The Open Innovation paradigm today represents the most suitable strategic and cultural approach to boost innovation and create value in your own business and sector.
New technologies play a key role in the development of the Open Innovation culture, thanks to the features of speed, pervasiveness and effectiveness, which allow the spread of knowledge in all directions.
What is Open Innovation and Open Innovation definition:
According to Henry Chesbrough’s open innovation model, the one who coined the term and the model of open innovation, the missing resources in your company can be traced externally, using Startups, Universities, Research Centers, inventors and experts, to bring ideas, tools and technologies to innovate.
The tools of Open Innovation
To become open innovation companies, organisations have different methods available:
– CALL FOR IDEAS: the tool of the competition for ideas allows the enteprise to launch a challenge to solve a problem and address it to external parties called to propose solutions that achieve the objective. Usually the recipients are Startups, Research Centers, Universities.
– HACKATON: it’s similar to the Call4Ideas, but it refers to a programming competition and is therefore intended for developers who must propose innovative digital solutions.
– INCUBATORS AND ACCELERATORS: a company can choose to create an internal hub, a laboratory, a company department dedicated to the promotion and development of Open Innovation. The goal is to support young companies by providing them with tools and spaces to develop a business or, as in the case of accelerators, investing in these emerging startup companies by supervising the growth process from the inside.
– PARTNERSHIP: it’s about creating networking opportunities. This can happen both thanks to the creation of inter-company agreements, between two large companies or between companies and startups, and by creating collaborative relationships with Universities, Research Centers or experts in a specific sector. That’s why we talk about Co-Innovation.
– AWARDS: companies can choose to set up prizes to identify those realities that have aroused the greatest interest by proposing an innovative solution and to collaborate with them in the realization of a project.
– ACQUISITIONS: in this case a company takes over shareholdings of another company, thus acquiring ideas, technologies, and skills, choosing whether or not to integrate employees into its workforce.
Obstacles to Open Innovation
The main obstacles to the Open Innovation model can be of two types: cultural or structural.
Among the cultural ones there is the lack of networking skills: not knowing how to create and share knowledge, both between the various company departments and externally, towards other companies and consumers.
Resistance to change hinders the reorganization of work necessary to achieve co-innovation, it is also related to a lack of training and culture of collaboration.
In the structural field, all this is reflected in the lack of systems for the knowledge sharing and the absence of collaborative platforms. There are usually no specialized figures and trained teams. Financial problems are often at the root of these shortcomings, as there is no investment in development and training.
From employees’ point of view, there is also a lack of motivation, since companies do not have incentive systems for those who work with a view to Open Innovation.
How to promote the culture of Open Innovation
In practice, promoting Open Innovation means changing, where necessary, internal processes and activities and rethinking the culture and company procedures:
The spread of an open to innovation mind-set starts with the top management, who is called upon to impartially evaluate the leadership style and implement examples of positive change.
The establishment of cross-functional teams that, with different skills and backgrounds, allows innovative ideas and different approaches to problem solving to emerge.
The spread of the entrepreneurial culture also goes through the motivation of employees. Implementing a training and incentive system to enhance positive examples and personal initiatives helps to make people understand the value of innovation.
Developing Knowledge Management systems and networking dynamics fosters a collaborative culture, through social and corporate networks of Knowledge Sharing, both internally and externally, such as co-creation practices with users.
Increasing Research & Development departments can make people understand the potential of education and experimentation as investments for the future.
Difference between Open and Closed Innovation and crisis of this last one
What represented until recently the traditional model of innovation is defined Closed Innovation, since it requires companies to control innovation.
It is based on self-sufficiency, that is making sure you can plan and manage every stage of innovation, from developing the idea, to making the product, to marketing and so on.
Furthermore, it is necessary to own the Intellectual Property of an innovation to maintain a competitive advantage in the market.
The aspects that have lately put this model in crisis are connected to globalization, the growth and mobility of the so-called “knowledge workers” and the enormous diffusion of digital technologies.
Investing in research and development processes, in order to be competitive and survive in the current scenario, is increasingly expensive; moreover, the increase of small startups and of subjects investing in realities of this type has meant that on the market there was a revolution in the way of creating ideas and innovation.
The Open Innovation approach is the most suitable tool to face this revolution.
European open innovation trends in the last year
Report open innovation Outlook 2020 collects insights from Europe’s corporate startup stars of the past years. Conducted by Mind the Bridge, an innovation consultancy company, brings out that “while a few years ago the main goal of companies was to communicate their activities in support of innovation, targeting attention from the media and, generally, their startup-friendly-ness, today it is all about producing collaborations with startups” (Alberto Onetti, Chairman, Mind the Bridge).
The report analyzes the european scenario of corporate-startups collaborations. Procurement (via funded proof of concepts and co-development programs continues to be the predominant way of engagement and Silicon Valley and Israel innovation outposts are definitively booming.
These are the main world’s technology hubs, where corporate startup stars look for innovation. 91% and 82% of companies are already active in these two places, respectively. Instead, the top european clusters for innovation are London, Paris, and Berlin.
The study also shows which are the main barriers to open innovation. Key barriers to implementation are rigid processes (68% of the respondents), lack of resources (open innovation’s budget and team) and scarce involvement of the business units (both 41%), in addition to the cultural one that we’ve already highlighted.
Therefore, adopting Open Innovation practices might not be enough: the decisive element for companies is, in fact, the joint adoption of both open innovation and virtuous practices in employees management, so the culture of innovation can be shared within the entire organization.