December 18, 2009
However, scanning through the list is one article on open innovation — the Enkel, Gassmann and Chesbrough introductory article to September special issue on open innovation. The article — “Open R&D and open innovation: exploring the phenomenon” — is available for free download.
I have a few quibbles with the article (since my friends didn’t send it to me for comment beforehand :-) but overall it summarizes the advances in research on open innovation since the publication of the 2006 Chesbrough et al book Open Innovation: Researching a New Paradigm.
So if someone wants a place to start on open innovation research, that would be a good place to start, as well as my earlier post on the most influential O/U/CI research.
December 10, 2009
Some of the ideas of my first (2007) cut comparing these three streams have been published in the Washington University Journal of Law and Policy. (This specialty journal ranks #174 on a list of some 1100 law journals). The paper was in a special issue called “Open Source and Proprietary Models of Innovation: Beyond Ideology.” Abstracts for the special issue can be found at the WUSTL law school website. (It was actually published a few months back, but I’ve been swamped).
The edited volume (Vol. 19) compiled work presented at an April 2008 workshop of the same name hosted by Charles McManis. I was privileged to be invited to offer one of the keynote talks, and to be surrounded by a lot of bright open source researchers (mostly lawyers) for two days worth of stimulating discussions. (Video of some of the sessions is available online).
I believe my own paper is the first published paper to contrast these three streams of research on neutral terms. However, the discussion of these three streams is relatively brief. Since I was speaking to lawyers, the back half of the paper is about implications, and thus its title: “Policy Challenges of Open, Cumulative, and User Innovation.” It considers how these different streams would make different predictions (or normative recommendations) for policy in areas such as taxation, antirust, or infrastructure development — presumably of greater interest to lawyers than to b-school profs.
The working paper is on my website, and I have a PDF of the actual pages if anyone is interested.
Meanwhile, I continue to extend the more detailed O/U/CI comparison presented in Hamburg last June. More news as it becomes available.
December 5, 2009
One question I’d heard before was “how is open innovation practiced in Silicon Valley?” It’s been my impression that the various Chesbrough books on open innovation had less of an impact on Silicon Valley than almost anywhere else. Yes, HP created an “Open Innovation Office,” but that’s just a new name (and broader responsibilities) for the existing university relations staff.
From my own consulting, research and speaking, I think open innovation has had a big impact in Europe, and in the Midwest. It’s also had an impact on South America (Brazil, Chile) and Asia, but it doesn’t seem to be as organized from an academic sense. I don’t see much of a groundswell here.
Why? One factor is that (in my decidedly unscientific anecdotal sampling) is that SV entrepreneurs don’t seem to read books. I don’t know if it’s because they are too busy or too arrogant, but business books seem to have less impact here than in say, Fortune 500 America, England or Japan.
But a more fundamental reason is that I think open innovation was practiced here before Chesbrough’s pathbreaking 2003 book was published. I’ve talked with Henry about it, and he sees my point — although he’s so polite that it was hard to tell if he was agreeing or being noncommittal.
After all, the first chapter of Chesbrough’s 2003 book is about Xerox’s Palo Alto Research Center. To put it bluntly, the copier executives from upstate NY didn’t know how to monetize all these great technologies, but eventually (as Chesbrough chronicles it) they use a combination of licensing and equity positions to capture value from the spin-off companies that are going to be created anyway.
It was an important and necessary adaptation by Xerox, since spin-off companies are a way of life here. The “silicon” in Silicon Valley came from semiconductor spinoffs (starting with Fairchild in 1957), and the idea of quitting to start a new company is well-entrenched. (A friend of mine, Martin Kenney, co-authored a 1990 book that argued that the spinoff-culture of Silicon Valley and Route 128 (still important then) were fragmenting American abilities to mass product new technologies; he’s since edited an important book praising the SV process: Understanding Silicon Valley.)
But more fundamentally, who were these companies that put the “silicon” in Silicon Valley? Merchant semiconductor manufacturers. These were companies that got all their revenues from component that went into the systems designed and built by other companies. And this was the norm in SV if not the US electronics industry.
Yes, IBM was vertically integrated (until the wrenching transformation chronicled by the 2003 Chesbrough book) — as was RCA before it committed seppaku — but such vertical integration is now long gone from US electronics companies. Meanwhile, NEC, Toshiba, Samsung, LG, Siemens, Ericsson, Nokia and other Asian (and European) companies remain among the most integrated of firms in the ICT sector.
Buying components is one of the three modes of acquiring external innovations, along with licensing knowledge/information/IP and custom solutions. Silicon Valley has thus been built around OI for 50 years, even if it wasn’t called that. Open innovation is relevant to SV, but you’d have a hard time selling it to local startups as a new practice.
November 16, 2009
I haven’t circulated the paper, but have engineering students using it as a conceptual basis for their study of the Android and iPhone application stores. I also have been using an abridged version as a rough case with my MBA students to make the point about ecosystem management. I’d be glad to share the case and notes if anyone’s interested.
The paper itself is sitting on my desk awaiting revision, but given the interest it’s sparked locally I thought I’d share it more widely.
Since there’s recently a raft of new open innovation research published, it also needs updating to reflect the state of the art. Suggestions are welcome.
November 13, 2009
One of the guest speakers was Henry Chesbrough, speaking on the topic “Open Innovation: Can it save the world?” Not surprisingly, the first half of the talk was about open innovation and the second half about applying the principles of OI to green technologies.
In his blog article, David reports on both halves. The first half makes a nice summary of the whole open innovation thesis, as presented in the original 2003 Open Innovation book. The second half offers suggestions of how open innovation is being used to accelerate progress in green technologies, such as the GreenXchange project hosted by Science Commons (with funding from Nike and BestBuy).
