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A Quick Intro to Open Innovation


The central idea behind open innovation is that in a world of widely distributed ... VERIZON. 38. ROYAL PHILIPS ELECTR. 39. NINTENDO. 40. COSTCO WHOLESALE. 41 ... – PowerPoint PPT presentation

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Title: A Quick Intro to Open Innovation

A Quick Intro to Open Innovation
  • Kevin Blackwell
  • Research Analyst in Innovation Strategy
  • Vice President of Sales Marketing

Nerac,Inc. kblackwell_at_nerac.com (860) 872-7000
What is Open Innovation Anyway?
  • Open Innovation is a term promoted by Henry
    Chesbrough, a professor and executive director at
    the Center for Open Innovation at Berkeley.
  • The central idea behind open innovation is that
    in a world of widely distributed knowledge,
    companies cannot afford to rely entirely on their
    own research, but should instead buy or license
    processes or inventions (i.e. patents) from other
    companies. In addition, internal inventions not
    being used in a firm's business should be taken
    outside the company (e.g., through licensing,
    joint ventures, spin-offs). In contrast, closed
    innovation refers to processes that limit the use
    of internal knowledge within a company and make
    little or no use of external knowledge. Some
    companies promoting open innovation include
    Procter Gamble, Innovation Exchange, NineSigma,
    InnoCentive, yet2.com, and IBM.
  • Prior to World War II, closed innovation was the
    paradigm in which most firms operated. Most
    innovating companies kept their discoveries
    highly secret and made no attempt to assimilate
    information from outside their own RD labs.
    However, in recent years the world has seen major
    advances in technology and society which have
    facilitated the diffusion of information. Not the
    least of these advances are electronic
    communication systems, including the internet.
    Today information can be transferred so easily
    that it seems impossible to prevent. Thus, the
    open innovation model states that since firms
    cannot stop this phenomenon, they must learn to
    take advantage of it.
  • It is the business model of the firm that
    determines what external information to bring
    inside, and what internal information to take

What is Open Innovation Anyway Really?
  • The exact opposite of NIH Not Invented Here

Who is practicing it?
  • The Worlds Most Innovative Companies - 2007
  • http//bwnt.businessweek.com/
  • interactive_reports/
  • most_innovative/index.asp
  • Particularly strong in Consumer Package Goods,

The Importance to Nerac
  • Nerac is a Research and Advisory firm for
    companies developing innovative products and
  • 3,000 clients worldwide
  • Historical roots in the NASA Apollo mission.
  • Integral part of many Open Innovation Strategies
  • Vendor sourcing
  • Intellectual property research
  • Technology scouting
  • Key Opinion Leader mapping
  • Nerac Solutions Network

2 OI Adoption Models
  • By the Book Adoption PG
  • Established innovation networks
  • Formally convey innovation missions to the
  • By their Nature Adoption Sun Microsystems
  • So good at it that the process may seem

Open Innovation Implementation Status
Trends in Innovation Networks
An Example Boeing 787
  • Innovation Partner Innovia Technologywww.innovi
  • Mission Build a new passenger jet with
    dramatically increased flight range.
  • Innovation Need Increasedpassenger comfort on
    long flights
  • Result advanced LED lighting that makes the
    cabin seem more spacious and emotionally

Key Recommendations
  • Look for companies that have a stated focus on
    Open Innovations
  • Expect that the logistics for participating are
  • focus on their mission, not the process
  • focus on disruptive technology companies will
    reinvent the process in real time for that.
  • Expect plurality in how to participate in a
    companies innovation networks.
  • Stage your OI relationship disclose your
    understanding of the mission aggressively, but
    details of your innovation more slowly.
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