Open Innovation Strategies
Description
This book describes the challenges of collaboration in the development of innovations in a context where the sustainability of value chains is central. The diversity of collaborative forms, shared spaces (FabLab, LivingLab, co-working spaces), the intrinsic characteristics of innovation, and the actors actively involved in its emergence are all addressed in this book. The structuring of partners collaborating in innovative projects in specific environments is also discussed. Furthermore, it questions the social responsibility of companies and their innovative role in generating sustainable solutions for stakeholders.
Camille Aouinait has a PhD in economics and innovation management. Her research focuses on open innovation, knowledge transfer and support in the implementation of innovation in agri-food firms and the agricultural ecosystem.
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Content
Preface ix
Introduction xi
Part 1 Static and Descriptive Innovation 1
Chapter 1 Definition of Open Innovation and Collaborative Innovation 3
1.1 Definition of open and collaborative innovation 3
1.2 Basic characteristics 9
1.2.1 From closed innovation to open innovation 9
1.2.2 Serendipity 13
1.2.3 Creativity 15
1.2.4 The absorption capacity of firms 16
1.2.5 The various degrees of innovation 18
1.2.6 Exploration versus exploitation in innovation processes 22
1.3 The creation of innovation and associated partnerships 24
1.3.1 Dynamics of collaborative innovation production 24
1.3.2 Forms of partnerships and degree of openness of innovation 25
1.3.3 Collaborative models: from the triple helix to mode 2, via the NSI 30
Chapter 2 History of the Evolution of Collaboration Between Actors, and Creation of Innovation Networks 33
2.1 Genesis of collaboration and its evolution through different innovation models 33
2.1.1 History of collaboration 33
2.1.2 Evolution of the innovation models used 35
2.1.3 Top-down and bottom-up approaches 37
2.1.4 Location of actors for collaboration and impact on the type of innovation 42
2.2 Business ecosystems 42
2.3 Partnership experience 45
2.3.1 Creation of innovation networks 45
2.3.2 Profiles of the partners involved in the collaboration 48
2.3.3 Importance of the territorial level for the governance of innovation 52
2.3.4 Emergence and use of collaborative platforms 54
2.3.5 Intellectual property rights: license exchange and other notable examples of collaboration 57
Part 2 Dynamic and Causal Innovation 63
Chapter 3 The Reasons Behind Open Innovation and its Evolution 65
3.1 Evolution of the use of collaborative innovation: from classical to new models 65
3.1.1 FabLabs 66
3.1.2 The Artlab 68
3.1.3 Coworking spaces 69
3.1.4 Hacker spaces and maker spaces 71
3.1.5 Living Labs 72
3.1.6 Creative Labs 73
3.2 Diversity of collaborative forms: an organized space of actors based on geographical, social and organizational proximity 74
3.2.1 The spatial organization of actors in the form of clusters 74
3.2.2 Industrial districts 81
3.2.3 National Innovation Systems and Local Innovation Systems 82
3.3 The intermediaries of innovation 83
3.4 Innovation jointly created with users 89
Chapter 4 Advantages, Disadvantages and Issues Related to Collaborative Innovation 99
4.1 Benefits of collaborative innovation for the actors involved 99
4.1.1 The modes of knowledge transfer and their implications on collaborative innovation 106
4.1.2 The role of collaborative innovation at the economic, social, societal and environmental levels 108
4.1.3 Sectors conducive to open innovation 122
4.2 Limitations of the open innovation paradigm 124
4.2.1 Actors' levels of organization, between small and large firms 124
4.2.2 Intellectual property: a sensitive point in the collaboration 125
4.2.3 Clarification of monetary benefits 126
4.2.4 Restricting access to protected results and impacts on science 127
4.2.5 Actors' cognitive skills 127
4.2.6 What value does the innovation bring? 128
4.3 Questions related to collaborative innovation 133
4.3.1 The various paradoxes inherent in collaborative innovation 133
4.3.2 Role of governance and actors 138
Conclusion 143
References 151
Index 181
1
Definition of Open Innovation and Collaborative Innovation
1.1. Definition of open and collaborative innovation
Innovation is a term defined by the Oslo Manual. This manual presents guidelines for the collection of data related to innovation. One of the goals is to be able to compare data at the international level and thus measure innovation across different contexts (OECD and Eurostat 2019). The definition of innovation in this manual is as follows:
An innovation is the implementation of a new or significantly improved product (good or service), or process, a new marketing method, or a new organizational method in business practices, workplace organization or external relations (OECD and Eurostat 2005).
The different models of the innovation process that have been defined in the literature have evolved through research and empirical results. The linear model was first recognized to explain how innovations move from scientific research to practitioners and firms. This model has been criticized, and the nonlinear model with different sources of innovation reported the use of different agents included in iterative feedback loops to constantly innovate (Biggs and Clay 1981). The innovation process is iterative, from discovery and invention to commercialization with several possible feedback loops and modifications. Indeed, the linear nature of innovation has for some time been superseded by the participatory nature of innovation. The different departments and services of a company or the actors who are involved and solicited in the innovation creation processes can give feedback on the product, process, organization or service under development, depending on the structure and management of the process. The chain-link model of technological change by Kline and Rosenberg (1986) takes up this concept. Feedback is possible through interactions with external partners (Kline and Rosenberg 1986; Evangelista et al. 1997; Arbo and Benneworth 2007).
