Dr. Sabine Brunswicker's presentation about the future of open innovation as presented at the 7th European Innovation Summit of the European Parliament: A Pact for Innovation. December 7th, 2015 in Brussels, Belgium.

1. Prof. Sabine Brunswicker, Purdue University
7th Innovation Summit, European Parliament, December 7, 2015
Open Digital Innovation
Shaping the Future of Open Innovation
RESEARCH CENTER
Open Digital Innovation

2. OPEN INNOVATION
A FAD
OR
A PHENOMENON?

3. Executive study 2013
UC Berkeley and
Fraunhofer
▪ Study among the largest firms
in Europe and US
▪ Firm criteria: >1000
employees and >250
million USD in sales
▪ Key informants: CEO,
COO, or CTO at
headquarter
▪ Data collection
October– December 2012
▪ 125 datasets
Adoption of open
innovation
Abandonment
Open innovation
experience
Management
support
Intensity
78% practice open innovation in
2013
No firm has abandoned open
innovation
Median of 5 years
71 % have increased
management support
82 % have increased open
innovation activity
Open Innovation – Not a Fad but a Phenomenon
Source: Chesbrough & Brunswicker (2013), Chesbrough & Brunswicker (2015)
THE OPEN INNOVATION EXECUTIVE STUDY in 2013 ALREADY SUGGESTED THAT OPEN INNOVATION IS
NOT A FAD BUT A PHENOMENON

4. IN OUR ONGOING OPEN INNOVATION EXECUTIVE STUDY 2015 WE LEARN MORE ABOUT THE
PARTICULARITIES OF MANAGING OPEN INNOVATION IN LARGE FIRMS
 Study among the largest firms in
Europe and US
 Firm criteria: >1000
employees and >250 million
USD in sales
 Organizational & Project level
analysis
 Data collection: January 2015 to
August 2015
 Current responses: 121 firm-
level data, additional project
level data
Executive Study 2015 Purdue &
Berkeley
Adoption of
open innovation
Abandoning
open innovation
Financial
support
Expenditures
Human
resources
Open Innovation – Not a Fad but a Phenomenon
~78% of firms (94 firms) practice open
innovation today (n=121)
~ 2.5% of firms adopting open innovation have
abandoned it
~61 % have increased the financial investment
~22 % have increased the financial investment
by more than 50%
~72% invest less than 20% of the total
expenditures for innovation in open innovation
~53% allocate more than 5 full-time employees
to open innovation

5. LARGE FIRMS ACCESS EXTERNAL KNOW-HOW WITH AND WITHOUT DIRECT FINANCIAL
COMPENSATION
Source: Global Open Innovation Executive Survey 2015; n=76 firms
Emerging Open Innovation Modes
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Pecuniary Inbound Open Innovation Practices
Non-pecuniary Inbound Open Innovation Practices
Median = 25%
Median = 20%
25 percentile: 5%
25 percentile: 10% 75 percentile: 50%
75 percentile: 50%
Share of projects completed within the last
2 years with inflows of knowledge
(inbound)

6. FREE REVEALING – NON PECUNIARY OUTBOUND INNOVATION – IS RATHER RARE; 50% OF
FIRMS FREELY REVEAL IN MORE THAN 5% OF THEIR PROJECTS
Source: Global Open Innovation Executive Survey 2015; n=73 firms
Emerging Open InnovationModes
Median = 5%
0% 20% 40% 60% 80% 100% 120%
25 percentile: 0% 75 percentile: 20%
Share of projects completed in 2013 with
free revealing

7. FIRMS ARE NET TAKERS
Source: Global Open Innovation Executive Survey 2015; n=73/76 firms
Median = 5%
Free knowledge sharing with external partners
Free access external knowledge
Median = 20%
0% 20% 40% 60% 80% 100% 120%
25 percentile: 0% 75 percentile: 20%
25 percentile: 5% 75 percentile: 50%
Share of projects completed in 2013 with
free inflows/ free revealing
Emerging Open InnovationModes