The model seems to fit what Scott Gallagher & I (in our 2006 article) call “pooled R&D” in the context of Eclipse and other firm-sponsored open source projects. However, one could also argue that it’s an example of cumulative innovation — today a somewhat diffuse and ill-defined literature — particular as manifest by Fiona Murray and Siobhan O’Mahony in their 2007 article.
Either way, open (or cumulative) innovation seems likely to play an important role in solving problems that have both a societal as well as shareholder return. My conjecture is that for issues with broader societal benefit, the pressures for results sooner rather than later will override a single firm’s efforts to attain competitive advantage. (Or perhaps it’s just that firms want to exploit funding while it’s available, before governments realize they’re broke or sponsors move on to funding some new trendy area.)
November 10, 2009
Based on indirect evidence, I suspect that Henry must have been exposed to too much Kuhn somewhere during his graduate school career. (The Structure of Scientific Revolutions was not published until 1962, so he couldn’t have been exposed in the womb). The Kuhnian model of anomalies leading to new science permeates his work, particularly in open innovation.
The original 2003 Open Innovation book was inspired by his studies of the puzzle of why Xerox PARC didn’t make more money from its many pathbreaking innovations. Unlike the guys who wrote Fumbling the Future, Henry concluded that Xerox learned from its mistakes and eventually developed a portfolio of strategies for monetizing inventions that didn’t its core business model.
More recently, he has been inspired by Donald Stokes and his book Pasteur’s Quadrant, a more recent re-interpretation of Kuhn’s model of scientific advance. Stokes’ point is that the most interesting research both contributes to scientific progress and has practical real-world utility.
Following the advice of Stokes, Henry believes that both open innovation — and the theories of innovation more broadly — benefit from a study of industrial practice. As he concluded in the opening chapter of the 2006 book:
The field of innovation studies arguably operates in Pasteur’s Quadrant (Stokes 1997), in that the processes and practices of industry actors often extend beyond the bounds predicted by academic theory. Close observation of the experiments that some of these ﬁrms have enacted reveals that the inwardly focused, vertically integrated model of industrial innovation so celebrated by Chandler (1990) and others has given way to a new, and not yet well-understood model (Langlois 2003a).And so the second chapter of the 2006 book (which he also wrote) he called the chapter “New Puzzles and New Findings.” In the spirit of Kuhn and Stokes, both chapters identified anomalies in the practice of innovation that merited further investigation. In this same vein, the final chapter (written joint by all three editors) sought to identify other opportunities for future research.
In September, I was fortunate to be asked to present my own open innovation research at Henry’s Center for Open Innovation; the session gave a background on OI (and UI and CI) to the graduate students. The slides and a YouTube video of this (and other) talks are linked from the COI’s speaker series web page.
The discussion afterwards raised some interesting points, including some that might qualify as new puzzles also worth investigating.
One of the graduate students asked about how open innovation would happen in Korea — presumably a reference the dominance of the chaebol and the difficulty small businesses have getting a foothold. Another student asked about open innovation in India and China: certainly Chesbrough’s 2003 book (and Chapter 6 of the 2006 book, which draws heavily on it) would argue that licensing internal innovations depends on appropriate IP enforceability (consistent with Teece 1986), and the general belief is that such mechanisms are not as strong as in more developed countries.
I could imagine other factors about economic development, government policy or industry structure that would make open innovation more or less likely, but such causal relationships are empirical questions left to be studied.
So here are a few more puzzles I think worth investigating. In the spirit of Kuhn, Stokes and Chesbrough, perhaps they will inspire new research that increases our understanding of open innovation.
November 5, 2009
- Chesbrough, Open Innovation (2003): 1340
- Chesbrough, Vanhaverbeke and West, Open Innovation: Researching a New Paradigm (2006): 615
- Chesbrough, “The era of open innovation,” Sloan Management Review (2003): 362
- Chesbrough and Rosenbloom, “The role of the business model in capturing value from innovation…” Industrial and Corporate Change (2002): 454
- Chesbrough, Open Business Models (2006): 203
- von Hippel, “Innovation by user communities,” Sloan Management Review (2001): 324
- Morrison, Roberts and von Hippel, “Determinants of user innovation and innovation sharing…” Management Science (2000): 168
- von Hippel, “Lead users: A source of novel product concepts,” Management Science (1986): 1193
- von Hippel, The Sources of Innovation (1988): 3546
- von Hippel, “Sticky Information,” Management Science (1994): 1518
- von Hippel, Democratizing Innovation (2005): 1142
- Allen, “Collective invention,” JEBO (1983): 499
- Nuvolari, “Collective invention…Cornish pumping engine,” CJE (2004): 89
- Chang, “Patent scope, antitrust policy, and cumulative innovation,” Rand (1995): 197
- Scotchmer, “Standing on the Shoulders of Giants,” JEP (1991): 671
- Scotchmer, Innovation and Incentives (2004): 393
- Green and Scotchmer, “On the division of profit in sequential innovation,” Rand (1995): 383
September 21, 2009
As Scott Gallagher & I noted in our 2006 book chapter, many of these contributions are motivated by nonmonetary incentives. Reputation and publicity are the most likely rewards — whether they can be monetized to get a job or sell a product, or just as a way to stroke an ego.
However, some organizations are using large (e.g. $1 million) prizes to encourage a supply of external innovations. Two examples this morning were the Netflix algorithm challenge and NASA’s search for a new lunar lander. More on both at my Open IT Strategies blog.
September 18, 2009
Below is the list of articles. The most striking thing about the nine articles (not counting the introductory article by the editors) is how German the issue is: seven articles by German authors, one from Switzerland, one from the U.K. (and none from outside Europe).
But if you dig a little deeper, what’s more impressive is that almost all of the articles are about Open Innovation. This means there’s a depth of open innovation research and researchers (at least in Germany) producing open innovation research good enough for a good journal like R&D Management.
