At its root, open innovation assumes that useful knowledge is widely distributed, and that even the most capable R&D organizations must identify, connect to, and leverage external knowledge sources as a core process in innovation. Ideas that once germinated only in large companies now may be growing in a variety of settings – from individual inventor or high-tech start up in Silicon Valley, to the research facilities of academic institutions, to spin-offs from large, established firms. Henry Chesbrough (2003) was the first to define the concept of 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. [This paradigm] assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as they look to advance their technology."

Figure 1 represents the innovation process in the "former closed model of innovation”. (Chesbrough, 2003)

Figure 2 represents open innovation process (Chesbrough, 2003)





What does the model of "open innovation" concretely bring in comparison with the classic conception of innovation process ? The way companies manage their innovation is very different if they adopt an open innovation approach. Here are some points of differentiation:

1. Regular connection with multiple sources of external knowledge, as for instance universities, public research institutes, start-up, individual inventors, databases of innovative products or patents.

2. Proactive and diversified management of intellectual property. Intellectual property becomes a key element of innovation strategy because it facilitates the use of markets to exchange knowledge and technologies.

3. Use of innovation intermediaries to look for external resources and to valorize its own innovation resources.

4. Implementation of new performance indicators : percentage of innovation projects generated out of the company, time between project generation and product launch, percentage of companies’ patents that are used etc...

5. Increased role of business model in innovation strategy. The study of the coherence with the business model allows to decide if the development of an innovation project will be carry out internally or externally, with a license or a “spin off“ company.

6. Implementation of processes to avoid evaluation mistakes as " wrongly negative " (project stopped despite a potential for the market). Companies dealing with open innovation give the responsibility for "recycling" the projects and the technologies to dedicated persons.

Associated links :

http://openinnovation.haas.berkeley.edu/
http://www.openinnovation.eu/