The past success of the Closed Innovation paradigm accounts for its persistence in the face of the changing landscape of knowledge. It is an approach that is fundamentally inwardly focused, which fit well with the knowledge environment of the early twentieth century.  However, the paradigm is increasingly at odds with the knowledge landscape at the twenty-first century.

The people who were trained as scientists in this period were mastering the tremendous intellectual breakthroughs in understanding the physical world, but were largely uninterested in applying those insights to practical problems.  Although the knowledge being created within universities seemed to hold great promise, your growing enterprise could not rely on this knowledge being put to use in your industry on its own.

The universities are full of professors with deep expertise.  Better yet, these professors are surrounded by graduate students, who apprentice themselves to these professors and their graduate students are clearly eager to apply that science to business problems.  The future research agendas of faculty members are coming to reflect important problems being confront in industry.  In the world of the Internet, leading scholars from around the world contribute new papers to online archive, creating a global community of scholars.

The logic underlying the innovation process is now completely reversed.  Even the expression not invented here (NIH) has an entirely different meaning.  Today NIH means that companies need not reinvent the wheel, since they can rely on external sources to do the job effectively.  The new logic turns the old assumptions of their head.  Instead of making money by hoarding technology for your own use, you make money by leveraging multiple paths to market for your technology.  Instead of restricting the research function exclusively to inventing new knowledge, good research practice also includes accessing and integrating external knowledge.  Instead of managing intellectual property (IP) as a way to exclude anyone else from using your technology, you manage IP advance your own business model and to profit from your rivals’ use.  You might even occasionally help fund a young start-up to explore an area of potential future interest.

Inserts based on Open Innovation by Henry Chesbrough.

Webster defines a channel as “a way, course, or direction of thought or direction of thought or action.”  These channels will be courses of action leading to innovation.  Much like distribution channels give producers a choice of how their product is distributed, innovation channels are the choices by which innovation skills are accessed, and apply to both internal efforts as well as external ones.  As the whole notion of open innovation has flourished, there have been few attempts to provide practitioners with a concrete set of guidelines for how and when to select an innovation channel.

Insight on innovation channels is explored by Alpheus Bingham and Dwayne Spradlin in their book The Open Innovation Marketplace: Creating Value in the Challenge Driven Enterprise.  This insert will provide you with sources for establishing a foundation on the channels themselves and their distinctions:

1. Internal – Innovating using the existing resources, namely people and equipment, within an organization.
2. Contract Research Organization – A well-defined range of specialties and capabilities.  In many instances, they repeat a given type of research more frequently than a product innovator does.  This gives them a competitive edge for conducting certain studies.
3. Electronic Request for Proposals – A contracting group can access organizations they may be unaware of and expand the range of alternatives prior to selection and agreement of terms.
4. Off-Shoring – Differently from outsourcing, this channel refers to the placement of the work in countries where labor costs are significantly lower.
5. Crowdsourcing, Ideation – The broadcasting of challenges to a wide audience but with the expectation that the solving audience would respond with only their ideas or a theoretical justification for why their approach should work.
6. Crowdsourcing/Reduction to Practice – The solving community will also conduct the studies required for “reduction to practice.” The solving community members to whom the challenge is broadcast are expected to conduct appropriate experiments and demonstrate the viability of their solutions.
7. University Contracts – Often conducted as part of graduate student thesis efforts, with special IP and publication issues, and more important, the efforts themselves provide affiliation with some of the most respected and trustworthy brands in the world.
8. Consulting – A self-explanatory internal innovation.
9. Right of First Refusal – A unique way to manage risk by paying for “fewer” rights upfront in exchange for the right to negotiate for greater IP, at a later date, after risks have been reduced by experimental outcomes.
10. Joint Venture – When entities, which usually do not compete with each other, may both benefit from the outcomes of an innovation endeavor and want to share risks, costs, and of course, financially attractive outcomes.

Software innovation is made more manageable and less expensive in an open source environment. The point of open source is to offer software which is cheaper, dependable, and of superior quality. This software is often free and available for anyone’s use.

The Benefit
In an open source environment, all may benefit from the program a programmer creates or improves. Programmers are also given the ability to work on several projects at once. The open source community can be a great entry in the venture capital world and widen the possibility landing a super OS job. Many of these nuances keep the open source boat afloat.

