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Open Innovation Framework as a
STI Strategy
Krishna Ravi Srinivas PhD
RIS New Delhi
[email protected]
Closed Vs. Open Innovation
Open Innovation
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Two facets of Open Innovation – 1) Sourcing of technology and knowledge from
outside partners like universities, suppliers, customers and collaborators. 2) Aiming
for revenue from knowledge developed in-house that is not commercialized
Open Innovation through different modes – partnership (alliances, joint ventures,
joint development), acquiring technology and knowledge (contract R&D, selling,
purchasing, licensing), venturing (spinning off, divestments)
Open Innovation’s objective is to build alliances/partnerships across different
actors with different capacities so that they complement each others’ capabilities
and work together
Open Innovation demands innovation management and aligning objectives with
skills/capacities and using knowledge that is not limited to single actor
Open Innovation thus is a mode for organizing innovation
Open Innovation can be combined with open source, crowd sourcing and crowd
funding and other strategies like networks
Open Innovation should be used selectively and not all problems/issues need to be
approached through this mode
STI Strategy
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STI strategy promotes innovation particularly turning R&D outcomes to tangible
innovations in terms of products, services and facilities
In case of many developing countries and LDCs STI strategy has to catalyze capacity
building and create an enabling milieu for activities that can result in innovation to
flourish.
STI strategy has to take into account the capacities of different stakeholders and
parts of the NIS and the outcomes should be commensurate with this.
STI strategy should thus develop frameworks and structures that would facilitate
networks, alliances to emerge and function efficiently. In this the needs and
capacities of universities, SMEs and academic institutions should be taken into
account
How Open Innovation Framework can be a STI Strategy is an important question
Open Innovation Framework
Framework and ecosystem
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Open Innovation Framework should include different actors, the common objective and the
flow of knowledge, technology, skills and the paths for collaboration
Although Open Innovation is often driven by limited objectives with participation by a
limited number of participation as STI Strategy it can be broader with sub-objectives
A key feature in Open Innovation Framework is that it builds up synergy through
collaboration
Another feature is that it enhances the network effort. According to Metcalfe the value of the
network is proportional to the square of the number of connected users which means more
the no. of users the value is more. In case of Open Innovation similar logic can be applied to
collaborators and networks within a Open Innovation Framework.
Private sector firms like Apple, Proctor Gamble use Open Innovation approach to develop
Developer Ecosystem. For P&G 50% of new product ideas came from outside the company.
Innovation Ecosystems can exist in many forms. While Open Innovation is externally focused
and collaborative, Innovation Networks bring in Cross-organizational Innovation
Open Innovation Framework should go beyond promoting Open Innovation per se and it
should facilitate development of Innovation Ecosystems
Innovation Ecosystems and OIF
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Innovation Ecosystem can be around a region or a particular industry. But today it is possible
to speak of virtual innovation ecosystems that are not tied to an area.
According to Bill Aulet of the MIT Entrepreneurship Centre, the seven key components of an
innovation ecosystem are Government, Demand, Invention/Innovation, Funding,
Infrastructure, Culture and, most importantly, Entrepreneurs.
Instead of waiting for an Innovation Ecosystem to evolve governments play a proactive role in
developing/facilitating them. E.G. Connecticut’s policy to promote state innovation
ecosystem, Ireland report on Building Ireland’s Smart Economy that put National Innovation
Ecosystem as core strategy
Broad coalitions result in ecosystems built around a product or service. E.g. development of
developer ecosystem surrounding Apple’s platform. In this there is collaboration as well as
competition
GENIVI, An Open Source Development Platform created by OEM in automobile industry to a
develop a standard platform for infotainment. Companies will innovate on this standard
platform. Collaboration lowers cost of development, faster development and accelerate
innovation. Competition on innovating on the top of this platform
Greentouch consortium to improve energy efficiency of computer networks promoted by
Alcatel Lucent
Innovation Labs and Innovation
Ecosystem
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Innovation labs are spaces to enable collaborative innovation. They are used in services, R&D, and
to promote disruptive innovation
Innovation objective imposed or selected
Focus on large innovation challenges (e.g. financial innovation lab in London)
Focus on breakthrough innovation, disruptive innovation
Semi autonomous institutions
Heterogeneous participation and collaboration
Long term perspective
Use of multiple tools and modes for stimulation, collaboration and prototype
Focus on ideas and solutions
As part of STI strategy Innovation Labs can be used to achieve an objective through open
innovation
A network of innovation labs can form an innovation ecosystem around a service or sector or in a
region
While the pros are many the cons are Innovation Labs are yet to demonstrate their utility in a big
way, difficulties in bringing actors together, constraints in developing an open innovation culture
among actors,
Still developing nations can make a beginning by developing them
Applying lessons from OIF
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OI framework has been successfully used by many corporates to overcome issues
in closed innovation.
The original idea for Apple Ipod came from an outsider and Apple developed that
further by providing a team to work on the idea, delivery model so that a product
is linked with a model that can be used in other products
P&G and other firms have used OI framework in many ways and have realized the
importance of user innovation, innovation contests and prizes and developed
strategies to harness OIF as part of organizational innovation strategy.
Sticky issues like IP rights have to be anticipated and resolved
Realize that collaboration and competition go hand in hand and what is important
is realizing value addition from collaboration
Today OIF is used in electronics, manufacturing, biosciences and also in services
and service delivery
But the big question is this as a STI strategy or just a fad/fashion that helps the
industry to overcome some issues in innovation management
Innovation Models - Evolution
OIF as STI strategy
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Stimulating networking
Co design with STI policy
Link with Science Policy and Technology Policy and identify elements than can be
combined with OIF
OIF to build new alliances and networks
OIF can be applied in specific sectors to begin with and then can be expanded
OIF can also be tried at a regional level and then expand to wider level
Key issues 1) Can STI strategy enable networking and collaboration or does it
promote Business As Usual Approach and closed innovation models
2) Are the actors willing to collaborate or do the institutional cultures inhibit such
collaboration
3) How strong are the linkages across actors in NIS and across sectors
4) Is the STI strategy realistic about innovation potential
5) Who will promote the OIF- government, private sector or both
OIF as STI strategy
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As Open Innovation is a novel idea failures in OIF can delegitimize the framework,
so be careful about initial moves and objectives
OIF can be first tested with academic institutions, govt. laboratories and R&D
centres in selected projects
Management of open innovation calls for a change in mindsets and assumptions
about roles and limits
So transformation from closed to open innovation and use of OIF as STI strategy is
a road filled with obstacles and constraints
Small scale initiatives in products and regions can be used to test the capacity to
network, willingness to collaborate
SMEs can be good targets for implementing OIF by linking with OEMs, large scale
manufacturers and universities
Identify sectors where the potential is untapped or where collaborations are more
common
Align the objectives of OIF with national STI strategy
OIF not a panacea
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Understand the limitations of OIF
OIF cannot solve all problems in STI strategy or in NIS
In some sectors where the need to collaborate is better felt or where stakeholders
realize that collaboration and competition is better than competition per se OIF
will work
In case of developing countries and LDCs first do a diagnosis of NIS and then apply
OIF if that offers a solution
But OIF needs a level of maturity and capacity to succeed, so top down OIF may
not result in good results unless actors share the same objectives
Making a beginning with OIF on a limited scale is better than doing nothing
Thanks
• The literature/references will be added