Open Innovation is the fact that a company opens its R&D department to external people or, internally, to employees from other departments. These outsiders are usually researchers and experts in a field or technology. More generally, a company can also rely on different actors with different resources such as customers, students, the crowd (also known as collective intelligence) or other companies.
Innovative companies encounter several types of situations that may justify the use of an Open Innovation “outside in” and “inside out” approach. Three main ones can be mentioned:
- The need to apprehend a new emerging technology, to understand its potential impact on the company’s market, competitive risks or new opportunities. This need is typically described by an ‘outside-in‘ approach in the Open Innovation vocabulary (Chesbrough, 2003).
- The need to maximize the return on investment of a technology developed by the company: is it possible to increase the return on investment by applying it to other needs, other markets? (an ‘inside-out‘ approach in the Open Innovation vocabulary)
- The need to solve a technological or scientific issue for which the company does not have the competence and will seek external expertise (another form of “outside-in“).
Open Innovation involves various concepts such as co-development and intellectual property.