Sustainability is a shared responsibility in an open source setting. A programmer is no long solely responsible for the maintaining their innovations, but others can contribute through shared codes. This frees them up to crank out more innovations. An open source environment is an amazing starting point for innovators.

Now the preverbal need to re-create the core is eliminated. Open sources makes innovation easier. An additional benefit is the innovators ability to work alongside other innovators and his or her varying vantage point and worldwide view.

Innovation is global, multidisciplinary and open; therefore the need to bring different minds and different perspectives together to discover new solutions to long-standing problems is immense. Therein lies the essence of collaborative innovation.

In the words of Thomas Goetz:

Software is just the beginning … open source is doing for mass innovation what the assembly line did for mass production. Get ready for the era when collaboration replaces the corporation.

The Power
So what makes open source so powerful?

Goetz gives two reasons: the rise of the Internet and the excesses of intellectual property. The Internet is open source’s great enabler, the communications tool that makes massive decentralized projects possible. Intellectual property, on the other hand, is open source’s nemesis: a legal regime that has become so stifling and restrictive that thousands of free-thinking programmers, scientists, designers, engineers, and scholars are desperate to find new ways to create.

Freed from the need to re-invent the core, they are able to devise the new more easily, of course. But just as they are no longer responsible for all 100% of the sustaining, they are also able to work alongside other innovators and to benefit from their differing view of the world, bringing new richness.

The Myth
The notions that open source is not innovative and only a means to avoid license costs are now busted. A software innovation trail is being swiftly blazed by the open source revolution. Industry leaders such as Apple and Microsoft are using it build the world.

http://thedecisiontree.com/blog/thomas-goetz/

http://www.wired.com/wired/archive/11.11/opensource_pr.html

http://startupowl.com/resources/startup-boosters/open-preneurs/

These days, the former leading industrial enterprises are finding remarkably strong competition from many newer companies.  Companies such as Intel, Microsoft, and Cisco conduct little or no basic research on their own.  Although they have been very innovative, these companies have innovated with the research discoveries of others.  And there is a legion of other, even newer companies waiting to supplant these firms if an opportunity should arise.  They are likely to rely on someone else’s discoveries to ascend to leadership.

What accounts for the apparent decline in the innovation capabilities of so many leading companies, at a time when so many promising ideas abound?  Closed innovation.  It is a view that says successful innovation requires control.  In closed innovation, a company must hire the best and the brightest people, so that the smartest people in their industry work for them.  In order to bring new products and services to the market, they must be discovered and developed from within.  If they discover it, they will get it to market first and, thus, declared the winner.  If the lead the industry in making investments in R&D, they will discover the best and the most ideas and will come to lead the market.  Therefore, they should control their intellectual property so that their competitors don’t  profit from their ideas.

Today, several factors combine to erode the underpinnings of Closed Innovation.  One factor is the growing mobility of highly experienced and skilled people.  The logic of Closed Innovation was further challenged by the increasingly fast time to market for many products and services, making the shelf life of a particular technology ever shorter.  When these erosion factors have impacted an industry, these assumptions and logic that once made Closed Innovation an effective approach no longer applied.

Open Innovation is emerging in the place of Closed Innovation.  Open innovation is a paradigm that assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as the firms look to advance their technology.  Although the Open innovation process still weeds out false positives (now from external as well as internal sources), it also enables the recovery of false negatives, that is, projects that initially seem almost worthless, but turn out to be surprisingly valuable.

G’day!

In a radical move to help society benefit from University research, UNSW has recently decided to make valuable technologies available to business and innovation partners FOR FREE – an approach called “Easy Access IP” –  read more.

Our goal is to let the world know about our technologies, researchers and laboratories so that value can be created through strong business partnerships. This is why we were excited to partner with the iBridge Network^TM. The iBridge Network^TM is a simple, convenient, way for organisations to find new technologies for the benefit of their business – EasyAccess IP community.

The University of New South Wales (UNSW) in Sydney, “down-under” is also seeking Open Innovation partners to help develop breakthrough technologies. As a partner you’ll also have direct access to over 5000 researchers, access to breakthrough technologies and access to world-class laboratories. UNSW is one of Australia’s leading research and teaching universities, ranked in the top 50 universities worldwide.

