mirror the structure geographic lines. The traditional product-based divi-of the industry by breaking up IBM to create a num- sions have been reorganised into ‘back-end’ provid-ber of specialised suppliers, Louis Gerstner, IBM’s ers of standardised solutions-ready components,CEO, executed a strategy to move into services, o en developed as common technology and product
  13. 13. 12 O P E N I N N O V A T I O N 2 0 1 2 platforms that can easily be configured for individ- Contact ual customers. In addition, some companies have set up service divisions — such as IBM Global Ser- Henry Chesbrough vices and Ericsson Global Services — as back-end providers of services, capabilities, processes, guar- for Corporate Innovation antees for service reliability, pricing and resources. Both types of back-end units provide solutions- UC Berkeley ready components that can be mixed and matched Information Systems Professor, ESADE Business in different combinations by the front-end units. School Ramon Llul University, Spain A ‘strategic centre’ manages the interfaces and chesbrou@haas.berkeley.edu flows of knowledge and resources between the two operational units. This ‘reconfigurable organisation’ References can adapt and respond to continuous changes in technology, sources of component supply and cus- [1] Chesbrough, H. and Davies, A. (2010), ‘Advancing world’s largest supplier of cellular phone networks) Kieliszewski, C. and Spohrer, J. (eds), Handbook of Service Science, Springer, New York, NY. has created back-end units — Ericsson Gobal Ser- vices and Ericsson Systems — and formed 28 mar- [2] Chesbrough, H. (2003), Open Innovation: The New Imperative for Creating and Profiting from Technology, ket units and individual front-end units — such as Harvard Business School Press, Boston, MA. Ericsson Vodafone — dedicated to the requirements of its large cellular network customers [1]. [3] Bessant, J. and Davies, A. (2007), ‘Managing Service Innovation’, DTI Occasional Paper, No 9, Innovation in Services, 65–94. Companies like Amazon now offer their back-end transaction processing services over the Web [4] Baldwin, C. Y. and Clark, K. B. (2000), Design Rules: The Power of Modularity, MIT Press, Cambridge, MA. through the Elastic Cloud computing service. Utilis- ing Amazon’s Elastic Cloud service gives companies [5] Chesbrough, H. and Kusunoki, K. (2001), ‘The access to world-class IT processes, and saves them Modularity Trap: Innovation, Technology Phase-Shi s and the Resulting Limits of Virtual Organizations’, the cost and headaches of developing and main- in Ikujiro N. and Teece, D. (eds), Managing Industrial taining such an infrastructure. Amazon also clearly Knowledge, Sage Publications. benefits, both from the additional revenue that [6] Davies, A., Brady, T. and Hobday, M. (2007), comes from opening its infrastructure to others, ‘Organizing for solutions: systems seller vs systems and also from sharing its infrastructure costs with integrator’, Industrial Marketing Management, Special a larger base of volume. So Amazon’s internal costs Issue, Project marketing and marketing solutions, go down, even as its revenues go up [12]. 36: 183–193. [7] Brusoni, S., Prencipe, A. and Pavitt, K. (2001), Conclusion ‘Knowledge specialization and the boundaries of This volume clearly establishes the growing impor- the firm: Why do firms know more than they make?’, t ance of services — and services innovation — in Administrative Science Quarterly, Vol. 46, 597–621. an advanced economy. We can learn much about [8] Prencipe, A., Davies, A. and Hobday, M. (eds) (2003), innovating services from the product management The Business of Systems Integration, Oxford University Press, Oxford. literature. Yet important departures from the world of products are necessary in order to grasp the [9] Gerstner, L. V. (2002), Who Said Elephants Can’t challenges and opportunities inherent in innovating Dance? Inside IBM’s Historic Turnaround, Harper Collins Publishers, London. services businesses. [10] Galbraith, J. R. (2002b), Designing Organizations: Innovative service organisations must be mindful An Executive Guide to Strategy, Structure, and Process, Jossey-Bass, Wiley, of the underlying systems knowledge required to identify, access, and leverage the wealth of external [11] Davies, A., Brady, T. and Hobday, M. (2006), knowledge surrounding them. They must be open, ‘Charting a path toward integrated solutions’, MIT Sloan Management Review, Spring 2006, 39–48. and strive to avoid the ‘not invented here’ syn- drome that neglects the external as they develop [12] Chesbrough, H. (2011), Open Services Innovation: the internal. And they would do well to consider Rethinking Your Business to Grow and Compete in a New Era both the customer-facing side of their business and the back-end transactional side of their business, in order to achieve both economies of scale and scope in their markets.
