November 17, 2011

Open innovation returns home

Today was the second day of #MCPC2011, more formally the 6th biennial Conference on Mass Customization, Personalization and Co-Creation.

Normally held in Germany or at MIT, this year marked its first appearance on the West Coast. The conference is being held in Burlingame, next to the San Francisco airport, and is hosted by the Garwood Center for Corporate Innovation of UC Berkeley, just across San Francisco Bay.

The theme of MCPC 2011 is “Bridging Mass Customization and Open Innovation.” Not surprisingly, the director of the Garwood Center is Henry Chesbrough, father of open innovation, who is also co-chairing the conference with conference founder Frank Piller.

The day saw a combination of talks by consultants and industry practitioners about open innovation, co-creation, crowdsourcing and related topics. The end of the day brought a concluding talk by Chesbrough, reviewing both his earlier books and his most recent topic, open services innovation from the book of the same name.

He began with a review of the factors leading to the increased prevalence of open innovation
  • Labor mobility: instead of one employer, the average engineer has 9 employers
  • University research: government used to support most university research. However, “Even Berkeley professors can figure out that if now the money is coming from industry, I need to focus on research questions that industry is willing to fund.“ Stanford, “the second most respected university in California,” has John Hennessy as its president, a serial entrepreneur and current board director.
  • Increasing prevalence of venture capital. “Venture capitalists don’t pay for research; they only pay for development,” so the initial research (for such startup companies) must come from somewhere else.
As noted earlier, Chesbrough thinks services are an important area for open innovation, and not just because services are (by some measures) of greater economic impact that products. Certainly services are no longer an afterthought, as when (in Chesbrough’s days as a disk drive manager) customer support was just a cost center.

Instead, services can add value as part of an ongoing feedback process of service creation and refinement. (The slide he showed was similar to one he showed last year, as captured by Maha Shaikh):

The future is not just services, but a platform that integrates both products and services. As an example, Chesbrough cited semiconductor foundry TSMC, which recently announced its “open innovation platform.”

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