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within the past forty-eight hours I’ve been hit once again with questions about co-innovation and if it is the same thing as open innovation. I’ve had this question or ones similar to it asked on and off over the past year so it is definitely a topic that I feel obliged to allow into my own blogspace.

There is a lot of information on the web discussing open innovation. Whether you are new to the topic or a wise old sage on the matter, I think a cornerstone from which to begin understanding open innovation is to spend some time exploring the work of Dr. Henry Chesbrough. According to Dr. Chesbrough, Open Innovation is a paradigm that assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as the firms look to advance their technology. In his book: Open Innovation: The New Imperative for Creating and Profiting from Technology, he compares the processes of Open Innovation to Closed Innovation and describes the inherent weaknesses of closed innovation in a time where to fail to innovate means death for a company. What Dr. Chesbrough’s research has indicated is that companies today commercialize industry knowledge differently than they have historically done so. With ever increasing mobility of highly skilled knowledge workers it has served to break up the knowledge monopolies that firms have traditionally taken advantage of to innovate and deliver dominant technologies to the market. The need to go to market more quickly than ever before given the impact of globalization is yet another factor contributing to the notion that a closed innovation model is not sustainable.

Where does “co-innovation” fit in to all of this? An attempt to compare co-innovation to open innovation begins with acknowledging that both embrace the concept that ideas come from within as well as outside of the firm. Co-Innovation in fact seeks to enable a firm’s ability to work with its ecosystem of partners and its customers to harvest the best ideas and to provide the appropriate tangible and intangible assets from all collaborators necessary to co-invent and co-develop new innovations. Co-innovation further acknowledges the need for an intellectual property (IP)  framework that serves to manage contributed and co-created IP using a more bi-lateral approach to contract development and licensing. The emphasis is then not so heavily weighted upon outright IP ownership and control but more so on its value in the market and how quickly it can be driven to commercial success. The resulting “spoils” of this success and how it is shared among the partners who made it possible then becomes the critical measure for how successful innovation helped to drive revenue and growth for the firm. 

One other comparison of importance is that in both, there is a “process of innovation”. The process betwween open and closed innovation differs greatly given that not only do ideas come from external sources but that pathways for ideas generated internally can be external. With Co-innovation, a single firm can physically host co-innovation projects pursued with partners and can provide a framework for engagement but the project management for development and go to market activities are often hybrid in nature as all participants learn to accept each firm’s unique business drivers, stakeholder requirements in addition to the need to identify joint business drivers and joint value propositions.

This topic is vast and is undoubtedly a target rich environment for more intense research. The effort here was just to offer a small glimpse in to how Open and Co-Innovation compare. If the topic is of interest to readers than I encourage you to comment and to help drive a broader discussion across our communities of innovation.

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3 Comments

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  1. Christine Puccio
    My two cents 🙂 – Innovation no longer comes from within a company but through collaborative ‘open’ efforts and partnership. Working with COIL allows companies to continue to combine ideas as well give them external paths to market.  This helps to advance the development of new technologies.  Open innovation enables us to be able to respond in a quick and flexible way to changes in the environment bringing that value to our customers. 
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  2. Mark Finnern
    Hi David,
    Like your post. Are there example of companies that are successful co-innovators? How did they solve the IP problem to the satisfaction of everyone involved?
    The additional IP overhead or headache is the biggest obstacles to wide adoption of co-innovation.
    How do you reward accurately an external idea that improved your product by X% with X really hard to quantify? Now add the dimension of time to it: What is the percentage of a difference that the idea made on my sales in the third year of its existence?
    How do you track and reward thousands of co-innovations and innovators?
    Really would be interested to see how that is done. We have one example here on SCN: InnoCentive, companies are posting challenges and you compete with other people to win a prize for the best solution. The IP goes to the company that posted the challenge.
    All other problem solvers, even if they had a great idea too, walk away empty handed.
    It is an interesting problem to solve.
    Looking forward to the continued dialog, Mark.
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  3. Ramalingam Krishnan
    Hi,

    Another reason why co-innovation is required: often, organizations come out with ideas that will result in a lot of value add in the market. However, to convert the idea to a solution might need the expertise of partners / customers.

    Best Regards,
    Ram

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