Open Innovation Blog

Open innovation in telecom

2012-01-09T21:04:00.000-08:00

On another website, someone remarked they were working on an article on “open innovation initiatives in the telecom industry.” I said to myself: “Wait a minute, hasn’t someone already done that?”

It’s that a new study isn’t needed, but as a reviewer I would sure expect the author to know this before submitting. Worse case, a research design that doesn’t add to what’s already known could be hard to publish.

Sure enough, I found four papers: two in journals, two in book chapters.

Dittrich, Koen and Geert Duysters. 2007. “Networking as a means to strategy change: The case of open innovation in mobile telephony,” Journal of Product Innovation Management, 24 (6): 510-521. DOI: 10.1111/j.1540-5885.2007.00268.x
López Berzosa, David, Manuel Lorenzo, Carmen de Pablos Heredero and Gonzalo Camarillo, “Practising Open Innovation in the Mobile Industry,” in Carmen de Pablos Heredero and David López, eds., Open Innovation in Firms and Public Administrations: Technologies for Value Creation, Hershey, Penn.: IGI Global, 2012, pages 209-220. DOI: 10.4018/978-1-61350-341-6
Maula, Markku, Thomas Keil and Jukka-Pekka Salmenkaita. 2006. “Open innovation in systemic innovation contexts,” in Henry Chesbrough, Wim Vanhaverbeke, and Joel West, eds., Open Innovation: Researching a New Paradigm. Oxford: Oxford University Press, pp. 241-257. http://www.openinnovation.net/Book/NewParadigm/Chapters/12.pdf
Rohrbeck, René, Katharina Hölzle, Hans Georg Gemünden. 2009. “Opening up for competitive advantage – How Deutsche Telekom creates an open innovation ecosystem,” R&D Management, 39, 4, pages 420–430. DOI: 10.1111/j.1467-9310.2009.00568.x

There may be others, but these are clearly positioned in their titles as being about open innovation in a telecom setting. (OK, so the Maula et al requires you to go to the title page to see that the 3rd author was then a Nokia employee.)

When ideas "have sex", knowledge recombines

2012-01-05T00:42:00.000-08:00

On Wednesday, syndicated reporter/commentator John Stossel offered a provocative essay entitled “Ideas Have Sex, and We're Better for It”:

An idea walks into a bar. She meets another idea. They get together, and nine months later (or maybe it's nine minutes or seconds? It's not clear how it works with ideas), a new idea is born. A baby idea with the best traits of both parents.

When this happens a lot, everyone gets smarter and the world gets better.

Does this man realize how twisted this is? Apparently he has some glimmer:

Did you know that ideas have sex?

It's a weird concept, but the more I think about it, the more right it seems. I learned it from British journalist Matt Ridley.

Ridley, author of The Rational Optimist, says the reason life gets better is that ideas have sex.

“Ideas spread through trade,” he told me. “And when they meet, they can mate, and you can produce combinations of different ideas. I think a good example is a camera pill, which takes a picture of your insides on the way through. It came about (during) a conversation between a gastroenterologist and a guided missile designer ... a process very similar to sex in biology, because through sex, genes meet and recombine, and you get new combinations of genes. That's what causes innovation in biology, and innovation in culture.’

(Sure enough, Ridley himself aired these ideas 18 months ago in a TED talk).

After quoting the original source, Stossel — the anti-government, unabashedly capitalist (but anti “crony capitalism”) libertarian — brings the story back to his ongoing leitmotif:

This didn’t happen because of central planning. It’s the spontaneous market generated from free individuals that sets and keeps it in motion.

However, thinking about this later, the catchphrase “ideas have sex” seems just a provocative metaphor way for standard academic jargon: “knowledge recombination.”

Provocative language aside, the Stossel (Ridley) view is in many ways parallel to that of Eric von Hippel in Democratizing Innovation. Both would advocate policies to promote decentralized invention and individual initiative, with the belief that this would encourage harness widely dispersed creativity and innovativeness. That said, I can see at least two crucial differences.

First, Stossel (being a money-grubbing Austrian-loving capitalist) probably assumes these ideas will be disseminated by new companies, whereas von Hippel is best known for the idea that users solve their own problems without help from companies (even if some of these ideas are later freely revealed to companies). The Stossel view is actually quite consonant with user entrepreneurship — created by two MIT doctoral grads of the user innovation school — although I’m not sure Stossel has heard that term.

The other difference is that von Hippel has a strong preference for weaker intellectual property protection in at least some cases, as in Chapter 8 of Democratizing Innovation. He makes arguments that parallel (and cite) those of Larry Lessig in Free Culture, with both emphasizing the value to society for consumers to have the right to adapt and modify the works of others.

Such a policy would help some companies and hurt others, so it’s not clear how Stossel would come down. Unlike some anti-patent libertarians, Stossel hasn’t taken a strong position either way on IP — other than a strident 20/20 commentary last summer against junk patents and trademarks. Certainly it’s possible to find examples of patent excesses that nearly everyone (even the SCOTUS) would condemn, but others are more controversial.

Still, I see at least one paper here — trying to combine the “ideas have sex” popularization with the “knowledge recombination” scientific literature. This would be a idea recombination that both Stossel and von Hippel should welcome.

What we know about inbound open innovation

2011-12-31T11:19:00.001-08:00

Even by my standards, 2011 was a well-travelled year as I flew to conferences in Pittsburgh, Vienna, Johannesburg, San Antonio, Augsburg and San Francisco. (Trips to San Francisco and Berkeley wouldn’t normally be road trips, except that this summer I moved to a new job at KGI in Southern California.)

In some of these cases, I was talking about solar energy, but most of the talks were about innovation openness. In Johannesburg, San Antonio and my visit to Berkeley’s Open Innovation Speaker Series, I was talking about “strategic openness,” my new work on how firms use selective openness to gain competitive advantage; more on this another time. At Stanford in March, I presented an updated version of the open innovation ecosystem paper I’m working on with David Wood.

However, of greatest interest to readers of this blog is the paper I presented in Pittsburgh (at Industry Studies), Vienna (at OUI 2011) and near San Francisco (at MCPC 2011) summarizing the research Marcel Bogers and I have done on inbound open innovation. (Marcel also presented our paper at Ludwig-Maximilians-Universität in Munich.)

At MCPC, Frank Piller and Henry Chesbrough kindly gave me the opening slot on the research program, so I had a full half hour to talk about what we have learned over the past two years. The talk was very well received — perhaps because people were being polite, or perhaps because (like a business school professor) I roamed the hall to make sure people didn’t fall asleep. However, I’d like to think that it also provided a good overview for the academic (and industry) attendees of what we do and don’t know about open innovation.

The paper reviewed some 280 publications on open innovation published from 2003-2010. We found that researchers seemed to be more interested in how firms find external sources of innovation than what they do with them later (or whether these external innovations actually benefit the firm).

Among the few papers that we found that focused on the bottom line were those by Bruno Cassiman and Dries Fames (who also participated in an OI panel discussion during Academy in San Antonio.) I certainly don’t want to suggest that this is the only worthwhile topic for OI research going forward, if for no other reason than it’s not one where I’m likely to do the empirics. However, it does point to the need for researchers to step back and think about when (or how or if) the recent OI fad is actually helping firms be more successful.

The slides from MCPC are up on SlideShare, and a slightly older version of the paper (what we presented at OUI) is on SSRN. We hope to post a newer version of the paper next year (but not tomorrow).

MCPC photo courtesy Bruce Cook Photography.

CFP: User Innovation in RTM

2011-12-16T21:42:00.001-08:00

The practitioner-oriented journal Research-Technology Management is soliciting articles for a special issue on user innovation.

Here are excerpts from the call for papers:

The focus of this special issue is users who innovate: how they come to innovate, how they share their innovations, how their innovations diffuse, who profits from them, and how increased user innovation is changing the corporate innovation landscape. User innovation is being spurred by the growth of Internet communities, small-scale fabrication labs, and more open paths to market; investment in user innovations may now rival that of corporate innovation.

RTM is looking for articles that explore the evolving landscape of user innovation and its implications for corporate management of innovation. Specifically we’re interested in exploring studies of user innovation, user communities, partnerships between users and corporations, the role of users in corporate innovation, and impediments to user innovation. The ideal submission will provide concrete examples to support theories about user innovation, community innovation, and corporate implications. Manuscripts that combine examples, theory, and recommendations are particularly sought. Successful submissions will offer readers practical information they can put to work immediately.

To be considered for the special issue, articles should be submitted to the Managing Editor via RTM’s Editorial Manager site at www.editorialmanager.com/rtm by March 15, 2012.

The recommended length of articles is 3,500 words.

Open innovation returns home

2011-11-17T23:42:00.000-08:00

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.”

Open innovation: less fakes, more reality

2011-11-11T14:21:00.000-08:00

Given the popularity of open innovation, it was inevitable that companies — and researchers — would seek to wrap themselves in the term to leverage its cachet to legitimate their otherwise unremarkable efforts.

One way that I’ve seen this is through a Google news watch on “open innovation” that lands in my inbox every night around midnight ET (9pm Pacific.) Every day there are 1-5 stories about companies (and increasingly the government) trumpeting their latest “open innovation” breakthrough. I am convinced that half the PR people (or execs sponsoring the underlying initiatives) couldn’t articulate a recognizable definition of open innovation.

In talking about this in conjunction with the creation of the Open Innovation Community, I found that Henry Chesbrough has a similar news watch. I’m concerned that faux open innovation will muddy the waters and confuse the market; also, from a research standpoint, a theory of everything is a theory of nothing. However, Henry is more inclined to give them the benefit of the doubt, perhaps because he is a more optimistic person.

The issue came up earlier this year in a press interview. Orange Silicon Valley (a branch of the French mobile phone company) hired a former WSJ technology writer to prepare a 48-page report on the future of Silicon Valley. This included interviews with 10 Silicon Valley experts, including California’s second most famous open innovation researcher. Here is an excerpt:

Do you think the phrase is being overused?

We don’t have a term for it, but there is an Open Innovation equivalent of “greenwashing.” Greenwashing is where people wrap themselves in claims of environmental-friendliness, but don’t change their actual practices to make their products more marketable.

When I use Google to see how corporations use “Open Innovation,” I’d say only about a third of it is really legitimate; the rest of it is just people want a buzzword to make themselves seem more innovative and more trendy.

In many cases, when they appoint a VP for Open Innovation, there is an attitude change and they really are being more collaborative. At other times, it’s just a new name for something they’ve always done, and they’re just calling it something else.

I was thinking of a particular example three years ago when one of Silicon Valley’s most respected companies renamed their university relations office to be their open innovation office.

However, I was a little more encouraged in looking through the news articles that Google emailed to me in November (thus far) — perhaps more encouraging than when I started the news watch four years ago.

Two sorts of articles have been there consistently throughout. One is for the crowdsourcing companies that are seeking to match firms with external suppliers of ideas — certainly a form of open innovation, but (as I’ve found in my research) tending to be narrowly focused on just the sourcing aspect.

The other common thread are stories that treat “open source” as synonymous with “open innovation.” The two terms are not synonymous: there’s an overlap in some cases but they are disjoint in other cases. This is the sort of misuse of the term I’m trying to discourage.

And yes, I saw a certain amount of greenwashing-type usages, using the buzzword for PR purposes. Alas, some of this is being done by the US government: small high-visibility innovation efforts don’t make a $3.5 trillion/year bureaucracy innovative — any more than banning iPad purchases make it efficient.

Still, what I found in this month’s data was more encouraging than I expected to find. One example was this news item from last week:

XYZ Corporation has announced a new Web portal to support its existing Open Innovation program. The new Web portal will increase the pace of innovation, in targeted areas, by improving XYZ Corporation's ability to leverage outside resources.

At the one level, this is the same as hiring Innocentive or Nine Sigma to find new technologies. On the other hand, the effort of setting up a portal demonstrates a greater level of commitment to OI — and perhaps to act upon these ideas — than a few experiments with outsourced crowdsourcing vendors.

Overall, I think the trend line is encouraging. There’s more real open innovation happening in practice, and perhaps even a higher proportion of it is real.

Apple's contributions to open innovation

2011-10-07T01:59:00.001-07:00

To mark the passing of Steve Jobs, this seems like a good time to review Apple's contribution over its 35-year history to what we now call open innovation.

Since Wednesday’s news of Jobs’ untimely death, various press reports have pointed to Apple’s success under Jobs in creating or transforming multiple industries. Often such coverage points to Apple losing the market share war due to its proprietary Macintosh platform, but the story of its problems during the 1990s was always more complicated than that.

When it comes to open architecture, its record is mixed. Apple has had its proprietary side — particularly recently with its iPhone, which was originally locked to one carrier, banning some applications but not others, and making misleading claims about its reasons for being closed.

However, Apple under Steve Jobs was also a pioneer in open innovation for technology-based industries. There were three ways that Apple set a new standard for how a firm can profit from external sources of innovation — and also how it could enable third party innovators to profit as well.

1. Component Based-Business Models

Apple has always shipped its own proprietary software. The two Steves recognized earlier than any other computer make that the value of the computer comes from the software, not the case or power supply. Apple has always been a system integrator, a crucial approach to open innovation in component-based industries.

Steve Wozniak is recalled as the electronics tinkerer who graduated from the Homebrew Computer Club to a Los Altos garage. However, even marketing guru Steve Jobs was (as he recalled in a 1995 interview) inaugurated to electronics by building electronics gadgets out of standardized components.

The Apple 1, II, ///, Macintosh and other products were made out standardized components, including CPUs from MOS Technology and Motorola. With the rise of global supply chains during the 1990s we take that for granted that this is normal, but it was certainly not normal in the 1960s and 1970s for market leading computer companies like IBM and DEC.

Apple also helped fuel the success of a small software company called Microsoft — which provided the Basic interpreter for the Apple II and its new Word and Excel applications for the Macintosh. And in the 21st century, Apple supported open source by bundling and provided resources for technologies such as CUPS and particularly with WebKit.

2. Standardized Complements

IBM certainly started the software industry with its crucial 1969 decision to unbundle software from hardware, made in the shadow of ongoing antitrust investigation. However, Apple played a comparable role in enabling the 1979 release of the first true software “application.”

The problem was that before the Apple II, nearly all software required some technical skill to install and/or configure. No two mainframe configurations were exactly the same, but with only a few thousand models sold of most mainframes. Even the popular CP/M systems had a wide range of configurations that posed a challenge for user-installed software.

The Apple II offered software developers a standard configuration, a large target market and with it economies of scale. The result was VisiCalc, the first “killer app” that provided a reason to buy a computer.

3. Direct Distribution of Complements

Steve Jobs was gone from Apple from 1985-1997, and during those dark ages many of us despaired that the company would be able to survive. This was also the era when the company had the worst problem with “Not Invented Here.”

When Jobs returned, the most crucial contribution to open innovation in the Jobs II era was the invention of the app store. Yes, the app store was important to the success of Apple’s iPhone franchise. And yes the success of the app store was not just the concept but also executing better than its competitor, while at the same time Google has been more open in its app store approach. Even when competitors had more installed base and more applications, Apple’s approach generated more revenue for more developers than any of its rivals.

Apple revolutionized the distribution of third party software with its app store. Before the app store, software developers had to fight to get distribution of their software on virtual or electronic shelf space. (That’s why my company got out of the software products business in 1993.) The iPhone App Store eliminated this barrier, enabling entry by even the smallest software developer with more than 500,000 applications available to any iPhone owner. (Windows claims millions of applications, but there is no practical way for the average user to identify or acquire the vast majority of these apps.)

Apple also created markets for third-party hardware with its physical retail stores. The various makers of iPod (and later iPhone) doodads — such as cases and external speakers — would not have enjoyed the sales they did if these complementary products were not internationally distributed alongside the core product.

Conclusions

Apple certainly gained success through partly-open, high margin strategies. No one was more intent on value capture than Steve Jobs, and there were many things the company did to justify its proprietary reputation.

However, the success of Apple also paved the way for the success of many other innovators, setting the pattern for the rest of the IT industry in its integration of hardware and software components, by creating standardized markets for complements and then accelerating the distribution of those complements.

Open innovation, entrepreneurs and resources

2011-09-29T22:31:00.000-07:00

Cross posted from the Engineering Entrepreneurship blog.

We had our first entrepreneur of the academic year speak today at KGI in Claremont. Eric McAfee is a chronic serial tech entrepreneur, having started two biofuels company, a solar company and a software company (among others).

I’ve met a lot of tech entrepreneurs and heard a few Silicon Valley entrepreneurs speak. Even so, I felt he made an important point about leverage and open innovation for startup companies.

For McAfee, the distinction between an entrepreneur and a manager is that an entrepreneur is someone “who allocates resources that they do not currently control,” while the manager allocates resources they control.

To me, this is the flip side of the oft-quoted Teece 1986 formulation. Teece focused on what entrepreneurs should do if they can’t control resources. McAfee’s point is that entrepreneurs often shouldn’t even try — that it’s usually better to buy or license the missing piece of the puzzle.

He explained two examples from his current biofuels company, Cupertino-based Aemetis. First, to get key bioprocessing technology he bought another company — U. Maryland spinoff Zymetis — rather than develop the technology in-house.

His reasons were completely in consonance with the open innovation paradigm. From a technology standpoint, “most companies are stuck with the not-invented syndrome,” McAfee said. “We’ve got to be the best technology company which sometimes means we have to buy other companies or license technology.”

The other approach is that they’re taking that technology and using it to improve the cost-effectiveness of existing ethanol plants — which are often stuck in a commodity business. So instead of buying and owning those plants, Aemetis partners with the existing owners and shares in the proceeds.

So if in Teece’s world of 25 years ago, the goal was to control as many resources as possible and make do when you cannot, in McAfee’s world, the goal is to control the resources that are important and partner for the rest. I think there are clearly cases when the latter approach is superior — particularly in a fast-moving industry where capital is scarce and the window of opportunity may close.

New opportunities in technology transfer research

2011-09-22T08:17:00.000-07:00

At the annual T2S (Technology Transfer Society) conference, a major emphasis has been the use of university science by existing or startup firms. Firms using university technology fits into the category of “innovation explorer” or “innovation benefactor” identified by Chesbrough (2003) and later mentioned by West, Vanhaverbeke and Chesbrough (2006).

Papers on university innovation were numerous among the 29 paper sessions at this week’s T2S conference in Augsburg, Germany. Among the keynote speakers, Mike Wright — recently appointed to Imperial College London — made academic entrepreneurs the subject of his keynote address.

