Four master’s students from the University of Southern Denmark present the
Paper "How Open is Innovation? A Retrospective and Ideas Moving
Forward" by Linus Dahlander, David M. Gann and Martin W. Wallin, written
in 2020 and published in 2021.
This paper analyses the last ten years of innovation and openness,
draws lessons, evaluates criticism and further papers, and concludes by
preparing us for another ten years of Open Innovation.
Technological development has had
a significant impact on how companies can benefit from Open Innovation (Artificial
Intelligence, Cloud Services, Robotics and APIs). These technologies allow
companies to change their business model. All this is related to the vast
amount of data that is constantly being generated. Data openness could
build bridges across organizations, but only a tiny part of data is used to
this end. Some organizations, such as Google, Facebook or Amazon, are just very
good at monetizing with data, but handling a lot of information might lead to privacy
violations and other issues.
It enables collaboration and value creation for some, but it could also
lead to exploitation and value destruction for others.
Among the technologies that impacted Open Innovation are APIs and login
services. They can facilitate interactions at a big scale, and they are
part of a rapidly growing market, and for this reason, some companies focused
their business models on them. But in some cases, this led to scandals and bad
situations. The case of Cambridge Analytica, which is very well known, had issues due to an excessive collection of
data.
Some issues can also be found in the volume of ideas generated through
crowdsourcing. Aligning the company's strategy with the crowds that generate
ideas could be challenging because of the attention deficit. Technology comes
to help in this case too. To cope with this, companies use different methods,
one of which is Artificial Intelligence, even though the limitation of AI is
the ability in evaluating brand new ideas, because of the way AI algorithms
are trained.
It has gained a considerable importance in the past ten years. We all know
its power to find funds for early-stage ideas, but we should also consider that
crowdfunding can generate only a tiny amount of funding compared to VC funds.
Nevertheless, its importance is linked to funding-generation and, most
importantly, to knowledge generation for the team. When a team posts a
content in a crowdfunding platform, they manage to collect information about
their potential customers.
And this links to information and data collection.
More than it was ten years ago, it is now clear that data has huge
importance for businesses, but it is still not easy for every company to
implement strategies based on data. Some very-well-known big tech companies,
such as Amazon, Facebook and Google, made their business models around data,
but this is not yet the case for smaller organizations.
It must also be understood that companies are still struggling to
effectively share data with big corporations due to the fear of an unbalanced
flux of information, such as the case of the German automotive industry and
Google Maps.
Therefore, one future research topic for Open Innovation researchers could
be to understand the balance between revealing data and capturing value from
data.
When people adopt idea-sharing mindsets, open innovation can change
traditional industry boundaries.
For instance, the article highlights Tesla, who is shaping the battleground
for the new automotive industry.
They have acknowledged that they cannot drive the electric market forward
alone. In fact, Tesla has revealed intellectual property to seek the
advancement of electric vehicle technology to accelerate electric vehicles'
market size.
Ultimately, their ambition would be to improve their cars and stay ahead of
the competition, and so they engage in an open, collaborative culture to gain
inputs from the masses.
Furthermore, with this approach, Tesla states that they are willing to
cooperate with electric car companies to compete against the fossil car market.
Platforms are essential for today's organizational development and
facilitate how organizations create and capture value. And their impact is not
surprising. Platforms minimize barriers of distance and connect people and
create a network effect. This provides a space where information and ideas
can flow.
And successful platforms providers to grow larger and larger.
It is difficult not to acknowledge the power that large IT corporations
have. They even own open-source platforms, with code
that is designed to be publicly accessible. Microsoft now owns “Github”,
“IBM” owns “Red Hat”. And while these large collaborations claim novel
commitment and intentions, it makes one reflect on how open open source really
is.
Yeah, we need to reconsider how much openness is
appropriate and at the end of the day, it will be a trade-off that should be
handled carefully. The amount of openness goes hand in hand with patenting.
This can be a barrier to adopting open innovation.
There are many reasons that patents are a barrier to open innovation.
The article highlights over-valuing internal ideas and fear of being the one
revealing the new commercial blockbuster to potential competitors.
Many companies still have a "no patent - no
talk" mindset and therefore miss out on the benefits of broad and distant.
They might miss out on business opportunities: What values do patents have, if
they lay unused in a drawer? The pharmaceutical company “Bayer” employs 7.000
scientists, holds thousands of patents, many unused. And yet only two employees
are responsible for licensing out.
Current tensions between nations make it harder
to cooperate across borders, e.g. USA CHINA TRADE war. https://www.bbc.com/news/business-45899310
In China, the CTO of “Aliba” said that we live in
the data age and that data could be processed better outside the
company.
The current crisis gave open innovation a boost,
exploration and collaboration among different institutes which did not
cooperate before.
The challenge is to carry this momentum into a post
covid world.
The importance of this momentum comes from the more
significant problems we have to solve, such as climate change. These problems,
which are not tangible, have high complexity and abstraction levels following
Rittel and Webber, are called wicked problems.
In the 2010 paper the focus was on company-specific
problems. But companies can have a significant impact on their environment. Yet,
another trend can be detected: We see a concentration in capabilities of
research due to the high cost of research equipment. A consequence of this is a
more multidisciplinary team.
This results in hotspots of research. The power
of this hotspot is the knowledge and motivation in one place. The downside of
this concentration is the downfall of collaboration among institutes.
Define the value of open innovation overestimates
their contribution to a project, so it is a challenge to measure OI scrutiny.
A second challenge is that organizations have to place OI either in the
periphery or at the core of their business: Substitute vs complementarity.
Dahlander, Linus & Gann,
David & Wallin, Martin. (2021). How open is
innovation? A retrospective and ideas forward. Research Policy. 50.
10.1016/j.respol.2021.104218.
Rittel, H.W.J., Webber, M.M.
Dilemmas in a general theory of planning. Policy Sci 4, 155–169
(1973). https://doi.org/10.1007/BF01405730
