Open Innovation

UI guru quoted on Apple open innovation

2009-06-26T11:20:00.000-07:00

Karim Lakhani was quoted Thursday in the FT for his knowledge of user innovation, although (perhaps ironically) it was in an open innovation context.

Karim certainly well known among user innovation researchers, one of two recent PhD graduates (along with Sonali Shah) of Eric von Hippel who’s spreading the UI flame (along with countless German apostles being churned out by the minute). He is very active and gregarious as an academic entrepreneur, whether it be a conference, a book project or merely co-authoring a paper or case study. (Karim and Eric are also on the advisory board of InnoCentive, a Boston-area firm shamelessly trying to commercialize crowdsourcing.)

Karim (like Sonali) is a personal friend, initially because of our overlapping open source interest which was kindled by the 2004 open source conference that Karim helped organize. Karim is also a co-author, on the basis of a paper we wrote last year about the under-studied role of communities as a level of analysis in user innovation and open innovation research.

In fact, at UOI 2009 earlier this month, a presentation by Oliver Alexy of LBS (on UI/OI co-authorship linkages) said that West-Lakhani collaboration made the two of us the only linkage between two major communities of UI/OI researchers. As with another paper Karim wrote with Lars Bo Jeppesen, this makes Karim (and his two collaborators) a boundary spanner, or in social network terms a cut point with high betweenness centrality. (As someone strongly identified with OI, I’m working on another collaboration to increase the personal and citation ties between the UI and OI communities.)

All of this is a long introduction as to why I was pleasantly surprised to see Karim’s name mentioned in the FT piece. To quote it, I thought I’d look it up on Google News, so here’s the quote that it provided:

“Hay una explosión de conocimiento en todo el mundo, y las empresas tienen que incorporarse a las redes para participar del flujo. Los muros que solían separar a las firmas del mundo exterior tienen que ser derribados”, explica Karim Lakhani, un profesor de Harvard que estudia las redes empresariales.

I’m guessing that Google didn’t see the real FT article behind its paywall, which is why only the Madrid partnership with FT is available free. Here is what UK (and US) readers of the column by “chief business commentator” John Gapper saw:

“There is an explosion of knowledge around the world, and companies have to embed themselves within networks to participate in the flow. The walls that used to separate the firm from the outside world have to be brought down,” says Karim Lakhani, a Harvard professor who studies corporate networks.

In other words, companies like Threadless harvest outside knowledge and others ignore it at their peril. In fact, on the day the FT article appeared, Karim tweeted:

Teaching @threadless case to SVMP http://www.hbs.edu/mba/svmp/in 14 mins - should be fun

To be polite, the actual Gapper article was a bit hard to follow. Let me see if I can summarize it in a more coherent form:

Apple has embedded itself in a mammoth value network of third party software suppliers that dramatically increases the utility of its iPhone. Competitors like Google and Palm may be able to match its product capabilities [debatable], but they have yet to match its market size.

If even the proprietary and secretive Apple does this, it proves that firms need to work with other firms to create success. This illustrates the point of Prof. Lakhani that knowledge is widely dispersed and firms need to work with others to harvest the benefits of that knowledge.

Since these app store contributors are mostly trying to (directly or indirectly) trying to sell products rather than scratching their own itch, this is more of an OI story than a UI story. Still, many of the principles that motivate firm cooperation with UI are also directly applicable to opening to OI.

What's so open about open innovation?

2009-06-22T12:25:00.000-07:00

Although this was the 7th year for the User Innovation workshop, it was only the second year in which open innovation was explicitly listed as a topic in the CFP. Although last year’s workshop at Harvard was officially the “User and Open Innovation” workshop, it felt a little awkward being there as a keeper of the open innovation flame, as many of the “open innovation” papers were not consonant with the Chesbrough definition.

This year, there were more papers on open innovation (as defined by this blog) and the user innovation researchers seemed more open to open innovation researchers and their participation.

That said, there is still a gap between how Chesbrough used the term “open” and how other researchers on distributed innovation use the term. For the latter, “open” is often a synonym for free, as in the communitarian (or communal) mindset of the Free Software movement. Much of the research on user innovation examines cooperative user production of goods that parallel Free Software.

Since I’ve done a fair amount of research on open standards and open source, I’ve been long aware that the “open” in open innovation is different. In fact, in a 2007 paper in First Monday (based on an earlier conference presentation) contrasting these phenomena, I wrote

A lot of open source and open standards participants wonder what’s “open” about “open innovation.” After all, both of the former have a shared or public goods element to them, whereas a prime goal of open innovation (as defined by Chesbrough, 2003) is that firms have a way to capture a private return. In fact, in West and Gallagher (2006) I argue that the purest forms of open source or free software (such as Project GNU) are specifically not open innovation. …

Open innovation is not “open” like the other two. If anything, open innovation brings a note of realism to the discussion of open standards and open source, by putting the profit motive front and center. …

Conversely, open standards and open source provide existence proofs for building effective institutions that align and coordinate the interests of potential competitors. For example, the open source license provides a “credible commitment” to make it less likely that commercial interests will under–invest in specific technologies.

