Speed up your R&D with Open Innovation

Ideas are everywhere but still we struggle on benefiting from them. Too many times creating new innovations is reserved to specific R&D department that has been assigned the responsibility to do research and create new innovations. This limits the diversity and amount of ideas generated. When people creating ideas have the same background, they tend to rely on the same proven or accepted approaches. Ideas generated outside are rejected because of “Not invented here” (NIH) principle. This leads to not using third party solutions because of their external origins and R&D department invents the wheel again and again even if similar solution already exists.

“Not invented here” (If a technology was not produced inside a company (i.e., not invented here), the company could not be sure of the quality, performance, and availability of the particular technology.)

The open innovation concept seeks to tackle this problem by emphasizing the importance of searching and sharing ideas outside your own organization. Many companies have problems exploiting their own research results and ideas because they don’t fit their current business model. Changing their business model to fit the needs of new business would lead them to lose the focus on the core business. This leaves a lot of research result to be left “sitting on the shelf” and waiting for a moment when they can be exploited. Instead of managing intellectual property (IP) as a way to exclude anyone else from using your technology, you should manage IP to advance your own business model and to profit from your rivals’ use. This creates possibilities on sharing research results and ideas between companies and enables the creation of start-up and spin offs companies that will be free to exploit ideas on their own and not disturbing the original company’s business.

In order to exploit open innovation concept internal R&D’s focus needs to be to:

  • To identify, understand, select and connect to the wealth of available external knowledge
  • To fill in the missing pieces of knowledge not being externally developed
  • To integrate internal and external knowledge to form more complex combinations of knowledge, to create new systems and architectures
  • To generate additional revenues and profits from selling research outputs to other firms for use into their own systems

Filling the gaps with external technologies (Chesbrough, 2003)

Benefits of open innovation concept (Chesbrough, 2003)

  • Enabling innovation beyond their normal areas of expertise.
  • Allowing access to a wider range of innovative ideas from which they choose which to take forward for commercialization.
  • Reduces the risks of innovation by transforming potential competitors into collaborators.
  • Provides faster returns (monetarization of value) through the manufacture, marketing and distribution of new products

Markus Halonen
Keto Software