OPEN INNOVATION

The Idea behind Open Innovation
At a glance even for the first time visitor, my impression on discovering Innocentive’s website was that of a company conscious of its image because of the webpage layout… which is not only clear and concise, but also sophisticated in trying to make viewers understand who they are “virtually”. And yet, there’s actually more to that in that Innocentive as an “open innovation” driven company avails firms the opportunity to use external as well as internal ideas, and internal and external paths to market, as the firms look to advance their technology.

Problems Solved
The concept of Open Innovation is considered as the “new imperative” for creating and profiting from technology in many business and not-for-profit organisation sectors.
Under open innovation, Innocentive’s clients use both external and internal ideas to create value, and internal mechanisms are defined to claim some portion of that value.
An added advantage of open innovation to customers is that it assumes that internal ideas can also be taken to market through external channels, outside the current businesses of the firm, in order to generate additional value. And in so doing, ideas can also start outside the firm’s own labs and can move inside.
Open innovation also allows the recovery of overlooked innovations in that there’s a greater chance for the projects to find value in a new market or to be combined with other projects, because everything is more open and flexible.

Customer Groups
Since it started business in 2001, Innocentive has been using the open innovation concept to serve customers in various sectors such as academic institutions, businesses and non-profit organizations. Despite the various reasons for their choice to change their business model, all the clients served by Innocentive are on the look-out for the latest innovation technologies for better performance in the various sectors in which they belong.

Open Innovation: How it Works
Thus with reference to Innocentive’s customer profile, the concept of open innovation can be considered applicable both on and off-line by the fact that the “boundaries” existing between firms are “porous” (when applying the open innovation concept), and this allows the use of licences or technologies that belong to a particular firm in another firm as a core business.

The Future of Open Innovation
With the rapid growth of technology, competition, and need to increase profit margins, “open innovation” I should say, can be considered as a sustainable business model because of the advantages it avails to many businesses for example; by spinning in ideas and innovations from outside, this enriches the services offered by the company, and reinforces networking and co-operation on ideas by shared facilities and technology.

Industries Involved
According to the study I have undertaken regarding open innovation, this concept is very beneficial to almost every business sector, and more especially in industries which undergo extensive Research and Development.In a further research, I discovered that some industries have been in the open innovation mode for a long time. The Hollywood film industry, for example, has innovated for years through a network of partnerships and alliances among production studios, directors, talent agencies, actors and scriptwriters. In addition to the film industry, modern investment banking has been using external ideas as well, adopting the new, exotic investment instruments devised by newly trained finance professors.
However, many industries are still in transition between open and closed innovation concepts for example; automobiles, biotechnology, pharmaceuticals, healthcare, computers, software, communications, banking, insurance, and consumer packaged goods, even military weapons and communication systems. Innovation in these industries is moving beyond the boundaries of the central R&D laboratories of the largest companies to start-ups, universities and other outsiders. In so doing, the company can renew its current business and generate new business. As a particular case study, this could be the case of Millennium Pharmaceuticals and Philips, the world market leader in the lighting, electric shavers, and DVD recorders sectors.

Case Study: Millenium Pharmaceuticals
To begin with Millennium Pharmaceuticals which is focused on the goal of developing breakthrough treatments that will make a real difference in patients’ lives, it has strategic alliances and business partnerships with some of the world's leading pharmaceutical and biotechnology firms. The relationships range from disease-oriented therapeutic collaborations and technology-transfer arrangements, to marketing and licensing agreements. For example, in June 2004, Millennium and GlaxoSmithKline (GSK) entered into an agreement in which GSK exclusively will market INTEGRILIN in Europe. The commercialization alliance is designed to provide significant sales and marketing support to capitalize on growth opportunities for INTEGRILIN in Europe and is designed to enhance the GSK cardiovascular care portfolio and presence in the European acute care market. Under the terms of the agreement, Millennium is entitled to license fees, milestone payments and royalties from GSK on INTEGRILIN sales in Europe upon the achievement of certain objectives.

Case Study: Philips Electronics
In as far as Philips is concerned, the company has developed and introduced many successful technologies. An atmosphere of collaboration which has been crucial to these achievements led to a decision at Philips to start developing technology more from the philosophy of open innovation: High Tech Campus Eindhoven in the Netherlands. Ever since this campus was opened in 1999, people have been working on an environment that revolves around interaction, networking, sharing knowledge and developing groundbreaking technologies in joint efforts. The site is open to business and non-business visitors. During office hours, anyone who wants to do so may enter the site on foot, on a bicycle, or by car and use some of the facilities.
As a Hotspot, High Tech Campus Eindhoven currently occupies an important position in the region. The campus road network has been added to the street map of the City of Eindhoven and all buildings have official addresses. This makes High Tech Campus Eindhoven even more part of Eindhoven and the Eindhoven region. The campus is in the very centre of the area, not only geographically but also, particularly, as the cradle of knowledge and innovation, and the matchmaker between businesses and knowledge institutes.
Philips’ case as illustrated in the slideshow below, clearly shows how companies can create a stimulating environment for cooperation and open innovation. Therefore, the Open Campus idea perfectly embodies what open innovation originally was about.

THE NEW HIGH TECH CAMPUS IN EINDHOVEN, THE NETHERLANDS

| View | Upload your own