We often talk about open-mindedness in order to broaden our horizons and discover new things that would not have been imagined by staying in our comfort zone. Open innovation is for the company what the open- mindedness is for the human being. So, what is open innovation?
A simple definition
Open innovation consists in collaborating with external co-workers in order to develop or improve a project. This approach enables to welcome new ideas and new know-how. Isabelle Deschamps, École de Technologie Supérieure de Montréal (ÉTS), summarizes it well: « To caricature, we could say that the open innovation concept is based on a very simple principle: no one can be good at everything».
One problem – many solutions
Generally speaking, the open innovation approach is above all a problem solving process. The idea is that experts in many different fields address the same problem in order to find the best solution. Various tactics exist like organising contests with a financial prize (eg NASA Grand Prize), collaborating with laboratories, research center or university, or searching for partnerships through specialised platforms.
The general public can also be a source of ideas regarding many different areas such as customer experience or technology development. Crowdsourcing campaigns are therefore used to invite the general public to share its creativity and know-how in one particular subject, mostly thanks to the Internet. The Yourail initiative of Bombardier is a great crowdsourcing example. Rail manufacturers asked Internet users to share their opinion regarding future interior design for train cars. The person with the best design was then selected by Yourail as the winner of the contest.
Why resort to open innovation?
It’s a given that one has to keep innovating to remain competitive. This is all the more true given the emergence of new competitors, first with Asian countries such as Korea or Japan and more recently with the BRIC (Brazil, Russia, India and China). Web2.0 also presents new challenges in the areas of social media, web semantics and the open data concept. By resorting to open innovation, we expand our skills while benefiting from the expertise of external collaborators. Thus, companies can stay at the cutting edge of their field and can fill gaps. Finally, one of the advantages of open innovation is the mutualisation of risks. In a period of financial crisis and budget cuts that often have an impact on R&D, open innovation is a way of saving human resources spending as well as sharing financial risks among partners.
Whom to collaborate with?
Open innovation can be used in private or public areas and has no borders. Open innovation is so open that people can collaborate with anyone as long as it allows them to bring an expertise to the company. Apart from the evidence of collaborating with other private companies of various sizes, partners can also be found in:
- laboratories, research center or university
- Consumers, general public (as mentioned with the crowdsourcing)
- Municipalities, States
- Governmental agencies
According to a Canadian government study undertook in 2012, SMEs often « suffer from the inability to obtain enough skilled partners, establishing collaboration agreement and acquiring tacit knowledge». Thus, it is relevant to resort to innovation platforms to meet potential partners.
What about intellectual property?
Collaborative work is enriching and, as aforementioned, open innovation allows spending and returns to be shared. However, how does it work with the intellectual property? Who owns the rights? According to the same study, it’s essential to meticulously negotiate and reference the sharing of intellectual property right. As it is the case with any agreement, as soon as the collaboration starts it’s very important to take into account these aspects. Possible solutions include :
- The sponsored search is made by a laboratory but the company owns the rights to the results.
- Establishment of a joint company in which the rights of intellectual property are shared.
- An awareness of an invention that motivates the company to buy a piece of intellectual property or a license to use.
- Small entities that want to collaborate with larger ones: the first can concede one or the whole part of intellectual property rights to the larger in exchange for an access warranty rights.
Quebec, France and open innovation
From one side of the Atlantic to the other, open innovation is a potential which is still not exploited enough. However the past few years have already shown the potential for collaborative work as long as the partnership is a healthy one. The aforementioned study underlines the importance of keeping good relations with collaborators within a project involving research laboratories. «Without constructive relationships few collaborations will move forward».
To learn more
A book: A Guide to Open Innovation and Crowdsourcing of Paul Sloane