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Future of open innovation slideshare

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Overview of Open Innovation practices and a peek ahead based on some back-of-the-envelope future scenarios ...

Overview of Open Innovation practices and a peek ahead based on some back-of-the-envelope future scenarios ...

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    Future of open innovation slideshare Future of open innovation slideshare Presentation Transcript

    • The Future of   Open Innova1on  February, 2011 Philippe Vandenbroeck,   Partner, shi4N Shiftn, ©2010www.shiftn.com 1
    • Understanding the future of open innova;on Shiftn, ©2010www.shiftn.com 2
    • A diverse landscape Shiftn, ©2010www.shiftn.com 3
    • Apples iPod > 300 million sold 70% market share in the US iTunes 1 billion USD Q4 2010 only 6 months development time !Shiftn, ©2010www.shiftn.com 4
    • Apples iPod > 300 million sold 70% market share in the US iTunes 1 billion USD Q4 2010 only 6 months development time ! because Apple sourced in the idea from an outside consultant and assembled a team of 8 component technology partners to bring it to marketShiftn, ©2010www.shiftn.com 5
    • Open Innova1on is not new Shiftn, ©2010www.shiftn.com 6
    • Open Innova1on is not new Shiftn, ©2010www.shiftn.com 7
    • Cri1cal uncertain1es   "Open Innova1on is the use of  purposive inflows and ou?lows of  knowledge to accelerate internal  Henry Chesbrough  innova;on, and expand the  markets for external use of  innova;on, respec;vely." Shiftn, ©2010www.shiftn.com 8
    • A diverse landscape  •  Sourcing in external exper;se    •  Collabora;ve innova;on    •  Valorizing endogenous (dormant) IP  •  User‐led innova;on       •  Corporate venturing     Shiftn, ©2010www.shiftn.com 9
    • A diverse landscape  •  Sourcing in external exper;se    •  Collabora;ve innova;on    •  Valorizing endogenous IP  •  User‐led innova;on        •  Corporate venturing      Different approaches   Different goals  Different implica1ons for strategy and capabili1es   Shiftn, ©2010www.shiftn.com 10
    • A diverse landscape OI Mode Goal Locus CapabilitiesSourcing in Reduce costs, End of stage-gated Frame issues, Speed to Market innovation process Find expertiseCollaborative Radical innovation, Fuzzy front end Ecosystem mgt,Innovation New business models IP regime design System integrationValorizing Increase revenues Modularization,endogenous IP from existing assets identify application spaceUser-led innovation Empower customers, Ideation, Crowdsourcing, Create brand loyalty customisation MarketingCorporate Venturing Secure access to Anywhere Scouting component technologiesShiftn, ©2010www.shiftn.com 11
    • Sourcing in exper1se Shiftn, ©2010www.shiftn.com 12
    • Tata Nano: only 34 patents Open Hardware Model Collabora1ve Innova1on  ?Shiftn, ©2010www.shiftn.com 13
    • SOCIAL PRODUCT DEVELOPMENT"Together, we develop two newproducts every week. One could beanything; the other is based on abrief we provide you ... "User‐led Innova1on Shiftn, ©2010www.shiftn.com 14
    • Valorizing endogenous IP Shiftn, ©2010www.shiftn.com 15
    • Corporate Venturing Investment focus: consumer products and services, health care,weight management and tness, media, water, clean tech,environmental services, ...Shiftn, ©2010www.shiftn.com 16
    • Wide scan: P&G Connect & Develop Shiftn, ©2010www.shiftn.com 17
    • Concluding  •  Open Innova;on is designing the flow of  knowledge assets across company boundaries.  •  Open Innova;on is not a monolithic prac;ce.  •  Building an OI por?olio has to be anchored in a  clear strategic vision.  •  Deploying full spectrum OI entails a strategic  upframing, away from product and technology  layer to include service and business model  innova;on. Enormous degrees of freedom!     Shiftn, ©2010www.shiftn.com 18
    • Drivers behind open innova1on Shiftn, ©2010www.shiftn.com 19
    • Fragmentation of IPEroding innovationmodel of majors The spread of OpenJob mobility InnovationProsumership FOR Shiftn, ©2010www.shiftn.com 20
    • the microprocessor paradigm asset liquidity and option density from value chain to value constellations: innovative co-productive relationshipsShiftn, ©2010www.shiftn.com 21
    • the microprocessor paradigm asset liquidity and option density from value chain to value constellations: innovative co-productive relationships "It is the views in the minds of business people that are the  greatest constraint, and the source of greatest opportuni;es today.   There are no mature businesses. There are only mature frames  of reference."              Normann and Ramirez, 1994 Shiftn, ©2010www.shiftn.com 22
    • Fragmentation of IP Culture (NIHS)Failing innovation The IP conundrummodel of majors The spread of OpenJob mobility Innovation Transaction costsProsumership Elusive business case FOR  AGAINST Shiftn, ©2010www.shiftn.com 23