A lot of the research has been conducted on US universities using the annual licensing survey by AUTM, the Association of University Technology Managers. In a session where I presented my own work (on solar energy), there were two new perspectives on this issue.

One was an (in progress) two-year study of European universities and research institutes presented by Franz Barjak of Fachhochschule Nordwestschweiz (FHNW) in Switzerland. The study was funded by the European Commission to follow up on its recommended principles for knowledge transfer (European Commission, 2008), and looked at the EU and other adjoining regions.

An early survey noted that the most systematic knowledge transfer policies were in the largest (UK, Germany, France, Spain) and Nordic countries — but that Switzerland and Israel had effective informal policies. In a second phase, a comparison to the AUTM licensing survey showed significant differences between Europe and the US — and also between European universities and other research institutes. More information on the study can be found at www.knowledge-transfer-study.eu.

An even more novel study was the one by Mary Beth Hughes of the Science and Technology Policy Institute, examining the 1000+ Federal Research Laboratories back in the US. Among other findings, the study found major variance in how revenue is split with researchers (15-40%), the resources devoted to tech transfer, and the ease of which industry can learn about the labs’ research.

A few labs had best practices — using SBIR grants, allowing employees to take entrepreneurial leave, bringing in an entrepreneur in residence — although the benefits of these practices are not proven. The fact that there is no integrated Federal site to identify lab technologies — or standardized reporting to monitor tech transfer efforts — suggests that (IMHO) Congress hasn’t been all that serious about its nominal transfer goals.

The full study is on the STPI website. Hughes encouraged researchers to study tech transfer in the research labs, both by using their data and by working through the 700 members of the Federal Laboratory Consortium for Technology Transfer.

References

Chesbrough, Henry. 2003. “The era of open innovation,” MIT Sloan Management Review, 44 (3), pp. 35-41.

European Commission. 2008. “Commission Recommendation on the management of intellectual property in knowledge transfer activities and code of Practice for universities and other public research organisations,” Directorate-General for Research, DOI: 10.2777/13162.

West, Joel, Wim Vanhaverbeke and Henry Chesbrough. 2006. “Open innovation: A research agenda,” In Henry Chesbrough, Wim Vanhaverbeke and Joel West (Eds.), Open Innovation: Researching a New Paradigm, Oxford: Oxford University Press, pp. 285-307.

The Open Innovation (Web 2.0) Community

2011-09-06T00:01:00.000-07:00

When Henry Chesbrough and I relaunched OpenInnovation.net last year as the Open Innovation Community, one of our major goals was to create a community by which open innovation scholars could meet to discuss important issues. (Here I confine my focus to the role of the OIC for an academic audience, which we see as distinct from the industry audience that the revamped website now serves).

To reach a broader academic audience, one obvious approach was to work with our former co-author, Wim Vanhaverbeke, to leverage the Exonovate network of scholars that he has built in Europe. (This was even more obvious because Wim and Hank are part-time faculty at ESADE in Barcelona, where they have been organizing OI classes for industry and PhD students.)

However, Henry and I also decided to form an academic advisory board and — to overcome the bias of our being in the same country and state — get a broader geographic representation. We approached three promising young open innovation scholars. (Young in this case being a relative term).

We were pleased when all three of our first choices agreed to serve: Oliver Alexy (Imperial College London), Sabine Brunswicker (Fraunhofer IAO) and Alberto Di Minin (Scuola Superiore Sant'Anna). Not surprisingly, all have been (or will be) speakers at Henry’s open innovation speaker series at UC Berkeley.

Oliver has been quietly adding information about teaching cases to the OIC teaching section. He also plans to add syllabi, teaching modules and other material that would be useful to faculty teaching classes about (or including) open innovation topics.

Alberto has launched a Facebook page that is the first official OIC presence away from the OIC website. The page can be found at http://on.fb.me/OIcommunity. We are also discussing possibly creating communities on other popular sites, such as LinkedIn or Xing.

Sabine is planning for discussions on the OIC website itself. Our goal would be to develop conversations on the website about any content that’s on the site. We also plan to link these discussions with Henry’s Twitter feed and this blog.

As with the rest of the web, there is a fine balancing act between encouraging conversations and attracting spam. I know from my own blogs that attempts to post overt spam (links to promote commercial transactions) are quite common. But I also know from the 1.0 website, email discussions and of course conference presentation that academics are often tempted by free opportunities for blatant self-promotion. (“The best OI paper ever published is … mine!”).

So the advisory board will be having discussions about the best way to encourage healthy conversations about ideas and opportunities — whether for research or teaching — that are relevant to open innovation scholars. Please feel free to contact any of us with your ideas or suggestions.

Fall OI speakers at UC Berkeley

2011-08-22T13:47:00.000-07:00

The Program in Open Innovation has replaced the Center for Open Innovation at UC Berkeley. It’s still headed by Henry Chesbrough (with Solomon Darwin holding the reins during his globetrotting) at the same location with the same website, but apparently it’s now bigger and better than ever.

The fall speaker series starts next week. The sessions will be held at the Haas School of Business on Mondays 2-4 p.m. with two speakers per session. As always, visitors are welcome — I know I’ve met some interesting people at these sessions.

With my move to Southern California, this may be the first time I’ve been unable to make it, but I look forward to the YouTube videos. Note: updated with last-minute substitution of October 10 speaker.

Date	Speakers	Topic
Aug. 29	Henry Chesbrough Director of the Program in Open Innovation, Haas School of Business, University of California, Berkeley
Aug. 29	John Wilbanks Vice President, Science, Creative Commons	Role of IP
Sept. 12	Ron Resnick President and Chairman, Intel, Mobile Wireless Group	Open Innovation in International Mobile Telecommunications
Sept. 12	Oliver Alexy Research Fellow, Imperial College, London	Open Innovation Intermediaries
Sept. 19	Jim Spohrer Director of Services Research, IBM	Role of Universities
Sept. 19	Esteve Almirall Professor, ESADE, Barcelona, Spain	Open Cities
Sept. 26	Howard Atkins (formerly) Chief Financial Officer, Wells Fargo Bank	Innovation in Financial Services
Sept. 26	John Pramod VP of Strategy and Innovation, McKesson	Open Innovation Strategy Challenges at McKesson
Oct. 3	Kal Patel (formerly) President of Asia, Best Buy	Open Innovation in Retail Businesses
Oct. 3	Aneesh Chopra Chief Technology Officer, Office of Science and Technology Policy, the White House	Open Government
Oct. 10	Deepu Rathi Director of Business Development, Cisco	Product Innovation
Oct. 10	Joel West Professor, KGI - Keck Graduate Institute ~~Solomon Darwin~~ ~~Associate Director, Program in Open Innovation,~~ ~~Haas School of Business, University of California, Berkeley~~	Strategic Openness

Another year of even more OI research

2011-08-16T18:39:00.000-07:00

At #AOM2011 on Monday, I was reminded that the first OI session at Academy was the 2004 PDW that Hank Chesbrough and Wim Vanhaverbeke organized in New Orleans. Within 48 hours, I had expressions of interest for the academic book (both by authors and publishers) that the three of us then published with Oxford in 2006, with chapters that were also excerpted in the 2005 Showcase Symposium that I organized and chaired in Honolulu.

This week in San Antonio, I attended 2½ OI sessions (late to one) as well as a crowdsourcing session and some other sessions in innovation and entrepreneurship.

The first of those sessions — and the only panel discussion — was held Monday morning at 8am (6am PDT, ugh). Organized by Dries Faems and Alberto Di Minin, it was (appropriately enough) entitled “Organizing Open Innovation: Combining Value Creation and Value Appropriation.” Repeating from the initial 2004 OI session were Wim and I (Chesbrough is overseas) as well as two all-Italian teams.

It’s difficult to synthesize a 90 minute session in a blog entry — although discussant Juan Alcacer of HBS did a great job. But if anything held the papers together, it was this focus on value creation vs. (or with) value capture.

Brusoni & Prencipe

The dynamic duo of Italian innovation research, Andrea Prencipe and Stefano Brusoni, presented their conceptual paper about innovation coupling that attempts to answer the question: when is it best to be open and when is it best to be closed. The closed story is fortunately similar to those we’ve seen in proprietary platform research for years: firms promulgate proprietary platforms early in a technological regime when their end to end coordination is highly valued. (Prencipe/Brusoni call this “responsive”).

The fundamental concept behind the paper was that we need to consider how firms couple their organizational units — both the strength and the linkage of the units. Their propositions about the optimal coupling depended on the environmental ambiguity, complexity and uncertainty. (Alcacer quite reasonably asked: what about firm-specific factors that influence the decision, or external factors such as appropriability or munificence.)

Beyond the when closed (or open) idea is the unexpected corner of the 2x2: when firms have to be both closed and open. While Chesbrough (in the Chesbrough funnel) talks about combining open and closed strategy, I don’t recall anyone ever making a case that firms need a special competence in being able to shift between the two. (Both Alcacer and I felt the construct was reminiscent of the Tushman-O’Reilly concept of an ambidextrous organization.)

Cassiman & Valentini

The two middle papers were empirical ones. Bruno Cassiman and Giovanni Valentini did a large-N study following up on the Cassiman and Veuglers (2006) Belgian CIS study. After selecting only firms that are innovation active, they they compared the innovation performance of firms that bought innovation (inbound OI), sold innovation (outbound OI), both or neither.

Following directly from Chesbrough (2007), the prediction would be the firms that do both would be the most successful: reducing their costs and incrementally increasing their revenues.

Alas, that’s not what happened — according to their econometrics thus far. With various controls and outcome measures — most about new products divided by some control — the buy/sell were consistently the worst. In at least one formulation, the buy-only and sell-only cases were twice as efficient as the other two cases.

We all scratched our heads over this one. As Cassiman noted, there is a theoretical (and well understood) complementarity of make vs. buy, but perhaps not of sell vs. buy. Some people wondered whether it’s a short-term effect: that over time such firms will be more successful.

Or it could be another manifestation of the finding of Dries Faems and colleagues (2010) that OI can raise costs more than revenues. Certainly the presumption of rationality does mean we expect firms to accurately estimate a priori the returns from a hybrid strategy, particularly early in a new bandwagon like OI.

As I sat there, I worried strongly about the endogeneity of the buy/sell decision — not from a methodological standpoint, but a theoretical one. (Easy for me to say, since I don’t try to do carefully controlled large-N econometric studies). Like other small countries, almost all the local companies are SMEs. We know that there is great variation among SMEs — some really good companies and some really struggling ones. Without having a better sense of why firms are pursuing (this unusual) strategy, I’d be cautious about trying to interpret the finding.

Vanhaverbeke

Next up was Wim Vanhaverbeke of Hasselt, Leuven Gent and Esade. (He’s holding more permanent faculty positions simultaneously than most people hold in their career.)

Wim has gone from a big firm SMJ-kinda guy to focusing on OI in SMEs. Of course, the first paper on this subject was van de Vrande, de Jong, Vanhaverbeke and de Rochemont (2009).

He gave us a taste of his in-depth study of OI in 10 small and young(ish) companies — but only a taste as he tried to cram a 45 minute talk into 15 minutes. His paper also keyed of Chesbrough (2007), in this case on the centrality of the business model.

He claimed his study was of low-tech OI but several of the examples were very high-tech approaches in low-tech industries. Exhibit A was Quilts of Denmark, using rocket science to make a better quilt. QOD collaborated with Outlast to leverage NASA-licensed material to make Temprakon, a quilt that was warmer for cold bodies and cooler for warm bodies.

Three of the most interesting observations were confirming observations about SME strategy and showing their direct application to OI SME strategy. First, OI collaboration between firms depends on strong individual-level ties. Second, cooperation is easiest between two companies of the same size — i.e. the small firms have trouble working with larger firms.

Finally, the OI-practicing SMEs don’t have some grand a priori strategy, but instead are pursuing a discovery-driven growth strategy (cf. McGrath & MacMillan, 1995).

West

Finally, academia’s most beloved open innovation blogger presented his own work tying together open innovation with open standards and open source, among other topics. This week’s paper — on a concept I call “strategic openness” — is a much more theoretical piece than the earlier West 2007)

The central motivation of the paper was the analysis of Simcoe (2006) on the inherent OI tradeoffs of value creation vs. value capture: not just that they are traded off, but that firms care about the product of the two, i.e. the total profit. Related arguments were made by West 2003 (in control vs. adoption) and West & O’Mahony 2008 (control vs. collaboration).

I got some very useful feedback at the session. I’ll be blogging more about this paper in a future article.

Alcacer

I had read Juan Alcacer but never met him. Far from being an open innovation advocate, he nonetheless was a great discussant — and not just because he liked my paper or that we both joked about Google’s announcement that morning of the Motorola purchase.

He saw all of the papers saying something about fundamental principles of open innovation — particularly the Cassiman presentation, which was testing a central tenet of OI. I was linking OI to strategy and competition, while Prencipe was examining the antecedents of OI. Wim has wonderfully rich and multi-dimensional data about how open innovation works in small companies.

Conclusions

This was a great session. The value was not just the people in the front of the room, but the great group of people in the room — all the top OI minds in Texas this week.

It was enough for me to tell my wife that it’s worth coming back to AOM next year — despite their price gouging strategy. (Alas, the rest of the conference was downhill from there).

References

Cassiman, Bruno and Reinhilde Veugelers. 2006. “In Search of Complementarity in Innovation Strategy: Internal R&D and External Knowledge Acquisition,” Management Science, 52 (1): 68-82. DOI: 10.1287/mnsc.1050.0470

Chesbrough, Henry. 2007. “Why companies should have open business models,” MIT Sloan Management Review, 48 (2): 22-28.

Faems, Dries, Matthias de Visser; Petra Andries, and Bart van Looy. 2010. “Technology alliance portfolios and financial performance: Value-enhancing and cost-increasing effects of open innovation,” Journal of Product Innovation Management, 27 (6): 785-796. DOI: 10.1111/j.1540-5885.2010.00752.x

McGrath, Rita Gunther and Ian C. MacMillan. 1995. “Discovery-Driven Planning,” Harvard Business Review, July-August, pp. 44-54.

Simcoe, Tim. 2006. “Open Standards and Intellectual Property Rights,” in Henry Chesbrough, Wim Vanhaverbeke, and Joel West, eds., Open Innovation: Researching a New Paradigm. Oxford: Oxford University Press, pp. 161-183.

van de Vrande, Vareska, Jeroen P.J. de Jong, Wim Vanhaverbeke, Maurice de Rochemont. 2009. “Open innovation in SMEs: Trends, motives and management challenges,” Technovation, 29 (6-7): 423-437. DOI: 10.1016/j.technovation.2008.10.001

West, Joel. 2003. “How Open is Open Enough? Melding Proprietary and Open Source Platform Strategies,” Research Policy, 32 (7): 1259-1285. DOI: 10.1016/S0048-7333(03)00052-0

West, Joel and Siobhán O’Mahony. 2008. “The Role of Participation Architecture in Growing Sponsored Open Source Communities,” Industry and Innovation, 15 (2): 145–168. DOI: 10.1080/13662710801970142

Developing country developing open source

2011-08-02T23:55:00.000-07:00

Over the weekend, I flew to Johannesburg, South Africa for a conference on open source software hosted by the School of Business and Economic Sciences at the University of the Witwatersrand (WITS). I was invited to give the opening keynote, and spoke about my current study integrating prior work on open IT strategies. (More on that later).

The conference featured both local and international speakers; the former were a mixture of faculty, few graduate students and one practitioner.

One interesting panel had an argument (between two friends) over conflicting IP goals of South African government policy. IT consultant Derek Keats complained that a 2008 Intellectual Property Rights from Publicly Financed Research and Development Act (a more centralized twist on Bayh-Dole) would make it difficult or impossible for SA academic researchers to give away IP to open source projects.

Meanwhile, Prof. Robert Vivian argued that a government mandated preference for OSS was arrived at via unconstitutional means. (I noted my conclusion based on a decade of OSS research: the best procurement policy is to mandate a fair price comparison between OSS and proprietary software — one that tends to allow buyers to use the threat of switching to reduce lock-in rents but avoid the disruption of actually switching.)

Among the international speakers, Sebastian von Engelhardt of Friedrich-Schiller-University talked about his 2009 survey of 6,000 German software developers and IT consultants. He worried that those that used OSS might have a harder time getting capital or growing than those that developed proprietary software, but generally found the two types were similar except that the OSS firms tended to be smaller and younger.

Not all the papers were about open source software. Alessandro Rossi of University of Trento summarized a series of papers on how Wikipedia activity changes after an article is tagged as having a major problem. For example, if a WikiSimple article is tagged as having readability problems, the readability quickly goes up — but the rate of other changes goes down.

Marcel Bogers (@bogers) summarized antecedents to open innovation in prior research such as evolutionary economics, transaction cost economics, social network theory and the resource-based view. My personal favorite was a paper by Maradona Gatara on mobile crowdsourcing in Kenya.

The workshop closed with the big gun — economist Richard Langlois of U. Conn. Summarizing a forthcoming book chapter, he noted the dramatic parallels between early radio and early PCs: assembly was cheap while the components were valuable, hobbyists played an important role, the business quickly shifted to the importance of software.

The main difference is that during World War I, the US nationalized radio patents to facilitate ship-to-shore communication, and then spun them off after the war to create the Radio Corporation of America.

Disputing The Electronic Century by the late Alfred Chandler, Langlois concluded that the large RCA R&D labs were not a spur to innovation but a drag on innovation — because RCA wasted its resources trying to find new areas rather than improve existing technologies. Vertical integration and control by RCA (and Columbia) prevented the sort of modular innovation that became commonplace in the PC industry.

This was the first of what (funding permitting) may become an annual conference. Meanwhile, the local representative of Nine Sigma was handing out flyers promoting the “4th SA Innovation Summit” on 30 August. The summit is dedicated to “change, revolution, transformation, metamorphosis, breakthrough” and proudly proclaims that “we are anti-red tape.”

Auf wiedersehen

2011-07-07T02:23:00.000-07:00

#oui11 — the Open and User Innovation 2011 — conference has been over for almost 24 hours, and the participants have scattered to the wind.

Actually, they have mostly returned to Austria, Germany, Switzerland or Scandinavia. My previous estimate of a dozen US-based participants appears to have been high, the number of Asians and Brits was half that; otherwise, there appear to have been misc. Europeans, two students from Mozambique and one Canadian. (Fred Gault of Canada doesn’t count in the latter category, because he’s clearly gone native.)

