shaping the future of open innovation
TRANSCRIPT
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Prof. Sabine Brunswicker, Purdue University7th Innovation Summit, European Parliament, December 7, 2015
Open Digital InnovationShaping the Future of Open Innovation
RESEARCH CENTEROpen Digital Innovation
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OPEN INNOVATION
A FAD OR
A PHENOMENON?
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Executive study 2013 UC Berkeley and
Fraunhofer
▪ Study among the largest firms in Europe and US
▪ Firm criteria: >1000 employees and >250 million USD in sales
▪ Key informants: CEO, COO, or CTO at headquarter
▪ Data collection October– December 2012▪ 125 datasets
Adoption of open
innovation
Abandonment
Open innovation experience
Management support
Intensity
78% practice open innovation in 2013
No firm has abandoned open innovation
Median of 5 years
71 % have increased management support
82 % have increased open innovation activity
Open Innovation – Not a Fad but a Phenomenon
Source: Chesbrough & Brunswicker (2013), Chesbrough & Brunswicker (2015)
THE OPEN INNOVATION EXECUTIVE STUDY in 2013 ALREADY SUGGESTED THAT OPEN INNOVATION IS NOT A FAD BUT A PHENOMENON
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IN OUR ONGOING OPEN INNOVATION EXECUTIVE STUDY 2015 WE LEARN MORE ABOUT THE PARTICULARITIES OF MANAGING OPEN INNOVATION IN LARGE FIRMS
Study among the largest firms in Europe and US
Firm criteria: >1000 employees and >250 million USD in sales
Organizational & Project level analysis
Data collection: January 2015 to August 2015
Current responses: 121 firm-level data, additional project level data
Executive Study 2015 Purdue & Berkeley
Adoption of open innovation
Abandoning open innovation
Financial support
Expenditures
Human resources
Open Innovation – Not a Fad but a Phenomenon
~78% of firms (94 firms) practice open innovation today (n=121)
~ 2.5% of firms adopting open innovation have abandoned it
~61 % have increased the financial investment~22 % have increased the financial investment by more than 50%
~72% invest less than 20% of the total expenditures for innovation in open innovation
~53% allocate more than 5 full-time employees to open innovation
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LARGE FIRMS ACCESS EXTERNAL KNOW-HOW WITH AND WITHOUT DIRECT FINANCIAL COMPENSATION
Source: Global Open Innovation Executive Survey 2015; n=76 firms
Emerging Open Innovation Modes
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Pecuniary Inbound Open Innovation PracticesNon-pecuniary Inbound Open Innovation Practices
Median = 25%
Median = 20%
25 percentile: 5%
25 percentile: 10% 75 percentile: 50%
75 percentile: 50%
Share of projects completed within the last 2 years with inflows of knowledge (inbound)
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FREE REVEALING – NON PECUNIARY OUTBOUND INNOVATION – IS RATHER RARE; 50% OF FIRMS FREELY REVEAL IN MORE THAN 5% OF THEIR PROJECTS
Source: Global Open Innovation Executive Survey 2015; n=73 firms
Emerging Open Innovation Modes
Median = 5%
0% 20% 40% 60% 80% 100% 120%
25 percentile: 0% 75 percentile: 20%
Share of projects completed in 2013 with free revealing
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FIRMS ARE NET TAKERS
Source: Global Open Innovation Executive Survey 2015; n=73/76 firms
Median = 5%
Free knowledge sharing with external partners Free access external knowledge
Median = 20%
0% 20% 40% 60% 80% 100% 120%
25 percentile: 0% 75 percentile: 20%
25 percentile: 5% 75 percentile: 50%
Share of projects completed in 2013 with free inflows/ free revealing
Emerging Open Innovation Modes
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Emerging Open Innovation Modes
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INDEED, EXISTING WORK ON OPEN INNOVATION DISCUSSES A VARIETY OF OPEN INNOVATION ‘MODES’
IP Licensing
Informal networking
Publically funded R& D consortia
External R&D services
Open Innovation Intermediaries
Open innovation „modes“
University grants
Supplier awards
Crowdsourcing
User co-creation
Idea competition
Source: Chesbrough & Brunswicker (2014); Enkel & Gassmann (2009); Van de Vrande et al (2009)
Emerging Open Innovation Modes
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WE ALSO LEARN THAT FIRMS ‘COMBINE’ DIFFERENT MODES IN ORDER TO SOLVE ONE PARTICULAR INNOVATION PROBLEM
Open call to the crowd
Call for solutions in the area of Powering
your Home
Crowd’s solutions
4000 idea submitted
23 partnerships
USD 200 million investment by GE
Source: www.ge.com, Chesbrough (2012) California Management Review
Large Crowd Bilateral Partnership
Emerging Open Innovation Modes
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Emerging Open Innovation ModesTHE VARIETY OF OPEN INNOVATION MODES CAN BE CLASSIFIED INTO FOUR MAJOR ARCHETYPES
Markets/ Contracts
Open InnovationPartnerships
Open Innovation Platforms (Contest)
Open InnovationCommunity
Medium to high-powered incentives
