Henry Chesbrough

Beyond High Tech: Early Adopters of Open Innovation in Other Industries

Companies have historically invested in large research and development departments to drive innovation and provide sustainable growth. This model, however, is eroding due to a number of factors. What is emerging is a more open model, where companies recognize that not all good ideas will come from inside the organization and not all good ideas created within the organization can be successfully marketed internally. To date, Open Innovation concepts have been regarded as relevant primarily to ‘high-technology’ industries, with examples that include Lucent, 3Com, IBM, Intel and Millenium Pharmaceuticals. In this article, we identify organizations in industries outside ‘high technology’ that are early adopters of the concept. Our findings demonstrate that many Open Innovation concepts are already in use in a wide range of industries. We document practices that appear to assist organizations adopting these concepts, and discover that Open Innovation is not ipso facto a recipe for outsourcing R&D. We conclude that Open Innovation has utility as a paradigm for industrial innovation beyond high tech to more traditional and mature industries.

A research manifesto for services science

The services sector has grown over the last 50 years to dominate economic activity in most advanced industrial economies, yet scientific understanding of modern services is rudimentary. Here, we argue for a services science discipline to integrate across academic silos and advance service innovation more rapidly.

The future of open innovation

Institutional openness is becoming increasingly popular in practice and academia: open innovation, open R&D and open business models. Our special issue builds on the concepts, underlying assumptions and implications discussed in two previous R&D Management special issues (2006, 2009). This overview indicates nine perspectives needed to develop an open innovation theory more fully. It also assesses some of the recent evidence that has come to light about open innovation, in theory and in practice.

Open Innovation and Strategy

The increasing adoption of more open approaches to innovation fits uneasily with current theories of business strategy. Traditional business strategy has guided firms to develop defensible positions against the forces of competition and power in the value chain, implying the importance of constructing barriers rather than promoting value creation through openness. Recently, however, firms and even whole industries, such as the software industry, are experimenting with novel business models based on harnessing collective creativity through open innovation. The apparent success of some of these experiments challenges prevailing views of strategy. At the same time, many of these experimenters now are grappling with issues related to value capture and sustainability of their business models, as well as issues of corporate influence and the potential co-option of open initiatives. These issues bring us back to traditional business strategy, which can offer important insights. To make strategic sense of innovation communities, ecosystems, networks, and their implications for competitive advantage, a new approach to strategy—open strategy—is needed. Open strategy balances the tenets of traditional business strategy with the promise of open innovation.

Business model innovation: it's not just about technology anymore

Purpose – To innovate the company business model, executives must first understand what it is, and then examine what paths exist for them to improve on it. This article aims to examine this issue.Design/methodology/approach – The article provides a practical definition of business models and offers a Business Model Framework (BMF) that illuminates the opportunities for business model innovation.Findings – The article finds that BMF sequences possible business models from very basic (and not very valuable) models to far more advanced (and very valuable) models. Using the BMF, companies can assess where their current business model stands in relation to its potential and then define appropriate next steps for the further advancement of it.Practical implications – An organization must give a senior manager the resources and authority to define and launch business‐model experiments.Originality/value – The article provides a cogent model for assessing the potential for new business model innovation, a framewor...

When is virtual virtuous?: organizing for innovation

AbstractThe following sections are included:IntroductionWhats Special about Virtual?Types of InnovationThe Case of Industry StandardsThe IBM PC: Virtual Successor or Failure?The Virtuous VirtualsChoosing the Right Organizational DesignScale and Scope

The Future of Open Innovation

Institutional openness is becoming increasingly popular in practice and academia: open innovation, open R&D and open business models. Our special issue builds on the concepts, underlying assumptions and implications discussed in two previous R&D Management special issues (2006, 2009). This overview indicates nine perspectives needed to develop an open innovation theory more fully. It also assesses some of the recent evidence that has come to light about open innovation, in theory and in practice.

The Logic of Open Innovation: Managing Intellectual Property

Companies have traditionally managed innovation as an internal process, relying upon their own skills and capabilities. However, this closed approach to innovation is no longer viable in a period of rapid diffusion of commercially valuable knowledge. If leading firms are to retain their capacity for innovation, they must begin to manage intellectual property via the logic of open innovation. Such an approach is much more fluid, emphasizing both the use of R&D produced outside the firm and the development of internal systems to reward commercially viable innovation within the firm.

Innovating Business Models with Co-Development Partnerships

OVERVIEW: Business model innovation is vital to sustaining open innovation. External technology partnerships allow open business models to accomplish even more. One important mechanism for innovating ones business model is through establishing co-development relationships. The proper character of these relationships varies, depending on the context for the relationship. To sustain co-development relationships, one must carefully define the business objectives and align the business models of each firm. One should also determine whether the various R&D capabilities are core, critical or contextual. The decision to partner externally will have different implications for each of these.

Designing Corporate Ventures in the Shadow of Private Venture Capital

“The search for innovation needs to be organizationally separate and outside of the ongoing managerial business. Innovative organizations realize that one cannot simultaneously create the new and take care of what one already has. They realize that maintenance of the present business is far too big a task for the people in it to have much time for creating the new, the different business for tomorrow. They also realize that taking care of tomorrow is far too big and difficult a task to be diluted with concern for today. Both tasks have to be done. But they are different. Innovative organizations, therefore, put the new into separate organizational components concerned with the creation of the new.“—Peter Drucker