The emotional highlight of the half-week was the “Gala” dinner Tuesday — at a rather famous Vienna conference center — that turned into a celebrity roast for Eric von Hippel. I was going to offer an entire post on the roast — and the planned book honoring Eric’s 70th birthday next month — but I didn’t bring my laptop to take notes and my cellphone pictures didn’t turn out. A few notes from the roast:

EVH is a fifth generation college professor. (I knew about his dad Arthur from my study of MIT’s impact on the San Diego telecom industry, but not the earlier generations.)
Before he launched a revolution against IP, EVH was granted four US patents and the rights to extract proprietary rents from them: #3533249, 3541579, 3578909 and 3640482.
Since his 1986 article, he’s garnered more than 10,000 citations for his books and articles.
As best I can tell, his four most recent PhD students were present: Stefan Thomke (Harvard), Dietmar Harhoff (Munich), Sonali Shaw (Washington) and Karim Lakhani (Harvard). Also, one of his current PhD students, Benjamin Mako Hill, was enjoying not having to run the conference (as with last year).

I’ll post more info on the book once the details are finalized.

Overall, the conference is bigger, and with it the frustration of having to choose between conflicting tracks is getting stronger. However, the conference is still relatively intimate and manageable in size — at least when held in Europe and all the Americans stay home — and the quality of the ideas remains good.

The WU Wien’s innovations of thematic overviews and roundtable papers were good ones. I spotted two areas for improvement. Timekeeping (and timekeeping norms) in the sessions and roundtables could have been more predictable. <self-interested-plug>Also, of the eight themes of the track, only one (open innovation) was not represented: open innovation.</self-interested-plug>

Many of the participants will be reuniting in San Antonio next month, for that large impersonal (and now overpriced) gathering that the Academy has become famous for. (This year, an added bonus is August in one of the hottest parts of the country).

Otherwise, we will be reuniting next year on the other side of the pond, with a lot more Americans and a few less European Ph.D. students. The conference is scheduled to be held at MIT and Harvard July 31-Aug 2, in anticipation of the the Academy plague descending on the city a few days later.

As user innovation continues to grow in popularity — and perhaps as open innovation (as defined here) continues to be accepted at the OUI conference — it seems certain that OUI 2012 will be the biggest ever, posing challenges as to how to maintain the intimate feeling. But it will still be smaller than DRUID, let alone more than 7000 people expected for next month’s Academy.

I hope to be blogging additional topics on OUI 2011 over the next week or two.

OUI: Return to Vienna

2011-07-04T04:16:00.000-07:00

The #oui11 Open and User Innovation conference began this morning at WU Wien. This is the 9th iteration of a conference that began here in 2003, and has alternated between the US and Europe ever since.

Nik Franke of WU talked about the ad hoc way that the first workshop got organized, when Eric von Hippel suggested that WU host it.. It was 25 participants then and 200 today. Franke showed a series of photos: a small classroom, overhead transparencies, perhaps some drinking. Even then it was mostly Germans: from among the photos, I recognized von Hippel, Franke, Frank Piller, and Christoph Hienerth.

The slides also showed some of the papers from the first conference that became journal papers. One I didn’t realize was at the first conferences was Sonali Shah’s seminal 2006 Management Science paper, one that introduced the idea of gated source to the academic literature.

Co-host Christopher Lettl noted the two main innovations in the format this year. One is the creation of roundtable (interactive) paper sessions. The other is the addition of invited keynotes: von Hippel and Carliss Baldwin this morning, more tomorrow and Wednesday. (All the major themes have a keynote, except for Chesbrough-style open innovation.)

Lettl also showed the stoplight alarm for minitalks that exceed their time limit, a formalization of last year’s flashlight by Mako at MIT. Unfortunately, the alarm got used (and ignored) far too often today.

The location and the path-dependence explain in part the high incidence of Germans here. Even more than in Cambridge last year, the hallway conversations are (natürlich) in German.

This is my 4th consecutive year at what (in 2008) was called the User and Open Innovation conference (and was the User Innovation workshop before that.)

In terms of trends in topics, business ecosystems are growing and communities remain strong. Policy and government implications seem to be growing. It seems like there is much less open source than previous years: only two papers (a third was cancelled when fellow Tweteer Maha Shaikh was unable to make it).

Open innovation (in the Chesbrough, not the von Hippel sense) remains small but significant — with one paper and three interactive sessions. It’s hard to tell, because in the three “open innovation” roundtable sessions, some of the title buzzwords (“lead user,” “online user communities”) don’t suggest an OI focus.

One thing that is certainly missing is any acknowledgement of July 4th. We dozen or so Americans here have remarked on it among ourselves, but apparently the Germans and Austrians don’t think noteworthy. There’s a good chance we’ll get würst and beer tonight, so other than being 9 hours ahead (and the only one wearing red, white and blue) the occasion will be suitably observed.

Update 9pm CET: My prediction was slightly off: no würst, no fireworks, but plenty of beer.

CFP: Participatory Innovation in a land down under

2011-06-30T00:01:00.000-07:00

The inaugural Participatory Innovation Conference was held January 2011 at the University of Southern Denmark (SDU) in Sønderborg, hosted by the SDU strategic research center SPIRE. A write-up of the first conference was published in early June at InnovationManagement.se.

What is “participatory innovation”? In their article, Henry Larsen and Marcel Bogers wrote:

Participatory innovation focuses on involving users as co-designers in processes of innovation. It draws on knowledge in a wide range of disciplines, such as participatory design, design anthropology, conversational analysis, innovation management, and organization theory. While it also relates to the theories and practices of user-driven innovation – as exemplified by the work of Eric von Hippel – and open innovation – as proposed by Henry Chesbrough – it distinguishes itself by its focus on innovation as being socially shaped.

As with any new conference, there was learning by doing: the first conference was held in Denmark in the winter, but the second one will be held in January 2012 in Melbourne, where it will be summer.

Here is the call for papers from the PIN-C 2012 conference website, written in some strange dialect that passes for English down under:

Participatory Innovation Conference 2012

Swinburne University Faculty of Design in collaboration with SPIRE, University of Southern Denmark is proud to host the Participatory Innovation Conference 2012.

This is a forum where participants from different disciplines and organisations can meet and challenge each other to develop the field of participatory innovation.

It will be held in Melbourne Australia from 12-14 January 2012.

The conference presents an exciting programme of five tracks: Indigenous Knowledge and Cultural Innovation; Evolving Design Anthropology; Making Design and Analysing Interaction; Organising Participatory Innovation; and Designing Innovative Business Models.
…
Abstracts and intents to participate: 5 August 2011
Notice of Acceptance: 5 September 2011
Full papers: 14 October 2011
Final submissions: 18 November 2011

As with the 1st conference, the intention is to have a multi-disciplinary approach, with research from design, innovation management and business. The organisers also hope to maintain the interactions between speakers and the audience — as well as academics and practitioners — that characterised the first conference.

Oui! We're coming to Vienna

2011-06-29T03:00:00.000-07:00

The opening of #OUI2011 is less than a week away. The 9th International Open and User Innovation Workshop is sponsored by the Institute for Entrepreneurship and Innovation at WU (Wirtschaftsuniversität Wien).

The first social event will be Sunday evening, and the program runs from Monday morning until lunchtime Wednesday. Seven keynote (plenary) talks are planned:

Eric von Hippel – User Innovation: The Big Picture
Carliss Baldwin – Open and User Innovation in Business Ecosystems
Dietmar Harhoff – User Communities
Karim Lakhani – Crowdsourcing
Christian Lüthje – Lead User Research
Sonali Shah – User Entrepreneurship
Nikolaus Franke – Toolkits for User Innovation and Design

I will be chairing the roundtable (interactive paper) session on open innovation Monday afternoon, and presenting a paper co-authored with Marcel Bogers in the open innovation paper session Wednesday morning.

It will be odd spending 4th of July in a foreign country (only the 2nd time I’ve ever done so), but I’m looking forward to seeing all my colleagues. Hopefully I’ll be over my jet lag and adjusted to Central European Time by then.

OI, crowdsourcing and Industry Studies

2011-06-03T19:31:00.001-07:00

At #IndustryStudies2011, Natalia Levina of NYU and I hosted a session Thursday entitled “Open Innovation and Crowdsourcing.” My talk was the open innovation, while the others provided empirical data about crowdsourcing.

I gave the Industry Studies Conference audience the Chesbrough (2006) and other definitions of open innovation, while (thanks to Natalia) I used the Howe (2006) definition of crowdsourcing. After summarizing an in-progress paper co-authored with Marcel Bogers, I transitioned to crowdsourcing by summarizing the archetypes Natalia presented last year at AOM.

Jan Marco Leimeister presented his study of crowd-sourced innovations in SAPiens. He presented his study of various instruments for evaluating the quality of crowdsourced ideas, ruling out the simplest approaches (thumbs up) and most complex approaches, in favor of a typology based on the work of Teresa Amabile. (His findings were immediately adopted by SAP).

Next up, Nikolay Archak of NYU talked about his life with TopCoder — first as a top coder, and now as a Ph.D. student studying the website and its contests. Although I’ve heard Nikolay talk about TopCoder before, one thing I didn’t know was that the site originally started as an online community — with the contests as a way to evaluate community members — and it was only later that firms began to use it to produce real software.

Finally, Natalia summarized her own work on what she terms “open innovation intermediaries,” and specifically her study of InnoCentive with various co-authors (including Anne-Laure Fayard and Karim Lakhani). After noting a theoretical debt to the work of Andrew Hargadon and his book How Breakthroughs Happen, she noted that the intermediaries offer a relatively low cost solution (compared to professional consultants) for firms facing an unsolved problem.

Natalia also noted that InnoCentive is moving beyond merely running contests to wrapping the contests with consulting services. This seems like a natural progression — ala IBM’s move from mainframes to IBM Global Services — and one that someone should have come up with years ago.

Will OI save advanced economies?

2011-03-31T19:50:00.000-07:00

On Saturday, I was privileged to be invited to the launch party for Henry Chesbrough’s newest book, Open Services Innovation.

The party was at Henry and Katherine Chesbrough’s Bay Area home. The staff of the Center for Open Innovation (at UC Berkeley) were there, as were many other locals that the Chesbrough thought would be interested.

COI† associate director Solomon Darwin introduced me to people as being the kickoff speaker every semester for the COI speaker series. Darwin joked although my definition of open innovation was not the same as Henry’s, it was close enough that Henry was comfortable with my introducing the Berkeley graduate students to the ideas of open innovation every semester.

At an appropriate time, Henry stood up to make a few brief remarks in his library (which reminds me of Baker Library back at Harvard with floor to ceiling books.) He first acknowledged his parents in the audience, Dick & Joyce Chesbrough, to whom he dedicated the book.

He also acknowledged Syed Hasanain, executive VP of Computers & Structures, Inc., who is featured on pp. 145-147 of the book where CSI is Henry’s example of a “specialist” small services firm.

In his remarks, Henry said that his book was not just about open innovation. He also hoped that — in a era of commodity priced-based competition for products — that Open Services Innovation provided an example of how developed economies could create and sustain high paying jobs that wouldn’t go offshore.

As I noted last fall, the idea of Open Services Innovation is about bundling services and products to better meet customer needs. As with any new management proscription, we will need a few years to see how much of a difference the book makes, but obviously it is targeting a pressing need for companies in these advanced economies.

† In Berkeley-speak, the "center" has become the "Program for Open Innovation". I forgot to ask Henry or Solomon what exactly that means.

Open innovation and system integration

2011-03-17T14:11:00.001-07:00

People who read Chapter 6 of the 2006 Open Innovation book know that I’m particularly interested in how open innovation happens in component-based industries — like the PC and mobile phone industries I’ve been studying for more than 15 years.

It’s always a pleasure to hear that the ideas in that paper — particularly Figure 6.1 — are having an impact on people’s thinking, even if it’s a small fraction of Henry Chesbrough’s opening chapter from the book or his many other books and articles. As it turns out, this morning a friend sent me a picture of a Nokia slide presented at a Finnish standardization workshop Wednesday that used a version of Figure 6.1.

One of the things that I tried to do in my chapter (and in the final joint chapter) was to link the open innovation literature to the systems integration work, as represented by the excellent book edited by Andrea Prencipe, Andrew Davies and Michael Hobday. (Chesbrough had his own chapter in the book.)

To me, the role of the system integrator is quite obviously that of a firm leveraging external innovations. Both perspectives lead to the same question: how does the integrating firm create (and capture) unique value if it’s leveraging the same external components as everyone else? I tried to provoke OI scholars to think more about system integration research — that there isn’t more research linking the two is perhaps my greatest disappointment about the book’s impact.

One of the few authors to consider this issue has been Jens Frøslev Christensen, who in his chapter (in our book) and his 2005 co-authored Research Policy article looked at how large consumer electronics companies reacted to the shift from analog to digital (Class D) amplifiers. The chapter in particular asks what open innovation means for the concept of core competencies.

However, coming at the same question another way is Mary Tripsas of Harvard, who presented a paper on digital cameras in UC Berkeley at its Open Innovation Speaker Series. The presentation was adapted from her forthcoming Strategic Management Journal paper with Mary Brenner (U. Minnesota) that is available on SSRN. Her presentation has now been posted to YouTube; below are some thoughts from listening to the presentation in person Monday.

Although not explicitly seeking to test an open innovation hypothesis, the design and empirical findings of the Brenner-Tripsas paper bear directly on this idea of integration, open innovation and core competencies.

The authors look at the features of digital cameras sold in the US 1991-2003. Why this period? Starting in 2004, a majority of the models conformed to the dominant design:

optical zoom
digital zoom
removable storage
high (1 MP+) resolution
lcd display
ability to record brief movie clips

What is interesting about the paper — and the context — is that the battle to establish a DD and win sales was taking place at the convergence of photography, consumer electronics (i.e. camcorder) and PC peripheral industries. So they test both industry- and firm-level effects as to how quickly firms adopt the newest (and eventually successful) features.

Since they got into SMJ, you know they have significant effects. With the seven features (including webcams, which did not become part of the DD), they see different effects for industry-level cognitive framing, firm-level cognitive framing and industry-specific imitation (i.e. copying your traditional rivals rather than the new ones created by the convergence smackdown.)

This suggests a chance to link open innovation back to the early cognitive strategy work of Tripsas, Anne Huff and others. (I once knew this literature, because my original dissertation plan was to look at the cognitive effects that expected demand had on the rollout strategies for cellphones in the US, Sweden and Japan.)

To put it more directly, perhaps knowing how to integrate is not the only skill that successful open innovation firms bring to the table — but also, as Brenner and Tripsas might suggest, knowing what and when to integrate as well.

Master class: open innovation and corporate entrepreneurship

2011-03-01T13:58:00.001-08:00

ESADE is reprising its master class on Open Innovation and Corporate Entrepreneurship. It will be held in Barcelona from June 6-10 2011.

The main presenters are:

Henry Chesbrough of the UC Berkeley Center for Open Innovation
Ken Morse of the MIT Entrepreneurship Center
Wim Vanhaverbeke of Hasselt University

For more information, see the ESADE website.

Innovation paths spanning fiefdoms

2011-02-09T12:00:00.000-08:00

When comparing open, user and cumulative innovation, one interesting pattern is that in some ways, open innovation is more like user innovation than other forms of open innovation.

The inbound mode of open innovation is about bringing external innovations into the firm for commercialization. So is the most corporate-oriented of user innovation research. There may be differences about the motivations (or unit of analysis) of the innovation supplier, but both streams encourage firms to look outside for innovation.

Similarly, some of the user innovation research has emphasized peer-to-peer communities, outside the locus of any firm. Examples include the (separate) work of Christopher Heinerth, Christina Raasch and Sonali Shah on communities of sporting good user innovators in areas such as snowboard, kayaking and sailing. But if you look at the cumulative innovation work of Peter Meyer at the 2008 and 2010 OUI conferences, there are many similarities.

Examining these similarities of distributed innovation research — regardless of the literature where they are positioned — is the topic of a paper Marcel Bogers and I have been working on. We argue that there are distinct innovation modes based on the locus (inside/outside) of both innovation creation and commercialization. We then elaborate the various modes (commercialization paths) and contrast the similarities and differences within each mode.

We developed a paper elaborating these ideas which we presented at Academy of Management conference in Montréal last summer, and I also excerpted elements of these ideas during my talk in Göttingen in May.

We are working to finish the paper for journal submission Real Soon Now, but that has been delayed due to my main responsibilities teaching and (since July) running the SJSU Solar Workforce project.

Still, we thought the paper might be of interest to others, and since AOM (unlike DRUID) does not distribute papers, we decided to post a working copy. For now, we’ve posted our final pre-Academy draft to SSRN (paper # 1751025).

Since then, we’ve been dunned with e-mails saying our paper was in the top 10 (as high as 7!) in ”Knowledge Management and Innovation” topic of SSRN. (We’ve gotten other emails claiming it’s popular in other categories but those seem to be false alarms).

This is, however, one of the first pre-publication papers I’ve ever posted to SSRN, even though mentors like Carliss Baldwin or Shane Greenstein have been doing this for years. As a doctoral student, I once believed the fiction of double-blind reviews. But today with Google and SSRN, it’s rare that an important paper will arrive at the reviewer’s desk totally blind. I think this is particularly true for user innovation researchers, given the role that the annual OUI conference plays in introducing UI scholars to each other and highlighting in-progress research.

German custom OI coming to town - twice!

2011-02-05T09:46:00.001-08:00

On Monday, Frank Piller will be the third speaker at the UC Berkeley Center for Open Innovation speaker series. Frank is well known in the open innovation community for his massive array of PhD students and postdocs at RWTH Aachen, his own substantial OI/UI publication record, and of course for his first love, mass customization.

On the latter front, Frank will be back to hold his biennial mass customization conference (#mcpc2011) here in the Bay Area on November 15-19. The 2011 theme is “Bridging Mass Customization & Open Innovation, and thus his co-chair is the father of open innovation (and COI director) Henry Chesbrough. The CFP has been posted and submissions are due March 30.

