Innovation can be Closed or Open
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In your business today you probably have access to more information that you can use. In your business you do not have to, and should not, rely on internal knowledge or research only. You can acquire (buy or licence) processes or inventions from other businesses. Also, inventions not being used internally by your business can be taken outside (sold, licensed, spin off, joint venture) to raise additional revenue.
The availability of information on the internet has been a catalyst for open innovation. In the past, most innovating businesses used closed innovation, keeping their discoveries highly secret and making no attempt to look for information from outside the business.
The thinking behind closed and open innovation is compared in Table 2. Do you use these approaches in your business?
Table 2. Closed and Open Innovation
| Closed Innovation | Open Innovation |
|---|---|
| The smart people in our field work for us | Not all smart people work for us. We need to work with smart people inside and outside the company |
| To profit from R&D, we must discover it, develop it and ship it ourselves | External R&D can create significant value. Internal R&D is needed to claim some portion of that value |
| The company that gets innovation to market first will win | Building a better business model is more important than getting to market first |
| If we create the most and the best ideas in the industry, we will win. | If we make the best use of internal and external ideas, we will win. |
| We should control our IP, so that our competitors cannot profit from it. | We should profit from other’s use of our IP (license out) and we should license in other’s IP whenever it advances our business model. |
| We will own all results from contract research with universities | We will partner with universities to create knowledge and encourage use outside our field |
Collaboration with Research Organisations
The innovative wastewater treatment company, Biolytix, uses open innovation in its research and new product development processes. Biolytix has developed a number of strategic alliances to assist. These include links with two universities, partnerships and joint product development with large commercial organisations.
Links to subsections of this topic
What is Innovation?
Innovation is Not Just About Products
Innovation can be Incremental or Radical
Innovation can be Closed or Open
Is your company innovative?
Ten ways to boost innovation