Innovation induces radical or slight changes. Radical or disruptive innovations and incremental innovations are generally opposed (Afuah and Bahram 1995). Consequently, the adoption of innovation is conditioned by the ability of firms to adapt to change. As Pavitt (1984) has argued, the diffusion of innovation is important for its success. For example, agriculture is a supplier-dominated industry; innovation comes primarily from input suppliers and research, but the needs of users are a growing source of concern for innovators (Rossi and Rosli 2013). Therefore, if the disclosed innovation does not target an appropriate audience, the diffusion and implementation of the innovation will fail. Thus, targeting the challenges of the value chain is fundamental to the success of the innovation.
Moreover, innovation is the result of a combination of factors such as new techniques, new knowledge and new organizations. Leeuwis and Aarts (2011) refer to it in terms of hardware, software and orgware respectively. Innovation therefore has several facets (Faure et al. 2018). The basic resources that are necessary for the proper development and use of an innovation are multifactorial and require knowledge and know-how that the agents developing the innovations do not have. This is where the intervention of external agents (individual or aggregated under the type of company) is crucial. Collaboration thus has the function of providing gaps that cannot be filled elsewhere.
Nevertheless, the opening of companies to their external environment does not ensure that internal R&D activities will cease. The latter is necessary so that companies can work on their absorption capacity (Loilier and Tellier 2011; Chesbrough 2012). Indeed, to be able to use the resources, information and knowledge collected outside the boundaries of the company, the latter must be able to reuse them internally.
However, the definition of innovation has not been agreed upon for years. Its multidimensional, nonlinear aspect, involving different actors, the degree of innovation and its stakes have been debated since the 1940s. The notion of creative destruction proposed by Jospeh Schumpeter is an example. Moreover, Baregheh et al. (2009) have reported on more than 60 definitions of innovation from several disciplines: from management, economics, science and marketing. The definitions can be adapted to the sector or field in which they are used. In the field of knowledge management, the object of study is knowledge. This key element is crucial for any development of novelties, which are to be commercialized. Nevertheless, the criterion of novelty in innovation remains a fixed and common element in all fields.
In addition to the type of innovation (i.e. product, process, service, organization, or marketing), the unit of analysis is important. The scale at which the innovation is developed and disseminated is important for its success and adaptation in different environments. Indeed, an innovation may be new for one company, but not for another (e.g. the implementation of a new production line). It is then very localized at the industrial level. It can be new for a sector (e.g. the digitization of agricultural tasks), an ecosystem or more broadly at the level of a region, a country or the world.
The production of knowledge differs between sectors. In supplier-dominated sectors such as agriculture and transport, firms develop innovations mainly through other firms such as their suppliers, customers or research departments. Scale-intensive sectors such as paper mills and telecommunications are characterized by process development via in-house production or capital goods suppliers. Specialized suppliers (e.g. software or professional services) develop new products in collaboration with customers. Finally, science-based producers (e.g. pharmaceuticals or biotechnology) collaborate more with universities to develop new products and processes (Lundvall 2008; Pavitt 1984). Not all of these sectors approach innovation with the same strategies and do not rely on the same resources.
One of the founding principles of open innovation concerns the interactions between the agents involved in the innovation creation process. By way of comparison, the interactions between supplier and customer or seller and buyer in industrial supply chains (Roy et al. 2004). The relationship is different according to the stage of the innovation's life cycle. Indeed, in the upstream stages of innovation creation, the innovator-customer relationship is critical to the performance and success of the final product, in contrast to the downstream stages, where the innovation reaches maturity (Johnsen et al. 2006; Codini 2015). Innovation is a by-product of networked collaborative network activities (Knickel et al. 2009). Thus, they are one of the driving forces of innovation generation.
In Figure 1.1, the different stages of the product life cycle in the innovation process are graphically presented. Several stages can then be identified.
Figure 1.1. Stages of the product life cycle (Karlsson 1988)
The first stage of the product life cycle occurs before the product is launched on the market. The product is in development. Once the product is conceptualized, it is launched to penetrate the target market. The costs inherent in its promotion and production do not allow it to be profitable. The growth of the product's sales occurs as soon as it is diffused and adopted by users. Thanks to economies of scale, the product becomes profitable for the company, and gradually gains market share. This growth stage should be as long as possible because it brings value to the company. Communication and marketing strategies are used to promote the product and keep it in the best possible position in the market. Slowdown and stagnation occur during the maturity stage. Growth is stopped, and even if profitability is significant, it stagnates. Production costs remain low, but it must be promoted further to stay in the market. However, the costs related to this expense are difficult to bring down. It makes more economic sense to invest in the benefits of the product's profitability in another innovation, which has room for growth. Then, the end of the product's life occurs when profitability and market share decrease. This is the decline or obsolescence stage. Consumers turn to similar products or other types of products because of a lack of interest.
Roy et al. (2004) suggest that internal factors such as trust in information technology, adoption and commitment, as well as external factors such as the stability of connections in the network and implicit knowledge about the technology can have a moderating impact on the generation of innovations.
Figure 1.2 shows the number of scientific articles published on open innovation between 2000 and 2020. The growth of these publications is explained by the shared interest in collaborative innovation in several types of fields. Moreover, the work of Chesbrough in the early 2000s highlights the concept of open innovation. Open innovation is a 2003 concept that comes from the work of Henry Chesbrough, notably through the book entitled Open Innovation: The New Imperative for Creating and Profiting from Technology.
Figure 1.2. Number of papers published on open innovation from 2000 to 2020. For a color version of this figure, see www.iste.co.uk/aouinait/innovation.zip
In special issues of journals such as R&D Management, Industry and Innovation, Research Policy and Management Science, open innovation and open source have enabled this notable growth. Dahlander and Gann...
