In our last post we discussed the importance of developing customer focused enabling technology platforms as a key enabler to accelerate new product development. But, this can be a daunting task. What if your polymer markets are quickly changing or radical new technologies are required to remain competitive? What if you don’t have all of the right skills in your R&D organization? Many companies are using Open Innovation to gain access to technology that most likely would take too long to develop internally. So what is Open Innovation?
Open Innovation is a term promoted by Henry Chesbrough, a professor and executive director at the Center for Open Innovation at UC Berkeley, in his book Open Innovation: the new imperative for creating and profiting from technology1. The main concept of open innovation is expanding the boundaries of your company and looking outside for some of your technical solutions. Open innovation is not new, but has become a necessity with the acceleration of new product development and the increasing breadth of technology required for truly innovative products.
So let’s look at some examples of how Open Innovation can enhance your product development projects. In an adhesives company, the R&D team had to respond to market drivers for an improved electrically conductive adhesive used in electronics. The filler was a key component of the formulation and the company had very close partnerships with their filler suppliers. The R&D teams in both companies worked together to develop technologies to get to very high electrical conductivities. In this case, the use of specific chemicals were required to prepare the filler surfaces so that during the adhesive curing effective particle-particle packing was achieved leading to high electrical conductivity. The company went outside their internal R&D group and partnered with a leading filler supplier to get the right technology for the specific application.
An example of leveraging technology that you have already developed is to actively pursue licensing agreements. IBM has a very active licensing program that yields over a billion dollars of revenue per year. Honeywell, Boeing, and many others have also profited from lucrative licensing agreements. This is a true win-win. The company that develops the technology gets to recoup some of their R&D investment and the licensee benefits from reduced time to market and access to needed technology.
One caveat before we close. Open innovation requires an investment, both in time and resources. Many companies today have what can be called “technology scouts” who spend full-time working to identify, evaluate, and develop open innovation pathways. Additionally, when I was a researcher, I had to spend time and work closely with my two university programs. If you don’t invest in resources to drive and manage open innovation, you won’t get the results you wanted.
Open innovation is a necessity in today’s fast paced markets. If you want to accelerate technology platform and product development, find a way to embrace it and make it work for your company.
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1) Henry Chesbrough, “Open Innovation, the New Imperative for Creating and Profiting from Technology,” Harvard Business School Press, 2003
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