SlideShare a Scribd company logo

Lecture: Open Innovation

My lecture on open innovation for innovation management class.

1 of 56
Download to read offline
Open Innovation:
Engaging resources outside of the organisation
Novem 23rd, 2023
Michal Hron, PhD
Lecture: Open Innovation
Galileo Galilei
“In the summer of 1609, Paolo Sarpi, a statesman and scientist from
Venice, told Galilei about new optical devices called “occhialini”.
Occhialini can magnify distant objects. Sarpi had heard about occhialini
through his network of diplomats.
Through this network, Sarpi also heard and then told Galilei about a
traveling businessman who sold occhialini in Padova and Venice.Venice
is where Galilei spent most of his time.This is probably how Galilei first
saw occhialini. It is told that he tried but did not purchase one.
Occhialini at the time cost about four times Galilei’s annual salary.
Then, less than three weeks later, on 21 August 1609, Galilei presented
his first telescope to the public.Within a few months after this initial
presentation, Galilei had surpassed his competitors in the European
telescope market.And he had laid the foundation for his scientific
discoveries (e.g. the moons of Jupiter and the phases of Venus).“
3
De Padova, Thomas. Das Weltgeheimnis. Piper Verlag, 2013.
Galileo Galilei
Galilei had an active and diverse network of academics,
manufacturers, businesspeople, diplomats, and others.Through
this network, Galilei obtained high quality, clear glass to make
his own telescope.
Galilei was no ivory tower scientist. Rather, he had his
own construction lab, where he could rapidly test and improve
ways of manufacturing telescopes
Galilei was not just scientist or just businessman. He
combined both worlds. Perhaps this enabled (or forced) him to
sometimes come up with pragmatic solutions
4
https://mergeflow.com/how-to/galilei-style-innovation
Galileo has practiced OPEN INNOVATION
Open innovation
▪ Open innovation is a concept that involves
collaborating with external partners to develop
new ideas, products, and services.
▪ departure from the traditional closed innovation
model, where companies rely solely on their
internal resources to innovate.
▪ can take many different forms, such as
crowdsourcing, partnerships, and collaborations.
▪ Idea formulated most strongly by Henry
Chesbrough
6
Chesbrough, Henry William. Open innovation: The new imperative for
creating and profiting from technology. Harvard Business Press,
2003.

Recommended

Open Innovation, Business Model Innovation, Lean Innovation
Open Innovation, Business Model Innovation, Lean InnovationOpen Innovation, Business Model Innovation, Lean Innovation
Open Innovation, Business Model Innovation, Lean InnovationGino Tocchetti
 
MetidMatch_open innovation and groupware
MetidMatch_open innovation and groupwareMetidMatch_open innovation and groupware
MetidMatch_open innovation and groupwareDaniela Casiraghi
 
Access Is The New Ownership A Case Study Of Unilever S Approach To Open Inno...
Access Is The New Ownership  A Case Study Of Unilever S Approach To Open Inno...Access Is The New Ownership  A Case Study Of Unilever S Approach To Open Inno...
Access Is The New Ownership A Case Study Of Unilever S Approach To Open Inno...Nathan Mathis
 
Towards open innovation measurement system – a literature review
Towards open innovation measurement system – a literature reviewTowards open innovation measurement system – a literature review
Towards open innovation measurement system – a literature reviewar1815
 
Presentacio Innoget
Presentacio InnogetPresentacio Innoget
Presentacio Innogetbi0leg
 

More Related Content

Similar to Lecture: Open Innovation

Innovation management open innovation management culture
Innovation management open innovation management cultureInnovation management open innovation management culture
Innovation management open innovation management cultureInnovationManagement.se
 
Schilling 2017 chapter two ( Sources of innovation )
Schilling 2017 chapter two ( Sources of innovation )Schilling 2017 chapter two ( Sources of innovation )
Schilling 2017 chapter two ( Sources of innovation )DeanaPutriSuharina
 
Profiting from External Innovation
Profiting from External InnovationProfiting from External Innovation
Profiting from External InnovationJoel West
 
Building muscles to improve innovation networks pugh skifstad may 2020 final (1)
Building muscles to improve innovation networks pugh skifstad may 2020 final (1)Building muscles to improve innovation networks pugh skifstad may 2020 final (1)
Building muscles to improve innovation networks pugh skifstad may 2020 final (1)Katrina (Kate) Pugh
 
Chapter 2 Schilling 2017 Sources of Innovation
Chapter 2 Schilling 2017 Sources of InnovationChapter 2 Schilling 2017 Sources of Innovation
Chapter 2 Schilling 2017 Sources of Innovationahmdirvan
 
Breeding environments for Open Innovation (2007) / paper for ICE Conference
Breeding environments for Open Innovation (2007) / paper for ICE ConferenceBreeding environments for Open Innovation (2007) / paper for ICE Conference
Breeding environments for Open Innovation (2007) / paper for ICE ConferenceIlkka Kakko
 
Open Innovation: The First Decade
Open Innovation: The First DecadeOpen Innovation: The First Decade
Open Innovation: The First DecadeJoel West
 
