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The Bright and Dark Side of Open Innovation

Henry Chesbrough explains open innovation and its role in the corporate world

The current success stories in vaccine development are the ultimate prove of the crucial importance of collaboration between different organizations for innovation. Bringing together BioNTech’s fundamental knowledge on mRNA with Pfizer’s capabilities in testing and manufacturing drugs, these companies were jointly able to be the first in getting approval for a Covid-19 vaccine. Therefore, it is not surprising that Open innovation has become one of the dominant concepts for innovation scholars, practitioners, and policy makers. In a new episode of WHU’s Most Awesome Founder Podcast, Henry Chesbrough, Adjunct Professor at Haas School of Business and founding father of the Open Innovation paradigm, reflects on how he arrived at this concept in his research, explains the relevance of open innovation for the current innovation activities of start-ups and corporates, and talks about the dark side of open innovation.

What is open innovation?

Open innovation refers to a process where organizations actively stimulate knowledge flows with external partners to increase the speed of innovation activities as well as maximize return on investment of innovation activities. In the podcast, Chesbrough vividly explains how the notion of open innovation emerged out of his research at Xerox’ Palo Alto Research Center and how being kicked out of Harvard as a Junior Professor pushed him to put his ideas on paper. At the same time, Chesbrough highlights that open innovation is not the same as open source. He actually sees intellectual property as an essential mechanism that can allow companies to profit from their open innovation activities.

How can start-ups benefit from open innovation?

Although the notion of open innovation emerged out of studying corporates, it also is a relevant topic for start-up companies. According to Chesbrough, start-ups can definitely benefit from collaborating with corporates as it allows accessing valuable resources that might require the start-up years to build themselves. At the same time, Chesbrough stresses that start-ups should not be naïve about their collaborative endeavors with corporates. He recommends start-ups to carefully protect the core intellectual property, making sure that the corporate cannot opportunistically abuse the collaboration.

Dark side of innovation

In the podcast, Henry Chesbrough also touches on the dark side of open innovation. He mentions a highly valued start-up that, by means of crowdsourcing, aimed to revolutionize the consumer goods industry. However, in this case, opening up organizational boundaries contributed to the demise of the company. Chesbrough also mentions how Proctor & Gamble, which first acted as posterchild of the open innovation movement, has immensely struggled with sustaining this approach more recently. These examples demonstrate that open innovation is not a magical medicine for all innovation challenges and that sustaining open innovation success will require continuous attention and commitment from top management.

To get more input on open innovation and to hear Henry Chesbrough’s opinion on the role of intellectual property in innovation, listen to his episode of the Most Awesome Founder Podcast!






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