Having articles about open innovation seem unremarkable. However, if you look at the previous R&D Management special issue in June 2006, five of the nine articles were clearly about user innovation with only passing mention (if at all) of open innovation as generally defined. This is no big deal if you want to argue that open innovation has subsumed and supplanted user innovation, but it is encouraging to draw the distinction if you believe (as I do) that they are related but distinct streams of research.
The most personally gratifying paper was that of Klaus Fichter on innovation communities, which picked up on two suggestions I made for open innovation researchers to expand their focus. One was the call (with Karim Lakhani) to more precisely use the “community” construction in open and user innovation research. The other (in the editor’s closing chapter of our 2006 book) was for a broader range of methodologies and levels of analysis in open innovation research. If open science is supposed to be the cumulative production of shared knowledge, as a researcher it was rewarding to see the work I’d done has had some impact.
It was also nice to see publication of the paper by Christina Raasch and her Harburg colleagues on tangible goods — including “free” beer and open source car — that was presented in a well-attended session at OUI 2009. Congratulations to all for their newly published papers.
|Ellen Enkel, Oliver Gassmann, Henry Chesbrough||Open R&D and open innovation: exploring the phenomenon||10.1111/j.1467-9310.2009.00570.x|
|Ulrich Lichtenthaler||Outbound open innovation and its effect on firm performance: examining environmental influences||10.1111/j.1467-9310.2009.00561.x|
|Marcus Matthias Keupp, Oliver Gassmann||Determinants and archetype users of open innovation||10.1111/j.1467-9310.2009.00563.x|
|Winfried Ebner, Jan Marco Leimeister, Helmut Krcmar||Community engineering for innovations: the ideas competition as a method to nurture a virtual community for innovations||10.1111/j.1467-9310.2009.00564.x|
|Klaus Fichter||Innovation communities: the role of networks of promotors in Open Innovation||10.1111/j.1467-9310.2009.00562.x|
|Gordon Müller-Seitz, Guido Reger||Is open source software living up to its promises? Insights for open innovation management from two open source software-inspired projects||10.1111/j.1467-9310.2009.00565.x|
|Christina Raasch, Cornelius Herstatt, Kerstin Balka||On the open design of tangible goods||10.1111/j.1467-9310.2009.00567.x|
|Sara Holmes, Palie Smart||Exploring open innovation practice in firm-nonprofit engagements: a corporate social responsibility perspective||10.1111/j.1467-9310.2009.00569.x|
|Anne-Katrin Neyer, Angelika C. Bullinger, Kathrin M. Moeslein||Integrating inside and outside innovators: a sociotechnical systems perspective||10.1111/j.1467-9310.2009.00566.x|
|René Rohrbeck, Katharina Hölzle, Hans Georg Gemünden||Opening up for competitive advantage – How Deutsche Telekom creates an open innovation ecosystem||10.1111/j.1467-9310.2009.00568.x|
September 17, 2009
- fixing the navigation header (on at least some pages),
- update the research page, with long-overdue reference to Daniel Fasnacht’s new book; and
- add a preliminary page for teaching open innovation.
In particular, right now I’m looking for teaching cases that can be used to teach open innovation (as I’ve defined on this blog). If you have any suggestions, drop me a line.
I’m also trying to fix a quirk in Apache server side includes (accessing a header file in another directory), but hopefully that will be transparent to the reader.
Finally, I’m experimenting with the color scheme for this blog to more closely match that of the website while still being readable. Please be patient.
September 10, 2009
Below is the current schedule (with one small correction):
|Aug. 31||Henry Chesbrough||COI Executive Director||UC-Berkeley|
|Sept. 14||Joel West||Associate Professor||San Jose State University|
|Sept. 21||Judy Estrin||CEO||J Labs|
|Sept. 28||Keval Desai||Director of Product Mgt|
|Oct. 5||Joachim Henkel||Chair, Professor||Technical Univ. of Munich|
|Oct. 12||Hyun Park||Head, Global Offering Mgt||Nokia|
|Oct. 19||Sabine Brunswicker||Manager/Senior Researcher||Fraunhofer Institute|
|Oct. 26||Lesa Mitchell||Vice President||Kauffman Foundation|
|Nov. 2||Wim Vanhaverbeke||Professor||Leuven University|
|Nov. 16||Rob Valli||Academic/Consultant||Cambridge University, UK|
|Nov. 23||Vivek Wadhwa||Professor||Harvard Law School|
|Nov. 30||Marco ten Vaanholt||Vice President||SAP Community Network|
|Dec. 7||Johann Fueller||Co-Founder||Hyve|
Henry said today that last week’s organizational meeting was full — mostly with engineering and business graduate students. I’m looking forward to seeing how big the audience is on Monday.
September 9, 2009
Next week, on Sept. 18 SDForum is hosting something it calls its “Second Annual Open Innovation and Corporate Research Fair.” The event is being held at Techmart, next to the Santa Clara Convention Center. Since I didn’t go to the first, I wasn’t sure how this year’s session relates to the definition of open innovation or whether it even would count.
The program has keynotes from EMC, Forbes, IBM and Nokia Research. So far, it sounds like yet another Silicon Valley conference. However, three hours in, there is a single one hour panel discussion
11:30am: Panel Discussion: "Open Innovation in Practice"OK, so here “open innovation” is being used as a synonym for “buying outside technology.”
Panelists will discuss how large high-tech corporations source technologies from outside developers explain how partnerships are formed, technology acquisition and transfer deals are structured.
Of course, that’s not the definition of open innovation. Still, there is a plausible enough overlap to use the buzzword.
It would be nice if someday the conference were to actually talk about open innovation in its totality — transforming how firms think about creating and commercializing innovations. But right now the term seems to be used mainly for big companies firing their R&D staff to outsource technology development or to rebrand existing university relations efforts.
