Open Innovation Model - MIT ID Innovation

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Introduction To Open Innovation Model MITID
Innovation
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The open innovation model first came into light
in 2003 when Henry Chesbrough introduced it to
the world. Chesbrough felt the need to diversify
knowledge and perspectives within a firm and use
this to help innovate new dynamics. This model
brought a unique stir in firms and companies, and
the vibrations of the stir still reside in the
worldwide market.
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What is an Open Innovation Model?
An open innovation model is a model for the
company's business management that promotes
innovation and collaboration with other companies
and individuals. This collaboration helps to
break the fixed mindset of the employees in that
company and invites talented individuals there.
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A company can implement open innovation practices
through communication methods like collaborating
with two or more companies, organizing research
chairs in universities and colleges, exhibiting
crowdsourcing competitions and innovation
ecosystems. Companies like Samsung, Lego, Quirky,
Mozilla, Facebook, and many more have already
laid down amazing examples of open innovations
that companies and firms can refer to for
inspiration.
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Types of Open Innovations
Globally, there are two types of open
innovations Inbound Open Innovation Inbound
open innovation is when a company uses external
sources and expertise to create, select, acquire,
and internalize ideas. The company analyzes ideas
and perspectives from its external environment
and modifies them as per their requirements.
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Outbound Open Innovation Outbound open
innovation is when a company uses joint ventures
and spin-offs to publicize its internal ideas for
external sources to analyze and use. When a
company feels that its internal ideas may be of
no use to them, it practices outbound open
innovation.
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Advantages of Open Innovation Models Over Closed
Innovation Models
Before understanding the advantages of open
innovation, you should know the structure of a
closed innovation model and the issues they
face.
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A closed innovation model does not allow the
interference of external ideology and
perspectives while developing products and
services. The companies that follow closed
innovation models prioritize the number of
projects they initiated, the volume of resources
they own and have generated, and how much they
have invested in innovation. Such companies own
big research departments to generate more
internal ideas.
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Companies following the closed innovation models
often face repetitive issues like incomplete
internal technical knowledge, ideas not reaching
the market, and not changing resources and
budgets. The speed of innovation is quite low as
the ideas need a lot of rework internally, which,
in turn, creates a low productivity rate. All
these factors lead to a low success rate of
20-30.
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Advantages
The basic advantage of open innovation is that
the companies practicing this model get in touch
with external sources, which help them understand
the technical inventions and trends from a
different perspective. Such companies may have
smaller research departments, but the quality of
ideas generated in them is far better.
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Since companies following the open innovation
model use both internal and external knowledge,
the innovation and productivity rates increase
exponentially, making the success rate
soar. Stats show that 50.4 of companies have
realized that technology disruption has a
positive impact on them.
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However, companies should ensure that they have
control over what information to share and
publicize. Revealing crucial information may lead
to losses. Also, there should be a proper way to
utilize external information, or else there may
be problems with the internal perspectives.
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About MIT ID Innovation
Find the best and most diverse innovation
courses at MIT ID Innovation. Choose the perfect
online course you need from a long list, starting
from building digital brands to business model
innovations. Boost your knowledge and gain
mastery over innovation lectures with
professional guidance from MIT ID Innovation.
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Conclusion
MIT ID Innovation Programme curates knowledge and
experiences that challenge the very paradigm of
evolution. And that's why we have set out to
define the future of industries, communities,
cities and ecosystems. MIT ID Innovation offers
the best Design Thinking and Innovation Courses
in India.
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