It has been a while since Henry Chesbrough coined the term Open Innovation and formulated its definition: “combining internal and external ideas as well as internal and external paths to market to advance the development of new technologies.” (Chesbrough, 2003). Over the course of time, the terminology relating with Open Innovation has evolved alongside developments in management literature and practices. Open Innovation as a paradigm on itself is on its quest to touch base outside the academic world. Rather than taking a (technical) process-oriented approach, Open Innovation is now also about Open Business Models (Chesbrough, 2006), Open Services (Chesbrough, 2010) – both from a more strategic perspective – and practical tools (Vanhaverbeeke, 2017) – more from a tactical or operational point-of-view.
Many organizations still wonder or try to figure out if Open Innovation is actually the best approach for them to be used as a framework to put their strategic, tactical and operational activities into practice. Many who have tried have realized its benefits, but sometimes get lost in the different forms that Open Innovation can take. To bring some order in chaos, I used the initial Open Innovation framework, based on the innovation funnel, to describe and position a long, but non-exclusive, list of activities that are related to Open Innovation. Of course, also other frameworks could be used to do so, but this seemed like a solid approach.
The infographic includes 33 routes to Open Innovation, ordened by:
- the level of involvement of partners (upper half) and clients (lower half): the closer the activity is to the funnel, the more involvement is required to succeed.
- The size of the circles are partly intuitive, partly evidence-based, and describe to current usage of the phenomenon or in some cases the current impact of the phenomemon.
- Also note that some of the ‘activities’ are rather ‘systems’ that could be tapped into in order to use it as a source of innovation in stead of an activity that you’ll have to organize and accelerate yourself.
Download a high-resolution (PDF) of this infographic now!
The goal of this framework: to give you an idea of all the possibilities that come with Open Innovation, where you could start and in what stage of your internal process it comes in (most) handy.
Route 1: In-licensing
The process of sourcing for external knowledge, patents or technology and to formalize the use of that information in your own innovation process. The ‘license’ often include information about the collaborators, how the risks are shared, how the pofits are shared and to what extend the technology or information may or may not be altered or adapted.
Route 2: Co-patenting
The process of collaboration between inventors and joined registration for a patent that may be used for further exploration and exploitation onwards. The effect has been studied by for instance Belderbos and it also an indication of the strength of (inter)regional collaboration, according to OECD.
Route 3: Spin-off
A spin-off is a form of Open Innovation in the sense that a company can ‘spin-off’ a newly developed technology to the public market for further exploitation by the involved engineers or startup team. It thus a technique to split off an early innovation in the hope that, when it leaves it mother’s wings, it will become more successfull on his own.
Route 4: Collaborative Innovation
Collaborative Innovation is a branche within Open Innovation that studies the effect of temporary Open Innovation-projects with a single goal in mind, such as the creation of a new product or the development of a new service. It is as such not a paradigm but a program management method. Vareska van de Vrande was recently appointed as professor of Collaborative Innovation at the Rotterdam School of Business.
Route 5: Co-engineering
Collaborative engineering: a term mainly used in conventional manufacturing and production industry, with a focus on collaboration between two or more partners in the full process of design, engineering and manufacturing with multidisciplinary teams and supply chain integration.
Route 6: Co-learning
A different approach to open innovation because it is more about HRM and than about the processes itself that become open. Co-learning is about the collaborative learning platforms or trajectories for personnel in order to gain new skills, both on operational level as on more tactical or strategic levels. The knowledge than flows back into the company making the influx of knowledge applicable to business processes. For instance: Faems (2006) and Rowley, Kupiec-Teahan and Leeman (1983)
Route 7: Spin-out
A spin-out differs from a spin-off in the sense that the technology or startup-team is moving to another ‘mothership’ in the form of an acquisition, merger or (most likely, because the former two usually don’t happen at this early stage) a joint venture.
Route 8: Open Innovation-based Business Models
Basically, this is about having a business model in place that exploits the opportunities that arise because of Open Innovation. Businesses with Open Innovation-based Business Models usually are trying to take the place of innovation intermediaries in Open Innovation networks. They can for instance be inventors with the sole purpose of registering and selling intellectual property. Or they can be network brokers. More information in Weiblen (2014) and Chesbrough (2010) when he describes these companies as merchants.
