Open Innovation:The First DecadeJoel WestKGI - The Keck Graduate InstituteClaremont, CaliforniaACAC 2013Atlanta23 May 2013
Open Innovation
What is “open innovation”?“Open innovation is the use of purposiveinflows and outflows of knowledge to accelerateinternal ...
Source: Chesbrough (2006)CurrentMarketTechnology InsourcingExternalTechnologyBaseInternalTechnologyBaseNewMarketTechnology...
Open Innovation: then and now6,161cites†† Google Scholar1,230cites1,156cites139citesDue in2014
What’s new?• Many antecedent/overlapping areas- Technology sourcing, IP markets,university licensing, alliances, supplieri...
Open vs. user innovationOpen Innovation UserInnovationFocal actor Firm UserKnowledge transfer IP NeedsIP regime Patents Fr...
Three open innovation processes1. Inbound (or “outside-in”)2. Outbound (or “inside-out”)3. Coupled combines these twoCf. C...
Inbound Open Innovation
Review of inbound OI• Goal: Synthesize inbound (& coupled)• Sample from 25 top SSCI management& innovation journals (+15 o...
Breakdown of 165 OI pubsInbound: 118 Outbound: 50Coupled: 7057 14112426 132
4-stage process modelInnovationSource†CustomersCommercializingObtaining IntegratingInteractionFocal FirmR&DOtherFunctions†...
1. Obtaining Innovations• Best covered of the phases- Searching, enabling, filtering- Sourcing particularly well covered• ...
2. Integrating Innovations• Considers org capabilities and culture- Absorptive capacity over-researched- NIH is mentioned,...
3. Commercializing Innovations• Lots of value creation- Sometimes measured using NPD metrics- Less research on value captu...
4. Reverse PathsBeyond the linear model, this includes• Feedback mechanisms- Information flow upstream• Reciprocal measure...
Other gaps and opportunities• Is everything an “innovation”?- Patent, copyright, knowledge• Where is the business model?- ...
Outbound Open Innovation
Key challenges of outbound OI• Identifying underused IP• Simultaneous internal/externalcommercialization• Functioning IP m...
Coupled Open Innovation
Coupled open innovation• Two modes- Bi-directional (Gassmann & Enkel, 2004)Combines inbound & outbound- Interactive colla...
Looking Forward
Forthcoming OI volumes• Re se arch Po licy special issue- Chesbrough, Salter, Vanhaverbeke & West,guest editors- Ashish Au...
Thank you!blog.OpenInnovation.net
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Open Innovation: The First Decade (ACAC)

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At Atlanta Competitive Advantage Conference, presentation for panel on “Open Innovation: Multidisciplinary Perspectives and Opportunities for Future Research”

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  • Thank you
  • The open innovation model emphasizes flexibility in a firm ’ s innovation strategy: The best source of innovation may be outside the firm (arrows going in) The best market for an innovation may be outside the firm (arrows going out) The importance of flexibility. Span firm boundaries. Can bring in technology at any point in the product development process. Major goal: if firm is fighting false positives (extra cautious), you will get lots of false negatives (Chesbrough 2006). Make sure you find a way to monetize or otherwise find a path to market for these false negatives.
  • Laursen & Salter 2006 SMJ: 1324 cites (3 rd after Henry’s 2003 book and 2003 Sloan article)
  • A lot of people when they think about open innovation they only think about the inbound mode; most of the research is about inbound
  • 15 highly cited, with 100+ Google Scholar cites. 3 books and 1 chapter by Chesbrough
  • 4-phase model
  • 1. Searching (where): Sourcing, Brokerage , Limits, University research, User innovation 2. Enabling process/mechanisms (how): Contests, Intermediaries , Toolkits, PlatformsCrowdsourcing 3. Filtering (which): Gatekeepers , Technology scouts, Technology brokering 4. Acquiring: Incentives to share, Contracting, Nature of the innovation
  • Absorptive capacity: 80/280 articles
  • Definitions of innovation from Schumpeter, Ed Roberts, Chris Freeman
  • Chesbrough and Rivette & Klein’s Rembrandts in the Attic, IP licensing is going up; Issue of what, why and how: descriptive, causal and normative. At least 6 OI-related papers on technology sourcing have been retracted: SMJ, Org Science, Research Policy, Strategic Organization, Industrial and Corporate Change. Google Open Innovation retraction to read all about it.
  • Late 2013, more likely in 2014
  • Open Innovation: The First Decade (ACAC)

