A recent survey report, “Managing OI in Large Firms“ by UC-Berkeley and the Fraunhofer Institute, published in May 2013, sought to clarify facts and dispel any flawed myths surrounding the use of Open Innovation strategies across companies in North America and Europe.
Specifically, the study authors wanted to address the current popular notion that Open Innovation is a “fad” that may be waning, but several other ideas and facts are surfaced. One surprise to us is that the very popular and talked about “crowdsourcing” techniques are rated among the lowest in importance. Despite its ‘mindshare,’ it’s operations are maybe not as practical as other techniques and supports the theory of crowdsourcing being more of a marketing tool than a source of profitable innovation.
Key findings of this report include (from page 4-5 of the report summary):
- 78 % of firms in our sample report practicing open innovation (3.1).
- No firms in our sample report abandoning their practice of open innovation (3.2).
- 71 % report that top management support for open innovation is increasing in their firm (3.2).
- 82 % report that, compared to three years ago, open innovation is practiced more intensively today (3.2).
- Inbound open innovation practices are more commonly practiced than outbound practices. The share of projects with an inbound component is 35 % on average. Only about 8 % of projects result in outbound activities (4.2).
- Customer co-creation, informal networking, and university grants are the three leading inbound practices in 2011. Crowdsourcing and open innovation intermediary services are rated lowest in importance (4.3).
- Joint ventures, selling market-ready products and standardization are the three leading outbound practices. Donations to commons and spin-offs play a minor role (4.3).
- Customers, universities and suppliers are the three leading open innovation partners reported by survey respondents (4.3).
- Firms are much more likely to receive “freely revealed” information than they are to provide such information (4.4).
- Establishing new partnerships, exploring new technological trends and identifying new business opportunities are the leading strategic reasons to engage in open innovation (4.5).
- Corporate R&D and product & process development units report more autonomy in budgeting for innovation activities (5.1).
- The typical large firm in our sample spends US$ 2 million annually on open innovation, and employees 20 full time equivalent people to do the work (5.2).
- Open innovation is not much formalized yet, and cultural norms are as important for open innovation as formal practices (5.3).
- The biggest challenges in managing open innovation are within the firm. The change process from closed to open innovation is rated as the most difficult task (5.4).
- Firms are not satisfied with their current open innovation metrics (6.1), though they are more satisfied with their overall open innovation performance to date (6.2).
The study authors admittedly point out two potential key biases of their survey response group: 1) respondents more heavily represented high tech manufacturing than other industries; and 2) survey population was slightly skewed more towards European companies.