    • The IP conundrum  ?  evolving  economic  partner‐  vola1lity  ships  Secrecy or Transparency?   Importance  interna1onaliza1on  Speed or Security?  of intangibles  Generic or Flexibility?  Increasing  heterogeneous  partnerships  Cost or Opportunity Cost?  speed  of innova1on   Shiftn, ©2010www.shiftn.com 24
    • Differen1ated suite of agreements and exit/divorce plans  Clear but modular typology of knowledge assets  Clear phasing of R&D process  evolving  economic  partner‐  vola1lity  ships  Secrecy or Transparency?   Importance  interna1onaliza1on  Speed or Security?  of intangibles  Generic or Flexibility?  Increasing  heterogeneous  partnerships  Cost or Opportunity Cost?  speed  of innova1on    Clear strategic vision Shiftn, ©2010www.shiftn.com 25
    • Elusive   Belderbos et al. 2009 Business Case  Data reflect technological ac;vi;es of 168 sample firms, 1996‐2003   R&D‐intensive European, US and Japanese firms in five industries Research Orienta-on  EXPLORATIVE  EXPLOITATIVE SOLITARY COLLABORATIVE  Collabora;ve Innova;on,  Valorizing dormant IP  Insourcing •  "Contrary to our expecta;ons, it is collabora1on in explora1ve technological ac1vi1es,  rather than collabora;on in exploita;ve technological ac;vi;es, that leads to a reduc1on  in firm value." •  "These findings ques;on the relevance of open business models for technological  ac;vi;es. In par;cular, they suggest that the poten1al advantages of collabora1on for  (explora;ve) technological ac;vi;es (i.e. access to complementary knowledge from other  partners, sharing of technological costs and risks) might not compensate for the poten1al  disadvantages, such as the incurred increase in coordina;on costs and the need to share  innova;on rewards across innova;on partners."   Shiftn, ©2010www.shiftn.com 26
    • The Future of Open Innova1on Shiftn, ©2010www.shiftn.com 27
    • Cri1cal uncertain1es Driving forces  Environmental  Impact of climate change  Poli1cal  Scarcity of energy/raw materials  Geopoli;cal security  Extent of mul;‐polarity  Social  Demographics  Economic  Availability of human capital  Intensity of global compe;;on  Acceptability of closed IP  Access to capital  Economic surplus  Technological:  Emergence of new business models  Informa;on security Shiftn, ©2010www.shiftn.com 28
    • Cri1cal uncertain1es Cri1cal Uncertain1es  Strategic agility of innovators  Low High Intensity of exogenous pressures Shiftn, ©2010www.shiftn.com 29
    • A back‐of‐the‐envelope scenario framework  high   strategic   agility  moderate  high  pressures  pressures  low  strategic   agility Shiftn, ©2010www.shiftn.com 30
    • Scenario framework  Willingness/ability to  high   embrace new business  strategic  models, partnerships.    agility  Pressing societal needs  (health, climate),   Expensive inputs,   Tough global compe11on  Low societal acceptance of  closed IP  moderate  high  pressures  pressures  low  strategic   agility Shiftn, ©2010www.shiftn.com 31
    • 4 thumbnail scenarios  Focus on time-to-market and exibility high   Strong focus on user-embedded technology strategic  Soft IP (licence of right)  agility  Highly differentiated innovation landscape Convergence on interoperability standards OI-oriented public procurement Techno‐  hybridiza1on  moderate  high  pressures  pressures  low  strategic   agility Shiftn, ©2010www.shiftn.com 32
    • 4 thumbnail scenarios  high   strategic   agility  Techno‐  hybridiza1on  moderate  high  pressures  pressures  Ac1vist OI  Open source/commons-oriented innovation Limits on patentability and copyright Erosion of IP base through hacking and theft State control of IP rights in strategic areas low  strategic   agility Shiftn, ©2010www.shiftn.com 33
    • 4 thumbnail scenarios  high   strategic   agility  Techno‐  hybridiza1on  moderate  high  pressures  pressures  Big = beau1ful  Ac1vist OI Business as usual: insourcing logicIncumbents dictate terms of semi-OIPatent-anchored hard IP low  strategic   agility Shiftn, ©2010www.shiftn.com 34
    • 4 thumbnail scenarios Strong focus on user experience high  Blue Ocean service/business model innovation strategic Fluid value constellations  agility Brands trump IP Techno‐  Blue Ocean  hybridiza1on  moderate  high  pressures  pressures  Big = beau1ful  Ac1vist OI  low  strategic   agility Shiftn, ©2010www.shiftn.com 35
    • Concluding  •  The future of Open Innova;on is an open future.  •  The ques;on is not whether we can prove these  scenarios true. The ques;on is: if they materialize,  what does it mean for our innova;on model?   •  Under the assump;ons studied, the dominant IP  regime is very likely to undergo significant changes.   •  Very likely all of these forms of Open Innova;on will  manifest themselves. In that sense the scenario  framework cons;tutes a typology of forms of OI.  •  The full poten;al of Open Innova;on can only be  leveraged by those companies that are willing to  innovate their business model. Shiftn, ©2010www.shiftn.com 36
    • www.shi4n.com Shiftn, ©2010www.shiftn.com 37