I’m sorry that I won’t be able to attend the talk: Mondays are a busy day for me and it’s two hours one way on the bus and BART. However, the COI speakers are being posted to YouTube. Here are the first two speakers:

Jan. 31: Henry Chesbrough: Open Services Innovation.
Jan. 24: Joel West: An Overview of Distributed Perspectives on Innovation (slides are also posted to SlideShare)

Frank is always interesting to hear, and last year I got to hear him speak twice. We shared the podium at an OI PDW at the Academy in August where he talked about how a successful OI program was ousted with its champion. In May, we were the one-two opening speakers for an OI workshop in Göttingen.

His is one of three or four talks that I plan to watch — since the video should be available a few days later on YouTube. After the semester gets further along, I might be able to sneak away to see one or two, as long as I’m back in time to teach my 6pm class.

CFP: OUI mit Sachertorte im Juli

2011-02-01T00:01:00.000-08:00

One of my favorite conferences of the year is the open and user innovation workshop, informally known among attendees as the Von Hippel Fest.

In 2011, the conference is returning to Vienna for the first time since the original 2003 User Innovation Workshop.

The hosts of the Open and User Innovation Workshop 2011 are two well-known user innovation scholars, Nikolaus Franke and Christopher Lettl. The conference will be held at the Institut für Entrepreneurship und Innovation at the Wirtschaftsuniversität Wien (aka WU Wien for us Yankees).

Nik & Chris have posted the details to a new website OUIcommunity.net. Some highlights of the CFP:

July 4-6, 2011
To be held in Vienna
About 200 scholars expected
Registration is first come, first served: early registration is recommended
Abstracts (of up to 2,000 words) are due by March 31, and the actual presentation is due May 31.

In addition to the minitalk and the full paper, the organizers are adding a third type of presentation, the panel discussion.

I was fortunate to be able to attend in 2008, 2009 and 2010. I hope to return this year if travel funding is available.

Intel does more inbound OI

2011-01-29T23:55:00.000-08:00

Stanford and Intel this week announced their joint R&D lab on the Stanford campus this week. As noted in the San Jose Merc and the Stanford press release, the research will include $2.5 million/year of Intel money over five years, as well as 30 faculty and 50 graduate students.

The Merc claimed it was “unusual”:

In an unusual collaboration, Intel and Stanford University announced Wednesday that their scientists will work together, on campus, to design new visual computing projects.

However, open innovation readers will recall that there’s nothing knew about Intel paying for its scientists to work alongside university researchers.

Intel’s cooperative university research was the focus of Chapter 6 of Chesbrough’s original 2003 book. And as Chesbrough noted in a 2005 interview with Strategy & Leadership, Intel worked closely with 15 US and 10 overseas universities on its basic and applied research. Intel has obviously made a major investment in this collaboration — paying its scientists, the lab costs and funding university projects — for more than a decade.

Intel is not the only firm to be so actively involved. In my 2008 road tour of mobile phone research at US universities, it was obvious that Nokia (then) had a significant presence at Stanford and MIT with its nearby research labs. Microsoft had an even greater presence.

This is not limited to software, which is why Novartis has a major research lab across the street from MIT and Johnson & Johnson has a research lab a mile north of UCSD.

Given the cutbacks in industrial research since the heyday of Bell Labs, companies are more dependent than ever on universities for basic research. The problems are that the companies need to have enough scale and investment in absorptive capacity to take advantage of the (rather expensive) access to external knowledge.

It also requires organizational slack and a consistency of commitment to see it through. When I visited Yahoo Research Berkeley with Youngjin Yoo in 2007, we were impressed with how far they had come in solving some tough problems at the cutting edge of mobile Internet services. When I went back a year later, YRB was gone, and its founder Marc Davis was temporarily at a Yahoo operational job en route to Microsoft (via a startup).

There’s more to open innovation and university relations that the canon of Chesbrough. One of the most oft-cited papers of the first decade of open innovation is the 2007 paper by Markus Perkmann and Kathryn Walsh entitled “University–industry relationships and open innovation: Towards a research agenda.” But as the paper suggests, there’s plenty of research that needs to be done at the intersection of these two streams.

Open Innovation Speaker Series: Spring 2011

2011-01-24T07:17:00.000-08:00

Today marks the first day of another semester of the Open Innovation Speaker Series at the Center for Open Innovation at UC Berkeley, a combination of a public speaker series and a graduate seminar in innovation.

The academic speakers include internationally known innovation experts, including Frank Piller, Mary Tripsas and Sabine Brunswicker. There will also be an array of industry speakers, including representatives of Clorox, PARC, SAP and Xerox and the former CTO of Cisco.

I look forward to reprising my appearance today at the COI and giving the Berkeley students an overview of open, user and cumulative innovation. My only regret is to not be able to catch up with Henry Chesbrough, who is teaching open innovation to European Ph.D. students Monday and Tuesday. Today’s session will be hosted by co-organizer Solomon Darwin of UC Berkeley.

Except as noted, the sessions are Mondays from 12:30-2:00 p.m. in Sutardja Dai Hall, room 250.

Date	Speaker
24-Jan-11	Joel West Professor, Innovation & Entrepreneurship San Jose State University
31-Jan-11	Henry Chesbrough Professor & Director, Center for Open Innovation Haas School of Business, UC Berkeley
7-Feb-11	Frank Piller Chair & Director, Technology & Innovation Mgt. RWTH Aachen University
14-Feb-11	Jennifer Miller Director of Corporate Innovation Clorox
23-Feb-11 (Wed) Haas S480	Alex Osterwalder Author & Speaker on Business Model Innovation Business Design, Switzerland
28-Feb-11	Jennifer Ernst Director, Business Development PARC, A Xerox Company
7-Mar-11	Santokh Badesha Manager of Open Innovation Xerox Corporation
14-Mar-11	Mary Tripsas Professor, Entrepreneurial Management Harvard Business School
21-Mar-11	Spring Recess
28-Mar-11	Judy Estrin CEO, J Labs (Former CTO of Cisco)
4-Apr-11	Vivek Whadwa Professor & Director, Center for Entrepreneurship Duke University
11-Apr-11	Anand Ramachandran Director of Co‐Innovation SAP
18-Apr-11	Sabine Brunswicker Manager/Senior Researcher Fraunhofer Institute, Germany
25-Apr-11	Francesco Sandulli Professor, Innovation & Information Technology University of Madrid

The limits of crowdsourcing

2011-01-20T12:01:00.000-08:00

At the #BAexec event last week, one of the interesting questions from the floor was “could the iPhone have been produced via crowdsourcing?”

My immediate reaction was “no”. What’s made Apple so special for the past 13 years has been the solitary, laser-focused vision of product design brought by its CEO. Of course, that’s just the supposition of a 35-year Apple-watcher.

What I think was more interesting was: what are the limits of crowdsourcing? Those who study crowdsourcing consider its advantages for accessing heterogeneous knowledge bases or sheer scale of ideas. But integrating that hodgepodge of ideas — no matter how good — can be daunting if not labor intensive.

I guess this comes back to a simple point: for some innovations, the integration of technologies is more important than the individual technologies themselves. But then anyone who’s read about the iPhone would know that such cases exist.

The pride of user innovators

2011-01-19T00:01:00.000-08:00

At the #BAexec sponsored event last week, the title was “Social Networks for Innovations”. The host was Prof. Terri Griffith of Santa Clara’s Leavey School of Business.

Leavey is arch-rival to my own employer, the SJSU Lucas Graduate School of Business, but Terri and I have a dense network of mutual friends that long predate our respective hiring dates.

The afternoon event at SCU included two panels:

External Engaging Innovation: David Cruickshank (SAP), Joel West (SJSU), Hutch Carpenter (Spigit) and Jim Newton (TechShop)
Internal Engaging Innovation: Andy Hargadon (UC Davis), Tad Milbourn (Intuit), Susie Wee (HP), Wolf Cramer (IBM) and Robin Daniels (salesforce.com)

With 90 minutes per panel — mostly discussion — the discussion was much deeper than at a typical conference. And having donated my afternoon in exchange for a free lunch, it was reassuring to hear from very smart people on topics that overlap with (and in some cases extend beyond) my own expertise.

Griffith and Cramer blogged on the event. A video of the whole thing is at SCU’s website (not in Flash, but worse, Silverlight format).

I had slides planned for my talk — providing an overview of open innovation — but since others didn’t use slides I decided to ditch them. (As I often do, I did reference the standard references by Chesbrough and von Hippel.)

I have only limited notes of the first panel (since I left my laptop at the table), but here are a few observations.

The story of TechShop was an inspiring one — providing a way for user innovators to produce tangible goods such as a bamboo iPad case now available for retail sale. (As Griffith noted, TechShop appeals to the same audience as the Maker Faire.)

Here’s one exchange where I did have notes:

Audience: How do you handle IP issues?
Newton: This is not an issue at TechShop, because each inventor assumes their idea is the best [and so ignore the others.]
West: Generally what you need is win/win propositions and complementary business models: direct rivals don’t have a reason to cooperate but complementors do. Also — as I found in my encounter on this blog with a big cereal company — large companies can often be shamed into doing the right thing because they care so much about bad PR.

Jim Newton raised an important point I never would have considered. Still absent any data, IMHO the pride and hubris of inventors is good for short-term advantage, but of course any good idea is going to get copied.

Finally, one audience member asked how to get a company to adopt open innovation and consider external ideas. Carpenter’s view was that “if the organization is not ready, you can’t make it.” My advice was to use the corporate equivalent of gaiatsu — leveraging external pressure to get your internal constiuents to do what wanted them to do anyway.

Community innovation in solar manufacturing

2010-12-29T15:05:00.001-08:00

As an open innovation researcher, I sometimes get invited to lecture at high-tech (or low-tech) companies on how the principles of open innovation can be used to improve the efficiency and efficacy of innovation. This draws both on my own published research and the reporting I do for the Open Innovation Blog.

Earlier this month I spoke at a one-day seminar on open innovation in solar manufacturing, held at the gorgeous Fairmont Hotel at the top of Nob Hill in San Francisco. Our hosts were Festo AG, a German process automation company that sells key technologies to PV manufacturing lines (among many others). Since Festo has issued a press release and other outlets have mentioned my role, I thought I’d comment on the event.

The Festo Engineering Network (fen.festo.com) is a free online community intended to spur idea generation and sharing among Festo’s direct customers — those that make solar manufacturing equipment — and its indirect customers (PV manufacturers themselves).

One of the ways that they’re doing this by issuing challenges — in other words, crowdsourcing. They also hope to create a sense of community by attracting the right people and have them network and share ideas.

My opening talk on open innovation was fun because I tried to do it Larry Lessig style. (When you are an academic standing between a room full of industry people and their dinner, use all means possible to engage them.) The slides are posted on FEN but I don’t know that they’ll mean much without the audio.

The real value for attendees came from the expert participants from the solar industry. I understood my role as an academic — to stimulate discussion and to get people to think beyond their current way of doing things.

Like any community, building up the FEN will take time. I believe Festo is pointed in the right direction, but we’ll see how quickly it goes.

Intuit tries open innovation via crowdsourcing

2010-12-16T23:59:00.000-08:00

On Wednesday, Intuit announced a new crowdsourcing initiative it calls “Intuit Collaboratory.” (For non-US readers, Intuit of Mountain View, Calif. is the primary maker of personal finance and small business accounting software here, and also one of the major vendors of personal tax software.)

The initial emphasis of the collaboratory is a crowdsourcing initiative with a $10k maximum prize. The two initial challenges focus on paperless accounting records and receipts. The effort is being led by Jan Bosch, who has been with Intuit since 2007 but was recently appointed vice president of open innovation (so recently, his LinkedIn profile hasn’t been updated.)

In general, the approach is similar to that of other organizations using innovation contests to obtain external innovations, including P&G, NASA, or Netflix. The initial problems and the prize money suggest that this is more of a trial ballon for Intuit — as opposed to Netflix which paid $1 million to improve its core business.

Still, Intuit’s initiative implies that other Silicon Valley firms will also be following suit. With its Intuit Developer Network, Intuit had followed a more conventional platform-based ecosystem model — attracting third party developers first with its SDK and more recently with add-ons to its Software-as-a-Service. (Apparently if you let others extend your SaaS, according to the latest buzzwords it becomes PaaS: Platform as a Service).

The press release emphasizes Intuit’s interest in collaboration, open innovation, and crowdsourcing solutions to specific challenges. (As I’ve predicted in the past, they’re cutting out intermediaries and creating their own market from scratch.)

I’m not quite sure if the new open innovation interest is meant to complement or eventually replace the platform approach. Again, this is an issue of broader interest across Silicon Valley, and thus one I’ll update in the future as I have more information.

Using open science to disseminate open innovation

2010-12-02T19:19:00.000-08:00

With the new OpenInnovation.net website, both Henry and I decided to build an academic steering committee for the “Researchers” section. The goal of creating such a committee is both to do a better job of updating the existing content and to add new content.

In addition, rather than being the opinion of one researcher (as it was for the first half-decade of this website), the academic content will be curated following policies set by a group of scholars. In other words, we would use more of an open science process to collect and disseminate scientific research on open innovation.

The content we anticipate providing would include:

Teaching materials, including cases
Conferences
Summary of new research
A bibliography of published OI research

One of the thorny issues we face is coming up with a clear definition of what is “open innovation”? If we are going to offer a comprehensive catalog of "open innovation” research and teaching materials, we need a clear (and easy to operationalize) definition that allows us to consistently decide what is or is not appropriate.

This was an issue I faced several times sinceI started the original website in 2005. It came up when deciding what to include in my old, ad hoc bibliography of published open innovation research, particularly when people sent me a paper and said “here, please list this.”

It’s also something that many of us wrestle with when doing a literature review or overview of the subject. For the website, we want to have a relatively broad definition — but at the same time one that remains consonant with the work of Chesbrough and others in this tradition.

Personally, I think the definition should be a little tighter for theoretical work — something either or is not “open innovation” — than for teaching cases that might illustrate points related to the use of inbound or outbound OI. For example, I find that user innovation cases can often be used to illustrate OI points, and to change the students’ orientation to look outside the firm. Another teaching example would be to look at IP licensing business models, which certainly existed prior to Henry’s 2003 book, but nonetheless can be used to illustrate the principles of open innovation.

We expect to have more to announce early next year. In the meantime, we would appreciate any suggestions from our academic readers as to content or other useful features we should add to the website.

Save the date: OUI 2011

2010-11-22T15:37:00.001-08:00

Christopher Lettl and Nik Franke shared an update today as to next year’s OUI conference.

The Open and User Innovation Workshop 2011 will take place from July 4-6 at the Festsaal of WU Vienna (located in Augasse 2-6, Vienna).

Normally the conference is held in June (when in Europe) or in August (prior to the Academy of Management) when in Boston. I’ll be curious to hear whether the July 4 date will be a positive or negative for American participation.

Distributed innovation at Berkeley II

2010-11-17T08:09:00.001-08:00

Clearing out old articles stuck in my outbasket.

Reprising my appearance last year, on Aug. 31 I presented my talk at Henry Chesbrough‘s Open Innovation Speaker Series in UC Berkeley. The audience was mostly engineering graduate students, with the largest proportion apparently chemical engineers.

My talk provide an overview of O/U/CI and thus was titled “An Overview of Distributed Perspectives on Innovation.” It was an updated version of my May talk in Göttingen, which in turn was an update of my September 2009 talk at COI. Part of this is that the goals were very similar: give an overview of OI and related theories in 45 minutes.

The slides are up on SlideShare and the PDF even has hotlinks to all of the books for readers who want to learn more about them. (Many of these same references are in my postings on the key books for O/U/CI research and influential O/U/CI articles and books, and my references for the May talk.)

For the first day of class, I think the value was in contrasting OI/UI/CI research, and then emphasizing the importance of topics like crowdsourcing and OI-by-acquisition (aka OI-becoming-VI). I spent a particularly long time on communities, because I think OI has (mostly) neglected studying communities to a degree that UI certainly has not.

For open innovation scholars, the most interesting part is the latest incarnation of my (2010 AOM) paper with Marcel Bogers on innovation modes. We made good progress during our time at Montreal, and I think are getting closer to having something that will make a publishable contribution (rather than just an interesting typology).

The presentation is now up on YouTube. If you watch the video, it’s obvious I had time problems at the end. One reasons was Chesbrough gave a substantive introduction to OI rather than (as I had assumed) just discussing the administrative policies. But the main reason was that my watch — synchronized to global time standards via my laptop — was five minutes behind the classroom clock, something I didn’t notice until near the end. It’s easy to make up 5 minutes when you have 30 minutes left, but not when you have 5 minutes left.

My other failing was that when I was asked about (effectively) corporate venture capital, I couldn’t remember the name of Markku Maula, lead author of Chapter 12 of our 2006 book. It has nothing to do with the quality of his work on CVC and everything to do with not seeing Markku more than once every few years. (Another problem is that he’s the only Markku or Maula that I know.)

My gratitude to Henry Chesbrough and Solomon Darwin for inviting me to kick off the program. It’s great to have a room full of people interested in open innovation, as was demonstrated by the lively discussion afterwards.

Note: I held the article awaiting the YouTube video, but due to technical difficulties the no video was made. My Sept. 2009 COI talk is on YouTube, and Solomon and I plan to double-check the A/V technicalities before my next COI talk on Jan. 24.

CFP: PhD seminar at ESADE

2010-11-14T23:00:00.000-08:00

Call for Participation

PhD Seminar
Open Innovation & Open Business Models

ESADE, Barcelona
24-25 January 2011

Organized by

Henry Chesbrough: UC Berkeley Center for Open Innovation; ESADE
Wim Vanhaverbeke: Hasselt University; ESADE; & Vlerick Management School

For more information, see the program and registration page.

OpenInnovation.net 2.0

2010-11-10T14:42:00.001-08:00

This week we launch the second phase of the OpenInnovation.net website, which is now called the “Open Innovation Community.”

The goals of the upgraded website are threefold

To go beyond the existing academic audience to also reach a managerial audience
To have an up-to-date source for information about all aspects of open innovation
To attract participation from a broad range of open innovation experts and interested parties

The change comes out of a series of conversations I had with Henry Chesbrough over the past three months. The timing was motivated by Henry’s desire to create a new website to promote his new book, Open Services Innovation.

More broadly, Henry (and Wim Vanhaverbecke and I and many others) are concerned a bout making sure that the concept of “open innovation” is used accurately. On the one hand, some of the claims made for open innovation are (in my opinion) overly expansive, stretching the original insights of Open Innovation beyond recognition. A theory of everything quickly becomes a theory of nothing

On the other hand, there are self-proclaimed open innovation “experts” that don’t seem to have read any of the prior research, including Chesbrough’s 2003 and 2006 books and the Chesbrough/Vanhaverbecke/West edited volume. (If you deliberately avoiding learning what’s already known about a subject, how can you be an “expert”?)

