The document discusses the future of open innovation. It explores different modes of open innovation including sourcing external expertise, collaborative innovation, valorizing dormant IP, user-led innovation, and corporate venturing. It also examines drivers behind open innovation like the fragmentation of IP, job mobility, and prosumerism. Finally, it presents a scenario framework for how the intensity of external pressures and companies' strategic agility could impact the future of open innovation.

1. The Future of
Open Innova1on
February, 2011
Philippe Vandenbroeck,
Partner, shi4N
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2. Understanding the future
of open innova;on
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3. A diverse landscape
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4. Apple's iPod
> 300 million sold
70% market share in the US
iTunes 1 billion USD Q4 2010
only
6 months development time !
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5. Apple's iPod
> 300 million sold
70% market share in the US
iTunes 1 billion USD Q4 2010
only
6 months development time !
because
Apple sourced in the idea from
an outside consultant and
assembled a team of 8
component technology
partners to bring it to market
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6. Open Innova1on is not new
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7. Open Innova1on is not new
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8. Cri1cal uncertain1es
"Open Innova1on is the use of
purposive inflows and ou?lows of
knowledge to accelerate internal
Henry Chesbrough innova;on, and expand the
markets for external use of
innova;on, respec;vely."
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9. A diverse landscape
• Sourcing in external exper;se
• Collabora;ve innova;on
• Valorizing endogenous (dormant) IP
• User‐led innova;on
• Corporate venturing
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10. A diverse landscape
• Sourcing in external exper;se
• Collabora;ve innova;on
• Valorizing endogenous IP
• User‐led innova;on
• Corporate venturing
Different approaches
Different goals
Different implica1ons for strategy and capabili1es
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11. A diverse landscape
OI Mode Goal Locus Capabilities
Sourcing in Reduce costs, End of stage-gated Frame issues,
Speed to Market innovation process Find expertise
Collaborative Radical innovation, Fuzzy front end Ecosystem mgt,
Innovation New business models IP regime design
System integration
Valorizing Increase revenues Modularization,
endogenous IP from existing assets identify application
space
User-led innovation Empower customers, Ideation, Crowdsourcing,
Create brand loyalty customisation Marketing
Corporate Venturing Secure access to Anywhere Scouting
component
technologies
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12. Sourcing in exper1se
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13. Tata Nano: only 34 patents
Open Hardware Model
Collabora1ve Innova1on ?
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14. SOCIAL PRODUCT DEVELOPMENT
"Together, we develop two new
products every week. One could be
anything; the other is based on a
brief we provide you ... "
User‐led Innova1on
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15. Valorizing endogenous IP
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16. Corporate Venturing
Investment focus: consumer products and services, health care,
weight management and tness, media, water, clean tech,
environmental services, ...
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17. Wide scan: P&G Connect & Develop
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18. Concluding
• Open Innova;on is designing the flow of
knowledge assets across company boundaries.
• Open Innova;on is not a monolithic prac;ce.
• Building an OI por?olio has to be anchored in a
clear strategic vision.
• Deploying full spectrum OI entails a strategic
'upframing', away from product and technology
layer to include service and business model
innova;on. Enormous degrees of freedom!
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19. Drivers behind open innova1on
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20. Fragmentation of IP
Eroding innovation
model of majors The
spread
of
Open
Job mobility Innovation
Prosumership
FOR
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21. the microprocessor paradigm
asset liquidity and option density
from value chain to value constellations:
innovative co-productive relationships
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22. the microprocessor paradigm
asset liquidity and option density
from value chain to value constellations:
innovative co-productive relationships
"It is the views in the minds of business people that are the
greatest constraint, and the source of greatest opportuni;es today.
There are no 'mature' businesses. There are only 'mature' frames
of reference."
Normann and Ramirez, 1994
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23. Fragmentation of IP Culture (NIHS)
Failing innovation The IP conundrum
model of majors The
spread
of
Open
Job mobility Innovation Transaction costs
Prosumership Elusive business case
FOR AGAINST
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24. The IP conundrum
?
evolving economic
partner‐ vola1lity
ships Secrecy or Transparency?