Open Innovation: The First Decade (ACAC)
Open Innovation: The First Decade (ACAC)Open Innovation: The First Decade (ACAC)
Open Innovation: The First Decade (ACAC)Joel West
 
Chapter two
Chapter twoChapter two
Chapter twoILHAMRII
 
Henry Lopez Vega Haas Bs 9 14 2010
Henry Lopez Vega Haas Bs 9 14 2010Henry Lopez Vega Haas Bs 9 14 2010
Henry Lopez Vega Haas Bs 9 14 2010Henry Lopez-Vega
 
SOURCE OF INNOVATION Schilling Chapter 2
SOURCE OF INNOVATION Schilling Chapter 2SOURCE OF INNOVATION Schilling Chapter 2
SOURCE OF INNOVATION Schilling Chapter 2celsa bella
 
IS HEC open innovation
IS HEC open innovationIS HEC open innovation
IS HEC open innovationosimod
 
Open innovation & transformation acceleration - 04th july 2020 I Nouamane Che...
Open innovation & transformation acceleration - 04th july 2020 I Nouamane Che...Open innovation & transformation acceleration - 04th july 2020 I Nouamane Che...
Open innovation & transformation acceleration - 04th july 2020 I Nouamane Che...Nouamane Cherkaoui
 
Open Innovation: The First Decade
Open Innovation: The First DecadeOpen Innovation: The First Decade
Open Innovation: The First DecadeJoel West
 

Similar to Lecture: Open Innovation (20)

Innovation management open innovation management culture
Innovation management open innovation management cultureInnovation management open innovation management culture
Innovation management open innovation management culture
 
Towards a Theory of Open Innovation: Three Core Process Archetypes
Towards a Theory of Open Innovation: Three Core Process ArchetypesTowards a Theory of Open Innovation: Three Core Process Archetypes
Towards a Theory of Open Innovation: Three Core Process Archetypes
 
Schilling 2017 chapter two ( Sources of innovation )
Schilling 2017 chapter two ( Sources of innovation )Schilling 2017 chapter two ( Sources of innovation )
Schilling 2017 chapter two ( Sources of innovation )
 
Profiting from External Innovation
Profiting from External InnovationProfiting from External Innovation
Profiting from External Innovation
 
Building muscles to improve innovation networks pugh skifstad may 2020 final (1)
Building muscles to improve innovation networks pugh skifstad may 2020 final (1)Building muscles to improve innovation networks pugh skifstad may 2020 final (1)
Building muscles to improve innovation networks pugh skifstad may 2020 final (1)
 
Chapter 2 Schilling 2017 Sources of Innovation
Chapter 2 Schilling 2017 Sources of InnovationChapter 2 Schilling 2017 Sources of Innovation
Chapter 2 Schilling 2017 Sources of Innovation
 
Breeding environments for Open Innovation (2007) / paper for ICE Conference
Breeding environments for Open Innovation (2007) / paper for ICE ConferenceBreeding environments for Open Innovation (2007) / paper for ICE Conference
Breeding environments for Open Innovation (2007) / paper for ICE Conference
 
Open Innovation: The First Decade
Open Innovation: The First DecadeOpen Innovation: The First Decade
Open Innovation: The First Decade
 
chapter 2
chapter 2chapter 2
chapter 2
 
Open Innovation: The First Decade (ACAC)
Open Innovation: The First Decade (ACAC)Open Innovation: The First Decade (ACAC)
Open Innovation: The First Decade (ACAC)
 
Open innovation resume
Open innovation resumeOpen innovation resume
Open innovation resume
 
Chapter 2
Chapter 2Chapter 2
Chapter 2
 
Chapter two
Chapter twoChapter two
Chapter two
 
Open innovation wp fv
Open innovation wp fvOpen innovation wp fv
Open innovation wp fv
 
Henry Lopez Vega Haas Bs 9 14 2010
Henry Lopez Vega Haas Bs 9 14 2010Henry Lopez Vega Haas Bs 9 14 2010
Henry Lopez Vega Haas Bs 9 14 2010
 
SOURCE OF INNOVATION Schilling Chapter 2
SOURCE OF INNOVATION Schilling Chapter 2SOURCE OF INNOVATION Schilling Chapter 2
SOURCE OF INNOVATION Schilling Chapter 2
 
IS HEC open innovation
IS HEC open innovationIS HEC open innovation
IS HEC open innovation
 
Open innovation & transformation acceleration - 04th july 2020 I Nouamane Che...
Open innovation & transformation acceleration - 04th july 2020 I Nouamane Che...Open innovation & transformation acceleration - 04th july 2020 I Nouamane Che...
Open innovation & transformation acceleration - 04th july 2020 I Nouamane Che...
 