  14. 14. 131.2 The drivers for new societal fabric: why active measures for the new societal dialogue are needed for creativity and growth in the wisdom societyThis article represents one perspective of the need did before, just ‘better’ and ‘more effectively’, veryto create a new societal fabric for user-centric much based on those paradigms we were familiarinnovation, especially for the services sector. The with in the industrialised society.knowledge-intense services will be the key for thecreation of new growth beyond the economical and -partly societal turmoil we are currently in. out putting enough thought into the fundamen- tal change we are in. It is not about transformingThe knowledge society is in transformation to the something into an electronic format. The change iswisdom society, where information and knowledge much more profound. Society is moving from a hier-is not only seen as a raw material for normal activi- archical and controlled to something where citizenties, but where the structural use (mash-up) of empowerment together with value-based commu-societal and technology innovation is based on new nities will have a profound role. This is already seentypes of connectivity and value aggregation. around us in people’s behaviour, but also in the new innovation processes where connectivity of skillsIn this article, possible new drivers for growth are and values are increasingly important.elaborated, as well as the possible enablers for newtypes of entrepreneurship and sustainable soci- What has changed? When we look at the technologyetal and economic development. We need to see revolutions and the following industrial and societalhow to build the new societal fabric for innovation revolutions a hundred, two hundred years ago weand sustainable development both societally and need to have a focus on the transformative natureeconomically. most recent revolution, the ICT revolution, has itsBackground transformative power in the fact that, for the firstWe are in a bigger societal change than ever before time in mankind’s history, our society is moving toin mankind’s history. The information and commu- less hierarchical one, simultaneously both in timenication technologies have already affected human and space.behaviour fundamentally, by enabling wide demo-cratic connectivity and easy information availability What does that mean? Now, more than 10 yearsat our fingertips. a er the beginning of this revolution we see the power of crowds, and also new business modelsHowever, when we look at the current eDrivers seriously conquering the old ‘dinosaur’ models(eCommerce, eGovernment, eServices, etc.), we still which were valid in the industrialised era. We aresee that there is a strong trend to do things as we now in the hype of the ‘knowledge society’ whereFigure 1. A lot of keywords — what is behind them — the real world in change!
  15. 15. 14 O P E N I N N O V A T I O N 2 0 1 2 Fundamental change – a revolution! Figure 2. Handicraft Industrial E-business E-life + e-work Space Local Multinational Inherently global Operation Sequential Parallel Strategy Win-lose Win-win Competitive factor Skills Capacity Multi-skill Innovation Energy Transportation Materials Individual Information Communication mobility processing 1800 1850 1900 1950 1980 2000 information and knowledge is accessible and being assume that Maslow’s hierarchies of needs are a part of the competitiveness of organisations and also individuals. But, the biggest issue is still how to create the societal fabric which will take Largely, in the Western world, the basic physiologi- us to the wisdom society, following the enablers cal and safety needs are in policy focus and, there- and also drivers ICT is creating, for connectiv- fore, we also can say that those are not necessary ity, for leadership leading to a both societally and the main issues for new policy actions, enabled by environmentally sustainable society. societal connectivity. The drivers of individuals and society When looking at the changes in societal behaviour, The change is inevitable. However, we need to see in we see that the levels of esteem and self-actuali- this new context some of the time-invariant drivers sation start to grow both in ICT applications (social over the various revolutions. Can we, for example, media) and the offerings enabled by (modern) ICT. !""#$%&##&(%)*%+,(&)-.(%/0#$,$1/2%3$0#(%1/,45# Figure 3. Upper levels of Maslow’s hierarchy drives change enabled by ICT [2] #4,6&#3%62%789 morality, creativity, spontaneity, problem solving, lack of prejudice, Self-actualization acceptance of facts self-esteem, confidence, achievement, respect of others, Esteem respect by others friendship, family, sexual intimacy Love/belonging security of: body, employment, resources, Safety morality, the family, health, property breathing, food, water, sleep, homeostasis, excretion Physiological