Importance
interna1onaliza1on Speed or Security? of intangibles
Generic or Flexibility? Increasing
heterogeneous
partnerships Cost or Opportunity Cost? speed
of innova1on
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25. Differen1ated suite of agreements and exit/divorce plans
Clear but modular typology of knowledge assets
Clear phasing of R&D process
evolving economic
partner‐ vola1lity
ships Secrecy or Transparency?
Importance
interna1onaliza1on Speed or Security? of intangibles
Generic or Flexibility? Increasing
heterogeneous
partnerships Cost or Opportunity Cost? speed
of innova1on
Clear strategic vision
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26. Elusive Belderbos et al. 2009
Business Case Data reflect technological ac;vi;es of 168 sample firms, 1996‐2003
R&D‐intensive European, US and Japanese firms in five industries
Research Orienta-on EXPLORATIVE EXPLOITATIVE
SOLITARY
COLLABORATIVE Collabora;ve Innova;on, Valorizing dormant IP
Insourcing
• "Contrary to our expecta;ons, it is collabora1on in explora1ve technological ac1vi1es,
rather than collabora;on in exploita;ve technological ac;vi;es, that leads to a reduc1on
in firm value."
• "These findings ques;on the relevance of open business models for technological
ac;vi;es. In par;cular, they suggest that the poten1al advantages of collabora1on for
(explora;ve) technological ac;vi;es (i.e. access to complementary knowledge from other
partners, sharing of technological costs and risks) might not compensate for the poten1al
disadvantages, such as the incurred increase in coordina;on costs and the need to share
innova;on rewards across innova;on partners."
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27. The Future of Open Innova1on
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28. Cri1cal uncertain1es
Driving forces Environmental
Impact of climate change
Poli1cal Scarcity of energy/raw materials
Geopoli;cal security
Extent of mul;‐polarity Social
Demographics
Economic Availability of human capital
Intensity of global compe;;on Acceptability of closed IP
Access to capital
Economic surplus Technological:
Emergence of new business models Informa;on security
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29. Cri1cal uncertain1es
Cri1cal Uncertain1es
Strategic agility of innovators
Low High
Intensity of exogenous pressures
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30. A back‐of‐the‐envelope
scenario framework high
strategic
agility
moderate high
pressures pressures
low
strategic
agility
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31. Scenario framework
Willingness/ability to high
embrace new business strategic
models, partnerships. agility
Pressing societal needs
(health, climate),
Expensive inputs,
Tough global compe11on
Low societal acceptance of
closed IP
moderate high
pressures pressures
low
strategic
agility
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32. 4 thumbnail scenarios
Focus on time-to-market and exibility
high
Strong focus on 'user-embedded' technology
strategic Soft IP (licence of right)
agility Highly differentiated innovation landscape
Convergence on interoperability standards
OI-oriented public procurement
Techno‐
hybridiza1on
moderate high
pressures pressures
low
strategic
agility
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33. 4 thumbnail scenarios
high
strategic
agility
Techno‐
hybridiza1on
moderate high
pressures pressures
Ac1vist OI
Open source/commons-oriented innovation
Limits on patentability and copyright
Erosion of IP base through hacking and theft
State control of IP rights in strategic areas
low
strategic
agility
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34. 4 thumbnail scenarios
high
strategic
agility
Techno‐
hybridiza1on
moderate high
pressures pressures
Big = beau1ful Ac1vist OI
Business as usual: insourcing logic
Incumbents dictate terms of semi-OI
Patent-anchored hard IP
low
strategic
agility
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35. 4 thumbnail scenarios
Strong focus on user experience high
'Blue Ocean' service/business model innovation strategic
Fluid value constellations agility
Brands trump IP
Techno‐
Blue Ocean hybridiza1on
moderate high
pressures pressures
Big = beau1ful Ac1vist OI
low
strategic
agility
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36. Concluding
• The future of Open Innova;on is an open future.
• The ques;on is not whether we can prove these
scenarios true. The ques;on is: if they materialize,
what does it mean for our innova;on model?
• Under the assump;ons studied, the dominant IP
regime is very likely to undergo significant changes.
• Very likely all of these forms of Open Innova;on will
manifest themselves. In that sense the scenario
framework cons;tutes a typology of forms of OI.
• The full poten;al of Open Innova;on can only be
leveraged by those companies that are willing to
innovate their business model.
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37. www.shi4n.com
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