What is Open Innovation? The Benefits of Open Innovation Why should SMEs engage in O.I.? “Open innovation is a paradigm that assumes that Open Innovation (O.I.) allows many people from different Most small companies are underfunded; therefore they firms can and should use external ideas as well as disciplines to tackle the same problem simultaneously and NEED to be creative in their resource allocation. This often- internal ideas, and internal and external paths to mar- not sequentially. Anyone can participate with collaborative times means outsourcing certain skill sets, such as rer ket, as the firms look to advance their technology” technology and OI training. When many minds are working search (in areas not part of one's own core competencies). by Henry Chesbrough on the same problem, it will take less time to solve it. What does open innovation mean to small companies? Open innovation is the practice of looking beyond the four What are the benefits of innovating together with walls of your company - to suppliers, universities, produ- others for small companies? cers of complementary products and services, and other SMEs can (and they should) open their own innovation firms - to identify and capitalize on new opportunities for processes... innovation. It's the hottest trend in innovation today. Open Innovation is not about… …but about For small companies, open innovation can mean collaborative bor work with other small companies, developing 'industry partner' relationships to jointly develop new prodpro ucts or services that may be small in volume but profitable. to implement internal ideas otherwise unexplored How can small companies prepare themselves for to ensure access to external ideas open innovation? to enable better utilization of their partially hidden innovation potential Small Sma companies can prepare themselves for open innovation by doing an internal audit of their expertise (core competencies) and begin to create new relationships with • open access to own technologies • strategic IPR management • outsourced R&D • strategic R&D • technology only • technical invention to share the wealth and efficiency in resource allocation (e.g. per unit cost accounting basis) • both technology and business model • commercial innovation their agents (employees, other companies in their sector, consumers, competitors, R&D Centers, Universities, to extend their potential for growth via mergers funding sources…). SMEs can also utilize their legal and/or attraction of funding resources to make sure they are aware of the implicaimplic as larger companies could offer ample opportuni- tions of any open innovation work, ties for them to access otherwise far too expensive joint development or those of resources/knowledge etc. strategic partnership. • appropriating value • win-win partnership • new ventures • core product development process "Creating linkages", as Open Innovation can be called, • partnerships only • innovation ecosystem building from collaboration. • cutting research costs • improving R&D Return on Investment enables multiple organizations to learn, grow and gain Why now is the time for O.I.? Because challenges are more complex and sophisticated and require the identification and combination of a higher amount of different knowledge. Also, the accessibility of information, contacts, etc. is easier than ever. What is new in O.I.? Traditionally the equation of "making innovation happen" meant “invest more resources to acquire more research results”. In case of timely implementation though, the accessibility of such results is at least as important as any possible objective valuation of its characteristics. Competitive advantage can not only be won by increasing research depth but also by increasing accessibility: making previously locked internal innovation processes visible to third parties, and at the same time scouting for OPEN INNOVATION NETWORKING ideas emerging from the innovation system of other PLATFORM FOR SMEs organizations. One of the O.I. mottos is “The world is our R&D department". Project Partners What are the starting points of O.I.? The key issue is to understand that the whole world can Agencia Navarra de Innovación be your R&D Department. Enterprises must prepare the (ANAIN), Navarra organization for a culture change, the development and www.navarrainnova.com enforcement of social media strategies, the training of their employees in innovation and how to deal with external partners. Enterprises must switch from a ser- Virtual Dimension Center VDC vice model to an open service model. Therefore, this Fellbach, Stuttgart Region has legal implications concerning partnership agree- www.vdc-fellbach.de ment or IP. Collaboration and co-creation can mean a OPEN INNOVATION Benefits for SMEs Workshop at ANAIN, Pamplona May 25 2011 certain loss of control because all the decisions are agreed on by all the agents. Nevertheless, O.I. can help INNONET, Centre of Innovation and SMEs to innovate in the areas in which they do not have Technology, West Transdanubia internal expertise. www.innonet.hu