  16. 16. 15We need to be much more active in focusing policy embedded knowledge. The ‘Maslow pyramid formeasures towards the new societal fabric, whichis clearly built on the upper levels of the Maslow this perspective. The most critical levels of successhierarchy. are cross-organisational issues, innovation culture (open, experimental, sharing) and the organisa-What does that mean for innovation? The focus of tional agility to position the competencies of thesuccessful innovation will be driving towards satis- company in the society, vis-à-vis other organisa-fying the upper-level needs, those factors increas- tions, but also among the citizens. Citizens are iningly being the differentiation factors between the new understanding not ‘objects’ for innova-successful and non-successful innovation. Hence, tion, but due to the societal fabric and nature ofuser-centricity, and even user-driven innovation innovation active players, ‘subjects’.paradigms, should be our new (European) approach. The challenge is to support the move towardsOpen innovation environments enable the wide higher level in the Maslow hierarchy to satisfyinteraction necessary for success. What is even societal needs for sustainable society. It requiresmore important is to understand the role of proto- an infrastructural change and also experimentationtyping, because then the various drivers are inter- and prototyping to see how we can match the soci-acting in a concrete way, not only conceptually. Our etal drivers, organisational drivers and individualresearch and development actions should build on needs in a robust way. To achieve a robust society,creating a strong, open innovation culture based a strong leadership is needed. A leadership enablingon prototyping (not piloting, as innovation is a true new societal contract between individuals and themash-up, no longer sequential). society, the inclusive wisdom society is the critical asset for the future.The same change can be seen in enterprises/organisations. In the industrial era, the drivers were Groups, especially value groups are driven bycost-oriented, focused on the basic, predictable agglomerated values. How to transform theand calculable value of the company or company described needs towards values is one of theclusters. key questions when we try to see new openings for growth and entrepreneurship in the field ofHowever, when we see the new operating citizen-close services.environment for knowledge-intense companieswe see the transformation from tangible products The universal value theory of Schwarz createsto intangible ones, or products and services with an interesting approach in the strategic thinking The innovatio culture and agility are the drivers for future enterprisesFigure 4. The innovation culture and agility are the drivers for future enterprises and organisations [3] and organizations soft impact on organizational success organizational measurability of bebefits agility innovation culture cross-org collaboration employee satisfaction customer satisfaction revenue generation cost-savings hard
  17. 17. 16 O P E N I N N O V A T I O N 2 0 1 2 Figure 5. The universal values by Schwarz create an interesting framework to look at the values of new types of entrepreneurs and enterprises [4] Openness to Self- Change Direction Universalism Self- Creativity, Social Justice, Transcendence Freedom Equality Stimulation Exciting Life Benevolence Helfulness Hedonism Pleasure Conformity Tradition Obedience Humility Devoutness Achievement Success, Ambition Security Power Social Order Conservation Authority, Self- Wealth Enhancement Organized by motivational Source: http://www.yourmorals.org/schwartz_graph.jpg similarities and dissimilarities of how to transfer the individual needs described also in special focus when looking at new entrepre- by Maslow to a more group and society-oriented neurship: how to create platforms for global develop- ment and experimentation for the ideas to be veri- fied in real-world settings, without too much risk, and Based on interesting study results, we see new providing a fair share of the return to the creators. types of values emerging, supporting the openness to change, self-direction and also self-enhance- Necessity of new approach ment. A good in-depth analysis is found, for exam- When speaking about the creation of new societal ple, in the discussion papers of the Selusi project fabric, new entrepreneurial forms and new extra- [5] funded by the European Commission. The project preneurship, co-creativity of services is important. focuses on social enterprises and entrepreneurs, The need to create knowledge-intense services widening the definition also to profit making com- based on open platforms enabling new service panies operating in the societal fabric, creating it, offerings also combining the cyber world with real- and also with usually large well-established com- world offerings is increasingly important. panies. These new enterprise ecosystems seem to be more stable than the traditional ones compris- ing of old type of businesses and also, remarkably, ICT enabled platforms, the new business models, the innovation capability of these new generation of and the increased personification of services put entrepreneurs is significantly higher than those in