8. Emerging Open Innovation Modes

9. INDEED, EXISTING WORK ON OPEN INNOVATION DISCUSSES A VARIETY OF OPEN INNOVATION ‘MODES’
IP Licensing
Informal networking
Publically funded
R& D consortia
External R&D services
Open Innovation
Intermediaries
Open innovation
„modes“
University grants
Supplier awards
Crowdsourcing
User co-creation
Idea competition
Source: Chesbrough & Brunswicker (2014); Enkel & Gassmann (2009); Van de Vrande et al (2009)
Emerging Open InnovationModes

10. WE ALSO LEARN THAT FIRMS ‘COMBINE’ DIFFERENT MODES IN ORDER TO SOLVE ONE PARTICULAR
INNOVATION PROBLEM
Open call to the crowd
 Call for solutions in
the area of Powering
your Home
Crowd’s solutions
 4000 idea submitted
 23 partnerships
 USD 200 million
investment by GE
Source: www.ge.com, Chesbrough (2012) California Management Review
Large Crowd Bilateral Partnership
Emerging Open InnovationModes

11. Emerging Open Innovation Modes
THE VARIETY OF OPEN INNOVATION MODES CAN BE CLASSIFIED INTO FOUR MAJOR ARCHETYPES
Markets/
Contracts
Open Innovation
Partnerships
Open Innovation
Platforms
(Contest)
Open Innovation
Community
Medium to high-
powered incentives
High-powered,
cooperative
Moderate incentives
Low to moderate
incentives
Usually high (and
externally owned)
Negotiable Varied Varied
Incentives
Control
over IP
Know-
how sharing Limited Strong Limited (Problem)
Strong and
multidimensional
Low Low High High
Diversity of
sources
Source: Bagherzadeh & Brunswicker (2015), see also Felin & Zenger (2014)
Bilaterial Multiple actors
Digitally transformed

12. Emerging Open Innovation Modes
TWO PROJECT (PROBLEM) DIMENSIONS MATTER IN ORDER TO MAKE THE RIGHT CHOICE
Complexity of the Problem Hiddenness of Solution Knowledge
• A large number of highly
interdependent tasks &
knowledge areas
• Difficult to decompose
• Little knowledge about the
sources or locations of solution
knowledge
• “Holy grail problems”
Source: Mehdi Bagherzadeh (2015), Felin & Zenger (2014), Nickerson & Zenger (2004)

13. Emerging Open Innovation Modes
OUR ANALYSIS OF OUR SURVEY DATA SHOWED, AN ASSOCIATION BETWEEN DIFFERENT PROBLEM
TYPES AND OPEN INNOVATION MODES
Problem
Complexity
Hiddenness of
Knowledge
High
Low
Low
High
Open Innovation
Platforms
(Contest)
Markets/
Contracts
Community
Type 1
Type 3
Type 2
Type 4
Open Innovation
Partnerships
Source: Bagherzadeh & Brunswicker (2015)

14. The Shift Towards Greater Access and Less Control
INDEED, INNOVATION ARCHITECTURES BECOME INCREASINGLY UNBOUNDED AND OPEN; EVEN APPLE
SUPPORTS GENERATIVE AND OPEN DEVELOPER COMMUNITIES
Internet
ISP
T
T T
Phone
WiFi
Enduser
system
Handset
Distribution
GUI
Shop
OS APIs
Audio-
Dateiformat
A A
A
Millions of songs
Thousands of Apps
Assembly
C
C
C C
Hundreds of
components
Hardware
interface
BIOS
Betriebs-
system
iTunes
Design
Source: Baldwin (2011)
Closed IP
External supplier
Complementor
Open Source
Closed Standard
Open Standard
Legend