Chapter 2
Chapter 2Chapter 2
Chapter 2
 
Open Innovation: The First Decade
Open Innovation: The First DecadeOpen Innovation: The First Decade
Open Innovation: The First Decade
 

Recently uploaded

Understanding Canada's international higher education landscape (2024)
Understanding Canada's international higher education landscape (2024)Understanding Canada's international higher education landscape (2024)
Understanding Canada's international higher education landscape (2024)CaraSkikne1
 
Persuasive Speaking and Organizational Patterns
Persuasive Speaking and Organizational PatternsPersuasive Speaking and Organizational Patterns
Persuasive Speaking and Organizational PatternsCorinne Weisgerber
 
A Free eBook ~ Mental Exercise ...Puzzles to Analyze.pdf
A Free eBook ~ Mental Exercise ...Puzzles to Analyze.pdfA Free eBook ~ Mental Exercise ...Puzzles to Analyze.pdf
A Free eBook ~ Mental Exercise ...Puzzles to Analyze.pdfOH TEIK BIN
 
Add Products From Catalog in Odoo 17 Sales
Add Products From Catalog in Odoo 17 SalesAdd Products From Catalog in Odoo 17 Sales
Add Products From Catalog in Odoo 17 SalesCeline George
 
spring_bee_bot_creations_erd primary.pdf
spring_bee_bot_creations_erd primary.pdfspring_bee_bot_creations_erd primary.pdf
spring_bee_bot_creations_erd primary.pdfKonstantina Koutsodimou
 
Nzinga Kika - The story of the queen
Nzinga Kika    -  The story of the queenNzinga Kika    -  The story of the queen
Nzinga Kika - The story of the queenDeanAmory1
 
CATCH UP FRIDAY LESSON PLAN GRADE 6.docx
CATCH UP FRIDAY LESSON PLAN GRADE 6.docxCATCH UP FRIDAY LESSON PLAN GRADE 6.docx
CATCH UP FRIDAY LESSON PLAN GRADE 6.docxAizaPolinarCruz
 
Mycobacteriology update 2024 Margie Morgan.ppt
Mycobacteriology update 2024 Margie Morgan.pptMycobacteriology update 2024 Margie Morgan.ppt
Mycobacteriology update 2024 Margie Morgan.pptMargie Morgan
 
Odontogenesis and its related anomiles.pptx
Odontogenesis and its related anomiles.pptxOdontogenesis and its related anomiles.pptx
Odontogenesis and its related anomiles.pptxMennat Allah Alkaram
 
SSC Hindu Religion and Moral Education MCQ Solutions 2024.pdf
SSC Hindu Religion and Moral Education MCQ Solutions 2024.pdfSSC Hindu Religion and Moral Education MCQ Solutions 2024.pdf
SSC Hindu Religion and Moral Education MCQ Solutions 2024.pdfMohonDas
 
Plagiarism, Types & Consequences by Dr. Sarita Anand
Plagiarism, Types & Consequences by Dr. Sarita AnandPlagiarism, Types & Consequences by Dr. Sarita Anand
Plagiarism, Types & Consequences by Dr. Sarita AnandDr. Sarita Anand
 
Genetics, Heredity, Variation, history, its roles, Scope, Importance, and Bra...
Genetics, Heredity, Variation, history, its roles, Scope, Importance, and Bra...Genetics, Heredity, Variation, history, its roles, Scope, Importance, and Bra...
Genetics, Heredity, Variation, history, its roles, Scope, Importance, and Bra...AKSHAYMAGAR17
 
Diploma 2nd yr PHARMACOLOGY chapter 5 part 1.pdf
Diploma 2nd yr PHARMACOLOGY chapter 5 part 1.pdfDiploma 2nd yr PHARMACOLOGY chapter 5 part 1.pdf
Diploma 2nd yr PHARMACOLOGY chapter 5 part 1.pdfSUMIT TIWARI
 
2.22.24 Black Nationalism and the Nation of Islam.pptx
2.22.24 Black Nationalism and the Nation of Islam.pptx2.22.24 Black Nationalism and the Nation of Islam.pptx
2.22.24 Black Nationalism and the Nation of Islam.pptxMaryPotorti1
 
The basics of sentences session 6pptx.pptx
The basics of sentences session 6pptx.pptxThe basics of sentences session 6pptx.pptx
The basics of sentences session 6pptx.pptxdeputymitchell2
 
Healthy Habits for Happy School Staff - presentation
Healthy Habits for Happy School Staff - presentationHealthy Habits for Happy School Staff - presentation
Healthy Habits for Happy School Staff - presentationPooky Knightsmith
 
A LABORATORY MANUAL FOR ORGANIC CHEMISTRY.pdf
A LABORATORY MANUAL FOR ORGANIC CHEMISTRY.pdfA LABORATORY MANUAL FOR ORGANIC CHEMISTRY.pdf
A LABORATORY MANUAL FOR ORGANIC CHEMISTRY.pdfDr.M.Geethavani
 
11 CI SINIF SINAQLARI - 10-2023-Aynura-Hamidova.pdf
11 CI SINIF SINAQLARI - 10-2023-Aynura-Hamidova.pdf11 CI SINIF SINAQLARI - 10-2023-Aynura-Hamidova.pdf
11 CI SINIF SINAQLARI - 10-2023-Aynura-Hamidova.pdfAynouraHamidova
 

Recently uploaded (20)