Still, there is a ways to go to bridge the open innovation and user innovation research communities.

At UOI 2009, someone more savvy than I remarked to Eric von Hippel that he did not use the term “open innovation” in his 2005 book Democratizing Innovation, but instead “open and distributed innovation.” If you search the PDF, the phrase appears 3 times and “open innovation” not at all.

I briefly discussed the boundaries of open innovation with Prof. von Hippel at UOI 2009, who said that his use of “open” referred to free information and said the Chesbrough usage was more about “IP markets.” I replied that the “open”-ness of open innovation was as in permeable firm boundaries of “open systems” theory (think Dick Scott and his book dating back to 1981).

When I asked von Hippel about user innovators who charged for their innovations — as in his paper from the Statistics Canada survey — he said that by his definition that was certainly user innovation, but not “open.” As suggested by his 2005 book, von Hippel’s interests today lie in users solving their problems and sharing those solutions, more than the commercialization of user innovation (which in some ways is more consonant with the open innovation paradigm).

For me, this is additional motivation (as if I needed any) to publish my work with Marcel Bogers contrasting user and open innovation. These communities of researchers (and their corresponding phenomena) have important overlaps, even there are important differences (which is why they are separate theories).

Cumulative, open and user innovation (III)

2009-06-16T11:00:00.000-07:00

At UOI 2009 earlier this month in Harburg, I presented my own research in the open innovation track. It was an extension of the research that I presented at EURAM 2007, UOI 2008 and AOM 2008 that contrasts cumulative, open and user innovation.

This year’s presentation reflected my subsequent investigation on the similarities and differences of these three bodies of work, joined by my new co-author Marcel Bogers (now of U. Southern Denmark). I first met Marcel in 2007 when he was a PhD student (under Chris Tucci) at EPFL, where he did his dissertation on user innovation. Marcel organized the excellent AOM workshop last year on open and user innovation, and we are finding that the contrasting perspectives were very helpful in making sense of these overlapping but distinct literatures.

One of the things that we noticed was that the various literatures (and studies of related topics) have varying definitions of “innovation.” We temporarily agreed to defer this question but probably will have to come back and address it more precisely before we are done. The definition of success was a little easier, since user innovation is clearly about the creation of innovations, cumulative innovation is about technological progress, while open innovation is firmly about profit.

All three literatures assumed that knowledge is widely dispersed, but differ in other areas. Cumulative innovation (at least in the Nuvolari and Scotchmer sense) is like open innovation in assuming a profit motive, while much (if not most) of the user innovation literature is about a self-interested utility motive. Conversely, open innovation largely depends on strong IPR while user and cumulative innovation assumes (or argues for) weaker IPR.

One of the ways the literatures differ is on their assumptions about the sources and flows of knowledge (whether that knowledge is disseminated in raw form or encapsulated in products or services). We tried to capture that with this value network diagram below:
Marcel and I do believe these three literature do have a lot in common and perhaps deserve a new term to represent the superset. (At UOI 2009, Nikolaus Franke suggested “distributed innovation” which seems as good as any.) Our thinking right now is at a preliminary stage, but as we flesh this out over the next few months, we hope to have more to share at the end of the summer.

Scratching an itch

2009-06-05T01:16:00.000-07:00

Although I’ve read key works by Eric von Hippel and his disciples — particulary in open source — I wouldn’t consider myself a user innovation person. Certainly here at UOI 2009, I’m strongly considered as a disciple of the open innovation camp.

Sitting here in Hamburg at my second UOI conference, I’m getting plenty of opportunity to come up to speed on user innovation. Below is my sensemaking of the overall thrust of the UI body of research — in particular, my 5 stage of user innovation — and linking this to papers this week at UOI 2009 on each stage.

1. Creating tools
There is a large body of research on toolkits that enable individuals to create or modify the relevant artifact. (e.g. von Hippel and Katz 2002). But also other types of tools, such as those to manage communities and solicit contributions for crowd sourcing as with Threadless (cf. Ogawa & Piller, 2006).

One of the papers on tools this week was by Johann Füller and colleagues about idea generation/invention in Second Life. Obviously such tools are going to become more common in the field.

2. Finding the right users
Oversimplifying a little, the lead user literature focuses on finding the prototypical users, those who are best able to articulate needs and solutions on behalf of a large population. (Think early adopters of Everett Rogers or Geoff Moore).

A common way to find many users is through communities. These might be formally defined communities offline (e.g. the Harley Owners Group) or online (cf. Jeppesen & Frederiksen 2006). Or they might be a communities informally defined by their embedded social network ties — such as word of mouth, or the streak of weak ties.

