With Web and Enterprise 2.0 technologies and approaches, firms have more options in researching and designing new products. Firms can easily connect to more potential customers, to experts across the globe, to partnering companies and to virtually anyone on the face of the planet who could help create the next new new thing.
So now the industry pundits are pooh-pooing "closed" innovation and are preaching "open" innovation. What's the difference? Closed innovation is restrictive in its licensing, exclusive in its sourcing arrangements, has one-sided royalty rates, requires rigorous legal scrunity, and has customers and partners wary of its potential lock-in strategy.
Open innovators tap into partner communities more openly, work with research universities, build strong relationships with some partners that it shares its secret sauce with, has generous royalty rates and engages the community more openly as it improves its product.
In other words, closed innovation has a bad and mean feeling about it and open innovation feels good and friendly.
Uh huh. And I was born yesterday!
I wonder if this characterization of open and closed innovation is just a tad bit stereotypical. Over the past 100 years or so, haven't most successful firms been open enough in their innovation? At least open enough to be successful? Perhaps monopolies are the only firms that can practice "closed" innovation, if they need to innovate at all.
Isn't preaching that open innovation is good simply making a virtue out of necessity? In order to compete, firms need to use others to quickly make new products. If this is true, why all the flowerly language? And it doesn't seem all that new, at least to me.
With globalism and the Internet, a more extreme form of open innovation is now available. In this form of innovation, a team of global do-gooders, driven by nothing more than the desire to unravel a near monopolistic competitor by making a wildly successful and nearly free product, might be able to colloborate loosely and remotely. And give all their knowledge away for free so that mainkind can fully benefit.
Can a team of global do-gooder innovators create a better iPhone? Or a better Wii? Or the next killer app? Can completely open innovation create a masterpiece? Can it create a monopoly?
I don't think so, which is why I believe the so-called new "open" innovation theory, when practiced, won't be as open as you would think. Especially if there are big profits in the innovation, which does occasionally happen for blockbuster products.
In any business proposition, there is nothing like seven, eight, or nine zeros after the one to cause friction to go up and openness to close. Just you wait and see.
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