What is Open Innovation?

What is Open Innovation?

By Shehwar Ali

Remember when you were in school and you had study sessions with a group in your class? That’s open innovation. You have someone else’s opinion in the work that you ultimately get credit for.

Open innovation has a negative connotation to some, and it’s downright genius to others. So, we are here to clear up some of the misconceptions about open innovation. We will show you projects that use it in the public and private sector.

Open Innovation in its simplest terms means that a business or person is collaborating to bring an idea to market or to improve upon a current project. The term ‘open’ is used because ideas and initiatives can come from inside or outside an organization. Ultimately, open innovation allows companies to utilize advanced business approaches that, in turn, provide better services and solutions. It also helps speed up the time to market. i.e. two heads are better than one.

Open innovation is widely studied in multinational enterprises.  Recently, a survey was conducted in Netherlands where data from small and medium-sized enterprises examined trends towards open innovation. There were a few findings from the survey:

  • enterprises have used open innovations for the past 7 years
  • open innovation  improved manufacturing and services
  • medium-sized enterprises are more actively engaged in open innovations than smaller ones

What’s New in Open Innovation?

Open innovation is revolutionizing industrial and business establishments. Previously, many businesses were restricted to specific business models. However, nowadays with open innovation, external knowledge also plays an essential role that can help companies have a competitive edge.

As open innovation minimized errors, it’s become a valid form for researching and developing. At PreScouter, we have worked with a number of companies like PepsiCo and USB Bank and Paul Mitchell as an extension to their internal R&D department. We use it as an extension to R&D departments in a non-disclosure setting. But, others use it in more of a crowd-sourcing sense.

Crowd sourcing, a type of open innovation, would be like posting a survey on your website and having anyone give their opinion and then narrowing it down. In comparison, semi-open innovation would be privately asking a select number of people to give their ideas and then choosing one. This is how a lot of companies operate to choose a consultant or hire experts.

Open in Public Sector Innovation:

Open innovation addresses the integration and incorporation of values to make decisions and improve quality. Collaborative democracy structured by the model of ‘Beierle’ is used in the enhanced processing of public trust. Prominent examples are found at governmental and federal levels in the USAID development challenge and the National Science Foundation. USAID is receiving maximum development enterprises in areas such as agriculture trade and banking.

Patents and Open Innovation:

The legal community also benefits from open innovation. A good example is the ‘peer to patent’ system. The U.S patent and trademarks office use crowdsourcing by opening up the examination process of patents to the general public. People can submit information. That information is then taken into consideration by the patent examiner, and the patent is then either approved or denied. It’s important to note that because people publicly post their knowledge and comment, it is crowd sourcing, if it was semi-open innovation, then the contents of the patent wouldn’t be public for everyone to comment on. Companies, such as IBM have benefited from this open innovation collaboration. Major companies like Intel, HP and Sun Microsystems have used this peer to patent system.

People Finder Project

People finder project is another example. This process of crowd sourcing is particularly helpful during natural disasters. For example, during one of the deadliest hurricanes in the US, Hurricane Katrina, a people finder project was incorporated. Qualified information was integrated through a web-based Google maps application. And, it’s made public for people to explore the databases. Through these open innovations databases, over 64,000 Hurricane Katrina survivors were identified.

Collaborative Democracy

Democracy principles, at its very nature, include open innovation because they require citizens to participate. The eDemocracy research is open to the public for democratic discussion to increase civic education, improving government legitimacy and strengthening the ties between the public and the representatives.

Innovation Contests

FixMyStreet.com’ and ‘patientopinion.org.uk ’ are open innovation forums. The innovation contest initiated by public sectors include the U.S. Department of Energy lighting prize, USAID Development 2.0 challenge and inducement prizes at the National Science Foundation.

Political Monitoring

The general public uses tools such as ‘Govtrack.us and data.gov’ to monitor political campaigns. This political tracking system facilitates governments to build democracy.

Public Security

Believe it or not, American border control has been monitored through open innovation. Texas Border Watch is a form of crowd sourcing initiative, where anyone with internet access can tune into a public security network used for observing the Texas/Mexico border via webcams. People from the United States and other countries have joined in to report drug trafficking and illegal immigration. It’s a bigger program, to the more well-known neighborhood watch program practiced in a lot of suburban neighborhoods in the United States. The other security open innovation approach is southern ‘Southern California Wildfire Response’.

The Future of Open Innovation:

Recently, a small community of management researchers has transformed into a recognized research entity. The use of purposive inflows and outflows of wisdom has expanded the market. Industrial penetration has become famous based on the principle of open innovation.

Technology, IT, pharmaceutical, medical, telecom and software industries are all benefiting from crowd sourcing and semi-open innovation. Even monolithic systems like Microsoft are using decentralized labs to enhance the absorption capacity of external knowledge. Philips’ new open innovation park  is another example. Swisscom is an example of this paradigm overtaking the telecom industry. Pharma industries like ‘Eli Lilly’ have increased medicine sale strategy through innovation.

Overall, the trend and its horizons are expanding. This concept also protect the patents whereby facilitating the temporary tradable profits. The intellectual properties have high potential of innovations and some countries have developed the patent funds to buy the patents and incorporate them in gaining success.

Viral marketing strategies, as well as improved developmental approaches, are also benefiting from open innovations minimized cost of research and reduced errors.

Startups and Fortune 100 companies continue to find value in open innovation. Larger, diverse networks collaborate using technology based open innovations system. Remember, the basic principle behind all these innovations is the inflow and outflow of knowledge.

If you have any questions or would like to know if we can help your business with its innovation challenges, please contact us here or email us at solutions@prescouter.com.

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