Recent Research: Open Innovation: What We Know, What We Don’t

A growing number of academic researchers and TBED practitioners are taking interest in the emerging subject of open innovation. Like all new concepts and business practices, open innovation is not well understood by broader audiences and under-researched in the academic community. Tobias Fredberg, Maria Elmquist and Susanne Ollila from Chamlers University of Technology in Sweden attempt to address both needs in a recent paper, Managing Open Innovation – Present Findings and Future Directions.

Their review of the subject involved two tasks, the first being the synthesis of literature dating from when open innovation was coined in 2003 to when they performed their search in November 2007. They identified four books, 35 journal articles and 10 book reviews explicitly using the term “open innovation.” The second task was the collection of opinions from nine key researchers to define the current frontier of open innovation research.
 
But first, what is open innovation?
 
Like many topics in emerging fields, the exact definition of open innovation is still being debated. The term’s roots can be found in the concepts of open source software development, where strategies to find novel ways for writing code and enhancing software products were increasingly being performed outside of the traditional boundaries of an in-house R&D staff. In an environment with a rapidly changing marketplace and increasingly mobile human and financial capital such as the software industry, companies sought new ideas from outside sources, often at different stages of their product development. Open innovation can be used to classify the activities of any firm as they use both internal and external resources, such as knowledge and capital, to commercialize products.
 
With the complexities of balancing intellectual property management and the size and structure of research divisions, companies are looking outside of the boundaries of the firm for efficiency and value. An example of a specific corporate strategy often found in discussions of open innovation is Proctor & Gamble’s “Connect + Develop” strategy, by which P&G is shifting the source of innovation for new products from their internal research department and traditional suppliers to outside innovators. P&G’s website reports more than 40 percent of their products now have a component of external collaboration. In the literature, the reach of open innovation and its ability to dissolve boundaries is extending beyond the firm level to also describe networks, industries, and even regional innovation systems.
 
The authors separate the literature examining the facets of open innovation into seven themes:

• The notion and principles of open innovation;
• The exploration of business models;
• Organizational design and firm boundaries;
• Leadership and culture in open innovation;
• Tools and technologies to push open innovation;
• IP and patenting issues; and,
• Industrial dynamics and manufacturing processes.

Combining their literature review with the interviews of research experts, the authors outline two main areas for future investigation in open innovation: human aspects and organizational aspects. The human side of future research could explore the kinds of leadership skills and sensibilities needed to manage open innovation, the aspects of teamwork within collocated and distributed groups of people, and finally, the motivation of individuals to take an open innovation approach to solving problems. Organizational issues for future research would consider structures that facilitate open innovation, the ability of companies to adapt to exploring open innovation, and the mechanical process of implementing open innovation techniques. The paper contends much of the existing research is based upon case studies and future work needs to concentrate on more theoretical development.
 
A question to leave practitioners reading this story is: If the model of open innovation is rapidly spreading to new industries, moving way beyond software development, how should TBED organizations react to the shift, and what tools can they leverage to assist firm growth and commercialization?
 
Managing Open Innovation – Present Findings and Future Directions contains a list of the existing academic literature on open innovation up until November 2007 and can be found at:
http://www.vinnova.se/upload/EPiStorePDF/vr-08-02.pdf