the end-user in the driver’s seat for the new ser- traditional sectors. vice society. Knowledge per se is no longer seen as an asset, but rather a raw material only, as only As shown in the study, the traditional entrepreneurs increasingly combined with human experience and focus very much on values like power and tradition societal values can we create sustainable develop- whilst the new generation of entrepreneurship is ment, in the wisdom society, where the new societal much more based on universalism and stimulation fabric for well-being is created. based on creativity, for example those micro-multina- Growth in well-being can increasingly be achieved tionals in gaming. Micro-multinationals, that is small by intangible actions and services, provided that companies operating on global platforms, should be the basic needs are fulfilled. Hence, the drivers
  18. 18. 17Figure 6. What does the average value profile of a social entrepreneur look like? [6] Universalism* Self-direction# Benevolence Social entrepreneurs appears to be Stimulation* Tradition* much less conformist and radically more Hedonism* Conformity* universalist than mainstream entrepreneurs Achievement Security* Power* Employees(ESS) Entrepreneur(ESS) Social entrepreneurs(SELUSI)from the Maslow and Schwarz theories are worth Conclusionbeing taken into closer consideration when develop- The next generation of Internet is emerging, withing new European citizen-centric innovation policies. mobility, true broadband, active interactivity andThis should also stimulate new entrepreneurship highly personalised services. However, we are cur-and new forms of wealth in the economy. rently relatively weak in driving the applications forward following the paradigm shi s in society,The traditional innovation pyramid is reversed, and setting the user in the centre (user equals citizens,there is no return. firms, etc.) We need to have a deeper look at the new societal fabric for innovation, building on theFigure 7. Reverse innovation pyramid [7] Traditional approach New open innovation models Service to the customer market - no user involvment - innovation ecosystem (including users, business partners, individual App developers, etc.) Wealth generation by the service provider - no user involvment - users as innovators / participants Users as in new services creation participants of innovation - service providers capturing new services by service ideas from the users creation by providers innovating service/ service/ technology technology development development Wealth generations: - innovation Share profit - user as a customer adoption by users - service provision and adoption service providers and service - innovation ecosystem partner - fair exploitation providers dissemination and uptake - upscaling - costs - costs
  19. 19. 18 O P E N I N N O V A T I O N 2 0 1 2 mash-up of societal drivers, value drivers and References technological (mainly ICT) enablers. [1] Salmelin, B. (1999), Presentation materials. Moving to user-centricity and co-creativity enabling [2] the fair and safe trial of new services on open plat- forms also requires new thinking of the legal and [3] http://www.cloudave.com/631/ policy approaches for the wisdom society, captur- maslow-s-hierarchy-of-enterprise-2-0-roi/ ing the societal dimension of the knowledge society. [4] Can we build new practices and principles based on the rights and the roles of the citizens in the [5] http://www.selusi.eu society? Can we create a set of fundamental rights [6] Stephan U. (2011), Creativity and Innovation of in the digital context which cannot be violated in any situation, thus enabling more freedom to make Conference, Brussels, 6 October 2011. prototypes and trials on new business and service [7] OSI Consortium (2011), Socio-Eonomic Impact models in the real-world settings? of Open Service Innovation Directorate-General for the Information Society However, when we look at the real issues, we need and Media (SMART 2009-0077) (http://ec.europa. to be very active on the political level to create ). rules, principles and practices on how the new society is shaped. What are the rules of the game regarding privacy, commercial v citizen rights? What do we want the future societal fabric to look like? Can we move into a development paradigm based on real-world prototypes and trials, encompass- ing the technology, society and policy frameworks, integrating them in experimental way, developing simultaneously the various components of the future society? It is right time to think about a new approach seriously, and lead the way by courageous pan-European actions. Now is the time to initialise the debate on the future wisdom society, its values and principles. What is the new contract between citizens and the society, in the new era? Contact Bror Salmelin Adviser to the Directorate H Directorate-General for the Information Society and Media European Commission bror.salmelin@ec.europa.eu