So the hope is that over the next few months and years, OpenInnovation.net and the Open Innovation Community will become a more collaborative venue for reporting, writing and discussing about open innovation. If people have news tips, they can be submitted via the contact page (I think we will eventually set up an email address as well.)

While the new website will have a broader focus, most of the existing content has been retained under the “Researchers” menu of the main site. I will continue to edit this blog going forward, at the same address, although other blogs might also be added to the website at some point in the future.

As part of the shift, I have transferred to Henry control of the domain name that I created back in 2005 to promote our book. He has invested significant resources in a professional marketing communications firm to develop the new website that was launched on Monday. (Most of the previous content transferred over, but there will be some teething pains: let me know if you spot anything.)

While Henry created what we now know as “open innovation” concept, his concept for the new OpenInnovation.net is his is not the only voice or perspective represented therein. Instead, as the outgoing owner of OpenInnovation.net, I nominated him as Benevolent Dictator for Life of the new site — much like Linus Torvalids, Guido van Rossum or Larry Wall — and he cheerfully embraced that model. As the BDFL, he retains the master key, but wants to encourage a thriving community of external participants.

Henry and I have discussed specifics about the academic community that we would like to create, and the sort of new leaders that will be necessary to make that happen. More on this in the next post.

Nov. 11 webcast on open services innovation

2010-11-04T09:10:00.001-07:00

Henry Chesbrough and Gary Hamel will be featured in a Nov. 11 webcast on open services innovation. The webcast will be hosted by OpenSource.com — the PR arm of RedHat, the Linux software distributor.

Chesbrough’s appearance is one of several is timed in anticipation of his new book, Open Services Innovation. Hamel is of course the well known strategy guru and consultant.

The webcast will begin at 1030 PST or 1830 GMT. For more information, sign up on the OpenSource.com web page.

Government especially needs external ideas

2010-10-16T10:54:00.000-07:00

NASA has been using prizes to attract external sources of innovation for several years. Not only is it helping attract innovative ideas for manned space flight, but it’s also providing a treasure trove of research information on crowdsourcing for researchers like Karim Lakhani, as this NASA press release Wednesday spelled out:

WASHINGTON -- NASA and Harvard University have established the NASA Tournament Lab (NTL), which will enable software developers to compete with each other to create the best computer code for NASA systems.
…
The lab will be housed at Harvard's Institute for Quantitative Social Science under the direction of Principal Investigator and Harvard Business School Professor Karim R. Lakhani, a leading scholar on distributed innovation and crowdsourcing. London Business School Professor Kevin Boudreau, an expert on platform-based competition, will be the chief economist of the NTL.

Under the NTL initiative, Lakhani and Boudreau also will conduct basic empirical research on the appropriate contest design parameters that yield the most effective solutions in a tournament setting. This will enable the routine use of innovation tournaments as a problem solving approach within NASA and the rest of the public sector. Harvard will collaborate with TopCoder Inc., a company that administers contests in software architecture and development, to manage and conduct the tournaments.

Lakhani and Boudreau have previously worked with challenge implementation companies to launch three experimental competitions using problems from the Harvard Medical School's Clinical and Translational Science Center and NASA's division of Space Life Sciences. Results from the experiments demonstrated the ability to deliver high performing solutions and extend the concept of innovation tournaments to scientific and engineering contexts.

At times during its 50 year existence, NASA was one of the most innovative places in the Federal government (next to DARPA and the NSA). Now that it’s shifting away from running a LEO bus service back to interplanetary exploration, it seems to be recovering its interest in innovation and new ideas.

Wouldn’t it be nice if this approach could be more widely adopted by the government? In a limited way, it is. PatentlyO blogger Dennis Crouch notes that the administration’s CTO last month unveiled a website with 35 challenges and prizes, including:

Create nutritious food that kids like — $12,000 prize.
Reducing waste at college football games — school prestige award.
Best original research paper as judged by the Defense Technical Information Center.
Provide a whitepaper on how to improve reverse osmosis membranes — up to $100,000.
Digital Forensics Challenge
Federal Virtual Worlds Challenge (Create the best virtual world for the US Army) — $25,000 in prizes.
Advance the field of wireless power transmission — $1.1M for a team that can wirelessly drive a mechanical climber to 1 kilometer height at a speed of at least 5 meters/sec.
Strong Tether Challenge — create a material with 50% more tensile strength than anything on the market for $2 million.

The problem is that the challenges — and the site’s mission itself — seem more oriented towards PR victories than solving real problems.

The Challenge.gov website proclaims itself “a place where the public and government can solve problems together,” which is just silly PR spin. A better title would have been “an admission that government doesn’t have all the answers and needs better ideas from an involved citizenry.”

I mean if an innovative company like IBM or Intel or even Apple relies on open innovation to generate new innovative ideas, certainly one of† the largest, most bureaucratic and unresponsive organizations in the world should do so. (And I say this as an employee of one of the most dysfunctional bureaucracies in the developed world — the state of California.)

We’re Number #3! We’re Number #3! As best I can tell, there are 2.7 million Federal civilian employees, vs. 3.9 million in India. I can’t find the comparable number for China, but would assume that it’s comparable to India.

CFP: Participatory Innovation Conference

2010-09-11T23:50:00.001-07:00

My co-author Marcel Bogers sent along the call for papers for the planned conference on “participatory innovation.” Here are some excerpts from the CFP:

I would like to call your attention to the "Participatory Innovation Conference" (http://pinc.sdu.dk), which will be held on January 14-16, 2011. The conference is organized by the Danish strategic research center SPIRE at the University of Southern Denmark in Sønderborg, Denmark.

Participatory Innovation gathers theories and methods across academic fields that describe how people outside an organisation can contribute to its innovation. Join this conference to help identify ways for industry and the public sector to expand innovation through the participation of users, employees, suppliers, customers etc. – both on a strategic level, in concrete methods, and in the day-to-day interactions.

Initial submissions require an abstract only. The conference plans five tracks

Making Design and Analyzing Interaction
Staging Design Anthropology
Organizing Participatory Innovation
Designing Innovative Business Models
Public Procurement of Participatory Innovation

A few key dates:

September 27, 2010: Submission of abstract, material or intent to contribute
October 28, 2010: Full submissions due
November 12, 2010: Notification of acceptance
December 12, 2010: Final submissions due

More information can be found at: http://pinc.sdu.dk

Editorial comment: I don’t know how “participatory innovation” is different from OI, UI, CI, O/U/CI, distributed innovation or even “open and distributed innovation.” However, they didn’t ask me for advice before picking the conference title.

Adam Smith and Henry Chesbrough predict OI in services

2010-09-03T08:48:00.000-07:00

Henry Chesbrough returned to PARC last week, to deliver the penultimate talk in the OPEN series of the PARC Forum speaker program at PARC headquarters in Palo Alto.

The title of his talk was “Open Services Innovation,” from his book of the same name that is forthcoming in January 2011 from Jossey-Bass. This is the most full I've seen the auditorium, with more than 150 people present for the free talk.

The talk marked his triumphal return to PARC, which formed the basis of so much of his work of the past decade (that in turn led to his seminal 2003 open innovation book). He noted the records of the Xerox spinoffs and licensing deals (used in these papers and this book) are now in the PARC corporate library, headed by Katherine Jarvis who was there at the talk.

He also apologized for not broadcasting the talk on YouTube. Being cognizant that the Internet never forgets, he worried about having this early talk live on in perpetuity. Apparently the Aug. 26 talk was his first public discussion of the forthcoming book: “like many experiments, there are going to be some failures.”

It’s hard to summarize an entire book in an hourlong talk, and I was handicapped by having to leave early to make it home to provide childcare coverage. However, I think OI blog readers would be interested in a few of the core ideas of the book.

He paraphrased (but formally acknowledged) the definition of Hill (1977: 318) for services:

A service may be defined as a change in the condition of a person, or of a good belonging to some economic unit, which is brought about as the result of the activity of some other economic unit, with the prior agreement of the former person or economic unit.

He talked about the growth of the services economy, using standard statistics offered by services experts. (I haven’t had a chance to talk to him as to whether these statistics make the common mistake of conflating information goods with actual services, but this is explicitly rejected by Hill, who emphasized: “Although services are often dismissed as immaterial goods, they are not special kinds of goods and belong in a quite different logical category from goods.”)

In many way, Chesbrough argues that researchers have been led astray in how they think about services by the “value chain” concept introduced by Porter (1985: 37). In the famous Porter diagram, services are ancillary to the value creation process, which focuses on the transformation of inputs into outputs across a supply chain.

Instead, Chesbrough argued for a more customer-focused perspective: services are the efforts of the firm to more precisely meet the needs of customers, rather than [to use my terms] peddle mass-market common products to everyone. Or, he noted, as Ted Levitt used to say: “People don't want to buy a quarter-inch drill. They want a quarter-inch hole!” Chesbrough’s conclusion: the way to be this customer-centric is to create a feedback loop that incorporates the customer into the services creation process.

I’m not a services guy — in part because my work tends to focus on mass-produced information goods which the services people (as noted above) mistakenly claim as their turf. However, to me this emphasis on the role of services and co-creation seems a more fundamental insight into the business of services, beyond just the application of open innovation to services.

Like Hill, Chesbrough’s conception of services starts with Adam Smith. In fact, the core idea of the talk seemed to be the linkage of Adam Smith to Nobelists Oliver Williamson and George Stigler to innovation in services. These three theories were linked in virtuous positive feedback cycle that reinforces a successful services strategy:

More specialization of labor reduces transaction costs.
Lower transaction costs grows the market.
Larger markets enable more division of labor.

He presented examples of the automobile being transformed from a product to a higher-utilization, more capital-efficient services via the taxi, local rental car, or ZipCar®. Other examples looked at UPS Transportation Management and the Amazon Marketplace.

The point of these last examples is that if firms ask outsiders to provide these missing parts of the value proposition, that’s an example of an open innovation strategy. I wasn’t able to stay for the whole talk due to family commitments; if I had time to stay, I would have asked how the insights of open innovation (or the new book) help firms understand how to use these outside sources of innovation more effectively than (say) the existing platform literature.

Still, this seems to be (sight unseen) the most significant departure by Chesbrough since his original 2003 book. The two books in between are, in some ways, extensions of the 2003 book: Open Business Models is a translation of the 2003 book for non-R&D managers while our 2006 book adapts it (and extends it with outside perspectives) in a form more relevant to academics. Open Services Innovation plants the OI flag on a new and sizable hill.

References

Hill, T.P., “On Goods and Services,” Review of Income and Wealth, 23 (1977): 315-338; doi: 10.1111/j.1475-4991.1977.tb00021.x

Porter, Michael E., Competitive Advantage, New York: Free Press, 1985.

The definitive Open Innovation primer

2010-08-31T22:22:00.001-07:00

Today was the kickoff of the UC Berkeley Open Innovation Speaker Series, including an updated version of the O/U/CI overview talk I gave in Göttingen in May. (More later).

However, before I spoke, the students (mostly M.S. students from engineering) got a 15 minute introduction to open innovation from the founder/oracle/sage of open innovation himself, Hank Chesbrough.

I don’t have the slides in front of me, but let me share the big picture for anyone who has to teach this to a class.

What is “open innovation”? Chesbrough used his 2006 definition from our book:

Open innovation is the use of purposive inflows and outflows of knowledge to accelerate internal innovation, and expand the markets for external use of innovation, respectively.

Noting the linkage of open innovation back to practice, he said "This is a way of thinking that emerged from observing what companies do in their practices."

The idea of spillovers predates open innovation, but in the past it was an afterthought, ignored or neglected — treated as an unintended byproduct. "In the world of open innovation, we argue that you can harness these flows and you can begin to direct the: you can direct them to you, and you can direct your flows to (specific) others outside." There are two main modes of open innovation: the inside out and the outside in.

Chesbrough summarized some of the findings from his Xerox field studies that led to his various papers and several chapters of the 2003 book. For example, he showed a number of interesting graphs from the various studies, including the Xerox “CIC/XNE Project funnel”

which looks a lot like Chesbrough’s open innovation funnel (Figure 1.3 of the 2006 book).

In the Xerox diagram, it allowed for three outcomes for internal innovations:

Commercialization via a business group willing to pay for it
Assignment to an internal “new enterprises” incubator
Licensing or spinout of the technology to external companies

Still, the Xerox strategy was more worried about false positives than false negatives. He noted that at one point, the aggregate market cap of 10 Xerox PARC spinouts (including 3Com, Adobe, Documentum) was more than twice that of Xerox.

He also showed a metaphor I hadn’t seen, the “holey” (not holy) funnel, where the holes represent the permeability of the boundaries of the firm. I didn’t catch the name of the author, but it was a new perspective, also capturing the need of a firm focus to focus on multiple “targets.”

At the end, Chesbrough listed some Frequently Asked Questions. Below are his answers [and mine, when I didn’t have a chance to capture his]:

As this the same as open source? [see Chapter 5 of the 2006 book]
What does a business model have to do with innovation? [see the 2003 book and his 2002 paper]
Is this anything new? Aren't companies already doing this? Yes, but there is a difference of degree today and integration of the various alternatives.
Why have companies struggled to adoption open innovation? This topic will be covered by many of the speakers this semester, who talk about best practice.
What are examples of good open innovation practice today? We have invited some of the most successful practitioners, so you may get a biased sample from our speakers.

Another semester of Open Innovation

2010-08-30T10:14:00.001-07:00

Tuesday marks the first installment of the Open Innovation Speaker Series at the Center for Open Innovation at UC Berkeley, effectively the “mother church” of open innovation studies.

The series is every Tuesday from 12:30-2:00 p.m. in 250 Sutardja Dai Hall. Coincidentally, at that exact same time and place is a course called "Topics in Open Innovation” (ENG 298A.4), taught by Henry Chesbrough and Solomon Darwin of the Center for Open Innovation. (Quite a coincidence! What are the odds?)

Below is the all-start lineup of industry speakers (plus a few academics):

Date	Speaker
Aug. 31	Joel West Professor, Innovation & Entrepreneurship San José State University
Sept. 7	John Hagel Co-Chairman, Deloitte Center for the Edge
Sept. 14	Henry López Vega Researcher, Innovation Studies ESADE Business School
Sept. 21	Kristian Möller Research Professor, Business Networks Helsinki School of Economics
Sept. 28	Robert D. Rodriguez Founder /Chairman, Security Innovation Network
Oct. 5	Rich Friedrich Director, Strategy and Innovation Office HP Labs
Oct. 12	Rick Rommel Senior VP and General Manager, New Business Solution Group Best Buy
Oct. 19	Dan Cherian General Manager, Sustainable Business & Innovation Nike
Oct. 26	Silvija Svejenova Nedeva Associate Professor, Department of Business Policy ESADE B-School
Nov. 2	Alberto Di Minin Professor, Business Model Innovation Scuola Superiore Sant'Anna, Pisa - Italy
Nov. 9	Vareska van de Vrande Assistant Professor, Strategic Management RSM Erasmus University
Nov. 16	Ted Torphy, Ph.D. Chief Scientific Officer; Head of External Research & Early Development (eRED) Johnson & Johnson
Nov. 23	Francesco Domenico Sandulli Associate Professor, Department of Management Universidad Complutense de Madrid
Nov. 30	Jennifer Miller Director of Marketing Clorox

The format seems similar to last year’s series, down to the meeting room. Previous years’ seminars have been archived on the COI website, and many have slides and YouTube videos — including this video from my visit to the COI a year ago.

Man on the dune by 1903!

2010-08-20T22:00:00.000-07:00

(Catching up on #OUI2010 blogging after an overload of material from OUI and AOM).

At OUI2010 in Boston, I heard the latest update from Peter Meyer in his writing about collaborative innovation by airplane entrepreneurs in the late 1800s and early 1900s, including the Wright Brothers and Octave Chanute. They were hobbyists, enthusiasts, and frenemies, all seeking to seeking to do better than Daedealus and his son Icarus managed to do centuries earlier.

Peter’s talk was one of the most interesting sessions at UOI 2008. Now he tells me he’s trying to flesh out the data, to show the knowledge flows and get it under review at a journal. A version of the paper was presented at Columbia earlier this year.

Thinking about Meyer's research project prompted a thought experiment.

Suppose Teddy Roosevelt had said “Let’s put a man on a sand dune by 1903”? (I pick TR because it’s not something either Cleveland or McKinley would be likely to say). This suggests a few questions:

Would the first manned flight have happened sooner? Would the technology have been more mature? Would it have diffused more rapidly?
Would it have been state funded? How would that have changed the incentives?
Would it have eliminated redundant investment? Would this have eliminated experimentation in different approaches to propulsion and wing design, the sort of variation-selection-retention that Utterback and Nelson-Winter write about during the pre-paradigmatic period of a new technological paradigm?

And finally, would the Wright Brothers have invented matrix management or Tang®?

Maybe this isn’t fair: by 1901, a privately-funded solution was right around the corner, so throwing money at the problem probably wouldn’t have sped things up. A better time to fund the project would have been 1880 or 1890.

But like all whimsical exercises, there is a serious point here: some inventions have such a pent-up demand and interest that it’s not a question of if it will be invented, but who or when. The automobile, telephone, radio, washing machine and personal computer are all devices that were going to be invented sooner or later — it was a question of who and when, not if.

There is no market failure here, no underinvestment, no delayed innovation. Boatloads of capital are needed for risky infrastructure — telegraph lines, railroads, highways — and perhaps for products for which there is no commercial market (three man capsules for lunar orbit).

But at least during an era where tinkerers can invent something on their own — or get capital to do so — we don’t have evidence that government intervention will make things better. Given some of the strategic procurement errors made by military bureaucracies before and after WW I, it’s quite easy to imagine how government funding (and control) would make things worse.

Freeman obituary

2010-08-18T14:43:00.001-07:00

From The Times, August 18, 2010, p. 54:

Professor Christopher Freeman
Expert on the social and economic consequences of developments in science and technology

Christopher Freeman won international recognition for his innovative work on the social and economic context of science and technology. In 1966 he accepted an invitation from Professor Asa Briggs, then Vice-Chancellor of the University of Sussex, to be the founding director of the Science Policy Research Unit (SPRU) at that university. Under Freeman’s leadership SPRU became one of the foremost groups in the world undertaking studies of how societies can maximise the benefits from science and technology while minimising their harmful effects.

