The Era of Open Innovation

March 9, 2021

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The era of digital transformation has brought about many changes for companies that have been established for years. These upheavals have required them to rethink their organization, their business, and also their products in the face of the complexity of new consumer needs.

Until the 1960s-70s, companies lived in closed innovation worlds. In 2003, the year when the term open innovation was popularized, the level of maturity of large companies in open innovation in connection with startups continues to increase; they now need to call upon actors external to their environment to innovate.



1- What is Open Innovation?


It is identified as a mode of innovation based on sharing, collaboration. The notion of open innovation therefore implies that in its Research and Development process, the company is no longer closed in on itself, but opens up to other external actors. By integrating external collaborations, even with other companies or partners. And it encourages the use of external resources (in addition to internal resources) in the context of a creative process whose goal is generally to create a product or service. 


2- Why is it important to innovate? 


With increasingly competitive markets and higher expectations from the public, open innovation appears as an essential engine for innovation.

Here are some of the main advantages of open innovation:

1.Remaining competitive: This is the first reason why companies implement an open innovation strategy.


2.Expanding its offering: Open innovation allows companies to offer new innovative products to attract new customers.


3.Conquering new markets: Open innovation enables the conquest of new markets with new technologies, and perhaps establishing new relationships with foreign startups already established in a targeted new market.


4.Reducing time to market: Working closely with startups helps reduce time to market for new products, thanks to the Lean startup method, its simple, agile organization, and pragmatic choices.


5.Reducing R&D costs: Research and Development costs are indeed reduced because startups are generally already advanced in terms of studies, strategy, and technologies. And they often need organizational and financial support. Therefore, it is no longer necessary to conduct research from A to Z. 


3- What process for open innovation?


OUTSIDE-IN: It aims to obtain ideas or solutions from the outside to feed and strengthen the internal innovation process of the company. By interacting with consumers, experts, or more generally the general public, the innovative company taps into external creativity and intelligence. The innovation process then opens up to communities, either professional or candid, to increase its innovation capabilities.


INSIDE-OUT: It involves valuing, sharing, growing, and making available internally the skills or resources of the company. This type of process can lead to company spin-offs, patent development, or technology transfers.


COUPLED PROCESS: It simultaneously combines the two previous processes. In this process, actors build or use specific collaborative platforms to engage in reciprocal exchanges of knowledge and know-how, of a mutually beneficial type. It is worth noting that new actors appear in this type of open innovation. These actors play the role of intermediaries in open innovation: they invite "creative minds" to find the best chances of solving problems encountered by other actors. And this is a role that banks are taking on. 





Due to technological advancements and the competitive environment in which companies operate, open innovation has become an indispensable engine for addressing the complexity of new consumer needs and the new challenges companies face. With its mode based on sharing and collaboration with other external actors. 




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