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I have had the opportunity to participate in a Pro-Inno workshop on Open Innovation last week. Great initiative by the organisers, my compliments to DG Enterprise. Here are some thoughts:

Open innovation (OI) has become an integral part of innovation strategies and business models of companies in recent years and has inspired policy makers to stimulate triple helix interactions and experiment with new ways of creating eco-systems that are inductive to innovation and interaction across boundaries.

OI is clearly more than a new hype or a re-branding of longstanding innovation behaviours and policies. It is a game-changer not only in the way companies manage their R&D but also in the way government and public policy approaches innovation support.

OI has broad systemic implications for the EU and the national and regional innovation systems in the Member States, in terms of support structures, regulatory (e.g. tax) and education systems, labour markets as well as international relations.

While many companies, particularly SMEs do not yet fully understand the benefits and available options related to this phenomenon, policy makers need to learn more about threats and opportunities of OI as well as policy instruments and framework conditions to harness the huge potential of OI for their regional economies and societies.

ERRIN is planning a conference on 11 June in Brussels at the Residence Palace/International Press Centre, where we will highlight some of the associated issues, the challenges and opportunities for policymakers and some examples from ERRIN regions of related policies and good practices. This will be an open conference targeted at the regional, science and innovation policy communities in Brussels. I will keep you posted about the programme.


Background:

The central idea behind open innovation is that in a world of widely distributed knowledge, companies cannot afford to rely entirely on their own research, but should instead buy or license processes or inventions (e.g. patents) from other companies. In addition, internal inventions not being used in a firm’s business should be taken outside the company (e.g., through licensing, joint ventures, spin-offs). Open innovation needs a different mindset and company culture than traditional or closed innovation. But it also needs enabling environments.

On the company side, innovation is, thus, increasingly based on knowledge assets beyond the boundaries of individual companies. Cooperation and networks have become an important way of tapping into knowledge resources outside in order to generate new ideas and bring them quickly to the market (the “outside-in” approach). At the same time companies may spin out technologies and intellectual property that they have developed internally but that are outside their core business and thus better developed and commercialised by others (the “inside-out” approach).

The most important benefit of open innovation to companies is that it provides a larger base of ideas and technologies. Companies look at open innovation as a close collaboration with external partners – customers, consumers, researchers or other people, such as users, that may have an input to the future of their company. The main motives for joining forces between companies is to seize new business opportunities, to share risks, to pool complementary resources and to realise synergies. Companies recognise open innovation more and more as a strategic tool to explore new growth opportunities at a lower risk. Open technology sourcing offers companies higher flexibility and responsiveness without necessarily incurring huge costs.

On the policy side, current innovation policies are mostly based on a theory of market failure, whereas OI builds on a rationale of system failure. It is about systemic development and a focus on interactions, rather than about markets and company support. It is about market pull rather than simply focusing on the push side of the supply chain. OI does not equal technology transfer but goes much further and the landscape in which OI operates is very complicated demanding sufficient skills in managing ideas, knowledge and cooperation.

Having said this, regional connections are vital and there is a lot regional policy makers and development agencies can do to harness its potential: Providing enabling environments, the “eco-systems” for innovation, in which firms operate, triple helix actors interact, and citizens participate and get socialised, setting new parameters for education (e.g. breadth vs. depth), promoting collaboration and culture change, targeting external as well as internal interfaces, leading by example with regard to public services and public procurement, but also making sure SMEs can benefit from and tap into associated revenue streams, linking them up to larger players, such as multi-national enterprises (NMEs), creating the necessary trust for these interactions, scouting and identifying promising technology and unused patents, promoting a global orientation, nurturing spin-outs and spin-offs, to name just a few. Interesting examples include Science or Open Innovation Parks build around NMEs as strong anchor tenants and the Living labs creating test beds for new markets, new technology and services.

The European Commission is currently working on a European Innovation Plan, a draft of which should be available by the end of this year. We will certainly see some of the OI thinking and lessons learned being taken up in this thoughtpiece. Stay tuned!

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