A few years ago, if one looked at how innovation functioned at a given company, one would possibly find a process that would be quite similar to that of a laboratory with researchers working on a project. As in a scientific research process, a problem would be identified and, then, a hypothesis to solve it would be devised. Hence, the path towards the solution would depend on the know-how that the company would have gathered from its experience; in lab terms, the company’s scientific and technological background. Once this hypothesis was established, the next step would be to develop it internally, with the company’s own resources. The projects that were able to grow and provide a solution for a problem would end up embedded in the company’s business model.
This innovation process belongs to the closed innovation paradigm, where an entity alone carries out the process per its own scientific and technological abilities and its own resources, without the intervention of any kind of external support. Due to its closeness, this paradigm presents several problems that, on many occasions, compromise the efficiency of the process:
- Identified challenges may not be paired with a hypothesis to solve them due to insufficient scientific and technological skills.
- The hypothesis development phase can be hindered due to insufficient resources, particularly in the case of SMEs, and so, the innovation process comes to a stop.
- Finally, the results obtained after the development phase may not find a place in the company’s business model and, accordingly, will not return the investment.
The solution to these obstacles are found in openness, particularly when practised along all the process phases, and external entities are welcomed and encouraged to share their experience and skills. This new paradigm is called open innovation. Quoting the pioneer of open innovation, Henry Chesbrough, open innovation processes are defined as the utilisation of internal and external knowledge inputs to accelerate the internal innovation and enlarge the markets where this innovation can be applied”. From this definition, it is possible to draw the main features of the new paradigm:
- Permeability: openness allows the company to feed any stage of the innovation process with external inputs. The technological background can come from outside the company and provide research results that the company alone would not be able to reach. This porosity can also be productive during the development stage, bringing to the company human and capital resources to energise the innovation projects.
- Variability: open innovation processes offer multiple ways for projects to reach the market, thus avoiding the problem of innovation process results not finding application. Licensing innovative products or services to other companies, or launching spin-offs with business models specifically designed to match these new value propositions, are good examples of how this variability can help the results of the innovation process roll out to the market.
With the new paradigm, we can solve the problems that closed innovation models created, and also increase the efficiency of the innovation process in all its stages. The future of open innovation seems to be aimed at even broader collaboration networks; there is no reason to settle for only one or two partners, as we can create innovation communities with multiple synergies between businesses, universities, research centres and others.
At Inova Labs, we believe that this new paradigm is the right driving force for innovation. Thanks to our experience in open innovation processes, where we collaborate with a great number of companies to bring to the market innovative products and services, we can design and manage these open dynamics to help businesses develop the innovation projects they need.