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A95 - The Embodiment of Open R&D Innovation Management Begins

2PLM e-zine, Volume 16, Number 17,
August 25, 2014

Description: In this fourth of a six part series, selected findings on "Open R&D Innovation" from GGI's recently published primary research will be discussed.

Open Innovation [OI] is the ability of a corporation to invent and innovate using outside sources and resources, excluding the use of contracted personnel to supplement employee-equivalent responsibilities.

The credit for coining the term, and beginning the body of knowledge related to Open Innovation, is generally given to Henry Chesbrough and the publication of his first book on Open Innovation in 2005.  Certainly the underpinnings of this work began years before.  Arguably, "the beginning" was the popularization of "benchmarking other companies" in the 1980s which changed historical practices of keeping private information within a company.  Robert Camp's book on benchmarking in 1988 methodized corporate practices that had begun a few years earlier. 

Bodies of knowledge take four to six decades to flesh-out and mature.  In its nascency for seventeen years, and now growing in corporate practices for almost a decade, Open Innovation has progressed enough to begin to see some of the strategies, approaches, frameworks, software, and metrics that are likely to withstand the test of time.  That said, much is still yet to be discovered and thought out.  GGI's research provides a snapshot of OI evolution after approximately the first decade in practice.

Open Innovation is a two way street.  GGI coined "Inbound Open Innovation" and "Outbound Open Innovation" to segment the research.  If a company looks to make its capabilities available to other companies that may have an interest, that is Outbound.  If a company is looking to acquire innovation to supplement its own Organic R&D Innovation capabilities, or perhaps to repackage and sell acquired innovation, that is Inbound.  This article focuses on Inbound OI.

Five Inbound OI areas were researched:  Importance of OI, Financial Tracking of OI, Financial Results from OI, Corporate OI Approaches To Acquire Capabilities, and Processes Used To Manage OI.  Over 95% of all respondent companies provided answers to these research areas.  That, in itself, is an indication that this evolving body of knowledge is likely to have staying power in the years ahead.

The research was conducted by sending questionnaires to a wide range of companies developing products throughout North America. Participating companies had headquarters throughout the Americas, Europe, and Asia, but their response was for North American R&D-Product Development operations. Complete data sets were received from 200 companies. Consumer, industrial, medical, chemical, and automotive/vehicular products were the top respondent industries. Participants completed 31 questions detailing their demographic information and practices in the following five research areas: R&D Operating Environment, Organic Innovation, Open Innovation, Intellectual Property, and the Top Corporate Metrics used to measure R&D and Product Development. The research period was September 2012 to October 2013. The results were published March 3, 2014 in a 138-page report. This research is statistically valid and provides a Margin Of Error for each research question.

2PLM is a bi-monthly publication by John Stark Associates [JSA], based in Switzerland. JSA is focused on the body of knowledge of "Closed Loop Lifecycle Management (CL2M)." CL2M is the logical extension of closed-loop Product Lifecycle Management and enables the desired information gathering, processing and exchange throughout the whole life of an entity from beginning, through middle to end of life.  JSA and GGI have collaborated on various projects spanning three decades, including this publication of highlights from our findings of GGI's 2014 Product Development Metrics Survey.

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