January 28, 2013

Please answer Lars' email!

I'm sure many in the user innovation community have received an email from Lars Frederiksen from the Aarhus business school, imploring us to take his survey “about the evolution of the user and open innovation community." The emails promise to share results at the Open and User Innovation conference next July in Brighton.

The most recent email said:
If you have already completed the survey, we thank you for your kind participation and ask you to disregard the email. In case you have not yet filled in the survey, please begin doing so by clicking the link at the end of this email. In order increase the participation rate, following this last reminder, we will initiate telephone interviews starting January 16th. 2013.
I meant to get around to it, but the first two weeks of the semester have been crazy. So imagine my surprise when Thursday I got a phone call from a Danish research assistant asking me to do the survey over the phone. (I was just leaving to pick up my mom, so I wasn’t able to complete the survey).

My surprise was even greater when I did the math and realized 6 p.m. PST is 3 a.m. CET. I always thought of Scandinavia as a worker’s paradise, but I guess they abuse their grad students and other research assistants in ways that would be unimaginable in Germany (or even a unionized U.S. public university). Suitably chastened, I agreed to fill out my survey in a Monday telephone interview. I hope everyone else does their survey, so that Lars, Oliver Alexy and Anne ter Wal will have something to report in six months.

Update Monday 10:30am: I did my interview this morning with Oana Marilena Vuculescu, who said they would very much appreciate it if others would also answer their emails and phone calls to complete the survey.

January 24, 2013

What we know about inbound open innovation

While this blog is intended as a resource for the open innovation community, like any blogger I reserve the right to advertise my own work. In 2012, most of my research was about open innovation. Much of this is still in progress, including three book chapters on OI in IT, and a new conference paper on OI in the life sciences. (Regular readers know I have also been working on co-editing a special issue on open innovation.)

Two papers accepted in 2012 were part of an ongoing collaboration with Marcel Bogers.

The first was published in March in Creativity and Innovation Management (Bogers and West, 2012). It offers a summary of what we know about distributed innovation, specifically open and user innovation, although it also touches on cumulative innovation and related topics. It’s the published version of the paper that Marcel and I presented at the 2009 Open and User Innovation Conference near Hamburg, and is up for a best paper award.

A Review of Research on Open Innovation

Even more exciting is our recently accepted literature review (West and Bogers, 2013) — forthcoming in the Journal of Product Innovation Management that has been posted to SSRN. It’s the largest (or at least most exhaustive) open innovation paper that I’ve ever written.

We looked for open innovation papers in SSCI in the top 25 journals for innovation management from 2003-2010. We identified 287 potential papers, and then we added four other highly-cited publications using Google Scholar. We coded these 291 publications and found 165 were actually about open innovation. We provide the full list of the 165 publications as a JPIM online-only supplement, (for now) in the SSRN paper, and on my website.

As spelled out in Table 3, 118 were about inbound open innovation, 70 about coupled (as defined by Enkel et al 2009) and 50 about outbound OI; obviously some touched on more than one topic. This provides a quantitative measure of what many have suspected for the last 10 years — academics (like practitioners) are more excited about inbound than outbound OI.

From this review, we developed a four phase process model on how firms bring external innovation (inbound or coupled) into the firm. The research is front-end loaded, focusing on obtaining external innovation (searching, enabling, filtering, acquiring). Less work has been done on the later phases: integrating (which is mostly absorptive capacity) and commercializing (e.g. measuring value capture). The fourth phase (interaction) considers the reverse flows that come from collaboration and feedback with external parties.

What was particularly noticeable was the absence of business models and firm-level outcomes from inbound open innovation. On the former, the work of Chesbrough and Rosenbloom demonstrated (before the 2003 book) that firms needed to align their innovations to their business models if they hoped to profit from them. On the latter, if inbound open innovation is about accelerating innovation, then firms should be able to see benefits on the bottom line, even though (we’d all admit) it takes more work to quantify such outcomes.

It was wonderful to see the process model cited at the London conference last June. We hope that the paper provides not only a cite to the body of open innovation — as review articles often do — but also (as with Dahlander & Gann) some insight on how to make sense of these hundreds of articles.

References

Bogers, Marcel and West, Joel, “Managing Distributed Innovation: Strategic Utilization of Open and User Innovation,” Creativity and Innovation Management, 21, 1 (March 2012): 61–75. DOI: 10.1111/j.1467-8691.2011.00622.x

West, Joel and Bogers, Marcel, “Leveraging External Sources of Innovation: A Review of Research on Open Innovation,” forthcoming in the Journal of Product Innovation Management, January 2, 2013, available on SSRN at http://ssrn.com/abstract=2195675

January 20, 2013

Open Innovation and Corporate Entrepreneurship

In June, ESADE is hosting its annual weeklong program on Open Innovation and Corporate Entrepreneurship. The executive education program will take place in Barcelona from June 10-14.

The course will present a range of ideas on how managers in large firms can work with smaller firms and other partners to bring new ideas and new technologies into the firm. It also considers what firms can proactively due to promote internal intrapraneurship and use corporate venture investments to identify and develop new partners.

As in previous years, the program features Henry Chesbrough, the father of open innovation. It also includes Wim Vanhaverbeke (Europe's leading open innovation expert), who like Chesbrough is a part-time faculty member at ESADE. They will be joined by serial entrepreneur Ken Morse of MIT, as well as guest appearances by Richard Huguet and Robert Kirschbaum.

For more information, see the ESADE website.

January 5, 2013

A small victory for user innovation in healthcare

In a 2005 paper (published in 2006), Eric von Hippel and his colleagues showed that the majority of new therapeutic applications approved one year by the FDA were due to user innovation by doctors and other clinicians. This comes through the practice of off-label prescription of existing therapies, which doctors vigorously defend as important both for scientific progress and helping individual patients.

The possibility of abuse has been used by the FDA to justify prosecuting doctors and pharma companies for off-label uses. A famous case is Xyrem, in which the FDA prosecuted a drug salesman, a doctor and the company. As I summarize the full story in my Bio Business blog, the company settled for $20 million, the doctor killed himself in 2011, but the salesman won his case last month on appeal.

At KGI, we often remark on how innovation is different in the heavily regulated field of human therapeutics. Getting FDA approval takes regulatory skills, time and money far beyond what’s required for radio handsets — let alone unregulated software or e-commerce. There’s no college students shipping products from their dorm rooms.

The life sciences map reasonably well onto open innovation. At last summer’s open innovation conference in London, we had two papers about open innovation by drug companies — one by Henry Chesbrough himself, and one by my KGI coworker Steven Casper. Even if these companies use OI, they still bring products to market through the same process of clinical trials, regulatory hoops, and expensive sales channels.

User innovation is another story. As with other user innovation, the off-label innovation is a decentralized, democratized innovation process. Consonant with von Hippel’s “sticky information” thesis, off-label decisions allow those closest to the point of need to find solutions to those needs. However, by their nature doctors (and nurses and patients) don’t have the hundreds of millions needed to go through normal regulatory channels.

Von Hippel and Carliss Baldwin hypothesized a division of labor between users and producers (that was later published in Org Science). Regulatory costs and restrictions clearly can distort this division of labor, favoring those (producers) that have access to capital over those who have scarce knowledge — suggesting an opportunity to modify and update their model.