Route 9: Out-licensing
Out-licensing is one of the most important strategies within Outbound Open Innovation. Outbound Open Innovation is a core principle of the Open Innovation Paradigm and includes for instance also spin-offs and spin-outs. Out-licensing explores gainin external rewards for internally developped technologies. More information: Lichtenthaler (2009).
Route 10: Co-design
This approach could also have been placed underneath the funnel: co-design usually happens with both partners and customers and is meant to have a more human-centered design approach in your R&D-funnel. It has become a main topic of research within design thinking. More info: Steen, Manschot & De Koning (2011).
Route 11: Open Business Models
Open Business Models are all-inclusive approaches to Open Innovation: “Open Business Models take a broad perspective of ‘resources’ that are exchanged and shared with the ecosystem. […] It is seen as an ecoystem-aware way of value-creation and capturing. (Weiblen, 2014). As such, firms with an Open Business Model collaborate with its ecoystem by building up partner-networks, platforms. The process of ‘opening up the business model’ is often referred to as Business Model Innovation.
Route 12: Open Business
Although the term is almost the same as the before-mentioned approach, ‘Open Business‘ is something completely different. An Open Business embeds a business model that aims to publicly share all data and information. It is related to open source, freeware and open science.
Route 13: Co-branding
Collaborative branding refers to the fact that a network of organizations join to create a synergetic branding effect. In many case they will create a joint brand that replaces the current product or company brand in order to gain a larger scale effect of the brand. This process is very common in public networks (such as Brainport, the Netherlands, were many companies use the brand Brainport rather than there own branding), but also works out for business-only partnerships, such as the Douwe Egberts and Philips co-brand Senseo. A related term is co-promotion.
Route 14: Co-production
Co-production – or co-manufacturing – is largely the same as co-engineering except from the fact that it focuses only the production part of the process, thus enhancing economies of scale and cost reductions in (mass) production environments.
Route 15: Co-marketing
Co-marketing, like co-branding, is about creating a synergetic effect in the commercialization stage of the innovation process. Collaborative marketing focuses on sharing distribution channels and pricing information. It involves joint teams of marketeers bringing to market different products from differnt companies.
Route 16: Sectoral Innovation Systems
A sectoral innovation systems describes the complete institutional environment, whose aim is to accelerate innovation and employability in a certain sector. In the EU, sectoral innovation systems have been a main focus point of both international and national programs over the last two decades. It’s effects still have to be proven.
Route 17: Shared Facilities
The availability of facilities that can be used by networks of companies. From an inbound approach, a company could make use of machine labs, printing labs or hubs with design and production lines; from an outbound approach, companies could share their facilities with others. It contributes to Open Innovation because of the fact that when using these shared facilities, often new combinations or ideas arise. An example of a shared facility is the Holst Centre in Eindhoven.
Route 18: Regional Innovation Systems
A regional innovation describes the institional environment, whose aim is to accelerate innovation and employability in a certain (geographically bounded) region. An example is Brainport. I’ve previously written about regional innovation systems.
Route 19: Business Ecosystems
These are ecosystems that are created and driven by businesses. Another term would be clusters. While business ecosystems are more likely to be created because of commercial opportunities (and as thus may be actually quite ‘closed’ and could prevend Open Innovation from happening), they could also be created with the purpose of Open Innovation in mind.
Route 20: National Innovation Systems
Same as regional, but than national 😉
Route 21: Fieldlabs
Field Labs are collaborative working places where businesses and knowledge institutes meet to create and develop new ideas. It’s primarily a place where students can work with professionals to create new products.
Route 22: Crowdsourcing
The activity of ‘sourcing’ the crowd: gather opinions, ideas, drafts, suggestions and information from the general public, sometimes – but not always – targeted to specific crowds, such as your current customers or users, a group of elite users or targets platforms (such as designers). Crowdsourcing is effective in the early stages of an innovation process because of the fact that it per definition a diverging activity and it results in a wide variety of options to choose from. The technique is not focused enough to be of use later on in the process. Be aware of having enough resourses avaiable when starting a crowdsourcing campaign, as it may go viral and require lots of hours to manage and react. As it is a form of ‘brainstorming’, the general rules of ‘brainstorming’ also apply to crowdsourcing, which includes taking every idea or opinion seriously.
