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OPEN INNOVATION: What’s your Innovation Strategy?

Markets are constantly evolving and companies need to understand which innovation model to adopt in order to keep up. What is the best way to bring innovation to your company?

Is it better to exploit only internal resources, thereby protecting your innovative product right from the beginning, or could you benefit more by opening up your project to outside collaboration?

According to the Open Innovation model, the best way to innovate is by leveraging your internal skills and those which are outside of your company.

According to a definition by Henry Chesbrough, a researcher at Harvard and Berkeley and inventor of Open Innovation, this model is based on “inbound and outbound knowledge flows aimed at accelerating internal innovation, and expand the markets for external use of innovation, respectively. [This paradigm] assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as they look to advance their technology”

Comparing Open innovation and traditional models of innovation.

The Open innovation model is totally opposite to the traditional model of innovation where the development of a new product has its foundations in the internal department of R&D and its distribution is managed solely by the organization. In fact, in the traditional process of innovation, the company alone bears the costs of developing a new product or service,for training specialized personnel and for the product launch.

The risk of this approach is that, with the speed with which the economy of the digital revolution is moving, the innovation produced by the company arrives too late.

The benefits of open innovation for businesses

Open innovation brings several benefits to companies:

  • reduces the cost of design, prototyping, production and distribution,
  • shortens the time to launch a product on the market,
  • increases differentiation, opening up new outlets and creates new sources of revenue for businesses.

In which way? Value is created through contamination, cooperation, technology, information, the experience that a company manages to mobilize within it and exposure to different external people. External knowledge does not necessarily have to come from suppliers, but can be brought in from universities and research institutes, startups, consultants and consumers.

How to implement open innovation?

To achieve open innovation, companies need to have a clear strategy. First, you need to understand your requirements:

  • make your expertise available outside and expand the market using the inside-out model.
  • leverage external expertise to incorporate it into your innovation process, using the outside-in model.

In the case of the inflow, outside-in model, different strategies can be adopted to enhance external contributions:

  • search for external ideas through crowd-funding or competitions
  • joint development or co-creation of a new product with your customers and partners

Open innovation is seen as an opportunity to create value in a different way: no longer via the closure and secrecy of innovation processes, but co-creation and sharing with experienced partners instilled with a new digitized culture.

This process needs a clear strategy that has to developed according to the specific needs of a company. With the guidance of an experienced consultant, making the change towards a new culture of innovation it round the corner.

If you are looking for a customized solution, do not hesitate to contact us.

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