August 17, 2009
International Journal of Innovation and Sustainable Development (IJISD)
Call For papers
Special Issue on: "Open Innovation, Closed Societies"
Steffen Roth, Bern University of Applied Sciences, Switzerland and Chemnitz University of Technology, Germany
Jari Kaivo-Oja, Turku School of Economics, Finland and National Academy of Sciences, Finland
The contradiction between the vision of OI and the reality of social borders thus provokes the central questions to be discussed:
- What impact do political, economic, legal, educational, scientific, or further social borders have on both intra-national and transnational OI projects?
- What are the ethical dimensions of open innovation in general and transnational OI in particular (keywords: working consumer, prosumer)?
- What forms of international OI and what corresponding strategies do we know both from literature and from case studies?
- What opportunities does transnational OI provide for the establishing international justice in terms of a more balanced access to resources, competencies, and markets?
- What borders do OI strategies have to cross at the intra-national level? In what spheres of society does open innovation (not) work successfully? Are OI projects closed for certain organisational forms, professional groups, ages, or genders?
- Deadline for submission of manuscripts: 30 September, 2009
- Communication of peer review to authors: 15 January, 2010
- Deadline for revised manuscripts: 31 March, 2010
August 8, 2009
Excerpts below, the full PDF is here.
Guest EditorI am posting the CFP in the interests of completeness and as a service to my readers. However, there is one part of the CFP with which I’d violently disagree:
Dr. Alexander Brem,
School of Business and Economics, University of Erlangen-Nuremberg, and
VEND consulting GmbH, Nuremberg
Open innovation describes an innovation paradigm shift from a closed to an open innovation model (Chesbrough, 2003). With this idea, the term open innovation became one of the most common used buzzwords of recent years, with a plethora of research.
Hardly anybody outside a company knows its products and processes better than its suppliers (Bessant, 2003; Petersen et al., 2003; von Hippel, 1995). Research confirms that intensive integration of suppliers in the value creation process positively influences the success of the company, particularly in highly competitive industries (Wingert, 1997). This is a result of the progressing reduction in the depth of value creation of manufacturers and the increasing transfer of know-how towards the suppliers. In multilevel business-to-business relationships, the suppliers often have the best or the only access and comprehensive knowledge about the end users (Groher, 2003).
In this context, theoretical and conceptual papers on supplier integration and challenges on the firm level are welcome. Empirical studies that feature examples and results of supplier integration are encouraged, as well as papers on success factors and risks. Comparative studies that examine similarities and differences between different sectors and countries are also welcome.
1-2 page abstract 1st November 2009
Submission of manuscripts 1st February 2010
Notification to authors 15th March 2010
Final drafts of papers 1st June 2010
Publication Autumn 2010
You are invited to contact the guest editor to discuss the topic of a possible paper in advance: …
However, the concept has been criticized for being too prescriptive and for offering little new to innovation research or practice (Trott and Hartmann, 2009). For instance, the lead-user concept (von Hippel 1988, 2005) became one of the most important trends in innovation management in the last ten years, but is open innovation any more than the lead-user concept (see IJIM Special Issue on User Innovation, 2008, 12(3))?This is a naïve and simplistic comparison of the literatures. Just as open innovation doesn’t subsume all user innovation, user innovation doesn’t subsume all open innovation.
Regular readers of this blog know that I have been working hard to tease out the similarities and differences of these two literatures, including presentations at OUI 2009, UOI 2008 and EURAM 2007. I hope to have a more detailed analysis (from my evolving research paper) to post to this blog later this year.
July 27, 2009
Google, after all, has done an amazing job with its search engine and, thanks to the profits from all the ads it sells, has an enormous war chest to invest in research and development. The company is so keen on innovation that it allows its engineers to spend 20 percent of their working time on projects that aren't necessarily part of their job description. It's that "20 percent time" that helped spawn such projects as Google Suggest, AdSense for Content and Orkut.I realize this is just one commentator’s interpretation of a $20 billion/year company. Still, I find Magid’s final point particularly interesting. Most of the internal innovations are related to search (Orkut is a me-too social networking site that has pockets of success), while the new areas have come from acquisitions.
And what Google can't invent, it can buy. Its Google Voice application, which it acquired when it bought GrandCentral Communications in 2007, is a stellar product, as is YouTube, which Google acquired in 2006.
In other words, to successfully diversify outside its area of expertise, Google has to buy not make those businesses. Google is the most successful high-margin, high R&D, high-growth tech company of our era, just as Microsoft was in the 1990s, Apple and DEC in the 1980s, and IBM in the late 1960s. One way to look at this is if Google doesn’t have the resources to pull off internal diversification, who does?
Another way to look at it is that Google is copying Cisco — diversification through acquisition — because it’s painfully aware of its predecessors’ failures. Yes, IBM created some great businesses through internal R&D, as have Apple and Microsoft (in many cases by hiring key talent from outside). However, the “not invented here” model of internal innovation also brought us such notable flops as the DECmate, DEC Rainbow, IBM PCjr and Apple Newton.
So perhaps we should give Google credit for taking its cash and savvy for buying the best innovations that are available — assuming it spends its money more prudently than the drunken sailors in Washington.
This does come back to a minor academic controversy: is it “open innovation” to buy up innovative companies? It’s open innovation to buy products from such companies, and closed innovation to develop things inhouse. Although others might disagree, I think the integration (or diversification) by acquisition is in the end a form of closed innovation, because it reflects an ongoing desire to control key technologies through administrative hierarchies rather than source them using markets.
July 13, 2009
I got two wrong — one because I couldn’t see the singer, and one because there were two (somewhat obscure) artists closely associated with each other, and I guessed the wrong one. In the latter case, out of 20,000+ respondents, the correct answer had the lowest % of right answers of the entire quiz (65.2%). The quiz allowed people to peek before answering, which may have inflated the correct answer count.
