July 30, 2014

Open Innovation at the User Innovation Conference

On Tuesday, Frank Piller of RWTH Aachen presented an overview of open innovation. He presented to attendees at the 2014 Open and User Innovation Conference — the 12th annual meeting of the user innovation workshop — which met at Harvard Business School. A track chair here at OUI, Frank is one of two members of the user innovation “tribe” (the other being Karim Lakhani) who's worked most actively in open innovation.

He noted that the 2006 Chesbrough definition of open innovation (from our 2006 book) as
”the use of purposive inflows and outflows of knowledge to accelerate internal innovation, and expand the markets for external use of innovation, respectively“
He presented statistics and analysis on the market for open innovation intermediaries from RWTH’s 2013 study. He also alluded to the Not Invented Here problem, the subject of a forthcoming paper with David Antons (which was presented earlier on Monday).

But perhaps the most important thing for the largely UI audience was talking about the linkages between OI and UI — both similarities and differences. He summarized Table 2.1 of our chapter in New Frontiers in Open Innovation.

Our contention is that UI and OI have two major differences, First, they study overlapping (but slightly different) phenomena — so many topics at OUI 2014 (e.g. “firms and users”) would apply to both, but some topics apply only to UI (user to user sharing) and some only to OI (markets for innovation).

Second, the focal actor for these studies are different. UI always has users (usually but not always individuals), while OI is about firms (or more recently, organizations).

In talking to a non-OI scholar at dinner Tuesday night, I became convinced the latter is the most fundamental difference between the von Hippel and Chesbrough camps: EVH cares passionately about user welfare, while for the past 11 years HWC has been promulgating a paradigm about helping firms improve their performance.

In many cases, the interests of these two actors aligned, but like any cooperation such alignment is not perfect nor permanent. In other cases, they have conflicting goals, as when UI scholars seek to make user free of oligopolistic producer control (e.g. over IP) or when OI scholar try to help firms maximize the rents they can extract for their IP.

Still, there’s a lot of overlap. I think OI can learn from UI about input from consumers and other individual contributors. In fact, the focus of Piller & West (2014) is about what we call an “interactive coupled” mode of open innovation, with a focus on co-creation that takes place outside any particular firm through collaboration between firms and individuals.

At the same time, OI could potentially inform UI scholars in how firms use these external innovations, with its focus on the success of firms and (presumably) what happens inside the firm. In our JPIM article (published this month), Marcel and I showed how most OI research is about the use of external innovation. However, most such research is on finding (or acquiring) such innovations, not what happens inside the firm to the innovations once they’re acquired.

So the relations between the UI and OI camp are far better than between the US and Russia (either today or a decade ago). Perhaps a better analogy is the US and Europe, or Britain and France: we have a lot in common (particularly for the phenomenon) but our interests are not always perfectly aligned.

References

Frank Piller and Joel West, “Firms, Users, and Innovation: An Interactive Model of Coupled Open Innovation,” in Henry Chesbrough, Wim Vanhaverbeke and Joel West, eds., New Frontiers in Open Innovation, Oxford: Oxford University Press, 2014, pp 29-49.

Joel West and Marcel Bogers, “Leveraging External Sources of Innovation: A Review of Research on Open Innovation,” Journal of Product Innovation Management, 31, 4 (July 2014): 814-831. DOI: 10.1111/jpim.12125

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