Open Innovation: A New Paradigm for Understanding Industrial Innovation (original) (raw)
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Introduction to the Open Innovation Paradigm
2016
This chapter introduces the teacher and the student to the open innovation paradigm. It points out the rationale for open innovation from the historical point of view and describes the differences between closed and open innovation. As open innovation has been observed in numerous contexts, this chapter addresses theories related to open innovation on one side and practical implications on the other. We discuss the incentives for firms to engage in open innovation, as well as the shortcomings from engaging in it. Competitiveness results from generating value propositions that differ from competitors’ value propositions. Innovation increases the customers’ value propositions and generates revenues for innovators or owners of innovation (Schumpeter, 1934). Innovation also generates value to the society, even if the innovator does not capture the majority of its profits (Teece, 1986). This chapter first defines innovation and then explains how open innovation helps firms to innovate ea...
A Novel Metaphor Concerning the Terminology of Open Innovation
The objective of this article is to present a metaphor concerning the terminology of open innovation. This metaphor will help both academics and practitioners in getting a deeper understanding of the terms and their relationships in this emerging field. An electrical circuit is used as the metaphor. In it, the following open innovation terms are included: inbound open innovation, outbound open innovation, sequential coherence, dynamic innovation capabilities, knowledge flow, absorptive capacity, organizational inertia, and innovation performance. A corresponding term for each one of these open innovation terms is given in the metaphor. Within an organization, open innovation involves the internal exploration of external knowledge and external exploitation of internal knowledge. Open innovation is gaining wide attention of researchers as it impacts innovation performance of organizations. Systematic metaphor analysis is a qualitative research method. A metaphor is an implicit comparison in which a word or phrase that originally denotes a certain object or concept is applied to another. Time tested relationships among variables in the metaphor of electric circuit offer new insights in the domain of open innovation.
Working Paper No 3 - Open Innovation as Corporate Strategy
Modern manufacturing is increasingly complex due to an increased number of stakeholders (e.g. community advocacy groups and consumer interest groups) as well as uncertainties created by rapidly changing technologies and economic conditions. Firms focused on keeping innovation exclusively in-house may find it difficult to develop products which satisfy the latest trends and diversity of interests. Open innovation models allow firms to integrate external IP as well as external resources into the firm’s production strategies. Careful planning and detailed attention to human resource development needs enables the creation of an internal culture that can readily absorb external information to generate value added business models and products.
Realization of Open Innovation: A Case Study in the Manufacturing Industry
Journal of Promotion Management, 2014
Across industrial settings and environmental conditions, innovation is viewed as a source of advancing firms' competitive position. Recently, a shift has been witnessed from the traditional innovation model, which mainly focused on internal research and development (R&D) towards open innovation. In this study, we have attempted to study if this approach is suitable for the regular, more mature industry by focusing the context of aerospace industry. The study involves a single case company that is a developer and manufacturer of components for both civil and military aero engines as well as for rocket engines. In addition to previous findings we would like to propose three key areas, which need special attention by any company aiming to successfully realize open innovation. These areas are people, process and technology, put into a framework. The PPT framework was found to be particularly helpful regarding the organizational changes needed for open innovation.
What is open innovation, really?
The open innovation paradigm involves the internal and external organization of the innovation process of firms. Proponents and opponents have different views on the actual contribution of this paradigm to the research community. We argue that given the prior literature on the subject, the main conceptual contribution of the open innovation paradigm is the claim that firms with a successful innovation process are simultaneously active on both sides of the market for technology by buying and selling technology. We derive a testable implication that buying and selling technology should be complementary in the production of innovations but find no evidence for such complementarity in a data set from the Community Innovation Survey for Belgian firms. The productivity of R&D for firms active in selling technology, buying technology, or doing both is not significantly different. Notably, firms moving toward both buying and selling increase their sales of new or improved products, but their R&D costs increase more than proportionally. The results suggest that more research is needed into the costs of organizing for open innovation to establish its actual contribution.
Innovation is higher than ever on companies’ agenda. 62% of executives interviewed in a recent survey say their business strategy is “largely” or “totally” dependent on Innovation. In today’s globalized competitive environment, innovation has become the key criterion by which you can assess how good a company is and how good it is likely to be in the future. To give an example of this innovation play in the emblematic mobile phone industry, Apple, RIM and HTC, the three most innovative companies in the industry, capture more than 50% of the total profit pool with less than 10% of the industry’s volume because they are ahead with innovation. In today’s world, companies are required to innovate more and faster than ever before. § Innovate more not only to address more demanding and fastly changing customers but also to respond to the specific needs of emerging markets. ChotuKool, the 69fridgeandNano,the69 fridge and Nano, the 69fridgeandNano,the 2,200 car are well known examples of the so-called “frugal innovation” chal...
Open innovation: the different pathways towards openness
HAL (Le Centre pour la Communication Scientifique Directe), 2017
Innovation is a condition for the survival of businesses, companies, territories and nations. This entry builds on the concept of "open innovation" to review a number of key aspects of the innovation issue. This metaphor is used to try to report on the major contemporary openings made by experts in "innovation studies", and in so doing, a number of important concepts in this field are reviewed. The openings in question concern not only the modalities of organization and implementation of innovation as implied by the concept of open innovation but also the content and forms of innovation as well as the sectors that engage in these activities.