I used to watch Who wants to be a millionaire? and it was remarkable how often (in response to a “lifeline”) the audience was right, particularly on the obscure questions. Still, I was amused when audience either split on a plausible answer or even got it wrong; with a large enough sample, a wrong answer would suggest some sort of systematic bias (e.g. towards a more famous actor or place).
From a strategic standpoint, it suggests to me that there are two types of crowd-sourcing contexts. In one, it’s helpful (or fun) to get the right answer, but it’s not the end of the world if you don’t. In other cases (the $1 million question, diagnosing your child’s infection) mistakes have consequences, and only the right answer will do.
I think the crowd-sourcing literature needs to make more of this distinction. For user innovations, the assumption (probably correctly) is the more the merrier — do a good job of ideation and the firm can sift through the ideas to get the right one. If you’re relying on Wikipedia, IMDB or other user-generated content to be accurate, then you want the correct answer. (Perhaps that’s why WikiDoctor is a cybersquatter rather than a real website).
It seems to me that several a great opportunities for experimental research here. First, if the recipient of the crowd-sourced data wants accuracy, are there ways (e.g. weighting) to design the idea generation or filtering process to improve accuracy?
Secondly, does the nature of the UGC/crowd source request (either implicitly or explicitly) change what the crowd does? For example, if you were surveying nurses, doctors or EMTs, would a simple manipulation (“life threatening” vs. “not life threatening”) change how the contributor approached the contribution process?
June 26, 2009
Karim certainly well known among user innovation researchers, one of two recent PhD graduates (along with Sonali Shah) of Eric von Hippel who’s spreading the UI flame (along with countless German apostles being churned out by the minute). He is very active and gregarious as an academic entrepreneur, whether it be a conference, a book project or merely co-authoring a paper or case study. (Karim and Eric are also on the advisory board of InnoCentive, a Boston-area firm shamelessly trying to commercialize crowdsourcing.)
Karim (like Sonali) is a personal friend, initially because of our overlapping open source interest which was kindled by the 2004 open source conference that Karim helped organize. Karim is also a co-author, on the basis of a paper we wrote last year about the under-studied role of communities as a level of analysis in user innovation and open innovation research.
In fact, at OUI 2009 earlier this month, a presentation by Oliver Alexy of LBS (on UI/OI co-authorship linkages) said that West-Lakhani collaboration made the two of us the only linkage between two major communities of UI/OI researchers. As with another paper Karim wrote with Lars Bo Jeppesen, this makes Karim (and his two collaborators) a boundary spanner, or in social network terms a cut point with high betweenness centrality. (As someone strongly identified with OI, I’m working on another collaboration to increase the personal and citation ties between the UI and OI communities.)
All of this is a long introduction as to why I was pleasantly surprised to see Karim’s name mentioned in the FT piece. To quote it, I thought I’d look it up on Google News, so here’s the quote that it provided:
“Hay una explosión de conocimiento en todo el mundo, y las empresas tienen que incorporarse a las redes para participar del flujo. Los muros que solían separar a las firmas del mundo exterior tienen que ser derribados”, explica Karim Lakhani, un profesor de Harvard que estudia las redes empresariales.I’m guessing that Google didn’t see the real FT article behind its paywall, which is why only the Madrid partnership with FT is available free. Here is what UK (and US) readers of the column by “chief business commentator” John Gapper saw:
“There is an explosion of knowledge around the world, and companies have to embed themselves within networks to participate in the flow. The walls that used to separate the firm from the outside world have to be brought down,” says Karim Lakhani, a Harvard professor who studies corporate networks.In other words, companies like Threadless harvest outside knowledge and others ignore it at their peril. In fact, on the day the FT article appeared, Karim tweeted:
Teaching @threadless case to SVMP http://www.hbs.edu/mba/svmp/in 14 mins - should be funTo be polite, the actual Gapper article was a bit hard to follow. Let me see if I can summarize it in a more coherent form:
Apple has embedded itself in a mammoth value network of third party software suppliers that dramatically increases the utility of its iPhone. Competitors like Google and Palm may be able to match its product capabilities [debatable], but they have yet to match its market size.Since these app store contributors are mostly trying to (directly or indirectly) trying to sell products rather than scratching their own itch, this is more of an OI story than a UI story. Still, many of the principles that motivate firm cooperation with UI are also directly applicable to opening to OI.
If even the proprietary and secretive Apple does this, it proves that firms need to work with other firms to create success. This illustrates the point of Prof. Lakhani that knowledge is widely dispersed and firms need to work with others to harvest the benefits of that knowledge.
June 22, 2009
This year, there were more papers on open innovation (as defined by this blog) and the user innovation researchers seemed more open to open innovation researchers and their participation.
That said, there is still a gap between how Chesbrough used the term “open” and how other researchers on distributed innovation use the term. For the latter, “open” is often a synonym for free, as in the communitarian (or communal) mindset of the Free Software movement. Much of the research on user innovation examines cooperative user production of goods that parallel Free Software.
Since I’ve done a fair amount of research on open standards and open source, I’ve been long aware that the “open” in open innovation is different. In fact, in a 2007 paper in First Monday (based on an earlier conference presentation) contrasting these phenomena, I wrote
A lot of open source and open standards participants wonder what’s “open” about “open innovation.” After all, both of the former have a shared or public goods element to them, whereas a prime goal of open innovation (as defined by Chesbrough, 2003) is that firms have a way to capture a private return. In fact, in West and Gallagher (2006) I argue that the purest forms of open source or free software (such as Project GNU) are specifically not open innovation. …Still, there is a ways to go to bridge the open innovation and user innovation research communities.
Open innovation is not “open” like the other two. If anything, open innovation brings a note of realism to the discussion of open standards and open source, by putting the profit motive front and center. …
Conversely, open standards and open source provide existence proofs for building effective institutions that align and coordinate the interests of potential competitors. For example, the open source license provides a “credible commitment” to make it less likely that commercial interests will under–invest in specific technologies.
