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Idea light bulb

Open your mind…

… to Open Innovation – an exciting approach to ideas generation, says Henry Chesbrough, Executive Director of the Garwood Center for Corporate Innovation at the University of Berkley.

Companies can no longer keep their innovations secret unto themselves. The key to success is creating, in effect, an open platform around your innovations so your customers, your employees and even your competitors can build upon it. Only by doing this will you create an ongoing, evolving community of users, doers and creators.

Open Innovation is the use of purposive inflows and outflows of knowledge to accelerate internal innovation and expand the markets for external use of innovation, respectively. This paradigm assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as they look to advance their technology.

Several factors have led to the erosion of closed innovation. The mobility and availability of highly-educated people has increased over the years. As a result, a vast amount of knowledge exists outside the research laboratories of large companies. Also, as employees change jobs, they take their knowledge with them, resulting in knowledge flows between firms.

Furthermore, the availability of venture capital has increased significantly, making it possible for ideas and technologies to be further developed outside the original firm, in the form of spin-offs or through licensing agreements. Finally, other companies in the supply chain are playing an increasingly important role in the innovation process. As a result, companies have started to look for other ways to increase the efficiency and effectiveness of their innovation processes – embracing Open Innovation.

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