What s Next for Open Innovation Research and Practice?

Transcription

1 What s Next for Open Innovation Research and Practice? Presentation to R&D Management Conference Pisa, June 2015 Henry Chesbrough Haas School of Business UC Berkeley, and Esade chesbrou@berkeley.edu 1

2 Antecedents of Open Innovation Arrow, 1962: economic spillovers Mowery, 1983: rise of internal R&D labs in early 20 th century Teece, 1986: appropriability of innovation Alfred Chandler, 1990: benefits of vertically integrated R&D Rosenbloom, 1994: why companies do R&D with their own money Cohen and Levinthal, 1990: absorptive capacity Langlois, 2003: the post Chandlerian firm Arora et al, 2001: Markets for Technology 2

3 A Chandlerian Innovation System Science & Technology Base The Market Research Investigations R Development New Products /Services 2008 Henry Chesbrough 3 D

4 Chesbrough & Bogers An Overview of 10 Years of Open 4 Thomas Kuhn: The structure of scientific revolutions A new paradigm must do more than explain a new phenomenon It must simultaneously explain known phenomena And explain previously anomalous phenomena

5 Innovation Anomalies in the Chandlerian Innovation Model Xerox PARC Lucent v. Cisco Spillovers an unintended cost of R&D Not Invented Here Syndrome Katz and Allen 1985 IP freedom to operate, defensive in character Rembrandts in the Attic (2000) Rivette and Klein 5

6 Xerox s Business Model, and Project Evaluation Errors Designed to minimize false positive errors Ignores risk of false negative errors 6

7 Xerox: Great at Chess, Lousy at Poker 7

8 What is driving the shift to the OI Paradigm? Five Erosion Factors 1. Increasingly mobile trained workers 2. More capable Universities 3. Diminished US hegemony 4. Erosion of oligopoly market positions 5. Enormous increase in Venture Capital 2008 Henry Chesbrough 8

9 Where is R&D Performed? 9

10 The Open Innovation Paradigm Internal Technology Base External Technology Base R Technology Spin-offs Technology Insourcing Current Market 2008 Henry Chesbrough 10 D Other Firm s Market New Market

11 Closed Open innovation Other firm s market Licence, spin out, divest Our new market Internal technology base Internal/external venture handling Our current market External technology base External technology insourcing Stolen with pride from Prof Henry Chesbrough UC Berkeley, Open Innovation: Renewing Growth from Industrial R&D, 10th Annual Innovation Convergence, Minneapolis Sept 27, EIRMA SIG III,

12 Can Open Innovation be a new Yin, 1988 Paradigm? To have internal validity, a new concept must provide a consistent, convincing account of activities within its initial area of inquiry To have external validity, a new concept must demonstrate applicability beyond its initial area of inquiry 12

13 OI s Internal and External Validity Internal Significant number of case studies P&G s CTO Gil Cloyd Growing number of Open Innovation job titles! External Initially, US hi tech CIS surveys: UK, Austria, Korea Rapid Adoption in EU Growing interest in Asia and Brasil Many industries SMEs 13

14 Growth of Citations to Open Innovation in Google Scholar Note: search criterion = open innovation OR cite Chesbrough (2003) An Overview of 10 Years of Open Chesbrough Innovation & Research Bogers 14

15 OI External Validity: Abstracts of the American Chemical Society Open innovation: The importance of culture Open innovation providing new chemical career options Transitioning your R & D toward open innovation From polymer synthesis to open innovation transactions: A hybrid technical career Implementing open innovation: Road warrior or road kill, it's your choice Open innovation and the faculty entrepreneur: Opportunities and perils Manage your IP well to win the open innovation race Accelerating green: Case studies on open innovation for sustainable chemistry How does open innovation drive sustainability? An Overview of 10 Years of Open Chesbrough Innovation & Research Bogers 15

16 Caution! Divergent Definitions of Open Innovation An Overview of 10 Years of Open Chesbrough Innovation & Research Bogers 16

17 Contrast the definitions Open innovation: the use of purposive inflows and outflows of knowledge to accelerate internal innovation, and expand the markets for external use of innovation, respectively. (Chesbrough, Vanhaverbeke and West,2006: p.1) Open collaborative innovation: An innovation is open in our terminology when all information related to the innovation is a public good nonrivalrous and nonexcludable. (Baldwin & von Hippel, 2011: p. 1400). involves contributors who share the work of generating a design and also reveal the outputs from their individual and collective design efforts openly for anyone to use. (Baldwin & von Hippel, 2011: p. 1403, emphasis in the original An Overview of 10 Years of Open Chesbrough Innovation & Research Bogers 17

