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Open Innovation process: an essential in every company?

Published on 14 October 2021 Read 25 min

At a time of constant digitalization and upheaval of our current practices, what we call “Open Innovation” appears more than ever as a way to innovate for companies. This term is not new, and companies must consider reinventing the approach and the process to take the most advantages out of it. Is Open Innovation process an essential in every companies who wish to be innovative? Is it necessary to go further? Alcimed takes stock.

What is Open Innovation?

Open Innovation can be defined as all the internal and external flows of knowledge that can accelerate internal innovation and expand markets.

One of the particularities of Open Innovation is that there is no one specific official definition of Open Innovation. Each company has its own way of definition and take advantage of it through different forms. Nevertheless, Open Innovation has been defined by Henry Chesbrough, its pioneer, as the shift from closed innovation processes towards an open approach of innovating. More globally, Open Innovation can be defined as all the internal and external flows of knowledge that can accelerate internal innovation and expand markets. Open Innovation is built around the mindset of being open to sharing and receiving information.

By defaults, Open Innovation in companies is generally R&D-driven, notably in the pharmaceutical industry, but it can also be an independent department or under the guidance of other internal departments. At the end, Open Innovation remains in line with the strategic imperatives and supports internal needs to bring innovation from inside and outside the company.

What are the benefits and challenges of Open Innovation Process?

Open Innovation process has different objectives including the opportunity to make new ideas emerge to bring value to internal innovation. Open Innovation can directly benefit to marketing, insights gathering, finding new talents or R&D to develop new products and services. Open Innovation processes can support companies reaching large and relevant audiences, increasing the chance to develop lucrative partnerships, involve customers, …

Nevertheless, Open Innovation also witnesses challenges such as unclear defined goals due to the variability of approaches and sources, build effective and visible internal process or still implementing to the end the ideas emerging from the process.

What is the difference between Open Innovation and External Innovation?

Open innovation and External innovation are often differentiated:

Open Innovation is more often described as an open mindset and external innovation is more related to R&D innovation or scouting. External innovation is part of Open innovation, but Open Innovation englobes a much wider vision of innovation flows, considering that creative people outside the company can also contribute internally to identifying new concepts and that it can be profitable for both parties.

Which aspects can Open Innovation take?

Open innovation, according to how it is understood in each company, can take different aspects forms. First, Open Innovation cannot be considered successful without partnerships. It plays a key role and can go from joint venture, consortia, innovation centers or joint labs. A lot of different players can be implied from large companies, start-ups, academics or even suppliers and customers.

Most initiatives are external such as external scouting, digital platforms, and shared knowledge access. Open innovation can be considered intracompany or intercompany, for a targeted audience of experts or even publicly open. Internal initiatives, also called “open inside” can be implemented as internal challenges or intrapreneurial programs to promote internal ideation or involve employees. For instance, Servier created the WeHealth entity to develop all the Open Innovation approaches and Michelin – a reference in Open Innovation – created an “incubator program office” to promote internal innovation. External initiatives can be either “outside in” such as scouting or sourcing or “inside out” more directed towards sharing ideas and intellectual properties such as digital platforms or hackathons. For example, Eli Lilly has developed a shared online platform called “Open Innovation Drug Discovery” to promote the discovery of new drugs.

What are the next steps for Open Innovation?

Open Innovation has no direct return on investment for companies, which can be frustrating, but it represents a real long-term opportunity of business for companies. It is important to have a very structured Open Innovation process in each company which wish to innovate, reinvent themselves, inspire their employees, … Nevertheless, Open Innovation must remain “open” minded and it would be a mistake to apply it without understanding the reason behind. For sure, in the current period, Open Innovation still has great years to come more particularly with the development of all the digitalization processes.

About the author,

Christelle, Project Manager in Alcimed’s Healthcare team

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