Today’s business reality is not based on pure open innovation but on companies that invest simultaneously in closed as well as open innovation activities.
Too much openness can negatively impact companies’ long-term innovation success, because it could lead to loss of control and core competences. Moreover, a closed innovation approach does not serve the increasing demands of shorter innovation cycles and reduced time to market.
The future lies in an appropriate balance of the open innovation approach, where the company or the institution uses every available tool to create successful products and services faster than their competitor and at the same time fosters the building of core competencies and protects their intellectual property.
This demand creates an increasing urge for identifying the cause-and-effect relationship of open and closed innovation activities, finding the appropriate contributors and integration mechanisms, and exploring non-economic approaches to enrich companies’ portfolios.
‘Not all the smart people work for us. We need to work with smart people inside and outside our company’.
Although the era of open innovation has begun for many firms, we still lack a clear understanding of the mechanisms, inside and outside of the organization, when and how to fully profit from the concept.
Procter and Gamble announced that they were able to increase their product success rate by 50% and the efficiency of their R&D by 60% by introducing the open innovation concept to the organization.
Philips has a well-established open innovation environment, while Siemens started a huge corporate open innovation program in 2009.
However, only first approaches of measurement systems and key performance indicators are known, which makes it hard to evaluate open versus closed innovation approaches.
For more information see Enkel et al 2009.