Understanding Canada's international higher education landscape (2024)
Understanding Canada's international higher education landscape (2024)Understanding Canada's international higher education landscape (2024)
Understanding Canada's international higher education landscape (2024)
 
Persuasive Speaking and Organizational Patterns
Persuasive Speaking and Organizational PatternsPersuasive Speaking and Organizational Patterns
Persuasive Speaking and Organizational Patterns
 
Advance Mobile Application Development class 04
Advance Mobile Application Development class 04Advance Mobile Application Development class 04
Advance Mobile Application Development class 04
 
A Free eBook ~ Mental Exercise ...Puzzles to Analyze.pdf
A Free eBook ~ Mental Exercise ...Puzzles to Analyze.pdfA Free eBook ~ Mental Exercise ...Puzzles to Analyze.pdf
A Free eBook ~ Mental Exercise ...Puzzles to Analyze.pdf
 
Add Products From Catalog in Odoo 17 Sales
Add Products From Catalog in Odoo 17 SalesAdd Products From Catalog in Odoo 17 Sales
Add Products From Catalog in Odoo 17 Sales
 
spring_bee_bot_creations_erd primary.pdf
spring_bee_bot_creations_erd primary.pdfspring_bee_bot_creations_erd primary.pdf
spring_bee_bot_creations_erd primary.pdf
 
Nzinga Kika - The story of the queen
Nzinga Kika    -  The story of the queenNzinga Kika    -  The story of the queen
Nzinga Kika - The story of the queen
 
CATCH UP FRIDAY LESSON PLAN GRADE 6.docx
CATCH UP FRIDAY LESSON PLAN GRADE 6.docxCATCH UP FRIDAY LESSON PLAN GRADE 6.docx
CATCH UP FRIDAY LESSON PLAN GRADE 6.docx
 
Risk in the changing world – Opportunity or threat
Risk in the changing world – Opportunity or threatRisk in the changing world – Opportunity or threat
Risk in the changing world – Opportunity or threat
 
Mycobacteriology update 2024 Margie Morgan.ppt
Mycobacteriology update 2024 Margie Morgan.pptMycobacteriology update 2024 Margie Morgan.ppt
Mycobacteriology update 2024 Margie Morgan.ppt
 
Odontogenesis and its related anomiles.pptx
Odontogenesis and its related anomiles.pptxOdontogenesis and its related anomiles.pptx
Odontogenesis and its related anomiles.pptx
 
SSC Hindu Religion and Moral Education MCQ Solutions 2024.pdf
SSC Hindu Religion and Moral Education MCQ Solutions 2024.pdfSSC Hindu Religion and Moral Education MCQ Solutions 2024.pdf
SSC Hindu Religion and Moral Education MCQ Solutions 2024.pdf
 
Plagiarism, Types & Consequences by Dr. Sarita Anand
Plagiarism, Types & Consequences by Dr. Sarita AnandPlagiarism, Types & Consequences by Dr. Sarita Anand
Plagiarism, Types & Consequences by Dr. Sarita Anand
 
Genetics, Heredity, Variation, history, its roles, Scope, Importance, and Bra...
Genetics, Heredity, Variation, history, its roles, Scope, Importance, and Bra...Genetics, Heredity, Variation, history, its roles, Scope, Importance, and Bra...
Genetics, Heredity, Variation, history, its roles, Scope, Importance, and Bra...
 
Diploma 2nd yr PHARMACOLOGY chapter 5 part 1.pdf
Diploma 2nd yr PHARMACOLOGY chapter 5 part 1.pdfDiploma 2nd yr PHARMACOLOGY chapter 5 part 1.pdf
Diploma 2nd yr PHARMACOLOGY chapter 5 part 1.pdf
 
2.22.24 Black Nationalism and the Nation of Islam.pptx
2.22.24 Black Nationalism and the Nation of Islam.pptx2.22.24 Black Nationalism and the Nation of Islam.pptx
2.22.24 Black Nationalism and the Nation of Islam.pptx
 
The basics of sentences session 6pptx.pptx
The basics of sentences session 6pptx.pptxThe basics of sentences session 6pptx.pptx
The basics of sentences session 6pptx.pptx
 
Healthy Habits for Happy School Staff - presentation
Healthy Habits for Happy School Staff - presentationHealthy Habits for Happy School Staff - presentation
Healthy Habits for Happy School Staff - presentation
 
A LABORATORY MANUAL FOR ORGANIC CHEMISTRY.pdf
A LABORATORY MANUAL FOR ORGANIC CHEMISTRY.pdfA LABORATORY MANUAL FOR ORGANIC CHEMISTRY.pdf
A LABORATORY MANUAL FOR ORGANIC CHEMISTRY.pdf
 
11 CI SINIF SINAQLARI - 10-2023-Aynura-Hamidova.pdf
11 CI SINIF SINAQLARI - 10-2023-Aynura-Hamidova.pdf11 CI SINIF SINAQLARI - 10-2023-Aynura-Hamidova.pdf
11 CI SINIF SINAQLARI - 10-2023-Aynura-Hamidova.pdf
 

