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Open Source Innovation

We all get it, innovate or die.   More acutely we must craft profitable innovations that are unique where above average margins can be harvested, at least for a bit of time.

The idea of Open Innovation (OI) is that it is hard to come up with mega market disruptive ideas but that innovation and refinement of existing products and services over time is more likely.  Further, that to accelerate innovation over time  ideas should be looked for in an open way – ideas from both inside the company and from outside the company.  OI is predicated on the idea that companies can tke advantage of other R&D to innovate their products and services and conversely look to license their internal R&D to other companies so that their IPCI has more and eariler market exposure and thus more immediate revenue generation, and in theory it will have more value.  One model that supports a proven innovation strategy is the Open Innovation Model (developed by Chesbrough in 2003). This OI model proposes brings innovation from external sources beside the internal ones. OI by the logic of its process and market forces is effective if it is associated with a competitive intelligence system.

OI advocates that a CI system must thus; be accessible to a wider base of information consumers within the organization, needs to draw upon a wide and diverse base (this Hayekian diffuse), integrated in to the companies choice making system, and understood that the collection assessment and choice making are extremely time sensitive.

It is a “quasi” forced collaborative model that gets information and information does not get better with time.  The emphasis on wide and rapid exposures to this information is a big part of OI. In reality, much information goes from an asset to a liability as it gets stale – such as the knowledge of an impending attack that you had weeks prior to the attack that just seemed not to make it to the choice makers.  The organization had the information but the choice makers did not.

OI also poses some interesting questions on ownership of ideas, and value of an IPCI asset that if the extraction of the value of the asset is faster, does it retain full value over its life, is it a straight line of declining value or is it a sharp decline that zeros out long before the rights exclusive use expire?

 

May be another article on that.

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