In response to this, a provocative paper was that by Jacob Høj Jørgensen, who was trying to find lead users to develop energy efficiency ideas. He contrasted users that participate in communities with users that are not embedded (which he called “hermits”). He used a clever approach to find the latter — bribing (with chocolates) people at a tech support center to save the contact information of particularly knowledgeable people calling for tech support on an energy saving hotline.

3. Getting Participation
Not all users will use tools: they may not have the interest, they may not be able to figure the tools out, they may not consider it worth their time.

One paper by Christina Raasch and colleagues tried to measure the cost/benefit of participation in a user community. Another paper on medical device user innovation — presented by Karine Lamiraud — said that organizations contributing user innovations depends on available resources; there is a nice tie here to the literature on the optimum level of slack to allow producer innovation (Nohria& Gulati 1996).

4. Generating Quality Ideas
Most of the studies seem implicitly assume that ideas generated are good ideas. (Or, perhaps to be more fair, if there are lots of ideas, a certain percentage will be of high quality and high value). Still, I have not seen anyone explicitly study the tradeoffs between the quantity vs. the quality of ideas generated — it seems like an obvious opportunity.

5. Bringing Ideas to Market
Users solve their own problems, and in the classic von Hippel formulation they put these solutions back in the hands of the producer: the producer (if savvy) then incorporates the most general of these innovations available to a broader audience.

Sometimes they are happy just to keep the changes to themselves. Frank Steiner talked briefly this week about how “embedded toolkits” allow users to customize products after they buy them: these user innovations (think iPhone app choices) are highly personalized and dynamics.

More recently, researchers have looked at users getting frustrated about innovations not coming to market, and thus we have the field of user entrepreneurship (cf. Shah & Tripsas, 2007).

References
Lars Bo Jeppesen, Lars Frederiksen, Why do users contribute to firm-hosted user communities? Organization Science, 2006. DOI: 10.1287/orsc.1050.0156

Nitin Nohria, Ranjay Gulati, Is slack good or bad for innovation? Academy of Management Journal, 1996.

Sonali K. Shah, Mary Tripsas, The accidental entrepreneur: the emergent and collective process of user entrepreneurship, Strategic Entrepreneurship Journal, 2007. DOI: 10.1002/sej.15

Susumu Ogawa, Frank T. Piller, Reducing the risks of new product development, Sloan Management Review, Winter 2006

Eric von Hippel, Ralph Katz, Shifting innovation to users via toolkits, Management Science, 2002.

Open innovation: structure vs. culture

2009-06-04T07:38:00.000-07:00

At UOI 2009, Katharina Hoelzle of Technische Universität Berlin presented a potentially ground-breaking paper on open innovation. It was presented as a 3-minute abstract of an “ongoing project” — which means no data yet, and not a lot of details.

Working with her professor Hans Georg Gemünden, Hoelze argued that there are two key dimensions of firm readiness for open innovation

Structural: networks, process, instrumens, contracts
Cultural: incentives, barriers to innovation, actors (either champions or promoters)

The success of firms is thus the combination of success on these two dimensions, moderated by contingency factors (which weren’t specified).

She presented a two-dimensional plot that shows how a firms can be classified on these two dimensions. (Here shown as a 2x2 rather than continuous values along each dimension):

		Cultural
		Low	High
Structural	High	Open Innovation department	“True” Open Innovation
Structural	Low	No open innovation	Open Innovation mindset

I would label it slightly differently:

		Cultural
		Low	High
Structural	High	Open Innovation department	Integrated Open Innovation
Structural	Low	Closed innovation	Open Innovation mindset

Either way, this nicely captures my observations about firms and their failure to implement open innovation. Some firms seem driven by the structure; some firms acquire an innovation hotshot (or make a convert) without doing anything else to make it happen. It takes both to sustain a successful open innovation strategy.

UOI: Year Seven, Day One

2009-06-03T15:00:00.000-07:00

The first (half) day of UOI 2009 here in Hamburg is now completed. This was just the tease — authors presenting 3-4 minute previews of their papers (about half of the papers were teased this afternoon).

Nikolaus Franke — host of the first User Innovation Workshop in 2003 — has attended all seven workshops and recalled the list from memory:

Vienna: Wirtschaftsuniversität Wien (WU)
Munich: Ludwig-Maximilians-Universität München (LMU)
Cambridge, Mass.: MIT Sloan
Munich: Technischen Universität München (TUM)
Copenhagen: Copenhagen Business School
Boston: Harvard Business School (the first “User and Open Innovation Workshop”)
Hamburg: Technischen Universität Hamburg-Harburg (TUHH)

This year there were 110 registered attendees (21 of which did not arrive in the first day). This is only slightly smaller than last year’s record participation at Harvard — 137 participants. However, there are a greater proportion of in progress papers: 31 completed and 44 in progress, versus 55 completed papers last year.