Lecture: Open Innovation

  • 1. Open Innovation: Engaging resources outside of the organisation Novem 23rd, 2023 Michal Hron, PhD
  • 3. Galileo Galilei “In the summer of 1609, Paolo Sarpi, a statesman and scientist from Venice, told Galilei about new optical devices called “occhialini”. Occhialini can magnify distant objects. Sarpi had heard about occhialini through his network of diplomats. Through this network, Sarpi also heard and then told Galilei about a traveling businessman who sold occhialini in Padova and Venice.Venice is where Galilei spent most of his time.This is probably how Galilei first saw occhialini. It is told that he tried but did not purchase one. Occhialini at the time cost about four times Galilei’s annual salary. Then, less than three weeks later, on 21 August 1609, Galilei presented his first telescope to the public.Within a few months after this initial presentation, Galilei had surpassed his competitors in the European telescope market.And he had laid the foundation for his scientific discoveries (e.g. the moons of Jupiter and the phases of Venus).“ 3 De Padova, Thomas. Das Weltgeheimnis. Piper Verlag, 2013.
  • 4. Galileo Galilei Galilei had an active and diverse network of academics, manufacturers, businesspeople, diplomats, and others.Through this network, Galilei obtained high quality, clear glass to make his own telescope. Galilei was no ivory tower scientist. Rather, he had his own construction lab, where he could rapidly test and improve ways of manufacturing telescopes Galilei was not just scientist or just businessman. He combined both worlds. Perhaps this enabled (or forced) him to sometimes come up with pragmatic solutions 4 https://mergeflow.com/how-to/galilei-style-innovation
  • 5. Galileo has practiced OPEN INNOVATION
  • 6. Open innovation ▪ Open innovation is a concept that involves collaborating with external partners to develop new ideas, products, and services. ▪ departure from the traditional closed innovation model, where companies rely solely on their internal resources to innovate. ▪ can take many different forms, such as crowdsourcing, partnerships, and collaborations. ▪ Idea formulated most strongly by Henry Chesbrough 6 Chesbrough, Henry William. Open innovation: The new imperative for creating and profiting from technology. Harvard Business Press, 2003.
  • 7. Xerox spawned a lot of innovation from its research lab ▪ The first graphical user interface (GUI), which used icons, pop-up menus, and overlapping windows that could be controlled easily using a point-and-click technique1 ▪ The development of the Ethernet, a ubiquitous computer networking technology5 ▪ The creation of the Alto, which was the first personal computer ▪ The invention of the laser printer ▪ The development of page description languages (postscript) 7
  • 8. However, Xerox commercially benefited less than its spin-offs from the research it funded 8
  • 10. Xerox I have concluded that Xerox’s problems with PARC arose from the way Xerox managed its innovation process. Xerox managed PARC through a Closed Innovation paradigm:The corporation sought to discover new breakthroughs; develop them into products; build the products in its factories; and distribute, finance, and service those products—all within the four walls of the company.This paradigm was hardly unique to Xerox; it was used to manage all the leading industrial R&D facilities operating in the U.S. economy after World War II. 10
  • 11. Another view of the closed innovation funnel 11
  • 12. What really worked was an open innovation funnel 12
  • 13. Open innovation 13 Chesbrough, Henry William. Open innovation: The new imperative for creating and profiting from technology. Harvard Business Press, 2003.
  • 14. Open innovation ▪ 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 (Chesbrough, 2003) ▪ ‘a distributed innovation process based on purposively managed knowledge flows across organizational boundaries, using pecuniary and non- pecuniary mechanisms in line with the organization’s business model’ (West, 2014) 14 Henry W. Chesbrough, Open Innovation: The New Imperative for Creating and Profiting from Technology (2003); Henry Chesbrough et al., Open Innovation: Researching a New Paradigm (2006). Joel West et al., Open Innovation: The Next Decade, 43 Res. Pol’y 805, 808 (2014)
  • 15. A lot off other terms go after the similar principle… 15 Open Innovation Distributed innovation via purposively managed knowledge flows across organization boundaries. User Innovation Innovation by single individual user or user firm, in order to use that innovation. Open collaborative innovation Innovation by a group of contributors who share the work of generating a design and reveal outputs openly. Free Innovation An inherently simple grassroots innovation process, unencumbered by compensated transactions and intellectual property rights. Peer Production Decentralized, collaborative, nonproprietary production by widely distributed, loosely connected peers. Open source Computer software licensed on terms that meet criteria for redistribution, source code, derivative works, etc Creative Commons A nonprofit organization providing standardized legal tools (licences) that enable sharing and use. Public domain Material that is not covered by, and can be spread without, intellectual property rights Beer, Jeremy de. 2021. “Intellectual Property and ‘Open’ Innovation: A Synthesis of Concepts.” In Handbook of Intellectual Property Research, 714–45. Oxford University PressOxford.
  • 17. Remember diffusion of innovations? 17 Lead users Are likely going to be innovators
