Open Innovation: trends and developments

– by Tatiana Schofield –

indexOver the last decade innovation has been rapidly becoming a key driver to economic growth and job creation (Global Innovation Index report, 2011).

We are observing a growing trend in developing national policies and government initiatives to build knowledge-intensive economies. There have been an emergence of indicators and measures of knowledge economy, e.g. Knowledge Economy Index produced by the World Bank, Global Competitiveness Index developed by the World Economic Forum, all of which featuring innovation and technology adoption levels.

So what is innovation? In simple terms, innovation is an idea plus commercialisation, i.e. translating new knowledge into benefits of individual firms or society.

As innovation performs a strategic function in developing a sustainable growth and national competitiveness, it is rapidly shaping to adapt to fast-changing economic, social and technological environment. It is spreading geographically, engaging a diverse range of stakeholders and extending from technology to service and business model innovation. In other words, innovation is becoming more open, collaborative and creative.

Balloons_in_the_skySince the terms was suggested by Henry Chesbrough, open innovation has transformed to a number of types, which share a key concept of open innovation, i.e. “that firms can and should use external ideas as well as internal ideas, and internal and external paths to market to advance their technology” (Chesbrough, 2003).

Frugal innovation (it is also often named reverse, Ghandian or Jugaad innovation (Ahuja, Radjou, Prabhu)) is a type of innovation when a low cost technology is customised to a mass market in emerging countries and is later spread to developed countries (e.g. Tata’s Nano car).  Jugaad principle describes Indian resourcefulness to produce affordable solutions with constrained resources.

Polycentric innovation is a new term proposed by researchers from University of Cambridge. The concept is based on gaining synergies from specialised R&D centres across the world to achieve a multiplied effect. Such multiple expert R&D centres allow large firms to acquire access to a global value chain and exploit new technologies.

Disruptive innovation (Christensen, 2003) is a type of innovation which transforms existing markets and create new markets. As opposed to sustaining innovation, disruptive innovation is often based on a new business model which drives a disruption (e.g. Skype, eBay models) by targeting new customers and doing things differently.

Social innovation is another growing trend aiming to tackle social challenges by means of innovation. The use of terms is often extended to the process of creating new services and products using community or user involvement, e.g. Open Source.

And finally, user and community innovation is a type of co-creation of new products or services using end-users or wider communities. Glass Collective is an example of the project where Google partnered with venture capital firms to provide seed funding to entrepreneurs for developing Google Glass’ applications. Crowdfunding and crowdsourcing are fast growing trends to share, shape and develop ideas with community support. A number of new approaches by corporate firms (e.g. GE’s ecomagination, IBM Jams, My Starbucks Idea) are also using a creative power of users and communities to co-develop new products.

The described types of innovations have inevitable effect on both commercial and public sectors.

????????????????????????????Tatiana Schofield is Business Development Manager at Imperial Consultants, the knowledge transfer arm of Imperial College London. Since joining Imperial Consultants in 2006, Tatiana has been developing and leading large-scale projects in healthcare, technology and energy efficiency both in the UK and internationally.

Tatiana has developed a unique career portfolio in knowledge and technology transfer. She has worked in international business development, research commercialisation and project management roles in such organisations as CIMA (the Chartered Institute of Management Accountants), Kaplan Professional, London Business School and Imperial College Consultants.

Tatiana holds an MSc degree in electrical engineering from Moscow Power Engineering University and an MBA from Warwick Business School. She is a member of the Chartered Institute of Marketing, UK holding a Chartered Marketer status.

Tatiana frequently speaks at high-profile events and presents her research and practical experience in university-industry collaboration, knowledge transfer and open innovation. Her recent publication on critical success factors in university-industry partnership won the Best Paper of the Year 2012 Award by SRA International.

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1 Response to Open Innovation: trends and developments

  1. lbretschger says:

    Thank you for this article, I strongly approve of spreading the concept of open innovation. However, as far as I remember the social innovation makes not part of Chesbrough concept, am I wrong ? where does it come from?

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