Search: Sources of Innovation and Innovation Networks Tidd & Bessant (Chs 5-6)

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1 Search: Sources of Innovation and Innovation Networks Tidd & Bessant (Chs 5-6)

2 Learning Targets (Tidd & Bessant Chs 5-6) 1. Understand Closed Innovation and Open Innovation concepts - and their differences 2. An understanding of why do organizations collaborate, and the range of forms of collaboration; 3. Trends and patterns of collaboration, and the influence of technology and markets on collaboration; 4. The factors influencing the success of, and scope for learning from, alliances. 5. Learn to know ideas that have led to the birth of the Open Innovation concept 6. Take a glimpse to similar concepts Know who management, Virtual boundary- less organization 7. Detect the impact of Open Innovation concept on actual innovation management practice 2

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5 Increased Clock Speed Charles H. Fine: Clockspeed (2003) Technology and competition, both simultaneously and globally, have intensified the clock speed of most markets. Due to this reason windows of opportunities are shorter and competitive advantages are lost faster All advantage is temporary, and the faster the clock speed, the more temporary the advantage. 5

6 Example: Factors which impact mobile phone development clock speed Operators, application and content producers Mobile phone OEMs, EMS/ODMs and component manufacturers Users: Consumers, business Users, telematics, Automation devides Regulators, Standards and Patents 6

7 Example: Clock speed of mobile phone industry Mobile phone manufacturing technology The manufacturing technology of mobile phone manufacturers The structures, processes, organizations and value networks of mobile phone manufacturers 7

8 Clock speed of mobile phone industry Carry trafficstandards: slow clock speed Operating Systems: slowish clock speed Software and applications: mediocre clock speed Services: fast clock speed Mobile phone components: very fast clock speed Charles Fine, Clockspeed (2003) 8

9 Complexity of Idea Creation and Management a a Process owner Business owner Creator of the ldea Centralized idea process Strategy link Production owner Idea registration and enrichment... 9

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12 Closed and Open Innovation Concepts Classics in literature Open innovations Henry Chesbrough (2003): Open Innovation: New Imperative for Creating and Profiting from Technology. Boston, Harvard Business School Press. Henry Chesbrough (2006): Open Business Models: How to Thrive in the New Innovation Landscape. Boston, Harvard Business School Press. Henry Chesbrough, Wim Vanhaverbeke and Joel West (eds. 2006): Open Innovation: Researching a New Paradigm. Oxford, Oxford University Press. 12

13 Comparison of the Concepts of Closed and Open Innovation CLOSED OPEN 1. The best experts work in our enterprise 2. To benefit from R&D we need to invent, develop, nurture and commercialize innovations based on work done i n our enterprise 3. If we invent the innovation, we are the first to bring it to the market L O U N A S 1. All best experts do not work in our enterprise. We have to work with knowledgeable people both internal and external to our enterprise 2. External R&D has the capability to produce significant value. Internal R&D is needed to capture part of that value 3. It is not necessary for us to be initiator of an innovation to benefit from it 13

14 Comparison of the Concepts of Closed and Open Innovation continued CLOSED A. That enterprise will win which enters the market first B. We will win, if we create more of the best ideas in our industry than our competitors C. We need to control our intellectual property (and IPRs) so that our competitors are not able benefit from our ideas L O U N A S OPEN A. It is more important to build a better business model than to be the first in the market B. We will win, if we create the best possible combination of intenal and external ideas C. We should gain profit from others using our intellectual property and we should byu intellectual property from others when that supports our business 14

15 Closed Innovations 15

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17 Practices Leading to Open Innovation 1. Inclusion of external experts into R&D, since 1970 s 2. Need to speed up time-to market, including research, R&D, manufacturing, marketing and distribution, since 1980 s 3. Outsourcing of manufacturing, R&D, design, and distribution 4. Increased complexity of innovation with need to integrate bigger varieties of skills and knowledge 5. Advances in materials and information technology, networking, internet and social media 6. Increased impact of innovation practices, difficulties of IPR protection and patenting 17

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19 Innovation Networks Tidd & Bessant, Ch. 6 19

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