So now when you think of Australia, “down-under”, we hope you will consider partnering with UNSW.

Cheers,

Steve

Dr Steve Brodie is the Open Innovation Manager with NewSouth Innovations (NSi) the Technology Transfer Company of UNSW. s.brodie@nsinnovations.com.au – www.nsinnovations.com.au

Thomas Friedman’s recent opinion piece in the New York Times focuses on the Obama Administration’s efforts to create eight innovation hubs across the U.S. in order to find solutions to the most pressing energy issues facing the country and the planet. Friedman described the plan as “the most exciting, moon-shot-quality, high-aspiration initiative proposed by President Obama that no one has heard of.”
So far, three of these hubs have been launched, but they have only been provided a limited amount of funding- $22 million for all three- for a period of one year. In his piece, Friedman relates a conversation he had with Kishore Mahbubani, dean of the Lee Kuan Yew School of Public Policy at the National University of Singapore, and Mr. Mahbubani’s disbelief that the U.S. couldn’t come up with the full $25 million needed for each of these centers.
The National University of Singapore is a member of the iBridge Network and Singapore is clearly a global leader in innovation that has been able to attract some of the best scientific minds in the world. They have the 43rd ranked GDP in the world, while the U.S. has the first. So, why can’t we find $25 million for each of these innovation hubs that could truly revolutionize the way we create and use energy while Singapore has no problem spending a billion on scientific research?
As we’ve recently pointed out, the Administration, specifically the Office of Science and Technology Policy (OSTP), has taken some major strides to bolster the country’s innovation economy. The administration is focusing on solutions that support moving innovations from the labs in which they are created into the commercial market where they can positively impact economic recovery and growth. What better way to do that than through these innovation hubs?
Congress is obviously facing major budget decisions and is also in the midst of a heated election year. But providing our country’s researchers with the opportunity to create game-changing solutions to energy problems must be a top priority. Fund the innovation hubs and the world could be thanking us for generations to come.

To clarify, the essay that Bob Litan and Lesa Mitchell co-authored in the Harvard Business Review does not question the validity or the positive effects of the Bayh–Dole Act, which gave universities the ownership of IP generated by federally funded research. Rather, the commercialization model proposed by the Kauffman Foundation specifically addresses the need for MORE CHANNELS to support the commercialization of university innovation. The idea consists of a very simple market-based principle: Faculty should have a choice relative to the commercialization pathway tied to innovations created in their lab.

They do not propose replacing the Bayh-Dole Act. Neither do they suggest the redesign of any royalty splits in faculty-university contracts, nor do they infer that commercialization is the only or main activity of faculty research. The proposal would simply build on the benefits of Bayh-Dole in a time of economic slowdown and unemployment.

To see all the articles please visit http://ibridgenetwork.org/info/news

It is said that 2010 is the year of the entrepreneur. That entrepreneurs will be the ones to save America from this economic crisis. Read this, in Entrepreneur Magazine. 

This in turn means, entrepreneurs need your innovations. They need to be able to have access to the innovations and the new ideas that are taking place in the universities. They need to have access to the best and the brightest, the experts in their field. Innovation will save America, read NY Times Post.

We need all the universities in the US to do their part and make sure all your research is made transparent and accessible!

The USA National Innovation Marketplace is a service of the Manufacturing Extension Partnership (MEP) a national network with hundreds of specialists who understand the needs of small and medium-size manufacturers. They have worked with thousands of manufacturers delivering $1.44 billion in cost savings annually and $10.5 billion in increased or retained sales in year one.

The Marketplace accelerates innovation by facilitating communication between buyers and sellers of innovation, giving inventors access to investors, distributors, contract manufacturers and R&D experts. Marketplace listings from non-profit organizations will coexist on the iBridge Network, allowing for even more exposure and collaboration opportunities. “There is a natural synergy between the USA National Innovation Marketplace and the iBridge Network,” said Lesa Mitchell, director of the iBridge Network. “We both are working to drive research to the marketplace and we are thrilled to be able to achieve that goal together.”

Several huge corporations have agreed the way to save the planet is by working together. They have started building communities and sharing innovations. The beautiful part…they pledged to allow the use of these patents for free! Read more here.