  • 18. User innovation is subset of open innovation 18 innovation Open innovation User innovation
  • 20. Outside-in 20 Two principal approaches to open innovation Inside-out • organization's capabilities and resources are more valuable than outside influences, and will be the key to success • Most new ideas are born inside the organization, typically generated by management or the innovation and R&D department. • E.g:Venturing, spin-offs, patenting • External resources are the keys to success. • Innovation processes involving customers, especially lead users, are more likely to succeed in the marketplace since customers have better and more creative ideas than internal product developers • External technology and knowledge is helpful. • E.g: Lead user involvement, acquiring startups Coupled process combination of outside-in a inside-out process by means of alliances, collaboration and joint- ventures Gassmann, Oliver, and Ellen Enkel. "Open innovation: Externe Hebeleffekte in der Innovation erzielen." Zeitschrift Führung+ Organisation 3 (2006): 132-138.
  • 21. Outside-in 21 A study of companies from Korea shows different combinations of inbound and outbound behaviours Inside-out Kim, N., Kim, D.-J., & Lee, S. (2014). Antecedents of open innovation at the project level: empirical analysis of Korean firms. R&D Management, 45(5), 411–439. doi:10.1111/radm.12088
  • 22. Think-pair-share 22 ▪ 1.What is the difference between inside-out and outside-in approaches? ▪ II.Which of the companies in the table is most open? Most closed? Uses coupled process? ▪ III. Does your project use any external resources? Inside-out Outside-in
  • 23. How does open innovation work? 23
  • 24. How does open innovation work? 24 ▪ Systematic review from January 2023 answers this question ▪ I rely on it to structure this talk Ogink, Ruben HAJ, et al. "Mechanisms in open innovation: A review and synthesis of the literature." Technovation 119 (2023): 102621.
  • 25. How does open innovation work? 25 Ogink, Ruben HAJ, et al. "Mechanisms in open innovation: A review and synthesis of the literature." Technovation 119 (2023): 102621.
  • 26. How does open innovation work? 26 4. 3. 1. 2. Governance and policies Learning by doing Env. Interactions Knowledge skills and capabilities
  • 27. How does open innovation work? 27 Description Mechanisms What makes OI work 1.Governance and politics The way rules, norms, and actions are structured, sustained, regulated and embedded. Formal contracting, Organizational permeability,Value capturing, IP protection, Risk sharing, Integrated standardization 2. Environmental interactions The way a person, project, firm, network or society interacts with, or is affected by its environment Entrainment, Orchestration, Scouting, Innovation intermediation, foresight workshops 3. Knowlede, skills and capabilities Awareness or understanding about specific topics, capabilities or experiences Absorptive capacity, Endowed knowledge base, Collaborative trust 4. Learning by doing Executing OI-related activities and outcomes Tacit knowledge transfer, Collaborative prototyping Ogink, Ruben HAJ, et al. "Mechanisms in open innovation: A review and synthesis of the literature." Technovation 119 (2023): 102621.
  • 28. Governance and politics ▪ Definition:The way rules, norms, and actions are structured, sustained, regulated and embedded. ▪ Mechanisms: Formal contracting, Organizational permeability,Value capturing, IP protection, Risk sharing, Integrated standardization 28 Power, Michael. "Accounting, boundary-making, and organizational permeability." Toward Permeable Boundaries of Organizations?. Emerald Publishing Limited, 2018. 31-53. 1.
  • 29. Example of IP protection Paradox of openness ▪ the creation of innovations often requires openness, but the commercialization of innovations requires protection (Laursen and Salter, 2014) ▪ Does IP protection help or restrict open innovation? 29 Laursen, Keld, and Ammon J. Salter. "The paradox of openness: Appropriability, external search and collaboration." Research policy 43.5 (2014): 867-878. Alexy, Oliver, Paola Criscuolo, and Ammon Salter. "Does IP strategy have to cripple open innovation?." MIT Sloan management review (2009).
  • 30. Paradox of openness ▪ From another perspective, however, there is no paradox at all. IP is a tool used to enable open innovation by mediating the tensions between collaboration and competition.(West, 2006) 30 West, Joel. "Does appropriability enable or retard open innovation." Open innovation: Researching a new paradigm (2006): 109-133.
  • 31. Paradox of openness ▪ “patenting increases new entrants’ number of open innovation relationships, on average” (Zobel, Balsmeier and Chesbrough, 2016) ▪ Patents are public and need to include full description of the process that a person knowledgable in the art should be able to follow. Is this closed? ▪ Designers can “invent around” a patent which increases innovation (Katznelson and Howells, 2021) 31 Zobel, Ann-Kristin, Benjamin Balsmeier, and Henry Chesbrough. "Does patenting help or hinder open innovation? Evidence from new entrants in the solar industry." Industrial and Corporate Change 25.2 (2016): 307-331. Katznelson, Ron D., and John Howells. "Exclusive Rights Stimulate Design Around: How Circumventing Edison’s Lamp Patent Promoted Competition and New Technology Development." Journal of Competition Law & Economics 17.4 (2021): 1007-1052.
