FBlog

As open innovation becomes increasingly sought after by many industries and across a variety of sectors, it can be useful to take note of the shifts and trends that have so-far defined the movement and made it what it is today.  Not only does this look give us an idea of the vast potential, applicability and flexibility of innovation techniques, but they can also provide some valuable clues as to the direction of the emerging landscape of innovation.  By nature, innovation will never have a single definition or a trend that will wholly capture it—this is precisely what makes it so exciting to tap into—but if we were going to try, here are some things to consider.

What does open innovation look like today?

Today we see open innovation manifested in a range of external ways, from crowdsourcing (UK Spending Challenge) to prize-based innovation (X-Prize) to innovation intermediaries (InnoCentive).  Open innovation has also shown itself as a powerful internal tool.  For large companies, this has often been a good starting point for establishing an innovation strategy; not only by providing valuable new and in-house sources of ideas and solutions, but by simultaneously increasing employee engagement and morale.

Today we no longer look at open innovation solely in scientific and technical terms (as often represented by the porous funnel), but as more of a fluid process that has the potential to take place across all areas of an organization: human resources, manufacturing, sales, finance, procurement and marketing. While it can be difficult for an organization to embrace the new mindset and culture required for more radical innovation, the process itself has can have extraordinary results.

Today we have no shortage of available tools and technologies that have helped facilitate these shifts toward open innovation and understand that it takes knowledge of these tools and appropriate design around them to get the job done.  We know from experience that it is critical to take into consideration key design parameters for every project involving open innovation to drive the desired outcomes.  We also know that there is no single platform or technology that can completely satisfy an open innovation strategy, but the right combination may. It has been important for companies to realize that a successful open innovation strategy requires a portfolio approach – an approach that considers all the available options to engage new networks, uncover new sources of ideas and solutions, and ultimately drive new insights that will shape the future. Where we will win and achieve these necessary breakthroughs is by designing the right interactions around the right combinations of these tools and technologies.

What is on the horizon for open innovation?

As we look forward in 2011, we see several important emerging trends:

1)   Innovation is becoming increasingly embraced by new industries and sectors

2)   Innovation is becoming more social

3)   New transparency in traditionally closed industries

Innovation is becoming increasingly embraced by new industries and sectors

New players, the automotive industry for example, are entering the scene.  While they have traditionally invested heavily in innovation as measured by spending on R &D and market research, only recently have we seen emerging examples of this industry trying out crowdsourcing or other innovation strategies.  In 2010 Volkswagen launched “App my Ride”, a prize competition that invited customers, designers, programmers and any other interested parties to design applications for their new infotainment system.  The goal was not only to collect new ideas for applications but also to involve the same community in actually creating these applications.  Similarly, The Ford Motor Company launched The Ford Story, a crowdsourcing platform that invites anyone to submit new ideas, share stories, and vote/comment on existing ideas. They have always had a passionate and loyal group of customers who are more than happy to share their ideas, which is perfect to leverage for this type of innovation activity. And a more recent entrant, Local Motors, is bringing co-creation to this traditional industry. They have a community of engineers, designers, and inventors who openly collaborate to design new automobiles.  As 2011 progresses, we may see even more examples from the auto industry and likely from new industries, some that may surprise us, who are ready to dip a toe into open innovation.

Innovation is becoming more social

As social networks such as Facebook and professional networks such as LinkedIn continue to grow, they are being utilized for more than just staying touch with friends and professional contacts. We see many examples of idea sharing and problem solving on both of these networks, and more recently Twitter and Quora have emerged as good sources for sparking innovation. On the corporate side, companies such as Clorox, with their CloroxConnects platform, are leveraging employees, suppliers, and external experts to share ideas and provide answers to posted questions. This network has a strong social component and a reward/incentive system to encourage participation.  With the explosion of social networking and its inherent potential, we expect to see increasing links between it and open innovation in 2011.

Innovation is opening in traditionally closed industries

The global pharmaceutical industry is at a very important crossroad when it comes to open innovation. The level of innovation (as defined by new drugs introduced into the market) continues to decline while innovation investment (as defined by R&D spending) continues to rise. When you add the vast amounts of data that they have generated in the search for new drugs, it becomes clear that the ability to unlock these vast data sets can provide a much-needed spark. And while we have seen many examples of pharma embracing certain aspects of open innovation, this open-source view of data is relatively new. Companies such as Novartis, Eli Lilly and GSK have opened up and donated previously secret data sets and made them available to any interested outside party. The Center for Excellence for External Drug Discovery (launched by GSK in 2005) continues to grow. Sage Bionetworks, Science Commons, and Public Library of Science (PLoS) are doing some of the heavy lifting needed to bring the global scientific community together to discuss new models for data sharing and openness in medical research (both at the academic and industrial level).

We can learn from all of these examples and apply what we’ve learned to develop new innovation strategies and stay ahead of the curve.  One thing is without question; it is an exciting time for open innovation where the opportunities have never been better nor the future more promising.  Happy innovating in 2011 and stay tuned for more innovation insights!