At OUI 2009, someone more savvy than I remarked to Eric von Hippel that he did not use the term “open innovation” in his 2005 book Democratizing Innovation, but instead “open and distributed innovation.” If you search the PDF, the phrase appears 3 times and “open innovation” not at all.
I briefly discussed the boundaries of open innovation with Prof. von Hippel at OUI 2009, who said that his use of “open” referred to free information and said the Chesbrough usage was more about “IP markets.” I replied that the “open”-ness of open innovation was as in permeable firm boundaries of “open systems” theory (think Dick Scott and his book dating back to 1981).
When I asked von Hippel about user innovators who charged for their innovations — as in his paper from the Statistics Canada survey — he said that by his definition that was certainly user innovation, but not “open.” As suggested by his 2005 book, von Hippel’s interests today lie in users solving their problems and sharing those solutions, more than the commercialization of user innovation (which in some ways is more consonant with the open innovation paradigm).
For me, this is additional motivation (as if I needed any) to publish my work with Marcel Bogers contrasting user and open innovation. These communities of researchers (and their corresponding phenomena) have important overlaps, even there are important differences (which is why they are separate theories).
June 16, 2009
This year’s presentation reflected my subsequent investigation on the similarities and differences of these three bodies of work, joined by my new co-author Marcel Bogers (now of U. Southern Denmark). I first met Marcel in 2007 when he was a PhD student (under Chris Tucci) at EPFL, where he did his dissertation on user innovation. Marcel organized the excellent AOM workshop last year on open and user innovation, and we are finding that the contrasting perspectives were very helpful in making sense of these overlapping but distinct literatures.
One of the things that we noticed was that the various literatures (and studies of related topics) have varying definitions of “innovation.” We temporarily agreed to defer this question but probably will have to come back and address it more precisely before we are done. The definition of success was a little easier, since user innovation is clearly about the creation of innovations, cumulative innovation is about technological progress, while open innovation is firmly about profit.
All three literatures assumed that knowledge is widely dispersed, but differ in other areas. Cumulative innovation (at least in the Nuvolari and Scotchmer sense) is like open innovation in assuming a profit motive, while much (if not most) of the user innovation literature is about a self-interested utility motive. Conversely, open innovation largely depends on strong IPR while user and cumulative innovation assumes (or argues for) weaker IPR.
One of the ways the literatures differ is on their assumptions about the sources and flows of knowledge (whether that knowledge is disseminated in raw form or encapsulated in products or services). We tried to capture that with this value network diagram below:
Marcel and I do believe these three literature do have a lot in common and perhaps deserve a new term to represent the superset. (At OUI 2009, Nikolaus Franke suggested “distributed innovation” which seems as good as any.) Our thinking right now is at a preliminary stage, but as we flesh this out over the next few months, we hope to have more to share at the end of the summer.
June 5, 2009
Sitting here in Hamburg at my second UOI conference, I’m getting plenty of opportunity to come up to speed on user innovation. Below is my sensemaking of the overall thrust of the UI body of research — in particular, my 5 stage of user innovation — and linking this to papers this week at OUI 2009 on each stage.
1. Creating tools
There is a large body of research on toolkits that enable individuals to create or modify the relevant artifact. (e.g. von Hippel and Katz 2002). But also other types of tools, such as those to manage communities and solicit contributions for crowd sourcing as with Threadless (cf. Ogawa & Piller, 2006).
One of the papers on tools this week was by Johann Füller and colleagues about idea generation/invention in Second Life. Obviously such tools are going to become more common in the field.
2. Finding the right users
Oversimplifying a little, the lead user literature focuses on finding the prototypical users, those who are best able to articulate needs and solutions on behalf of a large population. (Think early adopters of Everett Rogers or Geoff Moore).
A common way to find many users is through communities. These might be formally defined communities offline (e.g. the Harley Owners Group) or online (cf. Jeppesen & Frederiksen 2006). Or they might be a communities informally defined by their embedded social network ties — such as word of mouth, or the streak of weak ties.
In response to this, a provocative paper was that by Jacob Høj Jørgensen, who was trying to find lead users to develop energy efficiency ideas. He contrasted users that participate in communities with users that are not embedded (which he called “hermits”). He used a clever approach to find the latter — bribing (with chocolates) people at a tech support center to save the contact information of particularly knowledgeable people calling for tech support on an energy saving hotline.
3. Getting Participation
Not all users will use tools: they may not have the interest, they may not be able to figure the tools out, they may not consider it worth their time.
One paper by Christina Raasch and colleagues tried to measure the cost/benefit of participation in a user community. Another paper on medical device user innovation — presented by Karine Lamiraud — said that organizations contributing user innovations depends on available resources; there is a nice tie here to the literature on the optimum level of slack to allow producer innovation (Nohria& Gulati 1996).
4. Generating Quality Ideas
Most of the studies seem implicitly assume that ideas generated are good ideas. (Or, perhaps to be more fair, if there are lots of ideas, a certain percentage will be of high quality and high value). Still, I have not seen anyone explicitly study the tradeoffs between the quantity vs. the quality of ideas generated — it seems like an obvious opportunity.
5. Bringing Ideas to Market
Users solve their own problems, and in the classic von Hippel formulation they put these solutions back in the hands of the producer: the producer (if savvy) then incorporates the most general of these innovations available to a broader audience.
Sometimes they are happy just to keep the changes to themselves. Frank Steiner talked briefly this week about how “embedded toolkits” allow users to customize products after they buy them: these user innovations (think iPhone app choices) are highly personalized and dynamics.
More recently, researchers have looked at users getting frustrated about innovations not coming to market, and thus we have the field of user entrepreneurship (cf. Shah & Tripsas, 2007).