  • 32. 32 The myth of Edison’s monopoly Comparison of Edison’s all-glass globe lamp (right) and a stopper lamp (left). Edison’s claim was limited to lamps with a globe made entirely of glass with conductors passing through the glass.The two- part stopper lamp did not infringe this claim because it had a stopper portion and because the conductors were not “passing through the glass.” Katznelson, Ron D., and John Howells. "Exclusive Rights Stimulate Design Around: How Circumventing Edison’s Lamp Patent Promoted Competition and New Technology Development." Journal of Competition Law & Economics 17.4 (2021): 1007-1052.
  • 33. 33 The myth of Edison’s monopoly “Stopper” lamps, or lamps made of two parts, were the most commercially-significant design- around Edison’s patent because they enabled Edison-GE rivals to retain market share through the period of enforcement of Edison’s patent Katznelson, Ron D., and John Howells. "Exclusive Rights Stimulate Design Around: How Circumventing Edison’s Lamp Patent Promoted Competition and New Technology Development." Journal of Competition Law & Economics 17.4 (2021): 1007-1052.
  • 34. Environmental interactions ▪ Definition:The way a person, project, firm, network or society interacts with, or is affected by its environment ▪ Mechanisms:Technology scouting, foresight workshops, Customer integration n(e.g. lead users), joint development, strategic alliances 34 Rohrbeck, René, Katharina Hölzle, and Hans Georg Gemünden. "Opening up for competitive advantage–How Deutsche Telekom creates an open innovation ecosystem." R&d Management 39.4 (2009): 420-430. 2.
  • 35. Example:Technology scouting at Deutsche Telecom ▪ Deutsche Telekom engages with selected partners in joint workshops where this knowledge is shared.This is particularly surprising because Deutsche Telekom is operating a worldwide network of technology scouts (Rohr- beck, 2007) and it could be expected that this effort would be exploited by keeping this information secret and using it exclusively 35 Rohrbeck, René, Katharina Hölzle, and Hans Georg Gemünden. "Opening up for competitive advantage–How Deutsche Telekom creates an open innovation ecosystem." R&d Management 39.4 (2009): 420-430. Rohrbeck, René, Katharina Hölzle, and Hans Georg Gemünden. "Opening up for competitive advantage–How Deutsche Telekom creates an open innovation ecosystem." R&d Management 39.4 (2009): 420-430.
  • 37. Example: Corwdsourcing ideas @ Lego 37 ▪ Recent research develops findings: ▪ Let Customers Find the Hits: Customers are as good as (or better than) experts in identifying which products will become hits ▪ Give Unhappiness an Outlet: Rejecting ideas can lead to disappointment and negative comments on other ideas ▪ Share the Wealth: the company encourages not only creativity but entrepreneurship as well… Many creators are able to earn money from their proposals outside of Lego Ideas competitions Beretta, Michela, et al. "Lego Takes Customers’ Innovations Further." MIT Sloan Management Review 65.1 (2023).
  • 38. 38
  • 39. Knowledge, skills and capabilities ▪ Definition:Awareness or understanding about specific topics, capabilities or experiences ▪ Example Mechanisms:Absorptive capacity, Endowed knowledge base, Collaborative trust, permeable org structures 39 Wu, Linfei, et al. "How do digitalization capabilities enable open innovation in manufacturing enterprises? A multiple case study based on resource integration perspective." Technological Forecasting and Social Change 184 (2022): 122019. 3.
  • 40. Example: In manufacturing, digital capabilities enable openness ▪ “we conducted a multiple case analysis with interviews and document data from four different types of manufacturing companies with open innovation enabled by digitalization capabilities… “ 40 Wu, Linfei, et al. "How do digitalization capabilities enable open innovation in manufacturing enterprises? A multiple case study based on resource integration perspective." Technological Forecasting and Social Change 184 (2022): 122019.
  • 41. Example: In manufacturing, digital capabilities enable openness ▪ “The company has used the past one and a half years to completely independently plan and design a data and business digital operation platform system for both ecological partners and consumers, to open up the whole chain of e-commerce and logistics, to cultivate future- oriented digital business in the existing business operation system, and to better meet the needs of suppliers, distributors and consumers in the digital era (B1-45).” ▪ “Our innovation center relies on the accumulation of Internet of Things and big data to conduct joint R&D with research institutions and universities (D1-58).” 41 Wu, Linfei, et al. "How do digitalization capabilities enable open innovation in manufacturing enterprises? A multiple case study based on resource integration perspective." Technological Forecasting and Social Change 184 (2022): 122019.
  • 42. Learning by doing • Definition: Executing OI-related activities and outcomes • Mechanisms:Tacit learning transfer, collaborative prototyping 42 Bogers, Marcel, and Willem Horst. "Collaborative prototyping: Cross-fertilization of knowledge in prototype-driven problem solving." Journal of Product Innovation Management 31.4 (2014): 744-764. 4.
  • 43. Example Prototyping of smart thermostat ▪ Prototyping of smart thermostat at Danfoss ▪ We presented the ideas, what kind of ideas we are going for now, to practically all departments that are involved in this project. So they got an understanding of it and had the opportunity to provide feedback early on. 43 Bogers, Marcel, and Willem Horst. "Collaborative prototyping: Cross-fertilization of knowledge in prototype-driven problem solving." Journal of Product Innovation Management 31.4 (2014): 744-764. 4.
