Open Innovation

Book: Open Innovation. Henry Chesbrough.

Description

From the publisher:

"In his landmark book Open Innovation, Henry Chesbrough demonstrated that because useful knowledge is no longer concentrated in a few large organizations, business leaders must adopt a new, "open" model of innovation. Using this model, companies look outside their boundaries for ideas and intellectual property (IP) they can bring in, as well as license their unutilized home-grown IP to other organizations.

In Open Business Models, Chesbrough takes readers to the next step—explaining how to make money in an open innovation landscape. He provides a diagnostic instrument enabling you to assess your company's current business model, and explains how to overcome common barriers to creating a more open model. He also offers compelling examples of companies that have developed such models—including Procter & Gamble, IBM, and Air Products.

In addition, Chesbrough introduces a new set of players—"innovation intermediaries"—who facilitate companies' access to external technologies. He explores the impact of stronger IP protection on intermediate markets for innovation, and profiles firms (such as Intellectual Ventures and Qualcomm) that center their business model on innovation and IP.

This vital resource provides a much-needed road map to connect innovation with IP management, so companies can create and capture value from ideas and technologies—wherever in the world they are found."

Review

Jon Lebkowsky at Worldchanging.org:

"Open Innovation tells how technology research and development, formerly "closed" and handled inside megacompanies like IBM and Xerox, increasingly happens in smaller companies and universities. What he calls "Open Innovation" is typically driven by VC-funded startups that build toward acquisition, a model that was popular through the Internet boom of the 90s, and is still common. Chesbrough's book is a good overview of the history of corporate innovation in the USA, and a good explanation of the closed vs open models for innovation.

Closed innovation gave way to the more open model because the workforce started churning, and it became increasingly difficult to contain the ideas that resulted from the best thinking and experimentation within any one company. There's also been a knowledge sharing movement facilitated by the Internet, and the Open Source movement's commons-based peer production model, which is oddly excluded from Chesbrough's consideration.

This is where I had a problem with the book – it didn't go far enough. The model Chesbrough describes is an extension of the top-down corporate model, failing to acknowledge promising "small is beautiful" emergent approaches to innovation and business. Open source is one example, the bootstrap approach (favored by fast-growing groups like Bootstrap Austin) is another.

I do recommend the book for its value in setting context, but I don't think it's truly worldchanging. We would hope to see Chesbrough or someone follow up with an exploration of smaller, more modular approaches to business development and technology innovation, and business structures that are truly open, transparent, and inclined to balance competition with cooperation." (http://www.worldchanging.com/archives/004759.html)