This document summarizes a presentation on open innovation given by Joel West. It defines open innovation as using purposive inflows and outflows of knowledge to accelerate internal innovation and expand markets for external use. The presentation discusses the evolution of open innovation research since Henry Chesbrough's influential 2006 book. It identifies gaps in the research around obtaining, integrating, and commercializing external innovations, as well as feedback mechanisms and reciprocal measures. The presentation also examines research on outbound open innovation and coupled open innovation models. It concludes by previewing forthcoming volumes that will advance the field of open innovation research.
3. What is “open innovation”?
“Open innovation is the use of purposive
inflows and outflows of knowledge to accelerate
internal innovation, and expand the markets for
external use of innovation, respectively.”
Henry Chesbrough, O pe n Inno vatio n:
Re se arching a Ne w Paradig m (2006)
4. Source: Chesbrough (2006)
Current
Market
Technology Insourcing
External
Technology
Base
Internal
Technology
Base
New
Market
Technology
Spin-offs
Other Firm’s
Market
Licensing
“Open” innovation strategies
Chesbrough funnel
5. Open Innovation: then and now
6,161
cites†
† Google Scholar
1,230
cites
1,156
cites
139
cites
Due in
2014
6. What’s new?
• Many antecedent/overlapping areas
- Technology sourcing, IP markets,
university licensing, alliances, supplier
innovation, user innovation
• New ideas include
- Role of the business model
- Agnostic to internal/external paths
- Rise of innovation intermediaries
Cf. Chesbrough (2006)
7. Open vs. user innovation
Open Innovation UserInnovation
Focal actor Firm User
Knowledge transfer IP Needs
IP regime Patents Free revealing
Innovation production Hierarchy Community, individual
Motivations Monetary Social, personal utility
Frank Piller & Joel West, Ch. 4 of O pe n
Inno vatio n: Ne w Re se arch & De ve lo pm e nts
8. Three open innovation processes
1. Inbound (or “outside-in”)
2. Outbound (or “inside-out”)
3. Coupled combines these two
Cf. Chesbrough (2003, 2006), Gassmann & Enkel
(2004), West & Gallagher (2006)
10. Review of inbound OI
• Goal: Synthesize inbound (& coupled)
• Sample from 25 top SSCI management
& innovation journals (+15 oft-cited)
• Either mention “open innovation” or cite Chesbrough
(2003)
• Hand select 291 down to 165
• 161 articles, 3 books, 1 chapter
Joel West & Marcel Bogers, “Leveraging External Sources of
Innovation: A Review of Research on Open Innovation,” Jo urnalo f
Pro duct Inno vatio n Manag e m e nt, forthcoming
11. Breakdown of 165 OI pubs
Inbound: 118 Outbound: 50
Coupled: 70
57 14
11
24
26 1
32
13. 1. Obtaining Innovations
• Best covered of the phases
- Searching, enabling, filtering
- Sourcing particularly well covered
• Most popular area: sources of innovation
• Often about external knowledge and not
external innovations
• Not much about asset specificity of potential
innovations
14. 2. Integrating Innovations
• Considers org capabilities and culture
- Absorptive capacity over-researched
- NIH is mentioned, not well measured
- Implicit assumptions
• Integration seems to be a black box
- Are new competencies needed?
- Does utilizing external innovations help or
hurt internal R&D competencies?
15. 3. Commercializing Innovations
• Lots of value creation
- Sometimes measured using NPD metrics
- Less research on value capture
• Assumes external innovations
commercialized same as internal ones
- How do firms differ in external innovation
commercialization capabilities?
16. 4. Reverse Paths
Beyond the linear model, this includes
• Feedback mechanisms
- Information flow upstream
• Reciprocal measures
- Ongoing interactions
- Includes co-creation, communities
Research relatively scarce
17. Other gaps and opportunities
• Is everything an “innovation”?
- Patent, copyright, knowledge
• Where is the business model?
- Not a lot of value capture
• Where are the success metrics?
19. Key challenges of outbound OI
• Identifying underused IP
• Simultaneous internal/external
commercialization
• Functioning IP markets
• Appropriability fears
• Drag due to excess appropriability
Outbound OI research getting scarcer
Chesbrough (2003, 2006b), Fabrizio (2006), Enkel
et al (2009), Dahlander & Gann (2010)
23. Forthcoming OI volumes
• Re se arch Po licy special issue
- Chesbrough, Salter, Vanhaverbeke & West,
guest editors
- Ashish Aurora, lead editor
- ≈10 articles
• O pe n Inno vatio n: Ne w Re se arch &
Dire ctio ns (Oxford)
- Chesbrough, Vanhaverbeke & West, eds.
- 15 chapters
The open innovation model emphasizes flexibility in a firm ’ s innovation strategy: The best source of innovation may be outside the firm (arrows going in) The best market for an innovation may be outside the firm (arrows going out) The importance of flexibility. Span firm boundaries. Can bring in technology at any point in the product development process. Major goal: if firm is fighting false positives (extra cautious), you will get lots of false negatives (Chesbrough 2006). Make sure you find a way to monetize or otherwise find a path to market for these false negatives.
Laursen & Salter 2006 SMJ: 1324 cites (3 rd after Henry’s 2003 book and 2003 Sloan article)
A lot of people when they think about open innovation they only think about the inbound mode; most of the research is about inbound
15 highly cited, with 100+ Google Scholar cites. 3 books and 1 chapter by Chesbrough
4-phase model
1. Searching (where): Sourcing, Brokerage , Limits, University research, User innovation 2. Enabling process/mechanisms (how): Contests, Intermediaries , Toolkits, PlatformsCrowdsourcing 3. Filtering (which): Gatekeepers , Technology scouts, Technology brokering 4. Acquiring: Incentives to share, Contracting, Nature of the innovation
Absorptive capacity: 80/280 articles
Definitions of innovation from Schumpeter, Ed Roberts, Chris Freeman
Chesbrough and Rivette & Klein’s Rembrandts in the Attic, IP licensing is going up; Issue of what, why and how: descriptive, causal and normative. At least 6 OI-related papers on technology sourcing have been retracted: SMJ, Org Science, Research Policy, Strategic Organization, Industrial and Corporate Change. Google Open Innovation retraction to read all about it.