High-powered, cooperative Moderate incentives Low to moderate
incentives
Usually high (and externally owned) Negotiable Varied Varied
Incentives
Control over IP
Know-how sharing Limited Strong Limited (Problem) Strong and
multidimensional
Low Low High HighDiversity of
sources
Source: Bagherzadeh & Brunswicker (2015), see also Felin & Zenger (2014)
Bilaterial Multiple actors
Digitally transformed
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Emerging Open Innovation ModesTWO PROJECT (PROBLEM) DIMENSIONS MATTER IN ORDER TO MAKE THE RIGHT CHOICE
Complexity of the Problem Hiddenness of Solution Knowledge
• A large number of highly interdependent tasks & knowledge areas
• Difficult to decompose
• Little knowledge about the sources or locations of solution knowledge
• “Holy grail problems”
Source: Mehdi Bagherzadeh (2015), Felin & Zenger (2014), Nickerson & Zenger (2004)
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Emerging Open Innovation ModesOUR ANALYSIS OF OUR SURVEY DATA SHOWED, AN ASSOCIATION BETWEEN DIFFERENT PROBLEM TYPES AND OPEN INNOVATION MODES
Problem Complexity
Hiddenness of Knowledge
High
Low
Low High
Open Innovation Platforms (Contest)
Markets/Contracts
Community
Type 1
Type 3
Type 2
Type 4
Open Innovation Partnerships
Source: Bagherzadeh & Brunswicker (2015)
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The Shift Towards Greater Access and Less ControlINDEED, INNOVATION ARCHITECTURES BECOME INCREASINGLY UNBOUNDED AND OPEN; EVEN APPLE SUPPORTS GENERATIVE AND OPEN DEVELOPER COMMUNITIES
Internet
ISP
T
T T
Phone
WiFi
EndusersystemHandset
Distribution
GUI
Shop
OS APIs
Audio-Dateiformat
A A
A
Millions of songsThousands of Apps
AssemblyC
C
C C
Hundreds of components
Hardware interface
BIOS
Betriebs-system
iTunes
Design
Source: Baldwin (2011)
Closed IP
External supplier
Complementor
Open Source
Closed Standard
Open Standard
Legend
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The Shift Towards Greater Access and Less ControlINDEED, INNOVATION ARCHITECTURES BECOME INCREASINGLY UNBOUNDED AND OPEN; EVEN APPLE SUPPORTS GENERATIVE AND OPEN DEVELOPER COMMUNITIES
Internet
ISP
T
T T
Phone
WiFi
EndusersystemHandset
Distribution
GUI
Shop
OS APIs
Audio-Dateiformat
A A
A
Millions of songs
Thousands of Apps
AssemblyC
C
C C
Hundreds of components
Hardware interface
BIOS
Betriebs-system
iTunes
Design
Source: Baldwin (2011)
Closed IP
External supplier
Complementor
Open Source
Closed Standard
Open Standard
Legend
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SAMSUNG“ It is actually Open Source Software that is ‘eating’ the world…”(VentureBeat, Dec 7, 2015)
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“One of the challenges in Open Innovation right now in our organization or any other high tech organization is to figure out how we or they can [work] with open source communities” (Participant in Open Innovation Study)
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The Shift Towards Greater Access and Less ControlOPENSTACK, A OSS CLOUD SOFTWARE SOLUTION IS DEVELOPED FOLLOWING PRINCIPLES OF OPEN SOURCE SOFTWARE; MULTIPLE COMPETING VENDORS PARTICIPATE IN IT
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The Shift Towards Greater Access and Less Control
Source: Global Open Innovation Executive Survey 2014/2015 Purdue University & UC Berkeley ; n=56
IP Allocation Over Technological Solutions Successful Projects (n=32)
19%
50%
31%
17%
37%
46%
SELECTIVE OPENNESS SEEMS TO BE PAY OFF
Successful Projects (n=32) Unsuccessful Projects (n=24)
Completely retaining legal ownership rights
Selective retaining legal ownership rights
Completely waiving legal ownership rights
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introduction
Initiative to create openness in Government to ensure public trust and establish a system of transparency, public participation, and collaboration (President Obama, 2009).
WHAT IS OPEN GOVERNMENT AND OPEN DATA?
The Open Data Movement is here… just search Open governmental data play an increasing role in open innovation
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THE IRONHACKS Creating Value from Open Governmental Data
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Creating Value from Open Governmental Data
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an app with a mashup – simple, yet has impact…the app makes open data ‘social’
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INNOVATE WITH OPEN DATA: Create a novel, cool, and performative mash-up embedded in a website that helps users to solve their problem
PURDUE IRONHACK
OUTPEFORM OTHERS AND LEARN FROM OTHERS: IronHacks is about competition but you get also feedback and learn from others’ work
HACK VIRTUALLY BUT ALSO MEET PHYSICALLY: We offer a training on open data (tonight), using the required API, and have training in coding tools.
GAIN & FAME IN MULTIPE WAYS: Improve your score on the way, gain reputation, learn (GitHub) and win prizes.
