Open Innovation and Lead user innovation

It is known that the 80% of the products we buy today did not exist ten years ago.  Nowadays creativity and innovation are critical factors for the economy and for the survival of a company. The traditional model of innovation entails lots of boundaries between a firm and its environment.

Open innovation represents a shift from the traditional model where 100% of a company’s innovation originates from within, to a more open model where both internal and external ideas are combined to create a more collaborative advantage. In 2003, Dr. Henry Chesbrough coined the term “open innovation” as a paradigm that assumes firms should use external and internal ideas to support a firm’s innovation goals, as well as internal and external paths to market in order to advance their technology. Open Innovation is focused on uncovering new ideas, reducing risk, increasing speed and leveraging scarce resources.

The following table depicts the new “Open” Innovation viewpoint against the old “Closed” Innovation model:

Free Software is a very representative case of open innovation. It  is software that can be studied, modified without restriction, and which can be copied and redistributed in modified or unmodified form either without restriction, or with restrictions that only ensure that further recipients have the same rights under which it was obtained and that manufacturers of consumer products incorporating free software provide the software as source code.

A successful case of Free software is Mozilla Software. Their products use free and open source software licenses, Mozilla Public Licenses (MPL). The Mozilla Public License divides the rights it grants into two sections: the rights granted by the code’s initial author and the rights granted by other people who have added sections of code to the original author’s work.

The most salient conditions are that all distributed copies must contain the source code, all modifications must be described in accompanying documentation,  all copies of the code must have a statement of copyright attached, and all modified code must be distributed under MPL.

With this model, Mozilla Firefox has become the most popular web browser in Europe:


Another way to face the innovation issue is the User innovation. User innovation refers to innovation by intermediate users (e.g. user firms) or consumer users (individual end-users or user communities), rather than by suppliers (producers or manufacturers).

Eric von Hippel  observed that many products and services are actually developed or at least refined, by users, at the site of implementation and use. These ideas are then moved back into the supply network. This is because products are developed to meet the widest possible need; when individual users face problems that the majority of consumers do not, they have no choice but to develop their own modifications to existing products, or entirely new products, to solve their issues. Often, user innovators will share their ideas with manufacturers in hopes of having them produce the product, a process called free revealing.

LEGO is one example of Lead User Innovation. LEGO has open up a collaborative platform with the fan community where suggestions and new designs are proposed. This openness has created a better innovation process, which takes a starting point in user needs and involves users in solving that need, so products are more relevant and more appealing to users all over, which translates to better business.


 

In conclusion, delegating responsibilities and participation to people their initiative is encouraged, so this people will create and innovate. They will do their best and probably they will make mistakes, but in the long-term the benefits will be higher than in a closed atmosphere with fixed paths.

 

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