The model of open innovation promoted by Henry Chesbrough in his 2005 book “Open Innovation: The New Imperative for Creating And Profiting from Technology” embraces the management of distributed knowledge flows across interfirm networks. Within the open innovation model, knowledge flows inside and outside the firm. Greater value is created through these interactions between firms. In a 2013 survey conducted by pwc, 32% of firms said they are considering open innovation as the path to innovation that would drive the most growth for their company. Of these companies, 40% of healthcare firms acknowledged open innovation as a strategic path to innovation. The open innovation model is highly dependent on a healthy innovation ecosystem and high trust network. In the model, Chesbrough describes four types of innovation generators. Each of them serves an important role within the ecosystem.
“...40% of healthcare firms acknowledged open innovation as a strategic path to innovation.”
- Innovation Explorer: These explorers focus on the research and development (R&D) of new technologies. They are typically related institutional actors within the network (i.e., Government labs, Universities, etc.)
- Innovation Merchants: Merchants focus on research and development efforts focused on creating intellectual property that others can license to advance their innovations.
- Innovation Architects: The architects bring together a variety of intellectual property to develop custom solutions that together create more value. They offer the opportunity of numerous firms to be involved in the process. Due to the multiple interests and parts, innovations generated by architects is complex.
- Innovation Missionaries: Missionaries are driven by a collective vision and typically do not seek direct financial gain from the innovation developed by the community. Linux, Ubuntu, and Apache Web HTTP Server are successful examples of this type of open source strategy.
Other influential actors within the open innovation model include Innovation Marketers and One-Stop Center. They both serve to help facilitate the commercialization of innovations within the ecosystem.
- Innovation Marketers: Marketers focus on understanding the needs of a market. Their strength lies in their ability to understand the full range of technologies that are appropriate for solving the identified problems.
- One Stop Center: One Stop Centers are similar to Innovation Marketers. They are differentiated because they are agnostic toward where solutions come from including, their internal technologies. They are characterized by having strong ties with the end user and rigidly manage their resource.
Even though the open innovation model can benefit a firm’s innovation strategies, it can be difficult to implement in large part because of its complexity. Accenture’s 2015 global survey discovered larger firms focus more on corporate ventures, accelerators, and incubators to foster these connections and not on the broader ecosystem. This narrow focus misses opportunities of finding new ideas and market insights that serendipitous exploration can uncover. When there is a low level of trust between startups and larger companies, they can feel their partner isn’t committed to supporting them. This is typical of the startup's view of the larger firm, while the larger firm may lack the confidence that the smaller startups can follow through in bringing their side to market.
-Brian Phelps, Co-founder of the Nashville Innovation Project
