Progress with Open Innovation

In the midst of harsh economic conditions, businesses are being encouraged to innovate in an effort to stimulate growth. At the same time cuts in personnel and resources made by many in recent years have negatively impacted upon functions such as research and development (R&D), leaving organisations with less capacity to innovate than previously.

Open Innovation (OI) provides a potential solution to this issue by encouraging businesses to supplement their   reduced internal R&D capacity with innovative ideas from sources outside of their company boundaries; these sources may be other businesses, universities or individual inventors. In essence businesses can benefit from a greatly expanded pool of potential new ideas without dramatically increasing their internal R&D costs.

A different way of working

Gavin Smeilus, Senior Consultant within the University of Wolverhampton’s School of Technology explains the differences between a traditional approach to innovation and Open Innovation:

“Traditionally, companies would centralise their R&D: partly due to a belief that their own employees were in the best position to develop important new innovations; and partly to control knowledge and processes within the company. By controlling the entire R&D operation internally, companies considered themselves more able to restrict competitors from accessing their ideas, whilst maximising their potential for profit generation by ensuring first-mover advantage.

Open Innovation advocates an alternative approach. Whilst internal R&D is not abandoned, it is supplemented with knowledge and expertise from outside of the company in order to foster better ideas. Open Innovation advocates the acquisition of Intellectual Property from others in instances where your business is in a good position to exploit it for commercial gain. Similarly, businesses are encouraged to sell or license their own IP to other companies in instances where they can do little to profit from it internally.”

Large R&D intensive companies, in particular, have embraced Open Innovation. Indeed, it appears to offer distinct advantages over traditional methods of managing innovation. Firstly, in seeking radical innovations that drive future growth, it can be an advantage to take on-board ideas that originate outside of your industry and challenge traditional sector-based thinking. Secondly, the costs associated with running an R&D facility and introducing new products can be significantly reduced by opening up the new product development process to external parties, both in terms of innovative inputs, but also process expertise in key areas: rapid prototyping for example. Open Innovation also provides a mechanism for benefitting from projects have been halted due to lack of funds. Finally, collaboration can lead to exposure to other development opportunities that the business would otherwise be unaware of.

Open Innovation clearly offers a variety of advantages to different sectors. In today’s fast-paced environment, it could provide an ideal solution to stationary companies looking for new innovations to take them forward.

Open to all

Gavin adds: “The benefits of Open Innovation are not restricted to large R&D intensive businesses they also extend to SMEs. Open Innovation provides a basis upon which SMEs can collaborate with large corporates. Having a good idea is no guarantee of commercial success and sometimes the assets a large corporate possesses: a strong brand, customer trust, extensive routes to- market or manufacturing capabilities can be exploited by SMEs seeking to commercialise their technology.”

The University of Wolverhampton in conjunction with Coventry University is embarking upon a three-year funded programme that will facilitate greater understanding of the merits of Open Innovation and aims to help SMEs to engage with large companies with a view to achieving commercialisation of new technology.

Companies interested in finding out more about the implementation of Open Innovation should contact Gavin Smeilus directly on tel: 01902 321763 or email: