Distributed Perspectives on Innovation (UC Berkeley Aug 2010)Joel West
Revised slides for talk given August 31, 2010 at the UC Berkeley Center for Open Innovation, in the Open Innovation Speaker Series. Book references are hot-linked. See http://openinnovation.haas.berkeley.edu/speaker_series.html for the context
Prof. Henry Chesbrough's speech at the Open Innovation Seminar 2008, the first event about the subject in Brazil, promoted by Allagi. The event took place at the World Trade Center São Paulo in June 16, 2008.
Development of a Model of Product Innovativeness for Large Packaged Software:...Steve Remington
This project uses a design science research (DSR) approach to develop a model of product innovativeness for large packaged (i.e. enterprise systems) software. The project was motivated by the lack of a suitable model to assess the level of innovativeness of business intelligence (BI) software products. The design of the model was informed by a literature-based innovation output indicator (LBIOI) content analysis of 17 years of press releases and publicly available financial records to understand the sources, categories and rate of innovation of typical large BI platform vendor, and a concept-centric literature review of academic research on product and customer innovativeness. The model of product innovativeness for large packaged software (LPS) consists of seven constructs and six associations grouped into an industry perspective and a customer perspective. The industry perspective of the model can be used as stand-alone model to determine the inherent level of innovativeness of a new version of LPS, while the customer perspective can be used in conjunction with the industry perspective to assess the level of innovativeness of a new version of LPS relative to the specific circumstances of the customer. The primary contribution made by this research is the detailed definition of a draft model of product innovativeness for LPS that will be useful for academic researchers and practitioners alike, and the extension of the concept of product innovativeness into IS research. The secondary contribution made by this research is a demonstration that the LBIOI method can be used to describe and understand the nature of innovation for a single software company over an extended period.
A User's Perspective: Innovating Smarter with Invention Machine GoldfireIHS Goldfire
Customer Co-Host: Mr. William (Bill) Hessler; Mechanical Engineer Leader, Seasoned Innovator & Patent Holder; CSC in Aberdeen Proving Ground, MD
Description: Learn how to take the "hit or miss" out of your product innovation processes from a seasoned innovator and patent holder, Mr. William (Bill) Hessler. Hear first-hand what Bill has learned through more than 14 years of designing next-generation technologies, solving root causes, mining patents and improving existing products at Fortune 1000 and mid-sized industrial and medical manufacturing companies, by applying Goldfire and basic TRIZ principles to his research.
During this informative webinar, you will learn:
* Best practices Bill uses to boost his daily innovation productivity, more rapidly solve problems, and generate breakthrough solutions
* Real world applications of Goldfire
* When to apply the software, the types of problems it helps solve, and the successes achieved as a result
* ...and much more!
Open innovation fast forward seminar jg 2013Alan Scrase
Open Innovation Seminar (29th January 2013):
The “Open Innovation” paradigm is being widely proclaimed as the answer to the issues of expediting commercial success from technology and strengthening industrial competitiveness. However, the term can mean different things to different people according to their sector of industry, place in value chain, and company size. Open innovation sounds very attractive in theory, but in practice, unless well planned by all participants, can give rise to some unanticipated logistical and management issues. Different real scenarios from the speaker’s experience are presented and discussed.
Dr. James Green
Director of Intellectual Property, Ilika plc
Dr Green graduated from Bristol University. He has 42 years experience of innovation and IP. Initially, in industry and contract research, he was later appointed Secretary of the CBI Research & Technology Committee. In 1984, he joined Research Corporation’s venture with 3i plc. He then moved to Ohio as Vice President, Competitive Technologies Inc, returning later to Britain at ANGLE Technology. He relocated to the US in 2001, as Director of Development at Cumberland Pharmaceuticals Inc. Returning to the UK, he set up Seges Development Company Ltd, and is currently Director of Intellectual Property at Ilika plc.
