Ever since Henry Chesbrough published his book 'Open Innovation: The New Imperative for Creating and Profiting from Technology' in 2003, more and more companies, consultancies and educators have presented Open Innovation as the solution to all innovators' problems.
But what is it really about? And is it really the coveted solution to the need for companies to consistently increase their capacity to innovate?
What is Open Innovation?
This term refers to an innovation model according to which companies, in order to create more value and compete better on the market, cannot rely solely on internal ideas and resources but must also make use of technological tools and expertise from outside, in particular from start-ups, universities, research institutes, suppliers, inventors, programmers and consultants.
From this perspective, an 'open' company is a company that is able to deliberately use internal and external knowledge flows within its business model to accelerate the development of innovations and to expand markets through the exploitation of these innovations. From here it becomes clear that collaborating with someone on a specific project is not enough to say you are doing Open Innovation. It takes a structured, well-planned and shared business approach at all levels.
Open Innovation presupposes, in fact, two key elements:
1. The creation of an ecosystem within which the company can benefit from a continuous flow of knowledge from the inside to the outside and vice versa. It is only in this way that it is truly possible to nurture the company's business model and sustainably increase the company's ability to generate innovation on the one hand, and to capture the maximum value from the innovation generated on the other. Open Innovation, therefore, cannot be seen as a mere set of spot collaborations but requires an overall strategy related to what to develop internally and what to develop externally through its ecosystem.
2. The use of non-obvious sources of knowledge. A famous quote by Albert Einstein says that 'Problems cannot be solved at the same level of thinking that generated them'. Similarly, it is difficult to imagine practising truly disruptive innovation models from the same sources of knowledge and the same way of thinking that has always been used.
Starting from these two concepts, the Open Innovation model envisages that a company can, or rather must, access innovations 'for sale' on the market by integrating them with its business model.
An Open Innovation approach also allows a faster time to market, i.e. less time to move from the product or service conception phase to its launch on the market. This is because some phases of business processes can be outsourced to external specialised companies and are therefore more efficient.
Open Innovation in practice
The concrete ways through which Open Innovation is realised can be many. Just to mention a few
· inter-company agreements, whereby one company delegates to another, usually smaller, company the creation of certain innovations or the production of specific artefacts;
· the subsidising of competitions for start-ups, with a commitment to invest - directly or indirectly - in those that have developed the most promising innovations;
· hackathons, i.e. programming competitions whereby companies ask developers and innovators to invent innovative digital solutions in 24 hours in a given field;
· the acquisition by large corporations of innovative start-ups in order to integrate digital talent into their workforce and to take over some of the major innovations created by them;
· the creation of startup accelerators managed directly or indirectly by large corporations;
· the sharing and circulation of innovative ideas, also according to the open source philosophy, through networking events and conferences;
· partnerships with universities, research centres and incubators to innovate on specific topics.
This list is by no means exhaustive. In fact, Open Innovation can be applied to all business processes and each reality can find different areas of realisation.
The Italian road to Open Innovation
An interesting Italian example, also recognised and rewarded abroad, is that of Enel, which has extensively used the Open Innovation paradigm to rethink its business.
In order to achieve this important breakthrough, Enel has first of all placed innovation and sustainability at the centre of its business strategy, thanks to the creation of a dedicated division, with no distinction from general strategic planning.
Moreover, in recent years Enel has established hundreds of partnerships and woven various forms of relationships with start-ups: to date there are more than 80 collaborative projects in many of the 30 countries where the company is present. In California, in Berkeley, Enel has opened an Innovation.
Hub next to the Center for New Media, following the one in Tel Aviv opened in 2016, thus becoming the first company in the world with which the University of California forges a partnership for scouting, acceleration and collaboration with startups.
It is clear that, to achieve these results, it is necessary to develop a structured approach to Open Innovation that cannot be based solely on ad-hoc collaborations. It is necessary to develop an Open Innovation strategy by selecting the areas and spheres where to be Open and those where it is more appropriate to maintain the presence of skills and know-how.