The Strengths and Challenges of Open Innovation
The Strengths and Challenges of Open Innovation
University of British Columbia
APSC 598X
Abstract
Open innovation is a term coined by Henry Chesbrough in his book, Open Innovation, from 2003. Open innovation initiatives have been utilized in the time before that, however Chesbrough was the first to describe this model.
“Open Innovation is the use of purposive inflows and outflows of knowledge to accelerate internal innovation, and expand the market for external use of innovation, respectively”(Chesbrough, 2006).
This paper will through a series of examples show how and why businesses are embracing open innovation initiatives. The first part of the paper includes success stories highlighting important factors for successful implementation of open innovation initiatives. The last part of the paper will look more closely at the challenges arising from open innovation.
Over the past to decades or so companies have been moving from a traditional closed form of innovation to a much more open form. Traditionally organizations controlled all the key elements of new value creation. Internal R&D was viewed as a strategic asset and a barrier to competitive entry. Only large companies with significant resources and a solid R&D culture could compete (Chesbrough, 2004). Back then companies like AT&T and IBM would do most of the industry research, and off course obtain most of the profits. As communication technology advanced these large closed firms started feeling competition from innovative firms like Microsoft, Intel, Cisco, and Amgen, achieving success on research discoveries of others (Chesbroug, 2004). The Internet has made it easier to find, connect to, and collaborate with the outside world and has drastically changed how business is done, including corporate innovation (Euchner, 2011). Open innovation is becoming an essential way of competing in a world where the barriers of innovation are
University of British Columbia
APSC 598X
Abstract
Open innovation is a term coined by Henry Chesbrough in his book, Open Innovation, from 2003. Open innovation initiatives have been utilized in the time before that, however Chesbrough was the first to describe this model.
“Open Innovation is the use of purposive inflows and outflows of knowledge to accelerate internal innovation, and expand the market for external use of innovation, respectively”(Chesbrough, 2006).
This paper will through a series of examples show how and why businesses are embracing open innovation initiatives. The first part of the paper includes success stories highlighting important factors for successful implementation of open innovation initiatives. The last part of the paper will look more closely at the challenges arising from open innovation.
Over the past to decades or so companies have been moving from a traditional closed form of innovation to a much more open form. Traditionally organizations controlled all the key elements of new value creation. Internal R&D was viewed as a strategic asset and a barrier to competitive entry. Only large companies with significant resources and a solid R&D culture could compete (Chesbrough, 2004). Back then companies like AT&T and IBM would do most of the industry research, and off course obtain most of the profits. As communication technology advanced these large closed firms started feeling competition from innovative firms like Microsoft, Intel, Cisco, and Amgen, achieving success on research discoveries of others (Chesbroug, 2004). The Internet has made it easier to find, connect to, and collaborate with the outside world and has drastically changed how business is done, including corporate innovation (Euchner, 2011). Open innovation is becoming an essential way of competing in a world where the barriers of innovation are
References: Asllani, A., & Lari, A. (2011). Open Innovation Modeling Using Game Theory. Academy of Information and Management Sciences Journal, 14(2), 79+. Retrieved from http://www.questia.com Blanchard, D Chesbrough, H. (2003). Open Innovation: The New Imperative for Creating And Profiting from Technology. Boston: Harvard Business School Press. Chesbrough, H. (2004). Managing Open Innovation. Research-Technology Management, 47(1). Retrieved from http://www.questia.com Chesbrough, H Euchner, J. (2011). The Evolution of Open Innovation: An Interview with Henry Chesbrough. Research-Technology Management, 54(5), 13+. Retrieved from http://www.questia.com Euchner, J Huston, L., & Sakkab, N. (2006). Connect and Develope: Inside Proctor & Gamble 's New Model for Innovation. Harward Business Review, 3(March). Kirschbaum, R. (2005). Open Innovation in Practice. Research-Technology Management, 48(4), 24+. Retrieved from http://www.questia.com Munsch, K Sakkab, N. Y. (2002). Connect & Develop Complements Research & Develop at P&G. Research-Technology Management, 45(2), 38+. Retrieved from http://www.questia.com Wolff, M