Distributed Perspectives on Innovation (UC Berkeley Aug 2010)Joel West
Revised slides for talk given August 31, 2010 at the UC Berkeley Center for Open Innovation, in the Open Innovation Speaker Series. Book references are hot-linked. See http://openinnovation.haas.berkeley.edu/speaker_series.html for the context
Prof. Henry Chesbrough's speech at the Open Innovation Seminar 2008, the first event about the subject in Brazil, promoted by Allagi. The event took place at the World Trade Center São Paulo in June 16, 2008.
Development of a Model of Product Innovativeness for Large Packaged Software:...Steve Remington
This project uses a design science research (DSR) approach to develop a model of product innovativeness for large packaged (i.e. enterprise systems) software. The project was motivated by the lack of a suitable model to assess the level of innovativeness of business intelligence (BI) software products. The design of the model was informed by a literature-based innovation output indicator (LBIOI) content analysis of 17 years of press releases and publicly available financial records to understand the sources, categories and rate of innovation of typical large BI platform vendor, and a concept-centric literature review of academic research on product and customer innovativeness. The model of product innovativeness for large packaged software (LPS) consists of seven constructs and six associations grouped into an industry perspective and a customer perspective. The industry perspective of the model can be used as stand-alone model to determine the inherent level of innovativeness of a new version of LPS, while the customer perspective can be used in conjunction with the industry perspective to assess the level of innovativeness of a new version of LPS relative to the specific circumstances of the customer. The primary contribution made by this research is the detailed definition of a draft model of product innovativeness for LPS that will be useful for academic researchers and practitioners alike, and the extension of the concept of product innovativeness into IS research. The secondary contribution made by this research is a demonstration that the LBIOI method can be used to describe and understand the nature of innovation for a single software company over an extended period.
A User's Perspective: Innovating Smarter with Invention Machine GoldfireIHS Goldfire
Customer Co-Host: Mr. William (Bill) Hessler; Mechanical Engineer Leader, Seasoned Innovator & Patent Holder; CSC in Aberdeen Proving Ground, MD
Description: Learn how to take the "hit or miss" out of your product innovation processes from a seasoned innovator and patent holder, Mr. William (Bill) Hessler. Hear first-hand what Bill has learned through more than 14 years of designing next-generation technologies, solving root causes, mining patents and improving existing products at Fortune 1000 and mid-sized industrial and medical manufacturing companies, by applying Goldfire and basic TRIZ principles to his research.
During this informative webinar, you will learn:
* Best practices Bill uses to boost his daily innovation productivity, more rapidly solve problems, and generate breakthrough solutions
* Real world applications of Goldfire
* When to apply the software, the types of problems it helps solve, and the successes achieved as a result
* ...and much more!
Open innovation fast forward seminar jg 2013Alan Scrase
Open Innovation Seminar (29th January 2013):
The “Open Innovation” paradigm is being widely proclaimed as the answer to the issues of expediting commercial success from technology and strengthening industrial competitiveness. However, the term can mean different things to different people according to their sector of industry, place in value chain, and company size. Open innovation sounds very attractive in theory, but in practice, unless well planned by all participants, can give rise to some unanticipated logistical and management issues. Different real scenarios from the speaker’s experience are presented and discussed.
Dr. James Green
Director of Intellectual Property, Ilika plc
Dr Green graduated from Bristol University. He has 42 years experience of innovation and IP. Initially, in industry and contract research, he was later appointed Secretary of the CBI Research & Technology Committee. In 1984, he joined Research Corporation’s venture with 3i plc. He then moved to Ohio as Vice President, Competitive Technologies Inc, returning later to Britain at ANGLE Technology. He relocated to the US in 2001, as Director of Development at Cumberland Pharmaceuticals Inc. Returning to the UK, he set up Seges Development Company Ltd, and is currently Director of Intellectual Property at Ilika plc.
