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The days of corporations hiding behind barbed wire and security guards on suburban campuses are over, according to Berkeley Haas School Of Business Professor Henry Chesbrough. At the recent World Innovation Forum in New York City, Chesbrough spoke about how open innovation — a term he created based on the theory that unrestricted flow of knowledge accelerates innovation — is dramatically changing corporations around the world.
With knowledge now widely distributed, Chesbrough insists that companies will flounder if they rely entirely on their own research.
He spoke of a time not too long ago when multinational corporations were headquartered at sprawling, well-secured grounds. Ideas were generated only within these fortresses, spaces that were both literally and figuratively separated from the rest of the society. This design was thought to secure knowledge and ensure that ideas could not be poached.
At this time, most of the innovative breakthroughs were taking place at these mammoth companies. According to Chesbrough, in 1981 upwards of 70 per cent of total R&D spending was paid for by companies employing more than 25,000 workers. That same year, only 5 per cent of total R&D spending was paid for by companies smaller than 1,000 employees.
However, today the playing field is significantly more leveled. In this democratic era of idea pioneering, 35 per cent of total R&D spending is paid for by companies bigger than 25,000 employees, and total R&D spending paid for by companies smaller than 1,000 employees is up to 24 per cent.
Chesbrough cited Dutch electronics company Philips’ progress from being surrounded by barbed wire and security guards, to having an open campus that also facilitates collaboration with 5500 employees from 70 other companies.
As corporations continue to embrace Chesbrough’s “open innovation” model, it’s likely that more will rethink their physical plant structure and whether all security measures are necessary.
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