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:
- Internal – Innovating using the existing resources, namely people and equipment, within an organization.
- 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.
- 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.
- Off-Shoring – Differently from outsourcing, this channel refers to the placement of the work in countries where labor costs are significantly lower.
- 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.
- 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.
- 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.
- Consulting – A self-explanatory internal innovation.
- 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.
- 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.