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Making creativity and innovation happen
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10.4 Open innovation

Open innovation starts with the premise that ‘not all the smart people work for us’ (Chesbrough, 2003) and consequently legitimates the acceptance of ideas that were ‘not invented here’.

Open innovation leads inevitably to ideas of innovation networks where different aspects of the total process – i.e. from generating ideas through to commercial realisation, marketing and continuous development – are not just conducted by different people but by different organisations. In this sense the role of alternative organisation structures such as clusters and network organisations is implicitly recognised.

Table 2 compares the principles of closed innovation with those of open innovation.

Table 2 Principles of closed and open innovation
HighlightedClosed innovation principlesHighlightedOpen innovation principles
The smart people in our field work for us.Not all the smart people work for us so we must find and tap into the knowledge and expertise of bright individuals outside our company.
HighlightedTo profit from research and development (R&D), we must discover, develop and ship it ourselves.HighlightedExternal research and development (R&D) can create significant value; internal R&D is needed to claim some portion of that value.
If we discover it ourselves, we will get it to market first.We don’t have to originate the research in order to profit from it.
HighlightedIf we are the first to commercialise an innovation, we will win.HighlightedBuilding a better business model is better than getting to the market first.
If we create the most and best ideas in the industry, we will win.If we make the best use of internal and external ideas, we will win.
HighlightedWe should control our intellectual property (IP) so that our competitors don’t profit from our ideasHighlightedWe should profit from others’ use of our IP, and we should buy others’ IP whenever it advances our own business model.
(Source: Chesbrough, 2003).