    1. 1. Open Innovation:The First DecadeJoel WestKGI - The Keck Graduate InstituteClaremont, CaliforniaACAC 2013Atlanta23 May 2013
    2. 2. Open Innovation
    3. 3. What is “open innovation”?“Open innovation is the use of purposiveinflows and outflows of knowledge to accelerateinternal innovation, and expand the markets forexternal use of innovation, respectively.”Henry Chesbrough, O pe n Inno vatio n:Re se arching a Ne w Paradig m (2006)
    4. 4. Source: Chesbrough (2006)CurrentMarketTechnology InsourcingExternalTechnologyBaseInternalTechnologyBaseNewMarketTechnologySpin-offsOther Firm’sMarketLicensing“Open” innovation strategiesChesbrough funnel
    5. 5. Open Innovation: then and now6,161cites†† Google Scholar1,230cites1,156cites139citesDue in2014
    6. 6. What’s new?• Many antecedent/overlapping areas- Technology sourcing, IP markets,university licensing, alliances, supplierinnovation, user innovation• New ideas include- Role of the business model- Agnostic to internal/external paths- Rise of innovation intermediariesCf. Chesbrough (2006)
    7. 7. Open vs. user innovationOpen Innovation UserInnovationFocal actor Firm UserKnowledge transfer IP NeedsIP regime Patents Free revealingInnovation production Hierarchy Community, individualMotivations Monetary Social, personal utilityFrank Piller & Joel West, Ch. 4 of O pe nInno vatio n: Ne w Re se arch & De ve lo pm e nts
    8. 8. Three open innovation processes1. Inbound (or “outside-in”)2. Outbound (or “inside-out”)3. Coupled combines these twoCf. Chesbrough (2003, 2006), Gassmann & Enkel(2004), West & Gallagher (2006)
    9. 9. Inbound Open Innovation
    10. 10. Review of inbound OI• Goal: Synthesize inbound (& coupled)• Sample from 25 top SSCI management& innovation journals (+15 oft-cited)• Either mention “open innovation” or cite Chesbrough(2003)• Hand select 291 down to 165• 161 articles, 3 books, 1 chapterJoel West & Marcel Bogers, “Leveraging External Sources ofInnovation: A Review of Research on Open Innovation,” Jo urnalo fPro duct Inno vatio n Manag e m e nt, forthcoming
    11. 11. Breakdown of 165 OI pubsInbound: 118 Outbound: 50Coupled: 7057 14112426 132
    12. 12. 4-stage process modelInnovationSource†CustomersCommercializingObtaining IntegratingInteractionFocal FirmR&DOtherFunctions† Sources may include suppliers, rivals, complementors and customers.
    13. 13. 1. Obtaining Innovations• Best covered of the phases- Searching, enabling, filtering- Sourcing particularly well covered• Most popular area: sources of innovation• Often about external knowledge and notexternal innovations• Not much about asset specificity of potentialinnovations
    14. 14. 2. Integrating Innovations• Considers org capabilities and culture- Absorptive capacity over-researched- NIH is mentioned, not well measured- Implicit assumptions• Integration seems to be a black box- Are new competencies needed?- Does utilizing external innovations help orhurt internal R&D competencies?
    15. 15. 3. Commercializing Innovations• Lots of value creation- Sometimes measured using NPD metrics- Less research on value capture• Assumes external innovationscommercialized same as internal ones- How do firms differ in external innovationcommercialization capabilities?
    16. 16. 4. Reverse PathsBeyond the linear model, this includes• Feedback mechanisms- Information flow upstream• Reciprocal measures- Ongoing interactions- Includes co-creation, communitiesResearch relatively scarce
    17. 17. Other gaps and opportunities• Is everything an “innovation”?- Patent, copyright, knowledge• Where is the business model?- Not a lot of value capture• Where are the success metrics?
    18. 18. Outbound Open Innovation
    19. 19. Key challenges of outbound OI• Identifying underused IP• Simultaneous internal/externalcommercialization• Functioning IP markets• Appropriability fears• Drag due to excess appropriabilityOutbound OI research getting scarcerChesbrough (2003, 2006b), Fabrizio (2006), Enkelet al (2009), Dahlander & Gann (2010)
    20. 20. Coupled Open Innovation
    21. 21. Coupled open innovation• Two modes- Bi-directional (Gassmann & Enkel, 2004)Combines inbound & outbound- Interactive collaboration (Piller & West, 2014)Joint production• Various examples- Open source (West & Gallagher, 2006)- Communities (West & Sims, 2013)- R&D consortia (Muller-Seitz & Sydow, 2013)̈• More abstraction is needed
    22. 22. Looking Forward
    23. 23. Forthcoming OI volumes• Re se arch Po licy special issue- Chesbrough, Salter, Vanhaverbeke & West,guest editors- Ashish Aurora, lead editor- ≈10 articles• O pe n Inno vatio n: Ne w Re se arch &Dire ctio ns (Oxford)- Chesbrough, Vanhaverbeke & West, eds.- 15 chapters
    24. 24. Thank you!blog.OpenInnovation.net

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