Getting help with open innovation: The role of intermediaries

A year-long research project lead by Dr Letizia Mortara of the University of Cambridge Institute for Manufacturing has examined the role of intermediares in supporting open innovation. The project was undertaken in collaboration with a consortium of industrial and other partners, including: BP, CIRA, Crown Cork, Doosan Babcock, EPSRC, GSK, IXC-UK, NESTA, Oakland, PepsiCo, Quotec and Shell.

Firms increasingly need to collaborate with other businesses in order to introduce new products or services. Such partnerships – known as ‘open innovation' (Chesbrough 2003) – help them gain access to new technologies, ideas or skills they require to keep pace with today's evolving markets and changing customer demands. However, this more collaborative approach is an innovation in itself, and demands a new set of capabilities which many businesses do not possess.

Companies looking for help with open innovation will find numerous organisations offering assistance – from commercial and technical consultancies, to government departments, national and local development agencies, academic networks and university technology transfer offices. These organisations have come to be known as ‘innovation intermediaries'.

This project focused on the ways in which intermediary organisations can help to increase the effectiveness of open innovation and intelligence gathering activities. In particular, it aimed to:

understand the ways in which companies can improve their innovation and technology intelligence activities by engaging with intermediary organisations

provide criteria for companies to support the selection of intermediaries to work with

give guidance to intermediaries on how to improve their services and to organise their business models

The findings of the research have been captured in a report published this month. The report aims to help companies select the most effective source of help with open innovation. It describes the capabilities companies need in order to implement open innovation successfully and the range of assistance offered by different types of innovation intermediaries. It suggests a structured approach to selecting the most appropriate intermediary for a particular company's needs and illustrates this with case studies and examples. The report also aims to help intermediary organisations to present their services more clearly to their clients.

You can download an electronic copy for free by clicking here.

The geography of open innovation: Do what where?

Simple question: Does anyone know of research that links the implementation of open innovation with the decision on where to locate business operations?

To give this question some context, three research domains are related to this question (though there are of course many more).

1. Cluster theory: Regional clusters are believed to provide a fertile environment to support innovation. A huge amount has been written by economic geographers on categorising clusters, analysing how they form and evolve, identifying different policy measures that can be used to stimulate cluster development (addressing perceived market 'failures'), the role of inter-firm networks within clusters, etc. A good summary of work in these areas can be found in the 'Handbook of Research on Innovation and Clusters' edited by Charlie Karlsson.
2. Globalisation of innovation: There's plenty of research looking at the way in which innovation activities - especially those of multinational corporations - are increasingly distributed globally. However, some of this work uses R&D as a proxy for innovation. With the recognition that innovation is much more than just the commercialisation of the outputs of R&D operations, the use of R&D as a proxy for innovation seems to be potentially missing a big part of the picture. There is also plenty of research on the topic of innovation systems at the regional level.
3. Implementation of open innovation: With the frenzy of interest around open innovation (in all its guises), there is no shortage of how-to guides and useful examples from a wide range of industries and sectors.

However, we haven't yet come across much work that looks at the practicalities of implementing open innovation in a particular location. Specifically, we are looking for research which links the decision to locate some part of a firm within a particular region with the stated aim of implementing open innovation and the activities a firm needs to undertake at that location to ensure successful implementation of open innovation. So, if anyone knows of research which does make this link, we'd really like to hear from you either via the comment box below or via email to tim.minshall@eng.cam.ac.uk.

Three books, open innovation, and Maslow's hammer

On a recent hot, quiet and remote vacation, I read three books and when I had finished them I found myself pondering the implicit (or explicit) connections between the core theme of each book to open innovation. The three books were:

• Matt Ridley: "The Rational Optimist: How Prosperity Evolves"
• Carlota Perez: "Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages"
• Brian Arthur: "The Nature of Technology: What It Is and How It Evolves"

I'm not going to attempt to summarise these very interesting books other than to highlight what I think might be some of the open innovation angle that can be taken from each one (but I am still working on this ..).

Matt Ridley's core message is about the power of the exchange and reproduction of ideas, the trade in goods and services, and innovation as a 'collective phenomenon'. As such the book (to me) seems to push the role of collaboration innovation to the fore and, in fact, raise it to high prominence as an essential component in underpinning our ability to maintain growth across the globe in the face of major social, economic and environmental challenges.

Carlota Perez presents an excellent, structured summary of the patterns that can be observed in technological revolutions. She splits analysis of past revolutions into two broad phases of installation and deployment, and each of these is in turn split into irruption and frenzy, and synergy and maturity. She stresses the difference between financial and production capital in supporting the widespread adoption of the technology. A key message of this book, from an open innovation perspective, is the recognition that technologies are extremely unlikely to be brought to market by firms acting in isolation and that the development of the whole ecosystem - or 'techno-economic paradigm' - is required to support successful diffusion of novel technologies. And this is not a feature only of modern technologies, but something that can be observed in the analysis past technological revolutions such as canals, steel making, railways, automobiles, and many others.