18 More contrast Chesbrough et al Ideas can come from anywhere Ideas must be commercialized through business models Von Hippel Users are the source of many innovations Users benefit directly from sharing No need for a business model An Overview of 10 Years of Open Chesbrough Innovation & Research Bogers 18

19 Divergent Views on Open Source Software Open Software Shared open source code Allow private extensions of code Linus Torvalds: [Stallman is] too inflexible, too religious. I certainly am of the opinion that open source started working a lot better once it got away from the Free Software Foundation politics and values, and more people started thinking about it as a tool than a religion. I m definitely a pragmatist. (Lohr, 2001: p. 215) An Overview of 10 Years of Open Chesbrough Innovation & Research Bogers Free software Code must be made public (IP hampers innovation) Companies cannot build proprietary extensions to the software (everything commercialized must be shared back with the community) 19

20 Has Linux Sold Out? Linux penetration of corporate market due to IBM s embrace, (and IBM s biz model) Forked versions of Linux now emerging Android, Tizen, Kindle Fire Linux Foundation Board membership requires $500,000 donation Though there are 2 individual reps on 16 member board 2008 Henry Chesbrough 20

21 Google Apps Began as open source projects Abandoned by Google subsequently, once user requirements were understood Open Handset Alliance requires that members not make any non-android device Locks in handset makers 21

22 Searchable by text only Abandoned in 2012 Version 2.2 of Android Searchable by text, voice, Google Now. Continuously updated 22

23 Introduced in 2010 Has not been updated since Enhanced and cloud enabled Google music store Subscription service available Source: 23

24 Is Google Behaving Badly? (when) is it OK to enclose previously open projects? Not considered by von Hippelian school of OI Answer depends on Biz Model in Chesbrovian (?) school of OI 2008 Henry Chesbrough 24

25 Some Signs of Convergence Rich intellectual commons needed Publishing as part of IP management strategy in OI Selective revealing (vs. earlier free revealing) Some business models support open source development methods Communities can be competitive or cooperative Need different governance Crowdsourcing participants not motivated only by money Complementary perspectives: Dynamics: (Lead) users sources of innovation in early stages of industry development Business model helpful for capturing value from public good knowledge, particularly as innovation scales across society An Overview of 10 Years of Open Chesbrough Innovation & Research Bogers 25

26 What s the logic behind the Chesbrough (2003) definition? Purposive inflows and outflows of knowledge (Chesbrough et al, 2006) Basic research generates spillovers (Nelson, 1959) Social return to R&D investment > private return to the firm (Arrow, 1962) Firms do basic research with their own money to improve ability to use external knowledge (Rosenberg, 1990) Absorptive capacity: Ability to utilize external knowledge (Cohen & Levinthal, 1990) Erosion factors increase spillovers, undercut logic of closed innovation (Chesbrough, 2003) An Overview of 10 Years of Open 26 Chesbrough Innovation & Research Bogers

27 Direction of Knowledge Flow Dahlander and Gann, 2010 Inbound Acquiring Sourcing Outbound Selling Revealing Pecuniary Non-pecuniary 27

28 Updated Definition of Open Innovation open innovation is a distributed innovation process based on purposively managed knowledge flows across organizational boundaries, using pecuniary and nonpecuniary mechanisms in line with each organization s business model. Chesbrough and Bogers, p. 24 An Overview of 10 Years of Open Innovation Research 28

29 Old Wine in New Bottles? Points of Differentiation for Open Innovation 1. Equal importance of external knowledge to internal 2. The centrality of the business model for commercializing R&D 3. Type I and Type II errors in R&D project evaluation 4. Spillovers can be purposive, not only unintended a) Outside-in b) Inside-out 5. Useful industrial knowledge is abundant, not scarce 6. IP management can be strategic for innovation 7. The rise of innovation intermediaries is important 8. New metrics needed to assess innovation capability and performance 29

30 Research Opportunities in the Growing OI literature Small number of Large sample studies Failures, boundary conditions not well researched Convincing evidence of performance improvement from OI still lacking Moving OI to new levels of analysis Project level Ecosystem or community level Microfoundations of OI: e.g., human, team

31 Research Resources for the OI Community Openinnovation.berkeley.edu Openinnovation.net Exnovate.org WOIC November, 2015, Silicon Valley, CA Esade OI PhD course, January 2016 Open Innovation Communities Facebook LinkedIn 31

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