From the outset Freeman recognised the importance of building interdisciplinary research teams to undertake this work and always tried to employ both physical and social scientists to study particular issues. He was committed to studying science and technology policy in a global context, encompassing both industrialised and developing countries. During his tenure as director of SPRU, 1966-80, he considerably expanded the scope of SPRU’s research and introduced masters’ and doctoral programmes in science and technology policy and in technology and innovation management. After standing down as director, he continued to contribute to SPRU’s research and teaching activities, and in 2001 the University of Sussex named a building after him (the “Freeman Centre”). This now acts as an international focus for the activities he started so modestly in 1966.

Freeman was a quiet, effective, inspirational leader, commanding loyalty from his colleagues and the support of many funding agencies. He took a great interest in the research of postgraduate students. Indeed there can be few science and technology policy groups in the world which have not benefited in some way from his inspiration as a mentor, lecturer and teacher.
…
Professor Christopher Freeman, science policy guru, was born on September 11, 1921. He died on August 16, 2010, aged 88

Research Policy, Vol. 1, No. 1

2010-08-17T00:01:00.000-07:00

From pp. 1-2 of Volume 1, Number 1 in 1971:

editorial
research policy

This new journal will deal both with the problems of research and development policy in industry and with the research policy aspects of governmental science policy.

Whereas research management has received considerable attention in the literature during the past decades, research policy has received much less attention, yet in industrial research nowadays the main problem is not how to manage research, but how to determine its appropriate volume and scope, how to bring it in line with the long-term planning of the company and how to integrate it with other operations,

Increasing social concern with the short and long-term consequences of scientific research and technical innovation has led to a growing need to relate the private decisions of the individual researcher, laboratory or firm to a wider social context in which the full social costs and benefits of an innovation may find expression. This embraces both R & D project and programme evaluation and decision-making in industry, as well as in government and universities.

The social cost/benefit evaluation of research and innovation is one of the most complex problems confronting policy-makers, and several of the papers in this first issue deal with this problem, which will continue to be one of th.e main themes of the Journal.

In government research policy, perhaps the key question is how to determine priorities. A paper by one of the Editors in this first issue is intended to initiate critical debate on this fundamental question.

The experiences of innovating organisations in attempting, planning and implementing various innovations, whether complex or simple, are relatively little known or studied. The literature which deals with these questions and other problems of research and development policy is relatively unstructured and scattered in the journals of many different disciplines. RESEARCH POLICY will attempt to provide a focus for this literature and the policy debate it evokes.

The journal will publish papers relating to industrial R & D, particularly case-studies of innovations and analysis of R & D policy in firms. It is hoped that these will be contributed both by active participants in industrial R & D and its management, and academic observers of the process. One such paper is included in this first issue and we shall feature these studies regularly.

Concerning government policy for research, the journal is intending to include papers both by those involved in “science policy” decisions of various kinds, and by independent analysts and critics. The journal will concentrate on European problems including international European R & D experience. It will deal with methods of choice evaluation and programming as well as the measurement of public preferences and the formal theory of decision-making.

The issues confronting policy-makers, whether in government, industry or universities, involve questions of value as well as questions of fact and theory. Critical debate and clash of opinion on policy is both inevitable and desirable, and the Journal will provide a forum for such debate. However, in order that this may be fruitful, such controversy must be well-informed and based on understanding of the circumstances, needs and interests of the participants. For this reason the Editors are glad to publish the note by Professor Casimir on “Industry and Universities” and welcome further papers and comments on the respective role of industry, government and universities in research and innovation.

The Editors

C. Freeman and T.C. Sinclair,
Science Policy Research Unit,
University of Sussex,
BRIGHTON,
Great Britain

H. Krauch and R. Coenen,
Studiengruppe für Systemforschung,
HEIDELBERG,
Germany

Chris Freeman, 1921-2010

2010-08-16T09:57:00.001-07:00

Christopher Freeman died this morning, August 16, according to an email I received as a Research Policy reviewer. In a brief note, let me try to capture the debt that we all owe him.

Freeman was the founder and first director of SPRU, which was the central incubator of European innovation researchers from its founding into the mid-90s. For example, Giovanni Dosi got his PhD from the SPRU group in 1983 with the dissertation that became Technical Change and Industrial Transformation.

Freeman was also a co-founder of Research Policy, which spring out of SPRU with its first issue in late 1971. (In response to my request, both Ben Martin and Keld Laursen provided the opening editorial and the editorial board from Vol 1 No 1.)

If that is not enough, Freeman is the author of three editions of the definitive book on industrial R&D: The Economics of Industrial Innovation. As I’ve worked on my OUCI papers, I’ve turned back to it several times to understand what we know about internal corporate R&D that is sometimes overlooked by OI/UI/CI researchers.

I visited SPRU once but never had to chance to meet Freeman, either there or at a conference. Still, several generations of innovation scholars will be indebted to him for his key role in creating our field. May he rest in peace.

New paradigm, old trainwreck

2010-08-15T22:53:00.001-07:00

At our #AOM2010 PDW in Montréal, Herr Doktor Frank Piller gave a talk on a case he researched of Webasto. The talk was both exciting and depressing — and novel and familiar — simultaneously.

The company makes certain optional equipment for major car manufacturers, like sunroofs for Mercedes. Compared to auto suppliers, it has a relatively high R&D intensity: 7.5-9%. I’m guessing that’s because a lot of its stuff has to be exciting or people won’t buy it.

He told a great story of how the company brought in the lead user method and was admired around Germany, winning awards for its innovative approach to innovation. It made money selling open training to other companies. It even got hired by its automaker customers to tell them what their customers wanted.

And then in November 2008, the internal champion was fired and all the OI/UI activities were stopped (A quick Google search finds his name, which Frank didn’t mention). The board and/or management didn’t understand the value of the idea generation and either saw it as a distraction or used the recession as an excuse to get rid of someone who was getting more attention than they were.

Frank tells the story better than I, so I’ll defer to his slide deck for the details of the rise and fall of Webasto’s experiment in openness.

Let me instead try some free association: this to me is completely reminiscent of all the other innovative processes for producing innovation.

As a doctoral student during the 1990s (then in marketing), I hung with the PDMA/JPIM crowd because they were the most innovation-oriented of the marketing academics. I did a self-study on voice of the customer, cross-functional teams, lightweight and heavyweight project managers, and all these other good ideas for improving new product development.

Within an organization, usually such ideas start with a single individual, who learns about the latest and greatest, becomes a passionate champion and drags his/her employer kicking and screaming into the Brave New World. (I have also seen this pattern during my occasional consulting gigs.)

After a long time, if there are demonstrable results — or it gets institutionalized into organizational routines — the champion has protégés and assistants who can carry on if he/she disappears. But during its adolescence — or if a new regime wants to come in and sweep out the old — the innovation is only as permanent as the person pushing it.

So from a broader perspective, the innovation theories are new but the process by which organizations adopt them remains the same.

This seems like a good side bet for a doctoral dissertation: study open innovation practice within multiple firms, but write another paper about how it gets adopted in these firms (or non-adopted or unadopted). This is the ideal dissertation strategy: diversified theoretical perspective from a single data collection exercise.

Crowdsourcing is not a theory (II)

2010-08-11T15:00:00.000-07:00

At #AOM2010, crowdsourcing was a surprisingly hot topic on the program. As is usually the case at Academy, the most interesting and useful crowdsourcing ideas were not in a paper session, but a pre-arranged symposium (this one on Monday during the main program.)

In previous posts, I’ve asked whether crowdsourcing is a theory, including most recently a posting from last week’s OUI2010. The consensus at Monday’s panel — or at least from those listening to the presentation — seems to be that crowdsourcing is an umbrella term that subsumes a range of phenomena, which can be studied using multiple theoretical perspectives. Researchers are already well along in trying to disentangle important differences within that umbrella.

The session was organized by Yuqing “Ching” Ren and Natalia Levina, and also had presentations by Linda Wang, Nikolay Archak and Karim Lakhani. (Levina has posted her slides on her website. Update Thursday 8 pm: Ren has also posted her slides.)

Since I’m an OI (or O/U/CI) researcher rather than someone who studies crowdsourcing, let me focus on three aha! moments.

Noting that the term dates to a 2006 article (and later book) by James Howe, Ren identified six archetypes for crowdsourcing processes or organizations that use them:

Online content networks, e.g. iStockPhoto
Open innovation intermediaries: InnoCentive
Marketplaces for work: Small human intelligence tasks: Amazon Mechnical Turk.
Peer production and open source or open content: Wikipedia
Corporate initiatives: direct without intermediaries: Dell IdeaStorm
Open contest: TopCoder

I might quibble since not all “open source” fits the open content/peer production paradigm — just as not all open source is open innovation — nor is “open source” exactly the same as Wikipedia or other “open content” processes. I suspect the bullet point was not meant to imply this, only that the peer production open source communities fit into a group of similar phenomenon with Wikipedia (which at the 5,000' level is certainly true).

The second point, made by Karim Lakhani, is that firms typically run crowdsourcing in one of two modes.

The first mode is a competition, often winner-take-all, with all the dynamics of winners, losers, incentives, etc. (Anyone on the UI/OI circuit in the past 3 years has heard Karim give a TopCoder talk, and now at least one of these papers is forthcoming.) In this case, you want to smoke out the best idea from a large population, without demotivating participants through long odds of success.

However, the open source and other collaborative modes are fundamentally different, because individuals build upon each other, and rather than accessing the “best” knowledge of the crowd, firms are using the collective (and cumulative) knowledge of the crowd. (In the past I’ve asked if crowdsourcing is open innovation or user innovation — in this case it looks a lot like cumulative innovation).

These are clearly not disjoint, since the latest crowdsourcing fad is allowing competition between ad hoc (or pre-formed) teams. Still, Karim’s right that the dynamics of the two are fundamentally different and should not be conflated.

Finally, Karim (or perhaps Karim and co-author Karim Boudreau) made a really insightful point about how innovation contests are different from many other business optimization problems. The goal of a good contest is not to maximize the mean output quality, but instead that of the extreme value — often 2 or 3 deviations above the mean. You are getting M draws from a population of N, and all you care about is the superstar among that M (or maximizing the chance that above-average members of N become participants.)

This increased conceptual clarity shows that academic research on crowdsourcing is maturing much faster than I’d realized. (I mainly follow crowdsourcing for this blog, since my own empirical research tends to be on B2B open or user innovation).

Every new phenomenon goes through this process, when academics start trying to make sense of the phenomenon, and eventually are able to abstract universals without getting the facts wrong. This is the process we saw with “Internet,” “e-commerce” and “open source” research being replayed all over again. I was living the first one, tried to ignore the second one, but was in the thick of the third.

Today, researchers who ignore the canon of open source research will be suitably chastised (at least at any journal that picks competent reviewers.) Crowdsourcing is a ways from that, but certainly the landscape is changing rapidly and authors need to keep up to date with the latest work.

Not all open source is open innovation

2010-08-10T08:00:00.000-07:00

During my discussions at AOM2010, one of the topics that came up is that sometimes the term “open innovation” is conflated with other terms and phenomena.

My view: don’t call it “open innovation” unless you mean it in the Chesbrough (2003, 2006) sense. I say this not as a minor functionary of the "open innovation” dogma, but for the same reason I would tell a Ph.D. student to not use “RBV” or “five forces” or ”social capital” for other purposes than as defined in the mainstream literature. It creates confusion, and suggests confusion in your own mind (not a good thing).

There are other terms available, such as “open and distributed innovation” (as used by von Hippel 2005), collaborative innovation, or other terms that I can’t think of right now after 72 hours of AOM.

Similarly, not all “open source” is “open innovation.” In Chapter 5 of the 2006 book, the editor of Section II(Chesbrough himself) pushed Scott Gallagher and I to tease out the overlaps and differences between open source and open innovation. I’m certainly glad we did, as it gave me a conceptual clarity that I’ve used ever since — and perhaps with this blog I can inform those who didn’t wade through 300+ pages of academic prose.

The key discussion is on pp. 99-102, and is not in other versions of the paper (because the change came at Henry’s request). Figure 5.1 summarizes the main point: there is open source that is not open innovation and open innovation that is not open source. The latter is trivial, because things like Windows and other licensed proprietary software are examples of external innovations licensed by PC makers that they don’t develop themselves.

Conversely, the folks at the Free Software Foundation or Project GNU are not interested in making money for companies, which is the whole point of Chesbrough’s book, paradigm and body of research. There are many examples of non-commercial OSS (or FOSS or FLOSS if you must), just as there are other forms of non-commercial online communities that don’t fit the open innovation model.

(I also wrote a 2007 paper drawing distinctions between open standards, open source and open innovation.)

So “open source” as a construct is not identical to “open innovation”, “online communities,” “open content,” or for that matter “free software.” (Some people treat “free software” as a proper subset of “open source” and some don’t, but no one treats them as synonymous.) The better researchers are using their terms more precisely, so that the research findings of multiple authors can be contrasted and integrated without creating needless confusion.

References
West, Joel and Scott Gallagher (2006) “Patterns of Open Innovation in Open Source Software,” in Henry Chesbrough, Wim Vanhaverbeke, and Joel West, eds., Open Innovation: Researching a New Paradigm. Oxford: Oxford University Press, pp. 82-106.

Dare to Care about Open Innovation!

2010-08-06T00:01:00.000-07:00

When titled this post, my co-author Marcel Bogers joked “that should have been a paper.” But of course “Dare to Care” is the theme of this year’s Academy of Management annual meeting being held in Montréal. But then all of us have probably used a goofy framing to fit an AOM conference theme (at least until we learned that it didn’t matter).

For the benefit of blog readers, I thought I’d mention the open innovation sessions that I’m planning on attending. This is of course is a personal list, and only reflects the opinions of the management of OpenInnovation.net because we are one and the same!

A keyword search of the program lists 19 main program sessions and 2 PDW that mention “open innovation” in any way shape or form.

One of these mentions open innovation in the title: “Open Innovation with Suppliers” at 4:45pm on Saturday. Two of the four panelists (Herr Doktor Frank Piller, Herr Doktor Joel West) would be considered recognized open innovation scholars. Our web page lists the draft schedule.

The goal of our PDW is to link open innovation with the prior literature on supplier/producers cooperation. IMHO open innovation should be doing more of this, creating bridges to established pools of literature that informs both sides.

The other session that mentions open innovation as a keyword is “Open Science and its implications for science-based business,” with distinguished speaker Fiona Murray. I hope to attend this session at 12:15pm Saturday if my schedule permits.

Of the 19 sessions that mention open innovation in some capacity, the only other one that I’m sure I’ll attend is “Innovation Styles: Contrasts and Similarities” at 1:15pm on Tuesday. There we will be presenting new and improved version of our open/user/cumulative innovation research — continuing from our O/U/CI paper at OUI2009, my O/U/CI talk at the Center for Open Innovation last September, and presenting in more depth that I previewed in Göttingen in my talk on May 5. This is a conventional (PPT) paper presentation and we’re scheduled to be up first (i.e. 1:15-1:45).

My feelings won’t be hurt if OI scholars skip our session, the next to last of the conference. After all, there are three other sessions that mention “open innovation” being offered at the same time — one a paper session and the others a “division roundtable.” In fact, I won’t be attending a lot of OI sessions on Tuesday other than my own since I’m assigned to sessions during three of the first four slots. (During the 5th I’ll expect to be sharing a taxi with Christopher Lettl.)

A total of nine sessions Tuesday mention open innovation, and two of those (including mine) also mention user innovation. A third UI session features Jennifer Wooley and Tammy Madsen of Santa Clara doing a roundtable presentation on business user innovation, but I have to be in another room at the same time.

Given my Tuesday is so regimented, I haven’t made any firm plans for Monday but will play it by ear. There are 10 sessions to choose from, and three other sessions that are about user innovation. (Monday has one “cumulative innovation” session, while our O/U/CI talk Tuesday is the only other one in Montréal.)

Marcel has asked me to mention his own open innovation paper in a session entitled “Open Innovation and Learning” Monday at 4:45pm, but since I’m not on the paper I’m not going to give it a plug. However, I am tempted to hear Gary Dushnitsky present in the same session since I’ve been reading his entrepreneurship stuff for years but never met him.

For those who want to begin their Monday with O/U/CI, at 9:45am the session “Co-Creating Knowledge” will be a reunion of OUI2010 participants (and perhaps papers) in a division roundtable. The cast includes Pedro Oliveira/Eric von Hippel, Christian Lüthje/Alexandra Katharina Huener/Christoph Stockstrom of TUHH, and Johann Fueller of Innsbruck.

In offering recommendations, I feel a bit like my days as a movie reviewer — and probably about as many people will follow my recommendations. (At least then I got to see the show before offering a recommendation.)

End of 60 hours of OI, UI (& CI)

2010-08-04T23:54:00.000-07:00

#OUI2010 is over, and with it the annual gathering of user innovation, open innovation and a few cumulative innovation scholars.

In the final day, the conference host and founder Eric von Hippel announced that next year’s conference will be at Vienna University (WU.ac.at), hosted by Nik Franke and Christopher Lettl and their Institut für Entrepreneurship und Innovation. (Nik says that due to the WU academic calendar, it is likely to be July 2011). Eric disclaimed more than symbolic leadership:

This conference is not run by me, but has village elders like Nik Franke and Christopher Lettl.

We also ended the conference with a mug that proclaims “I Presented Brilliantly At 8th Annual International Workshop.” The most unusual thing was the reference to the “Open and User Innovation Society,” complete with a logo. On Monday, I asked co-organizer Mako Hill, who didn’t know much and didn’t know that there was never previously a “society”. On Wednesday, I meant to ask Eric or others about this seeming shift, but I didn’t get a chance.

This was an unusual conference for me, the first effort that I tried to tweet in realtime. With more than 120 two-minute talks (half of them ads for longer sessions, half the entire talk) it was impossible to post an update for each and every one. Still, I had people joke that “before I could figure out what the talk was about, you were already tweeting it.” (Maha Shaikh of LSE lagged on Monday, but on Tuesday and Wednesday nearly matched me tweet for tweet).