WHAT IS AN IRONHACK?AT PURDUE WE LAUNCHED IRONHACK TO INVOLVE STUDENTS IN CIVIC INNOVATION; THEY HACK IN 3 CYCLES: HACK, BREATHE, LEARN, AND ITERATE!
Creating Value from Open Governmental Data
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Introduction
FINAL SLIDE WITH “WEB” AND NEW MODELS OF INNOVATIONThe GRAVITY IS SHIFTING …
..citizen-centric and crowd-based ecosystems
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Lifecycle-orientedInnovation Ecosystems
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Lifecycle-oriented innovation ecosystemsFEDERATING LIFE-CYCLE ORIENTED ECOSYSTEMS REQUIRES GENERATIVE RESPONSES TO AT LEAST THREE TENSIONS
Data
Know-ledge
Technology
Con-tinued Value Creati
onLifecycle-oriented
Innovation Ecosystem
Competition versus Collaboration
Stability versus Change
Knowledge Sharing & Protection
IdeationSolutio
n development
Innovation lifecycle and continued value creation
Proto-type &
test
CitizenApplication developers
Application platform owner
Service providers
Tripartite Socio-technical infrastructure for Generative Responses
Service integrator
Software vendor
Build &
Produce
Launch &
improve
New Roles and Norms Virtual Trading ZonesTransparency as
Design Choice
Source: Brunswicker & Majchrzak (forthcoming)
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‘Federating’ Openness in Ecosystems
A Challenge
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Transparency as a Design Choice for Federating Innovation
Ecosystems
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Federating Open Innovation through TransparencyTHERE ARE AT LEAST TWO DIMENSIONS OF ‘DESIGNED’ TRANSPARENCY: PERFORMANCE AND SOLUTION TRANSPARENCY
Performance transparency describes the process of making an innovator’s
performance (evaluation by the market) transparent (e.g. via rank orders, top 20
list etc.)
Solution transparency transparency describes the process of making an innovator’s solution transparent (e.g.
ideas, views, solution, etc.)
Market/Performance Transparency Solution Transparency
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Federating Open Innovation through TransparencyIN OUR RECENT RESEARCH WE SHOW THAT THE DESIGN OF PERFORMANCE TRANSPARENCY MATTERS
Source: Brunswicker & Almirall (forthcoming)
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Federating with TransparencyTRANSPARENCY OF THE SOLUTION MAY ALLOW REMIXING OF IDEAS, SOLUTIONS, AND MAY TRIGGER INNOVATION
Matlab OSS Programming Contest
Source: Gulley (2006)
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But how to put the policies for open innovation 2.0Openness
…in policy design?
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PROCESS TRANSPARENCY CREATES MORE EFFECTIVE POLICIES AND REDUCES UNCERTAINTY IN POLICY MAKING
Open Public Policy Innovation
Agenda setting
Analysis
Policy creation
Implementation
MonitoringVisibility of
Citizen Knowledge
Visibility of Decisions
Visibility of Actions
Policy Development
Cycle
Online collaboration platforms
Sentiment analysis
Opinion mining
Embedded systems
Policy intelligence toolsAgent-based simulation
Source: Brunswicker & Almirall (forthcoming)
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Open public policy innovationIT IS ALREADY HAPPENING ……..ARE ALSO OBSERVING A NOVEL ERA OF PUBLIC POLICY DEVELOPMENT
Aufbruch Bayern
Stockholm Congestion Tax
Source: Brunswicker & Almirall (forthcoming)
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But how to put the policies for open innovation 2.0Not just greater accountability
. transparency for better policy design
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ABOUT ME AND RCODIMY RESEARCH CENTER FOR OPEN DIGITAL INNOVATION ASPIRES TO SHAPE THE FUTURE OF INNOVATION THROUGH SCIENTIFIC USER-INSPIRED RESEARCH
www.purdue.edu/opendigital
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LET’S EXPLORE NEW PATHS TO CREATE IMPACT WITH OPEN INNOVATION
„If you’re not failing every now and again, it’s a sign you’re not doing anything very innovative.“
Woody Allen
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Training session & Survey (6-
8pm)
Hacking phase 1
Evaluation phase 1
Hacking phase 2
Evaluation phase 2
Hacking phase 3
Evaluation phase 3
21 days
Oct. 28
Nov. 5-8, done by 8 pm
Nov. 2 (8am) - 5 submission at 8 pm
Nov. 9 (8am) –12Submission at 8pm
Nov. 12-15, done at 8pm
Nov. 16-19, final submission by 9pm
Nov. 19-22, done at 9pm
Work hard, be creative
Work hard, be creative
Work hard, be creative, compete
Check out scores
Check out scores
Wait…
Final winner
Dev-eloper
Expert/user panel
The IRONHACK PHASES
Milestones/metrics Nov. 22 (12-
2pm)
Creating Value from Open Governmental Data
Completing the post survey (before Nov. 22)
THE IRONHACK PROCESS IS STRUCTURED IN THREE STAGES