Open Innovation; the present and future of innovation

Currently, the world has been more and more globalized. The changes in the market are quick and the companies that want to maintain (or increase) their share market are forced to innovate and update constantly their business strategy. Open innovation has become since its formulation by Henry Chesbrough in 2003 in what it might be called as the framework in the management of innovation in the enterprise.

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It is a phenomena in which, due to the globalization and peoples’ mobility, the generation of excellent ideas have become almost impossible to be created only in the R&D of large companies. Currently, the best ideas are everywhere and businesses must devise mechanisms to discover those that can add value to their business and incorporate them in their business strategy. Open innovation offers much benefits to the companies in order to adapt their products to their customers. Some of the main benefit are:

• Promotion of R&D projects, which implies to reduce time and costs by capturing innovative solutions not developed inside the company due to lack of time, knowledge and / or technological means.
• Incorporation of innovation from external organizations (technology companies and research centers) in the form of ideas, patents, technologies and products (technology transfer: Licencing-in, technology-in)
• Facilitation of the commercialization of innovations ideas developed by the R&D department.
• Supporting the exchange of innovative ideas using innovation intermediaries or exchange centers that act as a meeting point between companies and external knowledge.

All these benefits have caused the important growth of the application around the world. Important companies, independently of the sector, have applied successful the open innovation. Big companies of computer science sector, textile, food or cosmetic have achieved important  benefits of the innovative application.

Source: http://osocio.org

Inside the computer science sector two of the main examples are IBM and Dell. IBM develops blogging platforms and has developed rapidly the internal application of the new 2.0 tools by testing them with their own employees before proposing to use them to their customers. Its open innovation is closely related to the use of free software, so that the community programmers are developing their products together with their own workers. On the other hand, Dell has become a pioneer in the application of open innovation, through the IdeaStorm; a site that allows public to suggest ideas for improvement and vote the proposals developed by other customers.

From the textile sector, there are many examples such as Nike and Threadless. Nike uses open innovation allowing the customers customize the sneakers and Threadless allows to its customers to suggest new designs and vote for other proposals developed by other customers.

Another sector where the concept has  been applied successfully is the food sector. Coca Cola and Starbucks for example are applying continually the open innotavion. Despite to be one of the most closed in the world (do not forget that his recipe is still a big secret) Coca-Cola allows their customers to design the bottle, through the initiative “Design the World a Coke”. Thus, Starbucks has launched a blog with similar ideas to Dell and has promoted a social network in which the employees and customers can interact through different social projects.

Inside the cosmetic sector also there are different examples; Missha and Eli Lilly for instance.  Missha a Korean cosmetics brand is been known through a network of Women’s social from which it receives ideas and proposals. On the other hand, Eli Lilly, a cosmetics firm has been known for launching Innocentive, one of the most bet-know innovative network. It allows scientists from around the  world to access to the real needs of businesses and, where is appropriate, propose solutions. The winners receive a prize that, in some cases has reached 35,000 dollars.

Other important companies, such as examples are the American multinational corporation Procter & Gamble or Facebook are applying the concept. In 2000 Procter & Gamble changed its manager completely changed their innovation systems and knowledge management in order to catch more ideas of the innovation ecosystem. Now it has 7,000 “virtual researchers” developing products from outside the company. On the other hand, Facebook allows the computer specialist to develop products (applications or “apps”) that work perfectly within their social network. It is a win-win strategy whereby developers have access to millions of users with whom they can win money and Facebook continues growing and offering more services.

To sum up, companies around the world slowly begin to dispense with the closed-form innovation. They are more and more open to proposals not only from other companies or groups of innovation, but also from their customers who are ultimately those who ended up buying their products. What better way to get more share market to develop products “customized” by each clients?.The future products and their innovation own not only to every company but also to the customers.

Comments Off on Open Innovation; the present and future of innovation / 12 Feb 2012 por Carlos Cerdan Infantes
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