  20. 20. 191.3 Unlocking the digital future through open innovationNeelie Kroes, Vice-President of the European this case the actions and policy formulations of theCommission and EU Commissioner for the Digital Digital Agenda, to be successfully delivered.Agenda for Europe (DAE), argues, “key to achievingmany of our competitiveness and innovation ambi- Digital Agenda for Europe — the contexttions in the coming years (…) is to embrace open The European Commission, in consultation with dif-innovation and platforms, so that we avoid wasteful ferent stakeholders, launched the Digital Agendaplatform competition, and anticompetitive lock-ins, for Europe to exit the economic crises and to faceas well as stimulating development and investment societal challenges such as demographic changein new generations of online services” [1]. and global competition in all economic sectors.The Digital Agenda for Europe was launched on The Digital Agenda sets out 101 actions clustered19 May 2010 as the first of seven flagship ini- in seven pillars; these actions shall ensure thetiatives under the ambitious Europe 2020 strat- emergence of a European digital single market andegy which sets out the EU growth strategy for society. The seven clusters of action are Vibrantthe coming decade to a smart, sustainable and single market, Interoperability and standards, Trustinclusive European economy. Research and Development (R & D), Digital literacy,In order to challenge the economic crises, slowed Inclusions e-Skills and Societal challenges (publicdown economic and social progress and exposed services, health, environment) [2]. The seven fieldsstructural weaknesses in Europe’s economy, the of action link technological and societal innovationoverall aim of the Digital Agenda is to deliver sus- within a strong framework for the future knowledgetainable economic and social benefits from a digital society, which is based on ICT infrastructures. Thesingle market based on fast and ultra-fast Internet use of ICTs in Europe is crucial to address policyand interoperable applications [2]. To achieve this, objectives in societal and economic key areasthe Digital Agenda proposes actions defining the such as an ageing society, climate change, reduc-role information and communication technologies ing energy consumption, improving transportation(ICTs) will have to play if Europe wants to succeed in efficiency and mobility, empowering patients andmaximising the social and economic potential of ICT ensuring the inclusion of persons with disabilitiesfor the benefit of European businesses and citizens. [2]. It is believed that by the right deployment of ICTs in the above mentioned fields, a digital societyIn the broader context of the policies and actions will be created with benefits for all actors involved.outlined by the DAE, it appears as if interoperabil-ity and standard-setting both for inclusive digital The deployment of ICT is a critical element inservices and eGovernment services are in need addressing climate change. So far, the EU has com-of pan-European platforms to coordinate cross- mitted to cutting its greenhouse gas emissions byborder service creation in partnership. The remain- at least 20 % by 2020 compared to 1990 levels anding question, which has been largely neglected by to improving energy efficiency by 20 % [2]. ICT forthe Digital Agenda till now, is how these emerging environment has a cutting-edge role setting stand-platforms can be aligned under common principles ards and measurement frameworks for ICT servicesand common architectures to build a genuine single and products targeted at reducing energy use andmarket ecosystem for services development and greenhouse gas emissions across Europe. Withinteraction between public, private sector actors, regards to a fast deployment of ICT-based solutionsand people. Henceforth, this article gives an insight for smart-grid and meters, near-zero energy build-into the discussion: Can open innovation give rise ings and intelligent transport systems, cooperationto open, interoperable platforms and ecosystems and partnership between industries, public authori-enabling successful implementation of policies and ties and other sectors is of vital importance to ena-actions outlined in the Digital Agenda for Europe? ble citizens and organisations to reduce their own carbon footprint [2]. ICT solutions are needed to fur-It will be argued that, from an intellectual capital ther monitor, analyse and visualise energy consump-perspective, open innovation represents the struc- tion and emissions of buildings, vehicles, companies,tural capital, while industry, academia and private cities and regions. In particular, smart grids are con-users present the human capital. Both structural sidered to lead towards a low carbon economy. ICTcapital and human capital raise the relational solutions such as open transmission-distributioncapital which enables the intellectual capital, in infrastructures, communication platforms and
