Open Innovation - global trends and examples

Global trends in OPEN INNOVATION José Cláudio C. Terra 1

Battle of Concepts Challenges to undergraduate students 2

TerraForum Consulting Our Mission “ Help our clients to learn, collaborate and innovate in more effective ways 3

More than 300 projects with leading companies within the last 7 years 44

Publishing Portfolio – TerraForum Consulting 55

TerraForum Consulting Innovation Center Portal 6

What is Open Innovation? “ Innovation distinguishes a leader from his followers. Steve Jobs 7

“ 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, respectively." Henry Chesbrough, 2003 8

Open Innovation Model – The Innovation Funnel Through the open innovation model organizations keep strong relationships with external parties at different stages of the innovation development process Research Development Comercialization Joint Venuture Licensing External Technology Insourcing Spin-in Merge and Aquisitions INTERNAL MARKET R&D Divest Spin-off Licencing R&D Services 9

Through Open Innovation businesses are increasingly open to insights, ideas and collaboration from multiple sources... 10

For most companies innovation is a proprietary activity but for others... Closed Innovation Open Innovation Not all of the smart people work for us, so we must Most of the smart people in our field work for us find and tap into the knowledge and expertise of bright individuals outside our company To profit from R&D, we must discover, develop External R&D can create significant value; internal and ship ourselves R&D is needed to claim some portion of that value We don´t have to originate the research in order to If we discover it, we will get it to market first profit from it Building a better business model is better than If we are the first to commercialize we will win getting to market first If we create the most and the best ideas in the If we make the best use of internal and external industry, we will win ideas we will win We should profit from others´ use of our IP, and We should control our intellectual property (IP) so we should buy others´ IP whenever it advances that our competitors don´t profit from our ideas our own business model 11

Open Innovation creates new revenues opportunities Closed Model Closed Model Open Model Past Present Future Revenues New Businesses Spin-Offs New Revenues Royalties Revenue Revenue Revenue Internal Internal Development Development Cost Internal Cost Development Cost Costs 12

How companies will organize themselves to support open innovation approaches? “ The best manner to predict the future is inventing it. 13

Companies are creating their own Open Innovation Systems, that are composed by... Processes Partners´ and Governance Network relationship Open Innovation System Organizational Infrastructure structure 14

Key Factors for Open Innovation Success Clearly Defined Support and IP policies Organizational Services for Structure and Partners Governance Strong Relation Infrastructure Network and location Adequate Partners Funding Collaborative Stakeholders Culture Support Open Processes Strategic Innovation and KPIs for Alignment Innovation System Mgmt 15

Benchmark Study: “Best Practices in Open Innovation Systems” Participating Companies Brazil Global 16

Best Practices in Open Innovation Systems (OIS) “ Philips established partnerships all over the innovation stages, from basic research to commercialization. Besides, developed a technology park in Eindhoven that became worldwide renowned that was capable to attract the strategic competencies to the company. Philips High Tech Campus offers infrastructure for their partners, e.g.: suppliers, consultants, patents office, venture capitalists, governmental research organizations, research specialists. It also offers paid services, such: offices for rental, incubation and laboratories. 17

High Tech Campus, a new concept on Open Innovation System  Modern technology park  More than €500M in investments;  Technology-based startups incubation  The design stimulates and forces collaboration between partners  Close to universities  “Research Hotel” concept 18

Best Practices in Open Innovation Systems (OIS) Philips High Tech Campus (Eindhoven) 19

Best Practices in Open Innovation Systems (OIS) “ Telefónica has established a network that involves more than 1,000 partners. The company structured 7 research centers, most in Spain and close to technology parks. “ Nokia promotes “Day Dreams” with their partners, where they discuss about the technology and products trends and forecast. “ Syngenta keeps a full time partnership manager to manage collaboration and the network relationship, stimulating new business and solving conflicts. 20

Using web2.0 tools to improve open innovation in organizations “ The best manner to predict the future is inventing it. 21

What facilitates this NEW approach to innovation is the rise of Web 2.0 – as an open and participatory platform... 22

Procter & Gamble Tremor Competitive Intelligence • Capture impressions and trends from teenagers • Establish relationships and understand specific publics • Benefits: • Improve the relationship of P&G products with strategic customers. 23

Dell IdeaStorm Ideas and Insights Users can: • Submit ideas; • Comment ideas posted; • Vote on ideas • More than 12.000 ideas • 84 comments and votes • 347 ideas implemented 24

Innocentive R&D Companies propose challenges to researchers and universities and give prizes up to US$1M. Benefits: • Increase the network • Improve the quality and speed on development of new solutions • Reduce the R&D investments More than 70.000 researchers 50 universities Companies such Basf, Syngenta e DuPont participate. 25 25

Kraft First Taste Testing Community to discuss new products where users can: • Provide feedback to new products • Share opinions • The most participative users have a “first taste” new products first than others Benefit: Kraft improves products by using costumers experiences. 26

Yet2.com Commercialization and Scaling up Companies buy and sell licenses for the usage of technologies and patents. Benefits: • Profits from non-strategic and not used technologies • Companies can innovate without internal R&D Partnerships with DuPont, P&G and Honeywell. Participation of 90% of Fortune 500. 27

Fiat Mio: Open source design Any company can use the ideas (more than 10.000) submitted by users 28

Peugeot Design Contest Open Design • More than 4 million page views • 5 demonstration models exhibited at automotive marketing events • Designers of around 100 nationalities • € 10.000 prizes • 5th year of the contest 29

Threadless Co-creation made by users 30

Lego Open source community Accelerating product innovation and turning Lego MindStorms into a highly profitable product for Lego 31

Global trends in OPEN INNOVATION Jose Cláudio Terra jcterra@terraforum.com.br www.slideshare.net/jcterra 32

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Open Innovation - global trends and examples

by Jose Claudio Terra on Apr 20, 2010

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