Open Innovation Conclusions

With the general view that organisations are moving a greater number of processing into the digital space and the prevalence of internet technologies open innovation will increase in popularity. As seen in the case of SAP by establishing a platform to enhance their existing eco-system is paying dividends. They are flexibly using both open idea-creation and selection processes dependent on their needs. It was highlighted that open innovation is based on traditional theories yet traditional approaches do not scale to large audiences, nor support shorter implementation cycles. The Idea Place provides a simple platform to co-innovate with customers and partners. Traditional product feedback relied solely on user groups or costly one-to-one interactions, which is unsuitable to open selection.

Not only are SAP benefiting, established partners have used the idea Place to define products or solutions to address specific customer needs which not prioritised by SAP. This enables the ecosystem to scale while SAP plays a more supportive, enabling role. The lack of physical product and large install base has lent itself to this more collaborative method of working. As highlighted in the SAP case, the control of the environment is fundamental to the commercialisation of the numerous ideas generated via the open innovation model (Rodgers, 2012).

As noted previously, the definition of innovation includes the adoption/application of the novel approach open innovation may have limited use. With the need for differing levels of resource to produce certain physical products open innovation will mainly be widespread in the ideation phase of the innovation process, as seen in the SAP case. The majority of opportunities would exist in more collaborative endeavours, where the various parties are able to share resources physical, technical, financial or physical. This type of collaborative innovation and partnering approach has existed for many decades and we could conclude that this is not a form of open innovation. As the number of involved becomes controlled this would form of closed innovation group resource sharing and joint commercialisation efforts in order to maximise revenue generation.

The established legal protection devised decades ago to protect large enterprises is unsuitable. Intellectual property rights, product & service ownership will continue to hinder open innovation initiatives as potential participants seek protection from “Arrow’s information paradox”. Protecting individuals’ ability to capitalise on the commercial value of their ideas generated restricting unauthorized use needs legal focus (Arrow, 1971).

The open selection principality builds a majority consensus selecting the most popular idea. By exorcising the deviant and extreme radical viewpoints the remaining options will tend towards the mundane and ordinary incremental improvement. The outlandish and revolutionary viewpoints are necessary to produce disruptive innovation (Berglund, 2004).

Thus concluding open innovation regardless of its theoretical potential will struggle to produce significant breakthroughs or revolutionary inventions without substantial corporate sponsorship.