  21. 21. 20 O P E N I N N O V A T I O N 2 0 1 2 control panels therefore ensure cooperation and eHealth policymaking, should thus be embedded interoperability between different grids. in the general context of eGovernment services like eBusiness,eLearning, eInclusion, eSecurity and The Commission has recognised the importance of many more to make sure that developments and healthcare to European citizens as well as the tre- policymaking is not excluded from other fields of mendous potential ICT bear for stimulating market eGovernment services, which may be working on growth and innovation in healthcare systems and the same issues in different development stages. pharmaceutical and medical devices throughout Therefore, private-public-people partnership and Europe. Therefore, the DAE subscribes huge impor- consultation is vital to address the development of tance to accomplishing its eHealth targets in order eHealth services with a real-life approach. to create sustainable healthcare and ICT-based support for dignified and independent living. Pre- Broadly speaking, eGovernment which often is requisite to eHealth creating benefits for all, how- referred to as eGov, digital government or online ever is, the removal of legal and organisational government [4] refers to services enabled by a barriers, particularly those to pan-European inter- new ICT environment. eGovernment services offer operability, and strengthening cooperation among a cost-effective route to better services, for busi- Member States [2]. It appears as if there is no doubt nesses and citizens and significantly reduce time, that eHealth has the potential to create benefits for cost and administrative burdens for public adminis- all actors in society. However, eHealth does not by trations. In Europe, some eGovernment services are far present the salutary approach to the structural already available in most Member States; however, shi in healthcare that seems to be inevitable. As huge differences exist between the levels of take- Mars (2010) argues, policymakers face critical up amongst Member States. According to the Com- challenges as they attempt to develop borderless mission, in 2009, only 38 % of EU citizens used the eHealth policy amid competing demands on funds Internet for accessing eGovernment services, com- and resources [3], which as a consequence, might pared to 72 % of businesses [2]. Hardly any pub- broaden the digital divide between those capable lic services are accessible either across borders or of using and participating in the digital society and across different industrial sectors within Member those remaining excluded. This not only links to the digital literacy of Europeans, but indeed challenges pushing for a swi implementation of user-centric, eHealth and the lack of uniformity in healthcare personalised and multi-platform eGovernment policies across the 27 EU Member States, as no services by 2015. common responsibility to eHealth exists among the Member States’ policymakers. Mars [3] points out The main prerequisite for seamless cross-border how in 13 countries, the main health policymakers eGovernment services in a digital single market however is the interoperability of eGovernment ser- eHealth policy, multiple ministries and/or national vices which are accessible by businesses and citizens stakeholders are involved in planning policy. across borders. The Commission aims at challenging the lack of cross-border public service applications In addition, eHealth policy targets vary across by driving towards pan-European public services Member States resulting in a lack of adherence to solutions. In order to do so, Europe needs better seemingly common goals [3] which leads to very administrative cooperation to develop and deploy poor universal policy implementation outcomes at cross-border public online services [2]. the Member State level, lacking any real-life prac- tice. Departing from this, even though there is only ‘The European eGovernment Action Plan 2011–15 little doubt that further R & D on eHealth will stir — Harnessing ICT to promote smart, sustainable technologies, applications and services facilitating and innovative Government’, proposes key priorities the emergence of a pan-European eHealth sector. to realise the objectives on eGovernment approved There is a huge danger that eHealth applications unanimously by the fi h Ministerial eGovernment and services are implemented without increasing, Declaration, also known as the Malmö Decla- at the same time, digital literacy among patients as ration. Overall, the Malmö priorities push towards well as medical staff. It is thus of most importance more resource-efficient usage as well as engage- to take citizens on board already in the early devel- ment with citizens. The use of ICT with innovative opment stages of eHealth applications and services technologies such as service-oriented architectures to make sure that technology is user-friendly and (SOA), or clouds of services, together with more functional. With regard to research, R & D frame- open specifications which allow for greater sharing, works need to be adopted with a strong focus on reuse and interoperability reinforce the ability of security policies, practices and broadband services. ICT to play a key role in this quest for efficiency