This presentation was accompanying a keynote at COFES 2011 -- the Conference for the Future of Engineering -- Scottsdale, April 2011. A more compact version of the same presentation was given to a group of Israeli engineers & entrepreneurs in Tel Aviv, during COFES Israel, December 2010. I am well aware that the presentation material, without the accompanying speech, may be a bit cryptic at times. Also, comments and questions are welcome at @cdn
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This presentation was accompanying a keynote at COFES 2011 -- the Conference for the Future of Engineering -- Scottsdale, April 2011. A more compact version of the same presentation was given to a group of Israeli engineers & entrepreneurs in Tel Aviv, during COFES Israel, December 2010. I am well aware that the presentation material, without the accompanying speech, may be a bit cryptic at times. Also, comments and questions are welcome at @cdn
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Sources of innovations have considerably changed in the past. How can policy makers react? What are the key desing features of new innovation support schemes. Based on the so called ANIS approach, regional innovation systems can be analysed and appropriate innovation support schemes developed.
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Talk by Joel West at a Academy of Management PDW (Professional Development Workshop) in Montréal, August 7, 2010. See http://www.openinnovation.net/Conference/AOM2010/ for full program
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An Overview of Distributed Perspectives on Innovation
1. An Overview of Distributed
Perspectives on Innovation
Joel West
blog.OpenInnovation.net
San José State University
Center for Open Innovation
UC Berkeley, Haas School of Business
January 24, 2011
Today’s Story
• Traditional and distributed innovation
• Similarities and differences
• Emerging areas of research and
practice
• Conclusions
2. What is “Innovation”?
Defining “Innovation”
Some disagreement over “innovation”:
• Technical vs. economic (or both)
• Radical vs. incremental
Is cost reduction radical? (Leifer et al)
• Adopter vs. producer perspective
• New to the firm vs. new to the world
Source: Bogers & West (2010)
3. Latent value of an innovation
“The inherent value of a technology
remains latent until it is commercialized in
some way.
“A business model unlocks that latent
value, mediating between technical and
economic domains.”
– Chesbrough & Rosenbloom (2002)
Invention vs. Innovation
“Inventions … do not necessarily lead
to technical innovations. In fact the
majority do not. An innovation in the
economic sense is accomplished only
with the first commercial transaction.”
—Freeman (1982: 7)
4. Vertically Integrated R&D
Source: Chesbrough (2006)
Science
& The
Technology Market
Base
Research Development New Products
Investigations & Services
Vertical Integration
Research of Alfred D Chandler (1918-2007)
• Studied large US firms 1840-1940
• Firms vertically integrate to supply own
inputs and control their outputs
R&D is an essential part of integration
Technology industries require large R&D labs
Markets don’t exists to buy/sell innovation
• Integration widely adopted in practice
Pattern of large 20th C US and MNC firms
5. Distributed* Perspectives
on Innovation
* i.e. open, user, cumulative innovation
Value Network
Rivals
Suppliers Users
Focal Firm
Comple-
mentors
6. Sources of Innovation
Focal Firm Suppliers Customers Rivals
Vertical
integration
X
User
innovation
X † X
Cumulative
innovation
X X
Open
innovation
X X X X
Source: West (2009) X = Sources of Innovation; † limited emphasis
User Innovation
• From von Hippel (1988, 2005)
• Users know their needs best
• Goal: engage users in innovation
Use empowerment, other motivations
Direct (toolkits) & indirect (feedback)
Requires processes, tools, design
• Found in ever-wider domains
7. Free vs. Paid Revealing
What do users do with their innovations?
• Use them and keep quiet
• Free revealing (Harhoff et al 2003)
Share them with other users
Give them back to companies
• Make money
Sell them back to companies
User-entrepreneur (Shah & Tripsas 2007)
Cumulative Innovation
• Promoted by Scotchmer (1991, 2004)
• Focus: developing radical innovations
Initial innovation is rarely complete
Subsequent shared technological progress
• Competitors build on each other
Need rights to each others’ work
Some IP regimes hinder C.I.
