3. Open Innovation

Question 1

What is the seed that opened the doors for open innovation to become a popular concept?

Answer 1

The high failure rates in product development in the 1990s.

Question 2

What are the limitations to the stage-gate model according to this view of openness?

Answer 2

The limitation is that the model assumes that all ideas, knowledge, techniques etc that the company has in-house is enough for achieving success within the innovation field.

Question 3

What can you add to the stage-gate model to make it open?

Answer 3

In stage 1, we can have co-development and crowd sourcing to generate ideas.
In stage 2, we can have in- & out licensing as well as venture capital to help the development of prototype and testing.
In stage 3, we can have spin-offs and co-branding to commercialize the new product innovation.

Question 4

Mention the three core processes of open innovation:

Answer 4

1. Outside-in
2. Inside-out
3. Coupled

Question 5

Outside-in process

Answer 5

It’s about enriching a company’s own knowledge base through integration of outside knowledge. Ex customer integration, supplier integration, external tech sourcing.

Question 6

Inside-out process

Answer 6

It’s about external exploitation of ideas in different markets, selling IP and multiplaying technology by channeling ideas to the external environment. Harvesting outside the company by out licensing, multiplication effect (standardization) and cross-industry innovation.

Question 7

Coupled process

Answer 7

It’s about consequent thinking along the whole value chain and business models. A conjunction of both processes to gain from joint research and harvesting. Ex strategic alliances and innovation networks.

Question 8

Crowd sourcing

Answer 8

Crowdsourcing involves obtaining work, information, or opinions from a large group of people who submit their data via the Internet, social media, and smartphone apps.

Question 9

In-licensing

Answer 9

When you hear the term “in-licensing,” simply think of the word “investor“. In-licensing is a contract that allows another firm to provide capital to the development and launch process, thus taking on financial responsibility. popular process for small bio-pharma start-ups. It can provide the capital a company needs, but the profits need to be shared.

Question 10

Out-licensing

Answer 10

Out-licensing is focused on opening up the delivery pipeline to assist you with getting your drug “out the door.” Out-licensing encompasses finding a partnership that will help identify your target market and assist you in getting your product into the right hands. This process may include working with marketing firms or legal firms.

Question 11

Venture capital

Answer 11

Venture capital (VC) is a form of private equity and a type of financing that investors provide to startup companies and small businesses that are believed to have long-term growth potential. Venture capital generally comes from well-off investors, investment banks, and any other financial institutions.

Question 12

Co-branding

Answer 12

Co-branding is a marketing strategy that utilizes multiple brand names on a good or service as part of a strategic alliance. The point of co-branding is to combine the market strength, brand awareness, positive associations, and cachet of two or more brands to compel consumers to pay a greater premium for them.

Question 13

Spin-offs

Answer 13

When a company creates a new independent company by selling or distributing new shares of its existing business, this is called a spinoff. A spinoff is a type of divestiture. A company creates a spinoff expecting that it will be worth more as an independent entity.

Question 14

Co-development

Answer 14

“Co-development is a voluntary process where management and bargaining agent work together on a jointly defined or desired matter in order to produce an agreed result.”

”: to develop (something) by working with one or more others : to develop (something) jointly”