Does Open Innovation (OI) Lead To More IP-Activity?

(Source: AI)

Henry Chesbrough is considered by many as the father of open innovation, which “refers to the ways that firms can generate and commercialize innovations by engaging outside entities” (Kuan, 2020). Recently, Chesbrough published an article on the accomplishments and prospects of open innovation, as well as examined the three phases of the evolution of this concept: (a) the antecedents of OI, (b) some of the main findings from OI (including both successes and failures), and (c) prospects for the future of OI. Interestingly, since 2003, many case studies have been published on organizations that have adopted an open innovation approach (e.g., Whirlpool, P&G, Ericsson, Huawei, Tesla, food industry, industry 4.0,), amongst other noteworthy publications (Bigliardi et als., 2020, Alvarez-Meaza, 2020).

Understanding its impact, does open innovation lead to more IP activity and competitive advantage? Yes it can. Here’s how:

IP-Activity

• Access to diverse knowledge: Open innovation allows companies to tap into a wider pool of knowledge and ideas, including those from external partners, researchers, and even customers. This can lead to the development of more innovative products and processes, ultimately increasing the potential for IP generation through patents, trademarks, and copyrights. (Chesbrough, 2003)

• Collaboration and co-creation: Open innovation fosters collaboration, which can accelerate the innovation process and lead to more inventions. Joint development efforts often result in shared IP ownership or licensing agreements, increasing overall IP activity. (Enkel, Gassmann, & Chesbrough, 2009)

• Faster commercialization: By leveraging external ideas and technologies, companies can bring products and services to market faster. This rapid pace of innovation can lead to a greater number of IP filings to protect the competitive advantage gained through open innovation. (Gassmann & Enkel, 2004)

Competitive Advantage:

• Enhanced innovation: Open innovation fuels the innovation pipeline, leading to the creation of novel products, services, and business models that can provide a significant competitive edge. (West & Gallagher, 2006)

• Reduced R&D costs: Sharing risks and costs with external partners can make innovation more efficient and affordable, allowing companies to invest in more projects and explore a wider range of opportunities. (Huizingh, 2011)

• Improved agility and responsiveness: Open innovation helps companies adapt quickly to market changes and emerging technologies, giving them a competitive edge in dynamic environments. (Vanhaverbeke, Van de Vrande, & Cloodt, 2008)

• Stronger external relationships: Building a network of partners and collaborators can create a robust ecosystem that supports innovation and strengthens the company's market position. 

Conclusion

Open innovation helps foster increased IP activity by expanding knowledge sources, encouraging collaborative invention, and accelerating commercialization. This may also lead to a stronger competitive advantage through enhanced innovation, reduced R&D costs, improved agility, and stronger external relationships. However, successful open innovation requires strategic alignment and careful IP management to mitigate potential risks like IP leakage. This is where MVIP™ can help. Contact us for more information.