UC Berkeley and Fraunhofer study how large companies practice innovation
The Garwood Center for Corporate Innovation at the University of California, Berkeley, and the Fraunhofer-Gesellschaft have conducted the first large-sample survey of open innovation adoption among large companies. Their study of European and U.S. companies gives an extensive overview of the ways that companies are now practicing open innovation, along with the trends that can be discerned.
Today, many firms purposivelyopen up their innovation processes and experiment with a wide variety of new practices to accelerate their innovation activitiesand to profit from innovation. In the ten years since Prof. Henry Chesbrough coined the term “open innovation”, the phenomenon has become a widely discussed topic. Until today the question of whether and to what degree large companies practice open innovation has not been systematically analyzed. In particular, the relative importance of different open innovation practices – both traditional and new IT-enabled ones – has not yet been understood. In their international study entitled “Managing Open Innovation in Large Firms”, the Fraunhofer-Gesellschaft and the University of California, Berkeley, surveyed 125 executives of the largest companies in Europe and the United States to examine how they practice open innovation.
The results show that large companies consider open innovation to be very important and are expecting it to grow even further. Of the companies surveyed, 78 percent reported that they have applied open innovation for many years, and none of the companies has yet abandoned it in favor of a closed approach. Companies are increasingly drawing on the innovative potential of external parties: they are co-creating innovations with customers, they are cultivating informal networks, and they are collaborating with universities. In contrast, approaches that have been widely discussed in the media – such as crowdsourcing, in which firms work with unknown outsiders to solve problems – are rated lowest in importance by large companies. In general, large firms are more inclined towards inflows of knowledge rather than outflows of knowledge. For the latter, the joint ventures and participation in standardization committees are the most highly rated practices; few managers report that they are freely revealing knowledge or engaging in spin-off activities.
“The evidence of the study strongly suggests that open innovation is not a fad that is about to go away, but a phenomenon that will remain important in the future,” says Henry Chesbrough, the father of open innovation. According to the survey, companies that engage in open innovation are satisfied with their results – and that satisfaction increases with experience. But the potential is far from exhausted. “Over the coming years, companies will gather more experience in open innovation, and the individual practices to implement open innovation are likely to evolve from where they are today ,” says Chesbrough. The biggest challenge lies within the organization: Managing the journey from closed to open innovation setting up new structures, processes and responsibilities.