As always, the man most in demand was Eric von Hippel of MIT, the founder (godfather) of the user innovation research movement. It seemed as though during every break he was surrounded by friends and admirers, old and new.

Being in Germany, we had a number of delegations of innovation researchers (mostly Ph.D. students and post-docs) funded under the German system, headed by a chaired professor: Nikolaus Franke of WU, Georg von Krogh of ETH Zürich, Frank Piller of RWTH Aachen and Cornelius Herstatt of host TUHH. Dietmar Harhoff of LMU wasn’t here but some of his team was.
When von Hippel asked for newcomers, about ¼ to 1/3 of the hands went up, with pockets from Aachen, TUHH and TUM in Germany; WU, U.K. Sweden in Europe, and Japan, Korean and NZ from the other side of the world. (There was one newcomer who travelled from the US: Jing Zheng, a mechanical engineer from Washington University in St. Louis).

No full papers yet — most are tomorrow, including my own (more later).

UOI 2009 opens tomorrow

2009-06-02T06:16:00.001-07:00

The 7th User and Open Innovation Workshop is being held this week in and near Hamburg, Germany. (Actually, it’s the 2nd UOI workshop but the 7th UI workshop).

The workshop begins Wednesday at 1230 at the University of Hamburg. Sessions Thursday and Friday are at the Technischen Universität Hamburg-Harburg (TUHH), which as its name suggests, is in Harburg near Hamburg.

I’ve posted the complete list of papers to a permanent HTML page, and will be blogging on some of the sessions later this week.

Open innovation videos

2009-05-26T09:00:00.000-07:00

The semester is over at UC Berkeley, and with the semester, its inaugural "Open Innovation" speaker series. The series began with the fall semester and ended on May 4.

The series was sponsored by Henry Chesbrough’s Center for Open Innovation, the Mecca for open innovation research.

I made only one in the fall, and none in the spring due to schedule conflicts. However, videos (and some presentation slides) are available for all of the spring talks and many of the fall talks.

Detroit needs open innovation

2009-05-22T15:26:00.000-07:00

An article posted today from the June Wired magazine talks about how the Detroit automakers could use some open innovation. It includes quotes from Henry Chesbrough, author of Open Innovation, Open Business Models and director of Berkeley’s Center for Open Innovation.

The article starts with Brian Ahlborn, president of Transonic Combustion, which is designing more efficient fuel injectors for automobile engines.

Here is a relevant snippet from the article by Charles Mann:

Transonic believes that its products could help drivers get as much as 100 miles per gallon out of otherwise standard internal combustion engines. "If you double gas mileage, that ultimately cuts consumption by about half," Transonic president Brian Ahlborn says. "We're in business to make money, but we're aware of what that kind of dramatic drop could imply." He hopes that in the next few years Transonic fuel injectors will be in millions of vehicles, saving millions of gallons of gas a year.

Not long ago, Ahlborn's dream would have seemed quixotic. Detroit's Big Three automakers have for decades been notoriously hostile to outside innovation; Flash of Genius and Tucker, films that decry the industry's insularity, are both based on true stories. No small US company has grown into a big carmaker in the past 50 years—one of the reasons that the automobile itself hasn't changed more fundamentally during that time. "It's as if the computer industry were still dominated by Wang and Data General and DEC, and they were still selling minicomputers," says Henry Chesbrough, executive director at UC Berkeley's Center for Open Innovation.

Global UGC science

2009-04-06T22:03:00.000-07:00

The 6.3 earthquake Monday 55 mi NE of Rome thus far has killed 150 people and damaged 10,000 buildings.

As with the minor quake a week ago in San Jose, there is an incident report at the US Geological Service. What I find fascinating is that (like San Jose’s 4.3 quake a week ago) there are user-generated damage reports online for the Italian earthquake.

It’s one thing to say that there will be contributions from users in the heart of Silicon Valley and 20 miles from the USGS Western Regional headquarters. But here, thanks to an easy-to-use and well known IT system, there are more than 600 reports from 170 towns a continent away from USGS and its nominal territory of concern.

(This obviously works better in densely populated foreign areas. There are no responses yet for the 7.0 earthquake in the Kuril Islands NE of Japan.)

Still, this appears to offer an example of building a global brand — for one organization to offer a global clearinghouse for compiling UGC, leveraging economies of scale and network effects by offering one-stop shopping.

Scientific user-generated content

2009-03-31T09:01:00.000-07:00

On Monday we had a 4.3 earthquake centered near San Jose. It was the strongest earthquake I recall in 15 years, probably because I was on the 5th floor of a concrete building that swayed for more than 10 seconds.

I quickly went to earthquake.usgs.gov to verify the magnitude. But what I hadn’t noticed is that they also have an automated system for gathering and displaying citizen responses. The system gathers location data (by zip or street address) and then walks through a structured questionnaire to classify local intensity from I (not felt) to X (very heavy damage).
This is a great example of user-generated content, in some ways better than Wikipedia. There are less motivations for bias (than, say, editing a post on abortion of George Bush). There are a larger number of reports, quickly, that tend to minimize the effect of error by any one contributor.