  22. 22. 21in the public sector. The eGovernment action plan, collaboration between industries, academia, andthus, complements the Europe 2020 strategy as small and medium-sized businesses, private andwell as the DAE by aiming at the implementation of public actors. In this vein, and in the context of thecross-border e-Government services for businesses Europe 2020 strategy, EU funding and frameworkand citizens by 2015, which by then shall be used programmes present the EU’s strategic approachby 50 % of EU citizens and 80 % of businesses. towards a common strategic framework for research and innovation.The Digital Agenda for Europe aims at bringingEurope back on track towards a digital single mar- -ket based on ultra-fast Internet. In order to moni- tiative focuses on advancing Europe’s R & D poten-tor the success of the DAE actions, the Directorate tial. According to the Commission, in Europe: inno-General Information Society and Media at the vation is our best means of successfully tacklingEuropean Commission has established the Digital major societal challenges, such as climate change,Agenda Scoreboard, which will be published on an energy and resource scarcity, health and ageing,annual basis at the Digital Agenda Assembly. which are becoming more urgent by the day [5]. The Commission argues that Europe has no shortage ofOverall, the Digital Agenda has a very strong inter- innovation potential, but instead fails to leverage itsnational approach to complete the actions in the potential by continuously underinvesting in R & D, indifferent clusters of action. The key challenge of the particular in comparison to the US or Japan. More-DAE, however, is the implementation of its actions over, unsatisfactory framework conditions, rangingacross Member States in accordance with the from poor access to finance, high costs of IPR (Intel- - lectual Property Rights) to slow standardisationsion will set up an internal coordination mechanism and ineffective use of public procurement [5] createto ensure effective implementation of the proposed serious disadvantages for companies who want toactions. The core principle of implementation is invest in R & D. Thereby, in Europe, we experiencecooperation and partnership with Member States, high fragmentation and costly duplication [6] acrossthe European Parliament and other stakeholders. In sectors.order to establish close cooperation with all actorsinvolved, the Commission aims at establishing a It appears as if the key challenge for the EU and‘High-Level Group’ to work together with Member its Member States is to adopt a common strategicStates, foster consultation and dialogue with mem- framework to innovation, based on common prin-bers of the European Parliament and set up large- ciples and overarching policy objectives, regulatedscale stakeholder events in the different fields of across Member States at the highest political level.action to facilitate debate and partnership. In this vein, the Innovation Union sets out such a bold, integrated and strategic approach [5], which,The Digital Agenda Assembly presents the cutting- in the next decade, has the potential to createedge event bringing together actors from Member 3.7 million jobs and increase annual GDP by closeStates, EU institutions, citizens’ representatives, to EUR 800 billion by 2025, if the Commission, inand industry to evaluate progress and emerging cooperation with public and private actors, man-challenges to the Digital Agenda for Europe. In ages to increase funding for R & D to 3 % of GDP bythis vein, the Commission published, in May 2011, 2020. Policies set out by the Innovation Union aimthe first annual Digital Agenda Scoreboard, which at strengthening Europe’s knowledge base by pro-provides a first, however, very early, update on posing actions to complete the European Researchsocio-economic developments as well as progress Area by 2014, bridging the gap between Europeanof DAE actions. As improving the EU research and and national research policies towards a commoninnovation funding and innovation partnership pro- cross-border policy approach, based on increasinggrammes, is one of the key prerequisites in order business-academia collaboration. The Commissionto stir European ICT innovation, it is worth analys- fosters the creation of a genuine single Europeaning programmes currently in place to support the market for innovation to attract innovative compa-targets set out by the Europe 2020 strategy. Thus, nies and businesses as well as to stimulate privatethe next section examines the nature and organi- sector investment in R & D and European venturesational developments of the most prevailing EU capital investments.research and innovation funding programmes. One of the most central themes of the InnovationEU research and innovation funding Union is to pool innovation efforts by involving eve-Successful implementation of actions and policies ryone in the innovation process. What has beenof the DAE requires innovation partnerships and coined European Innovation Partnerships refers to

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