Route 23: Crowdfunding
Based on the popularity of crowdsourcing, crowdfunding was firstly introduced in the beginning of the 21st century in the US. Its principles are the same, but the main ‘source’ you’re looking for is not ideas or opinions, but finance for your project. Crowdfunding platforms, just like crowdsourcing platforms, deal with intellectual property rights, commons and other legal issues that come into play when dealing with using external work for your project. Crowdfunding is a hugely popular technique but has very low success rates, because of the lower entry barrier.
Route 24: Open Data
This is more a philosophy than a concrete activity, but at least it is fair to say that the process of opening up your data and tapping into open data is an activity. Increasingly popular in software industry, public institutes and educational institutes, opening up (big) data creates opportunities for organizations that otherwise wouldn’t be able to see and use that data. Searching for and using open data is an effective and efficient Open Innovation tool. Wikipedia states, although it misses a source, that “Some make the case that opening up official information can support technological innovation and economic growth by enabling third parties to develop new kinds of digital applications and services.”
Route 25: Co-creation Labs
Co-creation labs are almost identical to Fieldlabs, except from the fact that co-creation labs are mainly intended for the public to participate (customers, local civilians, et cetera). Co-creation labs are an effective way to gather feedback on newly developed prototypes and get ideas regarding branding and marketing.
Route 26: Co-creation
The term of co-creation is used for a whole lot of different purposes, but in the context of Open Innovation is points to the fact that organizations deliberately seek contact with end customers to test and validate new ideas and prototypes and to gather new ideas for bringing the product to market. Although not intended as such, co-creation, if done right, is also an accepted marketing technique: it engages customers with your product.
Route 27: Community
Communities are groups of highly engaged customers, usually voluntarily involved with your product because of personal interest. Searching for and collaborating with these communities may increase new ideas. Lee et al (2011) argue that communities in the example of Lego, have an automatic filtering, for instance through fora, of ideas and these ideas are as such much more worth looking at than for instance ideas generated by crowdsourcing.
Route 28: E-Participation
Primarily a public or governmental activity, e-participation tries to involve the public in (usually) gathering feedback on delivered services. It also works for companies because gathering feedback helps in validating and incrementally increasing the quality of products.
Route 29: Open Source
Much related to Open Data, Open Source is a philosophy adopted by software engineers to generate sources codes that are freely available. This doesn’t mean that there isn’t any commercial activity involved: while the source code may be open to the public for use, only developers will understand it – and thus commercial activities can be exploited when making the software available for the public. Examples of Open Source projects are Wikipedia and WordPress.
Route 30: Co-working spaces
Increasingly popular, mainly because of the growing number of freelancers and self-employed personal, co-working spaces are actually an excellent place to start networking and source for new ideas. Because of the diversity of specialists working in those places, you are more likely to gather diverse ideas, which work best in the early stages of the inonvation process. In cities such as Amsterdam co-working spaces pop-up all the time, so it’s worth to search for a space that is as diverse as possible and offers also opportunities to chat and discuss.
Route 31: Collective Intelligence
This is the fundamental construct behind crowdsourcing: the idea is that the ‘collective intelligence’ always outperforms individual intelligence, even of the most awarded geniuses in your expertise. Tapping into the collective intelligence is therefore a useful activity.
Route 32: Smart Cities
The concept of Smart Cities is based around the ICT-perspective on ‘intelligence’: a highly digital, hyperconnected accessible information society in which broadband is present and the main industry focuses on services and online activities. Smart Cities are a cosmopolitan view on the world, but being located in one of them opens up a wide range of opportunities for innovation.
Route 33: User Engagement
The last route to Open Innovation focuses on the end users of your product or service. User engagement is widely researched as a highly effective approach to Open Innovation. This involves (creative) user research (Kumar) and Lead User Involvement (Bogers).
I’m quite sure there are many more techniques. Please feel free to add them and to indicate how to could be included in the graphic and I’ll update it.