Most importantly, unlike Wikipedia, the aggregation of earthquake observations does not require any coordination or personal editing to aggregate the disparate contributions into a coherent whole.

Will we see self-reported epidemiology? Alas, between hypochondria and the litigation lottery mentality in this country, there is a much higher risk of self-serving bias for such reports than for earthquakes.

CFP: TASM special issue on Open Innovation

2009-03-28T23:33:00.000-07:00

The journal Technology Analysis and Strategic Management (TASM) has posted a call for papers for papers on open innovation, with a particular emphasis on high-tech small firms (HTSFs).

Here are excerpts from the CFP:

Special Issue:
Managing open innovation in current and emerging intermediaries in the technology transfer process
Guest Editors: Brendan Galbraith and Rodney McAdam, University of Ulster, Northern Ireland
…
Subject Coverage

We welcome a broad range of theoretical and empirical contributions to our understanding of managing open innovation in current and emerging intermediaries in the technology transfer process. Topics may include, but are certainly not limited to:

The role of HTSFs in open innovation ecosystems and their relationship with other actors such as intermediaries and large firms
The open innovation processes, facilitators and challenges in science parks and incubators
Open business models of innovation intermediaries
Theoretical approaches that integrate open innovation with science parks and incubators
Management implications of the co-creation of IP for HTSFs, large firms and science parks and incubators
Network relationships and appropriation regimes of innovation intermediaries
Typology of the range, diversity and function of innovation intermediaries
An appraisal of Chesbrough’s (2006) innovation intermediaries and existing intermediaries. Are they more open and effective in terms of speed, cost and reach?
The application of user methods such as innovation toolkits and the lead user method to new contexts (eg. E-Health, eTourism, e-Energy, e-Government), and the role of an intermediary?

The submission deadline is October 1, 2009, with expedited reviews promised by November 15.

Open innovation by acquisition

2009-03-10T16:16:00.000-07:00

One of the key issues we faced in working on our 2006 book was coming up with a newer and more precise definition of “what is open innovation.” Henry Chesbrough wrote a revised definition that we used in the opening chapter; I’ve elaborated on this broader question since then.

However, one of the corner cases we wrestled with was open innovation by acquisition. This classification question was raised in Chapter 4, in the analysis of digital amplifiers written by Jens Frøslev Christensen.

In such cases, the innovation takes place outside the boundaries of the firm. Once acquired, the innovation has become vertically integrated (in a Chandlerian since) within the boundaries of the firm.

One of the big innovation stories in the news this week is a culmination of Roche’s $20b offer to buy the remainder of Genentech. This paragraph from this morning’s WSJ interpreted it as representing a broader trend:

Large pharmaceutical companies are abandoning the notion that they could build new drug pipelines on their own. Instead, Merck & Co., Pfizer Inc., and Roche have each placed huge bets that biotechnology companies are their best path to future sales gains.

If a big pharma firm partners to distribute compounds developed by startup biotech companies, that’s clearly innovation. If they buy their former partner, it seems as though the openness is historical but not ongoing.

It would appear that the open innovation ends once the vertical integration begins. Or, as I’ve sometimes told students, open innovation is defined as “not vertical integration.”

Collaboration Systems for Open Innovation

2009-03-06T23:02:00.001-08:00

Three Swedish academics are hosting a new forum for open innovation research, a minitrack at the annual HICSS conference.

The minitrack, entitled “Collaboration Systems for Open Innovation” is hosted by Stefan Hrastinski and Mats Edenius of Uppsala University and Niklas Z. Kviselius of the Stockholm School of Economics.

Here is the summary:

Hitherto, research on IT and open innovation has mainly explored how open innovation practices can stimulate the development of novel technologies. However, little research has studied how information technologies can support open innovation practices. ….
In this minitrack, we welcome papers that explore how various collaboration systems can enable and support open innovation in inter-organizational and intra-organizational settings, and in user and consumer networks.

The way HICSS works, there are minitracks and track. Each minitrack is 3-10 papers, but the broader tracks have a little more thematic coherence.

HICSS is an interesting conference; I ran a minitrack there for five years on standards and standardization. The conference is well suited for those with interests in MIS or CS, with all the various tracks and sessions in this area. Plus, of course, it’s in Hawai‘i: people love the environment and always seem to be in a good mood.

CFP: UOI 2009 in Hamburg

2009-02-26T06:00:00.000-08:00

The call for papers has been posted for the 4th annual User and Open Innovation Workshop. The workshop this year will be hosted by the Hamburg University of Technology (TUHH) and its affiliated Kühne School of Logistics and Management. It will be held from June 3-5, 2009 at the at the TUHH campus in Harburg and also at the University of Hamburg in the central city.

