Photo: Flickr Machine Project
Open Innovation generated a great deal of irrational exuberance in its early days. Like Artificial Intelligence, Virtual Reality, and the Internet itself, OI was believed to be a “next best thing.”
But excessive hype rarely matches future success—just think of Virtual Reality—and Open Innovation has admittedly lost some of its original luster.
In late 2008, there was wild expectation that crowdsourcing would be an alternative to traditional research and development, or that it would replace R&D altogether. This is certainly how OI is understood in the critical articles I mentioned above.
As Julie Battilana, author of the recent Le Monde article points out, OI tends to produce an unwieldy number of solutions that vary greatly in quality and relevance. Because of this, she continues, OI isn’t conducive to innovation on a large scale.
This is a valid criticism, but it hasn’t come as a surprise to the OI community and those who work with it.
The maxim is “the right tools for the right job”: OI platforms now have greater understanding of what sort of challenges they can best handle. Using open innovation to redesign a commercial aircraft, for instance, would be neither efficient nor productive; a better application would be using OI to improve window design or another, small part of the overall project. This is why some open problem-solving platforms are beginning to focus on medium-sized companies with highly-specific problems.
So the exaggerated hype that once attracted a great deal of attention to, and investment in, OI has been replaced by more sober and realistic expectations. If we look at things in terms of Gartner’s Hype Cycle, OI is somewhere on the Slope of Enlightenment; not quite at the Plateau of Productivity, where its benefits will have become widely demonstrated and accepted, but we’re close. This is good news: the truth is that OI has grown up—it has matured.
Probably the most important sign of the times is that Google has embraced OI. Google Prizes, a crowdsourcing competition site, was launched on 3 July. Google is a titan of the web and this new initiative may well offer stiff competition to top leaders in the crowdsourcing and open innovation marketplace.
Long-time practitioners of open innovation may not know how to react to this. But the appearance of Google Prizes should be received as good news: more competition means a higher standard and greater differentiation among competitors. For example, we can probably expect to see more creative applications of the principles of open innovation in new environments, such as Enterprise Open Innovation.
How has this maturation happened? It’s difficult to generalize, but it’s fair to say that over the past two years, OI platforms have begun a harsh re-evaluation of their model. When the initial excitement wore off, and it no longer seemed that crowdsourcing was the R&D cure-all that many had expected, OI platforms were forced to ask the question: How will we actually generate value?
The first thing they acknowledged was that crowdsourcing and OI weren’t there to replace a company’s R&D department, but to extend its scope—in a context of increased spending on research. Recent numbers confirm that global R&D spending has been on an 11-year doubling trend, and according to the U.S. National Science Foundation, who published this study of R&D spending, this “illustrates the rapidly growing global focus on innovation.” OI has settled into a more comfortable niche in a market that commands growing confidence throughout the world. It is not competing with R&D—it’s augmenting it.
Yet the most important realisation is that OI adds value at every step of the process. The old model focused exclusively on the solution. Yet people now recognise that open innovation is primarily about culture change.
For instance, using Open Innovation can tell a company how resourceful its R&D team actually is; it can encourage interaction and collaboration with experts from varied—and sometimes unexpected—fields, and it can teach people how best to describe problems to maximise the “adjacent possibilities” of solutions.
In fact, getting information on why a specific problem cannot be solved is as important for a company as a valid solution. In some ways, it is the solution. This is just some of the added value that Open Innovation platforms have begun to emphasise. And that makes OI stronger than ever before, from the perspective of both practitioners and investors.