• Jungle vs. commune view of rivalry
8. Three Cumulative Patterns
1. Core technology, many derivatives
E.g., Cohen-Boyer patent
2. Derivative of many building blocks
• E.g., GSM/W-CDMA MP3 cameraphone
3. Incremental quality improvements
• E.g., higher resolution inkjet print heads
Source: Scotchmer (2004)
Open Innovation
• Chesbrough (2003,2006,2007,2011)
• Key points:
Find alternate sources of innovation
Either markets or spillovers
Find alternate markets for innovation
Central role of the business model
• Cognitive managerial paradigm
• Framework consonant with UI, CI
9. R&D under Open Innovation
Source: Chesbrough (2006) Other Firm’s
Market
Licensing
Technology New
Internal Spin-offs Market
Technology
Base Current
Market
External
Technology
Base
Technology Insourcing
“Open” innovation strategies
ICT: Systems Integration Model
Innovator Integrator Users
Technology Component Systems Adoption
Component Complements
Component Rival Complement Provider
Source: West (2006)
10. Key Issues for Open Innovation
1. Maximizing returns to internal innovation
2. Identifying/incorporating external
innovations
3. Motivating an ongoing stream of external
innovations (with or without money)
Licensors Licensees
Motivating
3
Incorporating Maximizing
Firm 2 1
Ideas R&D Products
Source: West & Gallagher (2006)
Increasing OI Research
11. Related Innovation Models
Collaborative, peer-to-peer
innovation without monetization:
• Open Science
• Free Software
• Shared Production
Similarities Across O/U/CI
12. Dispersal of Knowledge
• “In Open Innovation, useful knowledge is
generally believed to be widely distributed,
and of generally high quality.” (Chesbrough,
2006: 9)
• “Different users and manufacturers will have
different stocks of information … each
innovator will tend to develop innovations that
draw on the sticky information it already has”
(von Hippel 2005: 70)
Other Similarities
• Orientation outside the firm
• Innovation activities take place across
organizational boundaries†
• Overall, rejecting Vertical Integration
† Some UI ignores firms and is entirely
outside any firm
Source: Bogers & West (2010)
13. Contrasting Modes of
Commercialization
Source: Bogers & West (2010)
Innovation Flows in Value Chain
Rivals
Suppliers Users
Focal Firm
Comple-
Open Innovation mentors
User Innovation
Cumulative Innovation
all forms
14. Sample Modes (1)
Cell Creation Diffusion Mode
Integrated Inside Inside Vertical
integration
Outbound Inside Outside Outbound OI
User sharing
Employee
entrepreneurs
Sample Modes (2)
Cell Creation Diffusion Mode
Orphan Inside N/A Left on the shelf
Inbound Outside Inside Inbound OI
Lead users
User
entrepreneurship
15. Sample Modes (3)
Cell Creation Diffusion Mode
Collabo- Outside Outside User sharing
rative
Open science
Shared
production
Egocentric Outside N/A User’s own need
Sample Modes (4)
Cell Creation Diffusion Mode
Coupled Inside & Inside Co-creation
Outside
Inside & Rivalrous
Outside spillovers
Cooperative
spillovers
16. Distinct Commercialization Paths
† Includes non-commercial
diffusion of innovations
Commercialization
inside outside not
focal firm focal firm commercialized
inside Integrated Outbound Orphan
focal firm
Creation
Coupled co-creation frontier
outside Inbound Collaborative† Egocentric
focal firm
Antecedents for Selecting Modes
• Supply conditions
Scale economies
Cost of production and distribution
• Demand conditions
Heterogeneity of demand
• Institutional conditions
Strength of IP regime
Markets for innovation
17. Selecting Inside/Outside Paths
Inside Outside
Creation • Strong R&D • Because not all knowledge is in
capabilities one firm (Chesbrough 2003)
• Unable to source firm- • To exploit sticky user
specific R&D (Dierickx information (von Hippel 1994)
& Cool, 1989) • Share scale economies of R&D
(West & Gallagher, 2006)
Commer- • Strong distribution, • Lack complementary assets
cialization other complementary (Teece 1986)
assets; or • Doesn’t fit business model
• Weak appropriability (Chesbrough & Rosenbloom
(Teece 1986) 2002)
Communities
18. Importance of Communities
• Best known from open source software
• Implicit in CI research
E.g. Meyer (2006) on 19th century airplane
• Increasingly important in UI
E.g. Franke & Shah (2003), von Hippel
(2005), Jeppesen & Frederiksen (2006)
• Finally being recognized in OI
Communities in OI
• Two pre-requisites:
Voluntary association of independent actors
Enabling innovation commercialization
• Open questions
Who are the members? Individuals (cf. UI
communities) or firms (cf. ecosystem, networks …)
What are the boundaries?