Organizers ask that participants register by March 30th and upload a one page abstract of their proposed paper by April 19th.

I attended the UOI event for the first time with UOI 2008. (Of course, this was the first “UOI” conference — the 2006 and 2007 conferences focused strictly on user innovation). I came back energized and excited — it showed the advantages of the workshop format over the larger conferences.

The organizers of the 2009 event includes Christina Raasch and Cornelius Herstatt who at UOI 2008 presented a slick paper about user innovation in sailboats. Due to size constraints, they don’t expect the conference to be as big as last year (55 papers and 120 participants), so send that application now!

Open innovation in financial services

2009-02-25T15:45:00.001-08:00

A new book is being published by Springer entitled Open Innovation in Financial Services. Amazon quotes an availability of March 1, while Springer quotes April 3. However, excerpts are available on Google books.

I have not seen a copy of the book, but the Google version implies there’s an interview with Henry Chesbrough at the end. I know that Henry has been keen to see more open innovation research done in the services area.

Update on OI by DuPont Chile

2009-02-24T11:55:00.000-08:00

Today DuPont posted its own news snippet on its presentation at the “Open Innovation = Connecting Knowledge” seminar in Santiago, Chile.

The notice has less specifics than my earlier discussion of its Armura solution for bulletproof cars for the middle class, but it does have a picture of presentation by the general manager of DuPont Chile.

J&J testimonial to open innovation

2009-02-04T23:12:00.000-08:00

In an op-ed article this week in the Boston Globe, Paul Stoffels of Johnson & Johnson wrote a testimonial to the value of open innovation. He concludes:

We believe open innovation will fuel the intellectual entrepreneurship and novel collaborations across institutions and geographies needed to develop solutions to some of the world's most critical healthcare challenges and to directly address patient needs in both developed and emerging economies. In turn, these solutions will provide the economic entrepreneurship that will help spur recovery and, when combined with health diplomacy, will ensure that innovation delivers solutions for generations to come.

He also made these points in an earlier interview with the WSJ.

I’m not clear what’s different. Big pharma has long used open innovation, particularly sourcing compounds or technologies form universities, and partnering with innovative biotech startups to enter new markets.

A friend in the pharma industry recommends the blog FierceBioResearcher, which appears to tie it all together. In commenting on the WSJ article as well as an earlier posting, blogger John Carroll notes that (to use my terms) big pharma is no longer able to use its R&D to create the separation it needs. Instead, as R&D has become more dispersed and commoditized, the pharma companies are sourcing technology from the cheapest possible locations.

To me, this sounds like the IT offshoring boom 10 years ago. Some of the offshoring failed and the work has come back, but overall, routine software engineering will never be concentrated within 40 miles of Palo Alto the way it once was.

Bringing Open Innovation to Latin America

2008-12-30T22:33:00.000-08:00

Last month for Global Entrepreneurship Week, I was invited to speak at a half-day seminar in Santiago, Chile entitled “Seminario Innovacion Abierta = Conectando Conocimiento”. (Translation: “Open Innovation Seminar = Connecting Knowledge”).

It was a great honor to speak at the event. The opening speaker was Hugo Lavados, the Minister of Economy for the Chilean government. I spoke last to allow for the uncertainty of arrival time and the risk of delay for my redeye flight from Los Angeles. (We need not have worried, as the LAN Chile flight arrived promptly at 6am).

Earlier, I posted a summary of open innovation readings for the seminar participants. The slides for the event have now been posted to the seminar website; naturally, all slides but my own are in Spanish.

The slides include the minister’s talk as well as an interesting talk by a representative of Minera Los Pelambres, Chile’s major copper mine. Not included is the talk by Dupont that I summarized earlier on this blog.

The summary of my qualifications, alas, embellishes things a bit. I am a collaborator of the famous Henry Chesbrough on open innovation but one of many (and one of two on the second Open Innovation book). Still, it was a pleasure to bring the discussion of open innovation to Chile, a country that has historically relied on natural resources (mining and farming) rather than industry for its economic growth.

Prof. Chesbrough himself has been spreading the open innovation message in Latin America, including a visit last June to Brazil. His presentation is on YouTube and his slides are posted to slideshare.net.

Seeking openness in Google Scholar

2008-12-15T16:00:00.000-08:00

Although we have some good paid databases at SJSU, I’ve become addicted to Google Scholar since first using it in November 2004. It’s a quick and fast way to find research on a given topic, not to mention the main enable of certain types of vanity searches.

However, Google does not make it easy for others to build applications on top of Google Scholar, i.e. by providing APIs to allow third party access — the way they do for Google search or Google Maps.

Such APIs would allow new applications to be created to service the needs of scholars for finding and cross-referencing academic research. Apparently the Google engineers (or their bosses) are not persuaded that these APIs are worth doing.