Finally, Brian Arthur's delivers 'an -ology of technology'. He discusses technology in terms of links to natural phenomena, the combining of and building upon existing technologies, and how technologies deepen and develop over time. He also presents an interesting discussion of the links between the evolution of the economy and technologies, and the way in which an economy can be considered as an expression of its technologies. From an open innovation perspective, this book provokes numerous interesting areas for further discussion. Among these, the links between modern technologies, management change and collaboration are interesting. E.g. "[..] the nature of modern technology is bringing a new set of shifts: In the management of businesses, from optimizing production processes to creating new combinations - new products, new functionalities. From rationality to sense-making; from commodity-based companies to skill-based companies; from the purchase of components to the formation of alliances; [..]. Order, closedness, and equilibrium as ways of organizing explanations are giving way to open-endedness, indeterminancy, and the emergence of perpetual novelty" (p210-211).

However, in reading all three of these books and looking for the open innovation links as I have attempted above, I'm not sure whether I have fallen into the trap identified by Abraham Maslow when he stated: "It is tempting, if the only tool you have is a hammer, to treat everything as if it were a nail". So, if anyone else has read these books and has an interest in open innovation, your comments would be welcome.

Key points from IfM's open innovation workshops

The open innovation workshops organised by the Institute for Manufacturing on 20/21 April attracted delegates representing a range of industry sectors and company sizes, with diverse experiences at implementing (or plans for implementing) open innovation. Ruth Thomson from Cambridge Consultants has kindly written two blogs summarising the key themes discussed at this event, and these can be accessed via the links below:

• Blog summarising 20th April workshop on "Open innovation for small firms: how to set up and manage collaborations with large firms"
• Blog summarising 21st April workshop on "Implementing open innovation in large firms"

Two open innovation events in Cambridge in April

The Institute for Manufacturing (IfM) is organising two workshops on 20th and 21st April 2010 focused on the challenges and opportunities of implementing Open Innovation (OI) from two perspectives:

• "Open innovation for small firms: how to set up and manage collaborations with large firms" will look at the challenges for small and start-up companies in forming productive collaborations with large companies.
• "Implementing open innovation" is focused at large and multinational companies wanting to understand how to develop the skills, processes, culture and motivation for OI.

Both workshops will draw upon research findings at the IfM's Centre for Technology Management (CTM), revealing ways in which companies collaborate and configure themselves to succeed in OI. They will be illustrated with case studies by experienced practitioners from technology-driven companies that have embraced the OI approach. Facilitated mini-workshops will focus on identifying the key challenges faced by participating companies, sharing best practice and learning from research understandings identified by CTM.

The workshops will be an ideal opportunity for companies to build momentum for the next step along the OI journey, whatever their current stage of development. The evening between the two workshops will also provide an excellent opportunity for participants to share experiences with colleagues who share similar challenges and to identify collaborative opportunities between large and small companies.

For more information, see http://www.ifm.eng.cam.ac.uk/service/events/info/openinnovation.html

We know open innovation is not new ..

There's an interesting paper recently published comparing open and closed approaches to innovation in the US steel industry in the 1920s. This contrasts with a comment made in the first post on this blog pointing out that open innovation does seem to have some of the characteristics of a recent management fad. So, I'm interested in finding further documented examples of open innovation going back through industrial history. If you know of any, please add a comment. I'll then collate the responses and attempt to produce a historical timeline of open innovation examples.

Links between cluster development and open innovation

As part of the preparation for a talk at the Japanese Cluster Conference 2010, I came across several interesting websites providing data on policies to support cluster formation, cluster / open innovation activities, and sites with slightly more tenuous - but potentially relevant - content. In case these might be of interest to others, I have grouped links to them below. Also the slides used at the conference can be downloaded from here.

Policies for clusters:
UK Department for Business, Innovation and Skills cluster strategy
French Pôles de Compétitivité
European Commission's view on the importance of 'Powerful Clusters'

Everyone wants to be Silicon Valley
Examples of 'Silicon + {geographic feature}'

Open innovation
IfM report on 'How to implement open innovation'
Examples of idea submission websites: P&G and 3M
Examples of open innovation intermediaries: Innocentive and NineSigma.

Corporate R&D and clusters
Examples of companies locating innovation activities within clusters: Nokia and Microsoft
Examples of companies seeking to develop clusters around their R&D facilities: Unilever@Colworth and Philips@Eindhoven

Examples of cluster strategies
Local = Cambridge; Regional = East of England Enterprise Hubs; Cross-border = Eindhoven-Leuven-Aachen Triangle (ELAT)

Networks within the Cambridge cluster
Cambridge Network
ERBI
University of Cambridge Enterprise Network