Closed and open model of innovation

In the 20th century, companies gained a competitive edge by financing their own laboratories. Many did basic research (often indirect), developing new technology that spun new products – even new industries. These special needs, even private companies, generate huge profit margins that funded more research.

This is known as & # 39; closed & # 39; a model of innovation. Research and development were vertically integrated into this innovation model, and market access barriers were high. At the beginning of the development of this model, market research played a small part.

The Idea of ​​Closed Innovation

Only part of completed research projects submitted in patents and only a fraction of these patents were taken to the development stage – no marketable products were identified or lacked capital. There were no experts who worked to view technology and provide products. IBM scored its famous initials on a slice of silicon on an atomic stage, but at that time, few, either, were clear where it would lead.

In many cases, companies have developed ground-based technology, but have not been able to use them. What about Xerox – they do copiers, right? Yes, but they did more – & GUI & # 39; user interface concept was first developed in Palo Alto Labs Xerox. It was Apple who made it a marketable concept in "Lisa." Then Microsoft is "Windows" followed by Apple's heels and the rest is a story – including lawsuit.

Although Apple has Steve Jobs, who Being a true wizard, companies can not count on having one. Holding technology within the company limits the ability to utilize external expertise, create a vision and take advantage of the business sector.

Other companies that could have used custom technology by lease it would have created a win-win situation for both. Similarly, the company itself could have licensed technology created by other companies.

As in the 20th century, many interesting mistakes made use of opportunities to wake up questions about closed innovation model, but the business partner changed with:

  • Increased option for unused technology.
  • Increased availability of risk
  • Increased mobility of skilled and knowledgeable workers.
  • Increased availability of highly qualified outsourcing partners.
  • Increased strategic market research on social, technology and lifestyle policies.
  • This led to the idea of ​​open innovation.

Open Innovation

In this term, the company's boundaries are porous. Unused technology in the company is now licensed to other companies that save income and time. It is important that the company (the owner of the device) can take advantage of market conditions. Internal emphasis is placed on technology that is used in the core business of the company – work and resources are not diluted.

The Innovation Company

In business, technology is only useful if it is marketed. Ways to do this are:

  • Use technology in current operations.
  • Allow technology to other companies.
  • Launch a new project with technology.

These innovative business model options closely pair entrepreneur input and economic output.

Rather than seeing threats and venture capitalists as threats, technicians can use them to test the marketing of new products. In addition, they can then re-export the goods into general business.

Many big companies open the innovation path by acquiring or forming a coalition; Others have set up their own internal venture companies that take advantage of their innovation process.

The advantages of opening the model are:

  • Income from non-core technology.
  • Shorter time to market to promote technology.
  • The possibility of numerous markets is explored and new.
  • Testing of other business models for new products / service orders.

Clearly, the flexibility of the open innovations model makes it so powerful, and it works well to rule out bugs in the closed model.


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