There’s a thread on Google’s site where at least 30 people (mostly academics) have asked for it. I’m hoping others (i.e. blog readers) will comment there as well.

Padua open source CFP

2008-12-09T12:31:00.001-08:00

The Department of Economics at the Università di Padova has issued a CFP for the 3rd FLOSS International Workshop on Free/Libre Open Source Software. Normally I ignore anything that uses FLOSS or FOSS as a euphemism for OSS, but it appears to be a common affliction in Europe.

This is only indirectly related to the themes of this blog, but there is one bullet item on the list of recommended topics:

Innovation models (FLOSS [sic] based innovation, open innovation, user innovation, public domain innovation, standards and interoperability, appropriability, sustainability and competitive advantage, etc.).

The workshop will be held July 2-3, 2009 and the deadline is March 31, 2009. For more information, see the workshop website.

Summer of UOI

2008-12-01T15:38:00.000-08:00

I’ve been meaning to post a note for readers about two open innovation-related academic conference sessions I attended last August.

The first was the User and Open Innovation Workshop held in August, sponsored by Harvard and MIT. While regular blog readers saw my many postings, you might not have seen the list of papers presented that I posted (with permission of co-organizer Karim Lakhani) to the OpenInnovation.net website.

The second was the Academy of Management symposium organized by Marcel Bogers. The symposium title was “User Innovation and Firm Boundaries: Organizing for Innovation by Users.” In addition to Marcel, there were four knowledgeable speakers: Allan Afuah, Lars Bo Jeppesen, Wim Vanhaverbeke and yours truly. In addition we had two great discussants: Frank Piller and Chris Tucci.

The session was mainly about user innovation: certainly that was the main focus of Marcel’s intro and Chris’ comments, as well as the three other papers: Allan’s talk on a user innovation life cycle model, Wim’s discussion of industrial lead users, and Lars’ talk on the role of users as complementers in game mods.

However, open innovation also made an appearance. In my talk I continued my efforts to try to integrate user and open innovation. As a discussant, Frank Piller did a great job of engaging those (and other) talks at a deep level.

The question of integrating these theories continued into our discussion period. Our first audience participant, Hank Chesbrough, asked about unifying the various theories and managing the complexity of the process. Also in the audience was Christina Raasch, who (with prompting by me) talked about her forthcoming paper on user innovation in sailboats.

Overall, with all the smarts in the room it was one of the best discussions I’ve ever heard at Academy. As Frank observed at the end, the topic (and in fact the session itself) were about co-creation, a theme that came through particularly strongly in Lars’ and Wim’s talks.

I’ve posted the slides that I have so far to the website. The ones that we have so far are great, and I’m still hoping to fill in the missing talks.

InnoCentive lands top researchers

2008-11-29T08:00:00.000-08:00

Doing a Google search earlier this month, I found an interesting press release.

Nov 14, 2008 14:04 ET
Preeminent MIT and Harvard Academics Eric von Hippel and Karim Lakhani Join InnoCentive's Strategic Advisory Board
Professors' World-Renowned Expertise in Open Innovation to Help InnoCentive Drive Adoption Across Industries and Expand Its Global Network of Solvers

WALTHAM, MA--(Marketwire - November 14, 2008) - InnoCentive, Inc., the global innovation marketplace, today announced the appointment of two new members to its Strategic Advisory Board: Professor Eric von Hippel, head of the Innovation and Entrepreneurship Group at the MIT Sloan School of Management, and Karim R. Lakhani, an assistant professor in the Technology and Operations Management Unit at the Harvard Business School.

The addition of Professors von Hippel and Lakhani to the board will support InnoCentive's growing business and provide insight into the challenges businesses face that open innovation can address. Their guidance is expected to help InnoCentive raise awareness of the intellectual resources that can be tapped within the larger global community to drive innovation across industries.

This is the inventor of user innovation and one of his top PhD students — probably the two top user innovation researchers within hundreds of miles of InnoCentive.

I have one small quibble. The crowd sourcing model of InnoCentive is a two-sided market: one side for innovation and another side for buying. Thus, it’s more of an open innovation play than a user innovation.

Still, since von Hippel studied a broad range of external innovation for his 2005 book Democratizing Innovation, and Lakhani wrote the HBS case on InnoCentive, they are eminently qualified to help InnoCentive develop and implement its novel business model.

Eliminating a real pain point

2008-11-27T00:05:00.000-08:00

When I was speaking in Chile last week, one of the speakers represented DuPont Latin America. As with other divisions of DuPont, they are charged with coming up with new applicants for the company’s materials. The case he discussed was the application of Kevlar, a heavy duty fiber invented in 1965 and quickly applied to bullet proof vests.