15. The Shift Towards Greater Access and Less Control
INDEED, INNOVATION ARCHITECTURES BECOME INCREASINGLY UNBOUNDED AND OPEN; EVEN APPLE
SUPPORTS GENERATIVE AND OPEN DEVELOPER COMMUNITIES
Internet
ISP
T
T T
Phone
WiFi
Enduser
system
Handset
Distribution
GUI
Shop
OS APIs
Audio-
Dateiformat
A A
A
Millions of songsThousands of Apps
Assembly
C
C
C C
Hundreds of
components
Hardware
interface
BIOS
Betriebs-
system
iTunes
Design
Source: Baldwin (2011)
Closed IP
External supplier
Complementor
Open Source
Closed Standard
Open Standard
Legend

16. SAMSUNG “ It is actually Open Source Software that
is ‘eating’ the world…”
(VentureBeat, Dec 7, 2015)

17. “One of the challenges in Open Innovation right now in our
organization or any other high tech organization is to
figure out how we or they can [work] with open source
communities” (Participant in Open Innovation Study)

18. The Shift Towards Greater Access and Less Control
OPENSTACK, A OSS CLOUD SOFTWARE SOLUTION IS DEVELOPED FOLLOWING PRINCIPLES OF OPEN
SOURCE SOFTWARE; MULTIPLE COMPETING VENDORS PARTICIPATE IN IT

19. The Shift Towards Greater Access and Less Control
Source: Global Open Innovation Executive Survey 2014/2015 Purdue University & UC Berkeley ; n=56
IP Allocation Over Technological Solutions
Successful Projects (n=32)
19%
50%
31%
17%
37%
46%
SELECTIVE OPENNESS SEEMS TO BE PAY OFF
Successful Projects (n=32) Unsuccessful Projects (n=24)
Completely retaining legal ownership rights
Selective retaining legal ownership rights
Completely waiving legal ownership rights

20. introduction
 Initiative to create openness in Government to ensure public trust and establish a system of
transparency, public participation, and collaboration (President Obama, 2009).
WHAT IS OPEN GOVERNMENT AND OPEN DATA?
The Open Data Movement is here… just search Open governmental data play
an increasing role in open
innovation

21. THE IRONHACKS
Creating Value from Open Governmental Data

22. Creating Value from Open Governmental Data

23. an app with a mashup – simple, yet has impact…the
app makes open data ‘social’

24. INNOVATE WITH OPEN DATA: Create a novel, cool,
and performative mash-up embedded in a
website that helps users to solve their problem
PURDUE
IRONHACK
OUTPEFORM OTHERS AND LEARN FROM OTHERS:
IronHacks is about competition but you get also
feedback and learn from others’ work
HACK VIRTUALLY BUT ALSO MEET PHYSICALLY: We
offer a training on open data (tonight), using the
required API, and have training in coding tools.
GAIN & FAME IN MULTIPE WAYS: Improve your
score on the way, gain reputation, learn (GitHub)
and win prizes.
WHAT IS AN IRONHACK?
AT PURDUE WE LAUNCHED IRONHACK TO INVOLVE STUDENTS IN CIVIC INNOVATION; THEY HACK IN 3
CYCLES: HACK, BREATHE, LEARN, AND ITERATE!
Creating Value from Open Governmental Data

25. Introduction
FINAL SLIDE WITH “WEB” AND NEW MODELS OF INNOVATION
The GRAVITY IS
SHIFTING …
..citizen-centric and crowd-based
ecosystems

26. Lifecycle-oriented
Innovation
Ecosystems

27. Lifecycle-oriented innovation ecosystems
FEDERATING LIFE-CYCLE ORIENTED ECOSYSTEMS REQUIRES GENERATIVE RESPONSES TO AT LEAST
THREE TENSIONS
Data
Know-
ledge
Technol
ogy
Con-
tinued
Value
Creation
Lifecycle-oriented
Innovation
Ecosystem
Competition versus
Collaboration
Stability versus Change
Knowledge Sharing &
Protection
Ideation
Solution
develop
ment
Innovation lifecycle and continued value creation
Proto-
type &
test
Citizen
Application
developers
Application
platform owner
Service
providers
Tripartite Socio-technical infrastructure for Generative Responses
Service
integrator
Software vendor
Build &
Produce
Launch
&
improve
New Roles and Norms Virtual Trading Zones
Transparencyas Design
Choice
Source: Brunswicker & Majchrzak (forthcoming)