Lars Bo Jeppesen, Lars Frederiksen, Why do users contribute to firm-hosted user communities? Organization Science, 2006. DOI: 10.1287/orsc.1050.0156
Nitin Nohria, Ranjay Gulati, Is slack good or bad for innovation? Academy of Management Journal, 1996.
Sonali K. Shah, Mary Tripsas, The accidental entrepreneur: the emergent and collective process of user entrepreneurship, Strategic Entrepreneurship Journal, 2007. DOI: 10.1002/sej.15
Susumu Ogawa, Frank T. Piller, Reducing the risks of new product development, Sloan Management Review, Winter 2006
Eric von Hippel, Ralph Katz, Shifting innovation to users via toolkits, Management Science, 2002.
June 4, 2009
Working with her professor Hans Georg Gemünden, Hoelze argued that there are two key dimensions of firm readiness for open innovation
- Structural: networks, process, instrumens, contracts
- Cultural: incentives, barriers to innovation, actors (either champions or promoters)
She presented a two-dimensional plot that shows how a firms can be classified on these two dimensions. (Here shown as a 2x2 rather than continuous values along each dimension):
I would label it slightly differently:
Either way, this nicely captures my observations about firms and their failure to implement open innovation. Some firms seem driven by the structure; some firms acquire an innovation hotshot (or make a convert) without doing anything else to make it happen. It takes both to sustain a successful open innovation strategy.
June 3, 2009
Nikolaus Franke — host of the first User Innovation Workshop in 2003 — has attended all seven workshops and recalled the list from memory:
- Vienna: Wirtschaftsuniversität Wien (WU)
- Munich: Ludwig-Maximilians-Universität München (LMU)
- Cambridge, Mass.: MIT Sloan
- Munich: Technischen Universität München (TUM)
- Copenhagen: Copenhagen Business School
- Boston: Harvard Business School (the first “User and Open Innovation Workshop”)
- Hamburg: Technischen Universität Hamburg-Harburg (TUHH)
As always, the man most in demand was Eric von Hippel of MIT, the founder (godfather) of the user innovation research movement. It seemed as though during every break he was surrounded by friends and admirers, old and new.
Being in Germany, we had a number of delegations of innovation researchers (mostly Ph.D. students and post-docs) funded under the German system, headed by a chaired professor: Nikolaus Franke of WU, Georg von Krogh of ETH Zürich, Frank Piller of RWTH Aachen and Cornelius Herstatt of host TUHH. Dietmar Harhoff of LMU wasn’t here but some of his team was.
When von Hippel asked for newcomers, about ¼ to 1/3 of the hands went up, with pockets from Aachen, TUHH and TUM in Germany; WU, U.K. Sweden in Europe, and Japan, Korean and NZ from the other side of the world. (There was one newcomer who travelled from the US: Jing Zheng, a mechanical engineer from Washington University in St. Louis).
No full papers yet — most are tomorrow, including my own (more later).
June 2, 2009
The workshop begins Wednesday at 1230 at the University of Hamburg. Sessions Thursday and Friday are at the Technischen Universität Hamburg-Harburg (TUHH), which as its name suggests, is in Harburg near Hamburg.
I’ve posted the complete list of papers to a permanent HTML page, and will be blogging on some of the sessions later this week.
May 26, 2009
The series was sponsored by Henry Chesbrough’s Center for Open Innovation, the Mecca for open innovation research.
I made only one in the fall, and none in the spring due to schedule conflicts. However, videos (and some presentation slides) are available for all of the spring talks and many of the fall talks.
May 22, 2009
The article starts with Brian Ahlborn, president of Transonic Combustion, which is designing more efficient fuel injectors for automobile engines.
Here is a relevant snippet from the article by Charles Mann:
Transonic believes that its products could help drivers get as much as 100 miles per gallon out of otherwise standard internal combustion engines. "If you double gas mileage, that ultimately cuts consumption by about half," Transonic president Brian Ahlborn says. "We're in business to make money, but we're aware of what that kind of dramatic drop could imply." He hopes that in the next few years Transonic fuel injectors will be in millions of vehicles, saving millions of gallons of gas a year.
Not long ago, Ahlborn's dream would have seemed quixotic. Detroit's Big Three automakers have for decades been notoriously hostile to outside innovation; Flash of Genius and Tucker, films that decry the industry's insularity, are both based on true stories. No small US company has grown into a big carmaker in the past 50 years—one of the reasons that the automobile itself hasn't changed more fundamentally during that time. "It's as if the computer industry were still dominated by Wang and Data General and DEC, and they were still selling minicomputers," says Henry Chesbrough, executive director at UC Berkeley's Center for Open Innovation.
April 6, 2009
As with the minor quake a week ago in San Jose, there is an incident report at the US Geological Service. What I find fascinating is that (like San Jose’s 4.3 quake a week ago) there are user-generated damage reports online for the Italian earthquake.
It’s one thing to say that there will be contributions from users in the heart of Silicon Valley and 20 miles from the USGS Western Regional headquarters. But here, thanks to an easy-to-use and well known IT system, there are more than 600 reports from 170 towns a continent away from USGS and its nominal territory of concern.
(This obviously works better in densely populated foreign areas. There are no responses yet for the 7.0 earthquake in the Kuril Islands NE of Japan.)
Still, this appears to offer an example of building a global brand — for one organization to offer a global clearinghouse for compiling UGC, leveraging economies of scale and network effects by offering one-stop shopping.
March 31, 2009
I quickly went to earthquake.usgs.gov to verify the magnitude. But what I hadn’t noticed is that they also have an automated system for gathering and displaying citizen responses. The system gathers location data (by zip or street address) and then walks through a structured questionnaire to classify local intensity from I (not felt) to X (very heavy damage).
This is a great example of user-generated content, in some ways better than Wikipedia. There are less motivations for bias (than, say, editing a post on abortion of George Bush). There are a larger number of reports, quickly, that tend to minimize the effect of error by any one contributor.
