Open innovation has been fundamental to major technological breakthroughs of current times. The Networked Society – in which everyone and everything are connected in real time – will change the way we innovate and collaborate, and is a key enabler of open innovation.

The term “open innovation” was popularized by Henry Chesbrough in his book Open Innovation: The New Imperative for Creating and Profiting from Technology. He wrote, “Open innovation is a paradigm that assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as the firms look to advance their technology.” Chesbrough demonstrates how, for several years, the corporate world has been adopting this process of collaboration, idea exchanging, experience sharing and integration of researchers inside and outside companies. But these concepts have never been as important as they are now in the 21st century.

Edvaldo SantosDirector, Ericsson Innovation Center Brazil

The increase in availability and mobility of highly qualified human resources in different locations is one of the advantages of adopting a research and development (R&D) process based on open innovation. It is also the fastest and most effective path to finding the right business model for company’s products and services.

The results are significant. And in a way, they explain the agility and quantity of technological innovations available to the society in the modern world.

We increasingly see shorter and shorter lead times between prototyping activities in R&D labs and market deployment, thanks to open source software which, inspired by open innovation, has further bolstered the concept.

In this scenario, investments in open innovation have increased the R&D budget of major players in strategic industries, such as infrastructure, telecommunications, oil, gas and automotive. The exchange of ideas, as well as R&D processes based on collaboration between private companies and universities, have proven efficient in keeping companies competitive and up to date with the latest cutting-edge technologies available.

Innovation has gone beyond the top of corporate agendas to governments worldwide, as countries compete to be well positioned in the knowledge-based economy. Therefore, the experience of large companies already providing R&D under the principles of open innovation warrants consideration and should be followed.

Although some companies still practice closed innovation, it stands to reason that the choice for open innovation is increasingly strategic: the competition between companies based on the use of open innovation lies in mastering the process of creating and managing the innovation ecosystem.

This process should have objective criteria for selecting partners, should offer knowledge-sharing tools and practices and, additionally, should consider geographic distribution of teams. Most importantly, this process should have efficient practices of project governance and coordination, so that agreed project targets are met. Moreover, the knowledge needs to be transformed into products with a competitive edge and developed within the lead time and cost parameters, as defined by the market.

This methodology promotes a win-win situation to all involved: companies enjoy increased competitiveness (as a result of cost reduction), increased knowledge base and an accelerated learning curve. Partners, universities and development institutes, enjoy access to technological knowledge and applications that generate immediate value for the society. Industry as a whole is subject to a more competitive business environment. And finally, society benefits from cheaper products and all the other advantages of global scale production.

ERC-12:000345 Uen© Ericsson AB 2012

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