Open Innovation

Henry Chesborough, the father of “Open Innovation”, is Executive Director of the Centre for Innovation at Haas School of Business, University of California at Berkeley. His research focuses on managing technology and innovation. His book “Open Innovation” was named the best book on innovation in 2003.

“Most innovations fail, and companies that do not innovate die” Chesborough says in his book. “In today’s world, where the only constant is change, the task of managing innovation is vital for companies of every size in every industry. Innovation is vital to sustain and advance companies’ current businesses; it is critical to growing new businesses. It is also a very difficult process to manage.”

Not long ago, internal R&D was viewed as a strategic asset and even a barrier to competitive entry in many industries. Only large companies with significant resources and long-term programs could compete.

Nowadays there is a broad awareness of open innovation and its relevance to corporate R&D. The implications and trends that underpin open innovation are actively discussed in terms of strategic, organizational, behavioral, knowledge, legal and business perspectives, and its economic implications.

Most research to date has followed the outside‐in process of open innovation, while the inside‐out process remains less explored. A third coupled process of open innovation is also attracting significant research attention. These different processes show why it is necessary to have a full understanding of how and where open innovation can add value in knowledge‐intensive processes.

The nature of the pharmaceutical industry is such that the main driver for its growth is innovation. In view of the vast challenges that the industry has been facing for several years and, in particular, how to manage stagnating research and development (R&D) productivity, pharmaceutical companies have opened their R&D organizations to external innovation.

There may be a need for a creative interpretation and adaptation of the value propositions, or business models, in each situation. In other words, there are important implications for new and emerging methods of R&D management. Open innovation is a timely, carefully researched, and thoughtfully articulated effort that companies make in collaboration with external partners toward the vitally important work of innovating innovation.