28. ‘Federating’
Openness in Ecosystems
A Challenge

29. Transparency as a Design Choice for
Federating Innovation Ecosystems

30. Federating Open Innovation through Transparency
THERE ARE AT LEAST TWO DIMENSIONS OF ‘DESIGNED’ TRANSPARENCY: PERFORMANCE AND SOLUTION
TRANSPARENCY
Performance transparency describes the
process of making an innovator’s
performance (evaluation by the market)
transparent (e.g. via rank orders, top 20
list etc.)
Solution transparency transparency
describes the process of making an
innovator’s solution transparent (e.g.
ideas, views, solution, etc.)
Market/Performance
Transparency
Solution Transparency

33. Federating Open Innovation through Transparency
IN OUR RECENT RESEARCH WE SHOW THAT THE DESIGN OF PERFORMANCE TRANSPARENCY MATTERS
Source: Brunswicker & Almirall (forthcoming)

34. Federating with Transparency
TRANSPARENCY OF THE SOLUTION MAY ALLOW REMIXING OF IDEAS, SOLUTIONS, AND MAY TRIGGER
INNOVATION
Matlab OSS Programming Contest
Source: Gulley (2006)

35.  But how to put the policies for open innovation 2.0
Openness
…in policy design?

36. PROCESS TRANSPARENCY CREATES MORE EFFECTIVE POLICIES AND REDUCES UNCERTAINTY IN
POLICY MAKING
Open Public Policy Innovation
Agenda
setting
Analysis
Policy
creation
Implementation
MonitoringVisibility of Citizen
Knowledge
Visibility of Decisions
Visibility of Actions
Policy
Development
Cycle
Online collaboration platforms
Sentiment analysis
Opinion mining
Embedded systems
Policy intelligence toolsAgent-based simulation
Source: Brunswicker & Almirall (forthcoming)

37. Open public policy innovation
IT IS ALREADY HAPPENING ……..ARE ALSO OBSERVING A NOVEL ERA OF PUBLIC POLICY DEVELOPMENT
Aufbruch Bayern
Stockholm Congestion
Tax
Source: Brunswicker & Almirall (forthcoming)

38.  But how to put the policies for open innovation 2.0
Not just greater
accountability
. transparency for better
policy design

39. ABOUT ME AND RCODI
MY RESEARCH CENTER FOR OPEN DIGITAL INNOVATION ASPIRES TO SHAPE THE FUTURE OF
INNOVATION THROUGH SCIENTIFIC USER-INSPIRED RESEARCH
www.purdue.edu/opendigital

40. LET’S EXPLORENEW PATHS TO CREATE IMPACT WITH OPEN INNOVATION
„If you’re not failing every
now and again, it’s a sign you’re
not doing anything very
innovative.“
Woody Allen

41. Training
session &
Survey (6-
8pm)
Hacking
phase 1
Evaluation
phase 1
Hacking
phase 2
Evaluation
phase 2
Hacking
phase 3
Evaluation
phase 3
21 days
Oct. 28
Nov. 5-8, done
by 8 pm
Nov. 2 (8am) - 5
submission at 8 pm
Nov. 9 (8am) –12
Submission at 8pm
Nov. 12-15,
done at 8pm
Nov. 16-19, final
submission by 9pm
Nov. 19-22, done
at 9pm
Work hard,
be creative
Work hard, be
creative
Work hard, be
creative,
compete
Check out
scores
Check out
scores
Wait…
Final
winner
Dev-
eloper
Expert/user
panel
The
IRONHACK
PHASES
Milestones/
metrics
Nov. 22
(12-2pm)
Creating Value from Open Governmental Data
Completing the
post survey
(before Nov. 22)
THE IRONHACK PROCESS IS STRUCTURED IN THREE STAGES