Most importantly, unlike Wikipedia, the aggregation of earthquake observations does not require any coordination or personal editing to aggregate the disparate contributions into a coherent whole.
Will we see self-reported epidemiology? Alas, between hypochondria and the litigation lottery mentality in this country, there is a much higher risk of self-serving bias for such reports than for earthquakes.
March 28, 2009
Here are excerpts from the CFP:
The submission deadline is October 1, 2009, with expedited reviews promised by November 15.
Special Issue:Guest Editors: Brendan Galbraith and Rodney McAdam, University of Ulster, Northern Ireland
Managing open innovation in current and emerging intermediaries in the technology transfer process
We welcome a broad range of theoretical and empirical contributions to our understanding of managing open innovation in current and emerging intermediaries in the technology transfer process. Topics may include, but are certainly not limited to:
- The role of HTSFs in open innovation ecosystems and their relationship with other actors such as intermediaries and large firms
- The open innovation processes, facilitators and challenges in science parks and incubators
- Open business models of innovation intermediaries
- Theoretical approaches that integrate open innovation with science parks and incubators
- Management implications of the co-creation of IP for HTSFs, large firms and science parks and incubators
- Network relationships and appropriation regimes of innovation intermediaries
- Typology of the range, diversity and function of innovation intermediaries
- An appraisal of Chesbrough’s (2006) innovation intermediaries and existing intermediaries. Are they more open and effective in terms of speed, cost and reach?
- The application of user methods such as innovation toolkits and the lead user method to new contexts (eg. E-Health, eTourism, e-Energy, e-Government), and the role of an intermediary?
March 10, 2009
However, one of the corner cases we wrestled with was open innovation by acquisition. This classification question was raised in Chapter 4, in the analysis of digital amplifiers written by Jens Frøslev Christensen.
In such cases, the innovation takes place outside the boundaries of the firm. Once acquired, the innovation has become vertically integrated (in a Chandlerian since) within the boundaries of the firm.
One of the big innovation stories in the news this week is a culmination of Roche’s $20b offer to buy the remainder of Genentech. This paragraph from this morning’s WSJ interpreted it as representing a broader trend:
Large pharmaceutical companies are abandoning the notion that they could build new drug pipelines on their own. Instead, Merck & Co., Pfizer Inc., and Roche have each placed huge bets that biotechnology companies are their best path to future sales gains.If a big pharma firm partners to distribute compounds developed by startup biotech companies, that’s clearly open innovation. If they buy their former partner, it seems as though the openness is historical but not ongoing.
It would appear that the open innovation ends once the vertical integration begins. Or, as I’ve sometimes told students, open innovation is defined as “not vertical integration.”
March 6, 2009
The minitrack, entitled “Collaboration Systems for Open Innovation” is hosted by Stefan Hrastinski and Mats Edenius of Uppsala University and Niklas Z. Kviselius of the Stockholm School of Economics.
Here is the summary:
Hitherto, research on IT and open innovation has mainly explored how open innovation practices can stimulate the development of novel technologies. However, little research has studied how information technologies can support open innovation practices. ….The way HICSS works, there are minitracks and track. Each minitrack is 3-10 papers, but the broader tracks have a little more thematic coherence.
In this minitrack, we welcome papers that explore how various collaboration systems can enable and support open innovation in inter-organizational and intra-organizational settings, and in user and consumer networks.
HICSS is an interesting conference; I ran a minitrack there for five years on standards and standardization. The conference is well suited for those with interests in MIS or CS, with all the various tracks and sessions in this area. Plus, of course, it’s in Hawai‘i: people love the environment and always seem to be in a good mood.
February 26, 2009
Organizers ask that participants register by March 30th and upload a one page abstract of their proposed paper by April 19th.
I attended the UOI event for the first time with UOI 2008. (Of course, this was the first “UOI” conference — the 2007 and earlier conferences focused strictly on user innovation). I came back energized and excited — it showed the advantages of the workshop format over the larger conferences.
The organizers of the 2009 event includes Christina Raasch and Cornelius Herstatt who at UOI 2008 presented a slick paper about user innovation in sailboats. Due to size constraints, they don’t expect the conference to be as big as last year (55 papers and 120 participants), so send that application now!
Mea culpa (23 Mar 2010): 2008 was “User and Open Innovation” but 2009 is “Open and User Innovation”. I’ve tried to update the various blog entries appropriately.
February 25, 2009
I have not seen a copy of the book, but the Google version implies there’s an interview with Henry Chesbrough at the end. I know that Henry has been keen to see more open innovation research done in the services area.
February 24, 2009
The notice has less specifics than my earlier discussion of its Armura solution for bulletproof cars for the middle class, but it does have a picture of presentation by the general manager of DuPont Chile.
February 4, 2009
We believe open innovation will fuel the intellectual entrepreneurship and novel collaborations across institutions and geographies needed to develop solutions to some of the world's most critical healthcare challenges and to directly address patient needs in both developed and emerging economies. In turn, these solutions will provide the economic entrepreneurship that will help spur recovery and, when combined with health diplomacy, will ensure that innovation delivers solutions for generations to come.He also made these points in an earlier interview with the WSJ.
I’m not clear what’s different. Big pharma has long used open innovation, particularly sourcing compounds or technologies form universities, and partnering with innovative biotech startups to enter new markets.
A friend in the pharma industry recommends the blog FierceBioResearcher, which appears to tie it all together. In commenting on the WSJ article as well as an earlier posting, blogger John Carroll notes that (to use my terms) big pharma is no longer able to use its R&D to create the separation it needs. Instead, as R&D has become more dispersed and commoditized, the pharma companies are sourcing technology from the cheapest possible locations.
To me, this sounds like the IT offshoring boom 10 years ago. Some of the offshoring failed and the work has come back, but overall, routine software engineering will never be concentrated within 40 miles of Palo Alto the way it once was.