  • 44. Example Prototyping of smart thermostat ▪ Prototyping of smart thermostat at Danfoss ▪ We distinguish formal managerial level and informal designer level of prototyping,. collaborative prototyping transforms from an activity belonging exclusively to the domain of design engineers to an activity integral to NPD, with participants from within the organization (different functions and managers) and from outside (consultants and users). 44 Bogers, Marcel, and Willem Horst. "Collaborative prototyping: Cross-fertilization of knowledge in prototype-driven problem solving." Journal of Product Innovation Management 31.4 (2014): 744-764. 4.
  • 45. How does open innovation work? 45 4. 3. 1. 2. E,g, Patents E,g, Foresight E,g, prototypes E,g, digital capabilities
  • 46. Galileo Galilei Galilei had an active and diverse network of academics, manufacturers, businesspeople, diplomats, and others.Through this network, Galilei obtained high quality, clear glass, for instance Galilei was no ivory tower scientist. Rather, he had his own construction lab, where he could rapidly test and improve ways of manufacturing telescopes Galilei was not just scientist or just businessman. He combined both worlds. Perhaps this enabled (or forced) him to sometimes come up with pragmatic solutions 46 https://mergeflow.com/how-to/galilei-style-innovation
  • 47. 47 Firm-centric OI: Focus on firm-centric aspects in Open Innovation (OI), emphasizing the role of knowledge, technology, and R&D in collaborative development. Research explores strategic expansion through R&D alliances, technology partnerships, and collaborative development, highlighting knowledge exploration and absorptive capacity. Management of OI Networks: Limited research on Open Innovation (OI) network management, with attention to industry networks, corporate ventures, and intellectual property (IP). Neglect of institutional networks, public sector roles, and wider strategic management issues like sustainable business models and governance mechanisms within OI networks. Users and Communities in OI: Limited attention to users and communities in Open Innovation (OI), despite being topical. Emphasis on collaborative development with value chain partners, with minimal focus on individual users as innovators. Scarce exploration of community roles, except in Open Source Software (OSS) projects, where profit appropriation and benefit accrual are key areas of interest OI is an expansive literature with open opportunities
  • 48. Critique: Old wine in new bottles 1) Creating false dichotomy to introduce a “new concept“ – Wrong vs. Right, black and white view – Companies already most of the way there 2) OI model is linear, variation on stage-gate model (vs. Chained model of innovation ) 3) Simplicity  popularity 4) Research ethics – not giving credit to prior work formulating similar ideas Trott, P., & Hartmann, D. (2009). Why „open innovation" is old wine in new bottles. International Journal of Innovation Management, 13(04), 715– 736. https://doi.org/10.1142/S1363919609002509
  • 49. Galileo Galilei Galilei had an active and diverse network of academics, manufacturers, businesspeople, diplomats, and others.Through this network, Galilei obtained high quality, clear glass, for instance Galilei was no ivory tower scientist. Rather, he had his own construction lab, where he could rapidly test and improve ways of manufacturing telescopes Galilei was not just scientist or just businessman. He combined both worlds. Perhaps this enabled (or forced) him to sometimes come up with pragmatic solutions 49 https://mergeflow.com/how-to/galilei-style-innovation
  • 51. Remember Helix models? 51 Etzkowitz, Henry, and Loet Leydesdorff. "The dynamics of innovation: from National Systems and “Mode 2” to a Triple Helix of university–industry–government relations." Research policy 29.2 (2000): 109-123. ▪ Triple helix model: industry, government and universities ▪ The model represents the shift from the dyad industry-government that dominated industrial society to triad industry-government- universities that is typical for knowledge society. Industry Gov Academia ▪ knowledge produced for application (Mode 2) ▪ As opposed to pure primary research (Mode 1)
  • 52. Open innovation…. Is opening up! 52
  • 53. 53
  • 54. Business Ecosystems ▪ ecosystem is defined by the alignment structure of the multilateral set of partners that need to interact in order for a focal value proposition to materialize. 54 Moore, James F. "Predators and prey: a new ecology of competition." Harvard business review 71.3 (1993): 75-86.
  • 55. Business Ecosystems… two ways of understanding the concept 55 Ecosystem-as-Affiliation Ecosystem-as-Structure Activities Discrete actions to be undertaken in order for the value proposition to be created Specifies the discrete actions to be undertaken in order for the value proposition to materialize Actors Entities that undertake activities Entities that are tied to the focal actor Positions Specified locations in the flow of activities across the system Specifies where in the flow of activities across the system actors are located and who hands off to whom Links Transfers across positions, which may or may not include the focal actor Transfers across actors, specifying the content of these transfers, which need not have any direct connection to the focal actor Adner, Ron. "Ecosystem as structure: An actionable construct for strategy." Journal of management 43.1 (2017): 39-58.
  • 56. Faculty of Business Administration Prague University of Economics and Business W. Churchill Sq. 4 130 67 Prague 3, Czech Republic Thanks Michal Hron Assistant professor michal.hron@vse.cz hronmichal.net