More and more companies are engaging in some form of open innovation, but such an approach requires a new way of working that employees are often ill equipped to undertake.
That’s the argument put forth by a new paper from The European Academic Network for Open Innovation.
Open innovation analysis
The researchers began by analyzing the breadth of open innovation work across industries, and the kind of open innovation companies were participating in. For instance, whilst horizon scanning for external ideas was rather popular, IP out-licensing was much less so. It was especially interesting that so called out-bound activities were collectively unpopular. These include activities such as the sale of unutilized technologies and IP licensing.
By contrast, companies were much more familiar with cooperative forms of open innovation, such as horizon scanning and co-creation.
There was also an interesting difference in how open innovation was applied in companies of varying sizes. For instance, smaller companies were keener on crowdsourcing that allowed them to scale up rapidly, whereas larger companies were more active in standardization and external technology acquisition.
There was also an interesting divide in open innovation activities based upon the age of the company concerned.
“The most noticeable result is that start-up firms (1 to 3 years old) adopt most of open innovation activities more intensively than other firms. The only exceptions are standardisation, IP in licensing and external technologies acquisition – these open innovation activities are adopted more intensively by mature and old firms (11 years and older),” the authors say.
Room for improvement
The report found that there was a considerable desire among companies to increase co-creation with customers, and external collaborations with suppliers, academics and so on. There was also a strong desire expressed to increase the external horizon scanning process.
A lot of these ambitions were somewhat undermined by a lack of capability development within companies. Around half of respondents revealed that they provide no training on open innovation, despite open innovation being promoted in nearly all companies.
The authors argue that open innovation is a sufficient shift away from business as usual to require support for employees to move towards a new way of working.
“Research on Open Innovation readiness suggests that employees require a certain education in order to be able to successfully apply Open innovation methods. Therefore, our results suggest that even though several companies use Open innovation activities, they are not exploiting its full potential,” the report says.
The kind of skills required by open innovation specialists typically revolved around networking, collaboration, communication, problem solving and team working.
Given the strong desire to work more effectively with universities, the report goes on to suggest that the universities themselves could do more in providing the kind of open innovation training that is shown to be lacking. This education could be an addition to other studies, or as a stand-a-lone executive education program.
Given that most respondents regarded themselves as being at an early stage of their open innovation work, this lack of skills development is perhaps not that surprising, but it does point to a very clear direction for improvement.
Early successes
The report does suggest that there are some strong early successes to build upon however. Some 60% of companies revealed a marked increase in the number of radical new products since they began open innovation activities. What’s more, companies also reported a reduction in product development time, and higher levels of market acceptance of new products and services. The ROI of open innovation was therefore strong.
If the skills of open innovation specialists could be improved however, especially in key areas such as IP management, entrepreneurship, collaboration, networking and problem solving, these strong early results could be significantly improved upon.
