December 18, 2009

Most popular 2009 OI article?

Wiley (owner of Blackwell) has published a list of the most popular articles in their journals in 2009. It’s hard to know what the definition means, since the criteria are not explicit (e.g. it includes articles published before 2009), and no rankings or numerical scores given.

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

OUCI publication #1

As I’d mentioned earlier, I’ve been working on trying to integrate open, user and cumulative innovation (which I refer to as O/U/CI or OUCI).

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

Open innovation and Silicon Valley

As California’s second most famous open innovation scholar — a distant second — I sometimes get emails from people asking about open innovation topics. This week a couple of visitors came from Japan to pick my brain, and we got talking about various open innovation topics, including markets for IP and innovation.

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.