It remains mostly a user innovation conference. Looking at the 124 papers on the program:

There were 8 papers in the “open innovation” sessions and another 5 that mention “open innovation” in their title, a total of about 10%.
Only 2 papers about cumulative innovation — one explicitly (Peter Meyer’s latest paper on early airplanes) and one implicitly about cumulative innovation and user entrepreneurship (Yu Xin on mountain bikes).
Not enough on user entrepreneurship, with only 4 official papers. In addition, Emmanuelle Fauchart and Marc Gruber identified user entrepreneurs within all nascent entrepreneurs, although “Schumpeterians” have become “Darwinians” in the latest telling.
Lead Users were officially only 5 papers although many of the ideas were present in other papers.
Communities remain very important — officially 30 (one-fourth) of the total, although some “firms and users” papers were also related to communities.
Open Source also remains important, with 10 papers in the official section and a total of 12 overall.

One of those 12 open source presentations was mine — asking how what we know about creating successful (sponsored or autonomous) open source projects could be used to develop a viable open source community for primary and secondary education. I hope to post more later.

Overall, at the conference Eric used the conference to continue the mission he started with Democratizing Innovation, to change public policy (as well as public perceptions) to shift power away from producers towards users. Judging from the papers, not everyone shared this goal, which suggests that OUI has become a “big tent” that subsumes a wide range of research on distributed innovation.

At this point in my career, I strongly prefer focused workshops and small conferences to the zoos that the general conferences have become. I am grateful for the chance to participate in OUI for the past three years, and to be welcomed by the community as one of their own, despite being more of an OI person than a UI person (particularly on policy issues).

Photo by Marcel Bogers, during our post-OUI2010 meeting to work on our O/U/CI papers.

Crowdsourcing is a skill, not a theory

2010-08-03T04:44:00.001-07:00

At #OUI2010, intra-organizational crowdsourcing has been one of the more interesting topics. (Of course, I am a producer of OSS and OI research of and a consumer of crowdsourcing work, so I am not as up-to-speed on the latter.)

Of the four long papers on crowdsourcing presented at the conference, two were about internal crowdsourcing.

The most ambitious was a paper by Hind Benbya and Marshall Van Alstyne (presented by the latter) about crowdsourcing can be used to create internal markets for knowledge, rather than the more hierarchical and bureaucratic approaches of more traditional knowledge management. As in external crowdsourcing, they use the two-sided market perspective (which Van Alstyne helped invent) to match buyers and sellers.

However, their new wrinkle is to argue that a price system — rather than internal fixed incentives or a rating system — is necessary to stimulate the right quantity and quality of idea generation. They spend a lot time trying to establish an appropriate price with its own currency that can be mapped onto a dollar price, and have a real system up and running that's being used already by a few banks.

Appropriately for a talk presented in the basement of MIT’s Sloan School of Management, the paper has been accepted by Sloan Management Review. It’s not yet finalized or on the SMR website, but the authors presented an earlier version at HICSS in 2008. (Update: last night they posted a new version to SSRN, and both authors emailed me asking me to link it.)

For external crowdsourcing, Karim Lakhani talked about his research with Kevin Boudreau on using TopCoder to crowdsource a solution for NASA to reduce the weight of medical kits for space shuttle astronauts. The company issued a press release last week about the success of the competition.

I previously argued (in June and Sept last year) that crowdsourcing better fits the user innovation paradigm or the open innovation paradigm. Now, I think crowdsourcing is more of a process or set of skills, enabled by an understanding of the two-sided market framework. (Are two-sided markets a phenomenon, a framework or a theory? It doesn’t seem like a new theory, but …)

In other words, crowdsourcing is really about systems and incentives, not any great new theory. The systems are the same sort of IT systems that have been refined over decades for online communities and collaborations. The incentives, as economists like Van Alstyne correctly note, are a matter of setting up efficient markets to self-regulate the supply and demand for ideas that are being sourced — and, as with all markets, the institutions to make the process run with transparency and efficiency.

Anticipating another 54 hours of UI and OI

2010-08-02T06:50:00.000-07:00

I’m here this morning at the first day of 8th Annual International Open and User Innovation Workshop at MIT at Cambridge, Mass. We will be going until 1pm on Wednesday. After an introduction by Eric von Hippel, we have started the blitz of 2-minute capsule overviews of 25 long papers being presented today.

The program is up at the official conference web page, and I have a slightly more organized listing of the talks posted at the OpenInnovation.net website

I counted 124 talks: 61 full papers (almost all with the 2 minute tease) and 63 "research updates” which only have the tease. One of the co-organizers, Mako (Benjamin Hill), said that 180+ attendees are registered.

Last year in Hamburg there were 31 full papers and 44 “in progress” submissions. As with the 2008 Harvard-MIT conference, the US workshops remain significantly larger than the European ones.

With this many papers, it’s going to be like drinking from a firehose, but as in previous years, I’ll try to highlight both trends and interesting snippets.

Innovation is a multi-faceted thing

2010-06-12T23:55:00.000-07:00

In working on our O/U/CI paper, one of the problems we’ve debated with is how much time to spend on the “I.” Clearly there is wide variation (some might say sloppiness) in the definition of innovation.

Last week, at the Tilburg Conference on Innovation, the Friday keynote speakers was Prof. Andrew van de Ven of the U. Minnesota. The choice was particularly apt, since van de Ven is on the scientific council of the Center for Innovation Research and because he spent the first five years of his life somewhere near here. (His family name goes back 18 generations at the Oshkot church less than 20km away from the conference site).

Most of all, he is known for the Minnesota Innovation Research Project, the multi-year, multi-disicplinary project that produced a series of papers and books, including The Innovation Journey. The study built on earlier innovation studies such as the work of Everett Rogers and Lou Tornatzky — crucial studies that are, alas, oft forgotten.

Prof. van de Ven offered three related definitions

change: an observed difference over time
invention: a new idea
innovation: the creation and implementation of a new idea

He suggested that “innovation” varies on eight different dimensions:

Time: duration, pace
Newness to observer and protgatonists
Recombination
Magnitude: radical vs. incremental
Complementarity
Unity of analysis: project, series of projects
Level of analysis: individual, organization or industry
Assessment: is the innovation good or bad? is it supported or opposed?

Prof. van de Ven called on researchers do define what they mean by innovation, to better allow comparability and integration of the various studies. Clearly this would also apply to studies of open innovation, user innovation and cumulative innovation.

I also had a chance to talk with Prof. van de Ven at dinner Friday night. One of his recent passions has been for research that is more integrated with the needs of our (nominal) clients in the real world. (Or, as he said Friday morning, “When theory meets reality, it’s a humbling experience”).

That passion was channeled into his recent book, Engaged Scholarship. The book so impressed us in the Entrepreneurship Division of the Academy of Management that we borrowed the phrase as part of our revised mission statement.

Distributed Perspectives on Innovation

2010-05-06T05:53:00.000-07:00

After 17 hours on an airplane (and then train) from San José, on Wednesday morning I arrived in Göttingen in the former Electorate of Hanover.

The reason was to keynote a workshop entitled “New Forms of Collaborative Production and Innovation: Economic, Social, Legal and Technical Characteristics and Conditions.” The workshop was intentionally interdisciplinary — attracting academics from law, economics, sociology, computer science. It attracted participants from around Germany — including lots of German PhD students — as well as a few other Europeans and two North America-trained lawyers.

The event was hosted by Sociological Research Institute (SOFI) and held at Lichtenberg Kolleg of the Georg-August-Universität Göttingen. The university was created by and named after Georg, Prince of Hannover (who was father of America’s least favorite King, George III). The event was held in the green room of the Carl Gauss’s former observatory.

Wednesday afternoon I gave the initial keynote, followed by a second keynote by the well-known and beloved user innovation researcher Frank Piller. (Once his slides are posted I’ll blog on some of his interesting ideas.) Frank & I were introduced by one of the conference organizers, Herr Doktor Volker Wittke of SOFI.

My talk was entitled “Distributed Perspectives on Innovation: Open Innovation, User Innovation and Beyond.” As a keynote, I had 50 minutes (plus Q&A) so it’s longer, broader and deeper than a typical academic paper. My slides are up on SlideShare or I can email a PDF, and yesterday I posted links to many of the key references.

Because of the audience, I began the talk with an overview of O/U/CI adapted from several previous talks and my 2009 paper. I then summarized the discussion of innovation commercialization modes that’s the core of the paper that Marcel Bogers and I will be presenting at the Academy of Management conference in Montréal.

From this, I presented the audience with some questions and research opportunities:

The call to pursue more precise research on the community construct.
Does the chronic problem of sponsors sharing control with open source communities mean that firms are only as open as they (cynically or instrumentally) need to be?
My ongoing question about whether crowd-sourcing is open innovation or user innovation?
Another earlier question — one I perhaps dodged in the 2006 book chapter — of whether monetizing knowledge flows in OI produces socially suboptimal results. (A common view in CI research, perhaps heresy in OI research).
Is “open innovation” (use of external innovations) being used as a substitute rather than a complement to internal innovation capabilities?

Seriously jet-lagged, I scribbled some notes on the subsequent Q&A: my notes are better on the answers than the questions [and I also added other ideas after the fact.]

The first two questions centered on the value network slide, which I developed while teaching open innovation, used in previous talks, and is Figure 1 in the West & Bogers AOM paper.

The first question was whether there are sectoral differences in OI/UI. Chesbrough (2003) emphasizes the hardware business of Xerox PARC, while a lot of user innovation examples are about open source software. To this I had came up with three basic ideas:

The recent paper of Christina Raasch notwithstanding,
Users can produce software but not tangible goods, so user innovation works better for software [and other information goods.] Exceptions have been studied by Christina Raasch and colleagues [who spoke about this on Thursday morning.]
As would be evident to readers of Carliss Baldwin, the IT industry embraces open innovation because the modularity of architecture and well-defined interfaces enables component-based business models
Other industries have [perhaps for path-dependent reasons] been more integral and less open. Take the auto industry, which uses a vertically integrated model similar to 1900. But perhaps in 2050, we will have a more modular auto industry with standardized batteries and other components.

The second question asked about different forms of collaboration among the actors in this stylized value network.

I argued that our diagram is perhaps misleading because it emphasizes positional roles, but there are attributes of the collaborator that may be more important for firms to manage the collaboration process.

Is the collaborator a firm or an individual? Open innovation emphasizes [dyadic] firm partners, whereas user innovation is normally about individuals. The forthcoming Journal of Management paper by Bogers, Afuah and Bastian does talk about firm users (which they inexplicably label “intermediate users”), and of course the first von Hippel (1988) book highlighted engineers innovating scientific instruments at work
Scale of collaborators. If a company is providing batteries to Nokia, they may have several engineers working full-time collaboration.. If I am giving feedback to Google as a user, I might spend 10 minutes once a month offering my suggestions. So the tools and processes and learning curve for enabling the collaboration will be very different [for the deep vs. shallow collaborations.]
Number of collaborators. If I’m Nokia, I might have 2-3 different component suppliers for several key product categories, and thus the firm might have 10? 50? suppliers of major components. If I’m Apple, I have 100,000 third party app developers, [while Google would have 100s of millions of users.] So the processes for managing collaboration would be different for dozens vs. millions of collaborators.

I hope to have other posts on the workshop next week.

Photo credit: Herr Doktor Frank Piller.

References for Open Innovation and Beyond

2010-05-05T03:00:00.000-07:00

On Wednesday I am giving a keynote talk entitled “Distributed Perspectives on Innovation: Open Innovation, User Innovation and Beyond” at a conference at Georg-August-Universität Göttingen.

I see the talk as an extension of my ongoing work on OUCI. As with all invited talks, it is a great privilege and honor to be invited to speak at such an event.

For the people who were in the room, I wanted to post some references to the topics I talked about:

A reading list of references for open, user and cumulative innovation — both my personal recommendations and by citation counts
A reading list of open source academic publications
Open innovation research:

The manuscript of Open Innovation: Researching a New Paradigm.
The September 2009 special issue of R&D Management, including the oft-cited Enkel, Gassmann and Chesbrough introductory article.

Community research:

The paper Karim Lakhani and I did on communities in OI
Peter Meyer’s talk on cumulative innovation in late 18th century development of the airplane.
My Business Week column on the difficulty firms have giving up control of communities

Academic classification questions:

Should crowd sourcing be classified as UI or OI?
Is acquiring firms open innovation or not?

Henry Chesbrough’s comments on Pasteur’s Quadrant and the value of observing industry practice.
My own work:

West (2009) law review paper on OUCI and policy
West and Bogers (2010) paper that we are presenting at Academy of Management 2010
Blog commentary on increasing internal integration by Nokia and Google

This is not a comprehensive list of the material, but are most of the links where I could find URLs (without an Internet connect) at 38,000' over the North Atlantic en route to giving the talk.

I thought the references might also be useful to new readers of the blog. I hope to post my slides and additional thoughts late this week or next week after I get home.

CFP: Open Innovation book chapters

2010-04-19T00:01:00.000-07:00

Open Innovation at Firms and Public Administrations: Technologies for Value Creation

Editors:
Dr. Carmen de Pablos Heredero
Rey Juan Carlos University, Spain

Call for Chapters:
Proposals Submission Deadline: May 25, 2010
Full Chapters Due: September 1, 2010

…

Recommended topics include, but are not limited to, the following:
Open innovation policies
Open innovation as a model of innovation and creation of new knowledge
The analysis of the contingency elements that affect open innovation practices
The implementation and use of open innovation
The management of intellectual property
The role of the managerial side in open innovation
Motivation factors for open innovation
Leadership for open innovation practices
Questions associated to new markets and economic scenarios

Submission Procedure
Researchers and practitioners are invited to submit on or before May 25, 2010, a 2-3 page chapter proposal clearly explaining the mission and concerns of his or her proposed chapter. Authors of accepted proposals will be notified by June 25, 2010 about the status of their proposals and sent chapter guidelines. Full chapters are expected to be submitted by September 1, 2010. All submitted chapters will be reviewed on a double-blind review basis. Contributors may also be requested to serve as reviewers for this project.

Publisher
This book is scheduled to be published by IGI Global (formerly Idea Group Inc.), publisher of the “Information Science Reference” (formerly Idea Group Reference), “Medical Information Science Reference,” and “IGI Publishing” imprints. For additional information regarding the publisher, please visit www.igi-global.com. This publication is anticipated to be released in 2011.

See the CFP for more details.

What is "innovation"?

2010-04-13T07:34:00.000-07:00

Sunday night, as I waited for feedback on a draft chapter about open innovation — part of a volume on innovation for the Wiley Encyclpedia of Marketing — I saw an interesting headline on the Wall Street Journal website:

TECHNOLOGY
APRIL 12, 2010
What Is Innovation? Defining and Measuring a Nebulous Concept

BY NICK CLAYTON

Everyone agrees innovation is desirable but few agree on its exact definition, especially in a business context. But as companies chase it and governments attempt to promote it, the need to define innovation and, in particular, measure it has become increasingly pressing.

This was an intriguing headline and lead paragraph, because it seemed to overlap a concern I’ve had about open “innovation” and user “innovation” research — and one that I hinted at in the chapter — but because I was on deadline I saved a link to the article and set it aside.

By the time that I retrieved the article Monday (from the university’s Factiva subscription since I dropped WSJ.com due to price increases), it had a new headline, although the lead paragraph remained identical:

TECHNOLOGY
APRIL 12, 2010
Blueprint for fostering innovation
Defining and measuring what can be a nebulous concept poses conundrum for businesses, governments

The new headline was perhaps more accurate, since the bulk of the article was about how various governments (UK, Russia, Singapore) and the OECD are seeking new ways to promote innovation. However, I searched in vain for a reference to open innovation, user innovation, or other new concepts in innovation.

It included a plug for the recent book The Silver Lining by Scott Anthony, president of Innosight, the innovation consulting company founded by Clay Christensen. (Anthony apparently heads a VC firm called Innosight Ventures).

Anthony and others were quoted talking about alternatives to valuing companies to the traditional idea of counting patents. Private equity investor Saul Klein — whose firm Index Ventures made out like a bandit dumping open source startup MySQL on Sun Microsystems

It's thriving at a level that it probably never has before because so much of the infrastructure of the Internet and the software which runs the Internet has been commoditized and is freely available. All major software is now open-source.

"A lot of the heavy lifting software developers would have done in the past is now freely available to them to tinker with and adapt. That gives massive potential for innovation and really allows anybody at very low cost to develop new goods and services.

Of course, commercial open source software companies are practicing a form of open innovation, but this didn’t answer my question.

The issue I’ve been wrestling with in my O/U/CI research is that not all “innovation” in OI, UI or CI papers really qualifies as innovation. Marcel Bogers & I talk about this in our current O/U/CI papers, and it’s also something I mention in this week’s chapter on OI:

There is the open question (cf. West & Lakhani, 2008) as to whether a typical open source project generates “innovation” as normally defined in the literature— particularly for projects like Linux that are freely distributed imitations of existing technologies.

I don’t have time to say more today, because I have to finish a presentation for my work on engineering entrepreneurship in the San Diego Telecom industry. But I’ll come back to the topic — and my overview chapter — at another point soon.

Research behind Business Week OI column

2010-04-02T08:12:00.000-07:00

On Thursday, Business Week published my guest column for a special report about open source and open innovation. Business Week approached me at the suggestion of Henry Chesbrough (thanks Hank), presumably because I’m North America’s (or at least California’s) second most famous open innovation academic researcher and will work cheap.

When offered a platform to put open innovation topics in front of business readers — and presumably burnish my public visibility and consulting credentials — I immediately thought of a topic that I have been researching, blogging about and doing academic research on: the issue of sponsored open source communities. The subtitle “letting go is hard to do” captures the key dilemma that I (and others) have identified in our open source research: firms don’t want to let go, but they must if they want to capture the full benefits of external collaboration.

In trying to cover the issues of a 6,000 word journal article (or several) in a 900 word column, I had to speak in shorthand or leave things out entirely, so I thought I would provide (another 900 words of) literature references to my academic readers in case they wanted to follow up on any of the ideas. (More detail on the cases are given in my Open IT Strategies blog.)

First, of course, is the idea that a firm-sponsored open source community is an example of open innovation. When you consider open source research, there’s certainly a lot of it from the user innovation perspective — particularly from Karim Lakhani of HBS. User innovation exactly captures the “scratching an itch” mantra of open source maven Eric Raymond, and exactly describes the origins of a few projects like the Apache web server and the R statistics software.

While there is a clear overlap between user innovation and open innovation, as I have argued in this blog the two concepts are certainly distinct and efforts to blur the distinction are unfortunate.

