What is Open Innovation? Professor Henry Chesbrough shook up the business world with his book Open Innovation: The New Imperative for Creating and Profiting from Technology back in 2003.

In 2006 professor Chesbrough released another book Open Business Models: How to Thrive in the New Innovation Landscape and in 2011 Open Services Innovation: Rethinking Your Business to Grow and Compete in a New Era.

This illustrates that the open innovation field has innovated itself, and therefore I would like to focus a on the (research) question “What is open innovation?”.

Open Innovation Definition

Let’s start with a definition from the University of California, Berkeley – Haas School of Business website:

“Open Innovation is the use of purpose inflows and outflows of knowledge to accelerate innovation. With knowledge now widely distributed, companies cannot rely entirely on their own research, but should acquire inventions or intellectual property from other companies when it advances the business model.”

Open Innovation is not only about getting knowledge and ideas into the company boundaries, but also about outflows of knowledge and technology to various markets.

During the fifth European Masterclass on Corporate Entrepeneurship & Open Innovation with Henry Chesbrough & Kenneth Morse, professor Chesbrough emphasized the importance of the business model.

Definition Business Model

“A business model describes the rational of how an organization creates, delivers and captures value.“

Advancing the business model sounds like business model innovation as defined by Osterwalder et al. (2009).Osterwalder et al. (2009) provide a tool, the business model canvas, to help advance or innovate the business model !

Open Innovation Funnel

The open innovation funnel could be seen as the visual model of the open innovation definition above.

• You see both the blue internal technology base as well as the red external technology base;
• You see the various inflows and outflows of knowledge, including in-sourcing, licensing, spinning out, divest and venture handling;
• Finally you see the various combinations of market(s) from a company’s current market, a new market or another firms market.

The open innovation funnel will help me position open innovation research articles, but helps furthermore in the process of developing new business models.

Service focused innovation

Finally I would like to invite you to watch the following interview with professor Chesbrough, in which he briefly explains the change from product focused innovation to service focused innovation. 🙂

[youtube=http://www.youtube.com/watch?v=LbiJ_9W7UHM&w=570]

“Henry Chesbrough, executive director of the Haas Center for Open Innovation, rethinks the concept of open innovation to tackle a new economy. In his new book, Open Services Innovation (2011), Chesbrough offers the tools to apply service-focused innovation to avoid what he calls ‘the commodity trap.'”

Enjoy innovation !