In the US, DuPont has released “StormRoom,” a way of armoring a closet or other interior room to provide safety in the event of a hurricane or tornado. The design requirements are severe:

FEMA has created a national standard [that] requires structures to withstand high wind loads and to resist a 12ft, 15lb, 2’x4’ building timber shot at the shelter at 100 mph. 100mph is how fast a 250+mph wind will carry the 2’x4’. …The DuPont™ StormRoom™ with KEVLAR® meets the national requirements for hurricane and tornado shelters.

In the US, there are roughly 50 tornado deaths a year. Hurricane deaths are more variable, but one estimate put it at about 20 per year (although 2004 and 2005 had atypically high fatality totals).

In Latin America, DuPont has found a bigger pain point: the high murder rate in several countries. For example, Brazil has nearly 50,000 murders annually. The problem is large enough to be a concern of the middle class, beyond just the executives who are targets of kidnapping schemes.

Thus DuPont has unveiled Armura, a retrofit solution for passenger cars that uses Kevlar for door panels and SentryGlas laminate layer for windows.

The advantages of this solution over previous car armoring solutions are weight and cost. The solution adds 75 lbs. (90 kg) to a passenger sedan. In October 2008, DuPont Brazil unveiled solution. It offers the solution for BRL 16,000 or US $7,250 tailored for specific Toyota and Chevy models.

Using branch offices to find applications is not strictly open innovation. But it certainly is in the spirit of open innovation of decentralizing commercialization beyond the R&D lab or HQ marketing.

When I heard about Armura, it directly reminded me of Figure 4.3 (p. 77) of our 2006 book from the chapter on open innovation by RPI’s Gina O’Connor. Gina showed how (a decade ago) DuPont used an ad in Scientific American to solicit applications for its then new Biomax polymer based on renewable resources.

As I said in my own talk — prepared before the DuPont talk — DuPont is the exemplar of the vertically integrated firm of the late 19th or early 20th century. Our understanding of the development of DuPont and other such firms comes from Strategy and Structure and other books of Alfred D. Chandler, Jr. The “D” stands for Dupont., as his great-grandmother was raised by the DuPont family.

Reading list

2008-11-20T20:49:00.001-08:00

As part of Global Entrepreneurship Week, I gave a talk this week in Santiago on open innovation. This prompted me to pull together in one place the open innovation (and related) readings I’ve been recommending since starting this blog. (Note: as with anything else I write in this blog, these opinions are my own and thus are not necessarily those of the global innovation community).

As a starting point, I want to mention that we have a full bibliography of open innovation research on our website; I try to update this about every six months. I’ve also previously summarized definitions of open innovation.

There are also three books written (or co-written) by Henry Chesbrough:

Open Innovation (2003) was the first book: it created the open innovation paradigm and has guided all open innovation research and practice since then. This is the most often cited reference on open innovation, and it would be hard for anyone to be an expert in OI without owning this book (now in paperback).

If Chesbrough’s first book was written for R&D managers, then Open Business Models (2006) was written for the business side of the house. Chesbrough said that he found the first book convinced the R&D managers but those who run the numbers needed more tailored arguments.
Finally, Chesbrough, Wim Vanhaverbeke and I edited a 2006 book (Open Innovation: Researching a New Paradigm) with chapters from 15 innovation scholars. While primarily intended for an academic audience, this year I’ve used it in my MBA technology strategy class. My students seemed to be OK with reading Chapter 1, 3 (second half), 4, 5, 6. Other parts of the book will work if you are comfortable with academic jargon or can pick around it. (PDFs of the book manuscript are available online or it can be purchased).

Even with this wealth of material, those interested in open innovation shouldn’t stop there. Regular blog readers know that I’ve also been trying since May 2007 to provide an integrative perspective on three distinct research streams: open, user and cumulative innovation. While these streams overlap in what they consider, at least for now they seem to have their own scholars and body of research.

Here are some of the original readings for the two other streams:

User innovation. Eric Von Hippel’s 2005 book Democratizing Innovation is must reading (available for purchase or download), as it is up-to-date, lays out the current issues, and contains pointers back to the rest of the literature. The one emerging topic I would add is user entrepreneurship, as covered by Sonali Shah and Mary Tripsas in their 2007 journal paper.
Cumulative innovation. The most readable are the 1991 Journal of Economic Perspectives article by Suzanne Scotchmer and a deeper, more probing examination in her 2004 book, Innovation and Incentives. The broadest and most up-to-date treatment is last year’s article in Organization Science by Fiona Murray and Sibohan O’Mahony.

I gave talks in August contrasting these three streams ({open | user | cumulative} innovation) at the UOC 2008 and the Academy of Management. Those who want to cite a written lit review should for now see my workshop paper from last April, which will be coming out in a law journal next year and draws from my 2007 EURAM keynote. While this may the first actual paper I’ve written contrasting the literatures, it won’t be the last.

There’s a lot more related research streams that could also be mentioned — university-industry relations, open source software, the role of communities, etc. Perhaps I can these cover these in a future posting, but for now I hope this provides a good starting point for anyone interested in open innovation and related work.