In the 2006 R&D Management paper that first brought me to open innovation — co-authored with Scott Gallagher — we showed how firm involvement with open source nicely fit the open innovation paradigm — both the inbound use of external technologies and the outbound commercialization of internal technologies. (Alas, we tended to blur the distinction between open and user innovation.)

Fast forward to 2009, and the second R&D Management special issue on open innovation. In their introductory article, Ellen Enkel, Oliver Gassman and Henry Chesbrough suggest there is a third open innovation mode beyond the inbound and outbound mode, which they term a “coupled process”:

The coupled process refers to co-creation with (mainly) complementary partners through alliances, cooperation, and joint ventures during which give and take are crucial for success. Companies that establish the coupled process as key combine the outside-in process (to gain external knowledge) with the inside-out process (to bring ideas to market) and, in doing so, jointly develop and commercialize innovation.

Although it’s not cited, the West & Gallagher paper shows how this process is used by firms to cooperatively produce a shared good in a process we called “pooled R&D”. We argue the main difference between this and normal cooperative R&D is that the open source license means that firms are unable to fully appropriate the returns of their efforts, which freely spillover to participants and non-participants alike. (Obviously, this is most suited for commodity technologies that are necessary but provide little opportunity for competitive advantage.)

Another paper that anticipates the Enkel at al argument is my paper with Karim Lakhani — in a 2008 special issue of Industry and Innovation — which focuses on the importance of the community construct in open innovation research.

But the specific insight that motivated the Business Week article was the long effort of Siobhán O’Mahony (now at Boston University) and I to capture how sponsored open source communities are different from organic ones. In particular, our 2008 paper (in that same special issue) focuses on the difference between nominal and actual openness of these communities, and the difficulty that firms have in letting go.

Here are two paragraphs from the conclusions of the paper that summarize our findings:

By studying the design decisions that sponsors made when creating a community, we identified three dimensions that affected participation: (1) the organization of production, (2) governance and (3) intellectual property. In doing so, we showed that the participation architecture of a technical community is determined not only by its technical architecture, but also by community design decisions made by the community’s leaders. …

We showed that sponsors’ community design decisions on these three dimensions reflected the inherent tension between two conflicting goals. On the one hand, firms wished to retain control over technologies fundamental to their business success. On the other hand, providing the opportunity structure for others to participate was a prerequisite for gaining the benefits from developing an external community. Thus, when designing a participation architecture, firms mediate between surrendering control and offering opportunities for outside participation that could lead to community contributions and growth.

Not surprisingly, the Business Week column came to the same conclusion as the West & O’Mahony paper: managing this tension is difficult and thus rarely successful. The rare exception is the Eclipse Foundation, which is studied by firms setting up other sponsored open source communities.

So far, I’m unaware of any academic paper that looks at the process by which Eclipse developed this industry-leading shared governance. (Siobhán and I talked about writing one from our extensive interviews, but neither of us had the time.) Even if it couldn’t be published in an “A” journal, I still think the Eclipse exemplar is interesting enough that someone should do it — and, if well done, I think it would be cited.

CFP: OUI 2010

2010-03-24T08:15:00.000-07:00

The call for papers has been issued for the “8th Annual International Open and User Innovation Workshop,” aka OUI 2010.

I had a great time at OUI 2009 and UOI 2008, due to the stimulating combination of early stage research and first-rate innovation minds. I now do everything I can (within university travel budgets) to attend each year. In 2008 I attended UOI (née User Innovation Workshop) to learn more about User Innovation, and felt like a fish out of water as one of the few OI researchers. However, in Hamburg last year there was a significant contingent of OI researchers, including a few from host TUHH.

OUI 2010 will be hosted by MIT and held in Cambridge from August 2-4, 2010. Host Eric von Hippel asks that participants limit their submissions to topics directly related to the CFP, as the conference has been growing exponentially over recent years and (due to logistical reasons) is limited to 150 participants.

The timing is intended so that international visitors can leave OUI and head north to Montreal, where the Academy of Management begins August 8. Other people will be heading to Montréal in time for the August 6 start of PDW sessions. I will be among them, so I can speak at Frank Piller and Holger Schiele’s PDW session Saturday afternoon called “Open Innovation with Suppliers.”

Note: 2008 was the User and Open Innovation Workshop, but 2009 and now 2010 workshops are actually Open and User Innovation (as in 2010). I have corrected the 2009 posts to reflect this.

CFP: European Journal of Innovation Management

2010-03-17T18:17:00.000-07:00

EJIM Special Issue on Open Innovation
Special issue call for papers from European Journal of Innovation Management

According to Henry Chesbrough “Open Innovation is the use of purposive inflows and outflows of knowledge to accelerate internal innovation, and expand the markets for external use of innovation”. Several heterogeneous phenomena are compatible with such a broad definition and have all been labelled Open Innovation: Intellectual Property markets with or without the presence of intermediaries, crowdsourcing and lead user innovation, academic and company spin-offs, and collaborative research projects. The external sourcing and the external commercialization of innovation are very different practices as well.

To what extent these phenomena can be studied as one?

…

Guest Editors

Prof. Sven Carlsson
Department of Informatics
School of Economics and Management, Lund University
Ole Römers väg 6, SE-223 63 Lund, Sweden
Sven_Carlsson@hermes.ics.lu.se

Dr. Vincenzo Corvello
Department of Business Science, cubo 3C
University of Calabria
87036 Arcavacata di Rende (CS), Italy
vincenzo.corvello@unical.it

Submission details

The deadline for submitting full papers is September 15, 2010

See the CFP for full details.

Who claims crowdsourcing?

2010-03-12T20:22:00.000-08:00

Today I gave a progress report on my O/U/CI research with Marcel Bogers to my colleagues at the SJSU College of Business. The nominal reason was to prove that I deserved a summer support grant last summer (which we call the Lucas Fellowship after our donor), but it was also a way to try out some ideas for a paper that is in draft form but not at a journal.

At some point — perhaps after the paper is posted to SSRN or under review at a journal — I’ll share some of the ideas from the paper, but right now I’m more like a superstitious doctoral student (rather than a tenured full professor) in not wanting to circulate it prematurely.

However, a couple of slides won’t be ending up in the paper so I thought I’d share them. One is slide was an update of the citation counts of O/U/CI research from last November:

User innovation

von Hippel (1988): 3,784 cites
von Hippel (1994): 1,654 cites

Open innovation

Chesbrough (2003): 1,548 cites
Chesbrough, Vanhaverbeke, West (2006): 835 cites

Cumulative innovation:

Allen (1983): 548 cites
Scotchmer (1991): 941 cites

Another slide went back to my observation (which we should have mentioned in West & Gallagher 2006) that inbound open innovation — particularly from individuals — looks a lot like lead users/firms utilizing user innovation. It extends my earlier interest in how to study crowd sourcing, as well as my interest in both monetary and non-monetary incentives for individuals to supply external innovations.

So this was my O/U/CI slide comparing two ways how to think about crowd sourcing:

UI model

Users have sticky knowledge
Apply knowledge to solve own problems
Make it easy to obtain free revealing

OI model:

Users/non-users have knowledge
Maximize return from that knowledge
Use markets to identify, source ideas

My point is that OI covers almost any type of external innovation, but usually emphasizes monetary incentives — West & Gallagher 2006 being a notable exception. Meanwhile, user innovation is supposed to be about “users,” but a lot of crowd sourcing (or “wisdom of crowds”) utilizes individual knowledge not directly related to personal use.

I won’t claim the slide is profound, but under deadline to make my presentation, felt I got a clearer perspective than any previous attempt to explain why I thought both models were applicable here.

Of course, it’s easy to make a PPT deck and hard to do a quality empirical study. Lars Bo Jeppesen and Karim Lakhani have a forthcoming empirical paper in Organization Science, “Marginality and Problem-Solving Effectiveness in Broadcast Search.” The paper is more about problem-solving and search than about OI and UI, but it mentions both Chesbrough and von Hippel in passing.

Oddly, my friends Jeppesen & Lakhani give a prominent role to problem-solving contests, but don’t mention Suzanne Scotchmer’s 370 page book, Innovation and Incentives, about contests and other alternatives to the patent system. Maybe we need Prof Scotchmer to come speak to UOI 2010.

Accessing a canon of open source research

2010-02-10T14:22:00.000-08:00

First #FOSS2010 posting of many.

I’m here at the FOSS 2010 workshop hosted by UC Irvine, in a room full of academics talking about the future of open source research in hopes of shaping NSF funding of same.

Host Walt Scacchi asked for a show of hands: about 30 of the 40 people in the room are academics, and most of them are either from computer science or information science/information schools. There were only five of us “other” academics (i.e. social scientists) — and three of us were on the SBE (Social, Behavioral & Economic) panel.

So one of the things that’s clear is that even though the room represents hundreds of open source conference and journal papers, few of them have read any of the social science research on open source.

As a starting point, I thought I’d put together a canon of open source research — along the lines of my earlier canon of open/user innovation research (most people in the room have never heard of open innovation, Chesbrough, von Hippel or even Bayh-Dole)

1. Special Issues

Research Policy (June 2003) special issue on Open Source Software Development, edited by Eric von Hippel and Georg von Krogh
Management Science (July 2006) special issue on Open Source Software, edited by Eric von Hippel and Georg von Krogh

2. MIT Repository

Karim Lakhani created a repository of open source working papers at MIT — 655 and counting. It’s not comprehensive (e.g., only 3 of my 11 distinct papers on OSS are there). However, it does give a sense of the names and the themes that have been covered.

3. Google

In this world of Google-enabled everything, it would be possible to just search in Google Scholar for open source papers published in business and economics or social sciences (e.g. sociology, anthropology).

Because Google lists things in order of citations, this has the value of also listing some of the most-cited papers. Four of the top 20 come from the Research Policy special issue:

Guido Hertel, Sven Niedner and Stefanie Herrmann, 2003, “Motivation of software developers in open source projects: an Internet-based survey of contributors to the Linux kernel,” Research Policy 32 (7), 1159-177.
Georg von Krogh, Sebastian Spaeth, and Karim R. Lakhani, 2003. “Community, joining, and specialization in open source software innovation: a case study,” Research Policy 32 (7), 1217-1241.
Andrea Bonaccorsi and Cristina Rossi, 2003. “Why Open Source software can succeed," Research Policy 32 (7), 1243-1258.
Joel West, 2003, “How open is open enough? Melding proprietary and open source platform strategies,” Research Policy 32 (7), 1259-1285.

Joel's open innovation podcast

2010-02-08T13:44:00.000-08:00

That famed B-list open innovation celebrity, Joel West, is featured in a new podcast posted on the EnterpriseLeadership website. The podcast is a result of a telephone interview by host Tom Parish with Joel done a few months ago.

The interview covers the basics of open innovation from the perspective of the IT industry and chief information officers. It might be too basic for regular readers of this blog. But those who have already gone through the Chesbrough YouTube videos — or find them impractical to watch while driving or jogging — might want to check it out. (My one YouTube appearance to date comes from visiting Chesbrough at UC Berkeley to lecture in their fall seminar series).

Most popular 2009 OI article?

2009-12-18T21:13:00.000-08:00

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.

OUCI publication #1

2009-12-10T07:00:00.000-08:00

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.

Open innovation and Silicon Valley

2009-12-05T17:23:00.001-08:00

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.

Open innovation ecosystems

2009-11-16T08:00:00.000-08:00

At the 2008 UOI conference, I presented a paper on Symbian’s ecosystem management efforts and what it told us about the problem of firms using value networks for their open innovation strategies. Of course, it draws on the discussion of value networks in the final section of the 2006 book — the section that was (under our decentralized production process) was shepherded by Wim Vanhaverbeke.

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.

Chesbrough promotes green OI in London

2009-11-13T00:22:00.000-08:00

My friend David Wood (the only executive at Symbian from beginning to end) has been blogging (and tweeting) all week at the FT Innovation 2009 conference.

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.)

Is open innovation universal? New OI puzzles

2009-11-10T00:01:00.000-08:00

I’m convinced that open innovation would not exist without a particular personality trait (quirk) of its inventor, Henry Chesbrough. I feel comfortable in speaking this way, since Henry reminded me the last time I saw him that we have been friends for a long time: we met at the 1996 Strategic Management Society conference in Phoenix as middle aged IT veterans en route to careers as b-school profs, although we got to know each other best during the period from 2004-2006 when we were working on the 2006 Oxford book with Wim Vanhaverbeke.

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.

Influential O/U/CI research

2009-11-05T12:25:00.001-08:00

Here’s some quick citation counts of O/U/CI research as reported by Google Scholar. (For a discussion of some of these works, see my Nov. 2008 recommended O/U/CI bibliography).

Open innovation:

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

Other relevant work by Henry Chesbrough:

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

User innovation:

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

Lead users:

von Hippel, “Lead users: A source of novel product concepts,” Management Science (1986): 1193

Other relevant work by Eric von Hippel:

von Hippel, The Sources of Innovation (1988): 3546
von Hippel, “Sticky Information,” Management Science (1994): 1518
von Hippel, Democratizing Innovation (2005): 1142

Collective invention:

Allen, “Collective invention,” JEBO (1983): 499
Nuvolari, “Collective invention…Cornish pumping engine,” CJE (2004): 89

Cumulative innovation:

Chang, “Patent scope, antitrust policy, and cumulative innovation,” Rand (1995): 197

Relevant work by Suzanne Scotchmer:

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

(Non)monetary incentives for external innovation

2009-09-21T13:10:00.001-07:00

Crowdsourcing is a form of open innovation (and in some cases, user innovation) that attempts to get a large pool of outsiders to solve a problem. Product recommendations at Amazon etc. are probably the most often seen example.

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.

Open innovation progress in last three years

2009-09-18T09:25:00.001-07:00

About 18 months ago, the journal R&D Management called for papers on open innovation. This month, the journal has published the resulting special issue, edited by Ellen Enkel, Oliver Gassman and Henry Chesbrough. (No one told me the issue was out, but I found it while updating the Open Innovation website.)

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.

Authors	Title	DOI
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

Updated website

2009-09-17T23:53:00.000-07:00

Tonight I took care of some long-deferred maintenance and fixes for the open innovation website. That includes

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.

There is still plenty of work to do.

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.

Berkeley resumes its Open Innovation series

2009-09-10T14:41:00.001-07:00

Next week, the Center for Open Innovation at UC Berkeley is resuming its speaker series on Open Innovation that it began last year. The talks are being held at 2pm on Monday afternoons at the Center for Information Technology Research in the Interest of Society on the Berkeley campus.

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	Google
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. 9	TBD
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.

Silicon Valley technology sourcing

2009-09-09T16:06:00.001-07:00

More than 15 years ago, when I was helping to start a software trade association in San Diego we flew up to study the Software Developer‘s Forum. Today SDForum is helping foster solutions to technical and business problems across a wide range of industries.

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"
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.

OK, so here “open innovation” is being used as a synonym for “buying outside technology.”

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.

CFP: Open Innovation, Closed Societies

2009-08-17T00:01:00.001-07:00

International Journal of Innovation and Sustainable Development (IJISD)
Call For papers
Special Issue on: "Open Innovation, Closed Societies"

Guest Editors:
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?

…

Important Dates

Deadline for submission of manuscripts: 30 September, 2009
Communication of peer review to authors: 15 January, 2010
Deadline for revised manuscripts: 31 March, 2010

Full CFP here

CFP: Open Innovation and supply chain

2009-08-08T10:09:00.001-07:00

International Journal of Innovation Management:

Special Issue on Open Innovation and the Integration of Suppliers

Excerpts below, the full PDF is here.

Guest Editor
Dr. Alexander Brem,
School of Business and Economics, University of Erlangen-Nuremberg, and
VEND consulting GmbH, Nuremberg

Background
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.

Important Dates
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: …

I 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:

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.

Buying not making innovation

2009-07-27T11:25:00.001-07:00

Larry Magid has an apt summary of Google’s innovation strategy in his San Jose Mercury column this morning:

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.

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.

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.

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.

The wisdom of crowdsourcing

2009-07-13T16:30:00.001-07:00

In conjunction with the death of some middle-aged pop star, the Boston Globe is running a visual trivia contest to name seven of the 45 stars in a photo taken for the 1985 taping of “We are the World.” It’s a fun exercise for anyone who is/was a fan of 80s music.

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?

UI guru quoted on Apple open innovation

2009-06-26T11:20:00.000-07:00

Karim Lakhani was quoted Thursday in the FT for his knowledge of user innovation, although (perhaps ironically) it was in an open innovation context.

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 fun

To 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.

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.

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.

What's so open about open innovation?

2009-06-22T12:25:00.000-07:00

Although this was the 7th year for the User Innovation workshop, it was only the second year in which open innovation was explicitly listed as a topic in the CFP. Although last year’s workshop at Harvard was officially the “User and Open Innovation” workshop, it felt a little awkward being there as a keeper of the open innovation flame, as many of the “open innovation” papers were not consonant with the Chesbrough definition.

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. …

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.

Still, there is a ways to go to bridge the open innovation and user innovation research communities.

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).

Cumulative, open and user innovation (III)

2009-06-16T11:00:00.000-07:00

At OUI 2009 earlier this month in Harburg, I presented my own research in the open innovation track. It was an extension of the research that I presented at EURAM 2007, UOI 2008 and AOM 2008 that contrasts cumulative, open and user innovation.

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.

Scratching an itch

2009-06-05T01:16:00.000-07:00

Although I’ve read key works by Eric von Hippel and his disciples — particulary in open source — I wouldn’t consider myself a user innovation person. Certainly here at OUI 2009, I’m strongly considered as a disciple of the open innovation camp.

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).

References
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.

Open innovation: structure vs. culture

2009-06-04T07:38:00.000-07:00

At OUI 2009, Katharina Hoelzle of Technische Universität Berlin presented a potentially ground-breaking paper on open innovation. It was presented as a 3-minute abstract of an “ongoing project” — which means no data yet, and not a lot of details.

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)

The success of firms is thus the combination of success on these two dimensions, moderated by contingency factors (which weren’t specified).

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):

		Cultural
		Low	High
Structural	High	Open Innovation department	“True” Open Innovation
Structural	Low	No open innovation	Open Innovation mindset

I would label it slightly differently:

		Cultural
		Low	High
Structural	High	Open Innovation department	Integrated Open Innovation
Structural	Low	Closed innovation	Open Innovation mindset

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.