Upstream vs. downstream communities
Interactions within vs. with communities
Source: West & Lakhani (2008)
19. Communities as Third Mode
Open innovation has three modes
1. Outside-in: using external innovations
2. Inside-out: commercializing internal
innovations
3. Coupled: communities, ecosystems,
alliances, consortia etc.
Source: Enkel, Gassmann, Chesbrough (2009)
Findings about OI Communities
Study of three innovation communities:
• Participants from multiple organizations
• Anchored to specific innovation
• Shared goals, objectives, identity
• Leverage distributed competencies
Source: Fichter (2009)
20. Are ms Only “Open Enough”?
• Firms, OI communities share interests
• Firms chronically unwilling to give up control
E.g. OSS communities: Apple, Google, Nokia, …
• Is it possible for firms to be open?
Optimistic view: firms gain more by openness
Pessimistic view: Firms are only as open as they
need to be (West, 2003; West & O’Mahony, 2008)
Emerging Patterns of
Practice
21. Learning from Observation
”The field of innovation studies
arguably operates in Pasteur’s
Quadrant, in that the processes
and practices of industry actors
often extend beyond the bounds
predicted by academic theory.”
– Chesbrough (2006)
Are Acquisitions OI or VI?
• Firms buying innovation by buying firms
Cisco growth strategy (Mayer & Kenney 2004)
Now Google, Intel, Qualcomm
• Is this inbound open innovation?
Externally developed, internally
commercialized?
• Is it vertical integration?
Ongoing innovation, commercialization
controlled by one firm
22. Is ICT Vertical Integration Dead?
• Silicon Valley: distributed innovation
Ecosystems
Component-based business models
User innovation via beta sites, toolkits
1990s, even IBM became distributed
Grove (1996) pronounced VI dead
• Today: more vertical integration
Apple, Google, HP, Microsoft, Nokia
Is Crowdsourcing UI or OI?
• A user innovation model?
Users have sticky knowledge
Apply knowledge to solve own problems
Make it easy to obtain free revealing
• An open innovation model?
Users/non-users have knowledge
Maximize return from that knowledge
Use markets to identify, source ideas
23. OI: Substitute or Complement?
• Open innovation offered as a complement to
traditional corporate innovation
Increasingly, OI used as a substitute
• OI-Inbound: OI vs. internal R&D
Instead of correcting atrophied internal R&D
Firing internal R&D workers (e.g. HP)
What about absorptive capacity?
• OI-Outbound: OI vs. actual business model
IP licensing -> Patent trolls
Where is the value creation?
Monetizing Knowledge Flows
• Contrasting views of charging for knowledge
UI, CI celebrate free spillovers
Open source software
Other collaborative communities
OI emphasizes monetization
Universities chasing patent royalties
Impact on open science?
Which is socially optimal?
• Tied to IPR policy
Ongoing debates over patent trolls, patent reform
24. Conclusions
Summary
• Rapidly growing research on distributed
innovation
Distinct but overlapping O/U/CI streams
• Distributed innovation is here to stay
Requires different conceptual approaches
Requires different processes
Requires different metrics