Open Innovation (OI) describes distributed and collaborative practices that amplify innovation. At its core, the practice is about opening up organisational boundaries to allow the exchange of knowledge with others.
There are two important kinds of open innovation: in-bound and out-bound. ‘In-bound innovation’ is the process of incorporating external knowledge, while ‘out-bound innovation’ describes the process of taking internal knowledge to the wider marketplace for others to exploit.
OI approaches bring together diverse partners such as research institutes, industry and government to increase the speed and reduce the risks associated with innovating, particularly for smaller organisations. By providing SMEs access to advanced technologies and expertise, such collaborative arrangements facilitate the development of products and technologies with organisations often without the resources to manage such development on their own.
These collaborative arrangements have many labels – hubs, networks, clusters, accelerators and incubators, for example. They can emerge organically, or be purposefully created, with national, regional, sectoral, or technological agendas. Silicon Valley is an iconic example of an innovation cluster. Ecosystems are another type of collaborative arrangement usually set up to encourage a large number of diverse organisations to think beyond their traditional supply chains. These large networks are often coordinated by a central platform leader or hub firm that, among other responsibilities, is tasked with managing direction and opportunities, and overseeing agreements and aspects of IP governance.
Opening up to outbound use of IP is one of the main challenges for organisations in adopting OI practices. Those most successful have managed opportunities in both inbound and outbound innovation – diversifying their product pipeline while developing absorptive capacity to leverage the resources of others within the network. Opening up knowledge accelerates research and development processes. It provides ways for organisations to address new and emerging challenges, and creates opportunities for innovation not previously considered possible.
Australian Support Opportunities
- Advanced Robotics for Manufacturing (Qld) – armhub.com.au/
- Australian Research Council – arc.gov.au/grants
- Innovative Manufacturing CRC – imcrc.org/
- Advanced Manufacturing Growth Centre amgc.org.au/our-purpose/about-amgc/
Other OI Resources
- Openinnovation.net – Wealth of up-to-date press and articles. Site hosted by Henry Chesbrough, Executive Director of the Center for Open Innovation at the Haas School of Business, UC Berkeley Gartner.com/Develop-an-open-innovation-framework
- A manufacturing network in California cmtc.com/cmn