The advantages of Open Innovation vs Closed Innovation
Mon, May 5 2008 08:55 AM | Permalink
Many companies are taking advantage of the open innovation process ( over 140 000 users and most of the fortune 500). We will first have a look at the principals of both the closed and open innovation models. Then we will go over a case study to demonstrate how open innovation can work for your company.
Closed innovation Principles
Open innovation Principles
Challenge:
Company A ( Many of our clients choose to remain anonymous) has created a disruptive technology but needs to raise *$18 million USD to continue with R&D to develop additional innovations that will enhance their disruptive technology.
Solution:
Drayton Weissenfels via its extensive network finds another company ( Company B) that has already created the technology that Company A needs. Company A then acquires an exclusive license for $2 million USD leaving it with $16 million to focus on its business model and marketing efforts. Company A saved $16 million. It is important to note that both Company A and B could change roles in the future. Creating an additional revenue stream for Company A and additional savings for Company B.
Contact Drayton Weissenfels to find out how open innovation can work for you.
*The needed $18 million could be raised by Drayton Weissenfels depending on the potential of the disruptive technology.
Closed innovation Principles
- The smart people in our field work for us.
- To profit from research and development (R&D), we must discover it, develop it and ship it ourselves.
- If we discover it ourselves, we will get it to market first
- The company that gets an innovation to market first will win
- If we create the most and the best ideas in the industry, we will win.
- We should control our innovation process, so that our competitors don't profit from our ideas
Open innovation Principles
- Not all the smart people work for us. We need to work with smart people inside and outside our company.
- External R&D can create significant value; internal R&D is needed to claim some portion of that value.
- We don't have to originate the research to profit from it.
- Building a better business model is better than getting to market first.
- If we make the best use of internal and external ideas, we will win
- We should profit from others' use of our innovation process, and we should buy others' intellectual property (IP) whenever it advances our own business model.
Challenge:
Company A ( Many of our clients choose to remain anonymous) has created a disruptive technology but needs to raise *$18 million USD to continue with R&D to develop additional innovations that will enhance their disruptive technology.
Solution:
Drayton Weissenfels via its extensive network finds another company ( Company B) that has already created the technology that Company A needs. Company A then acquires an exclusive license for $2 million USD leaving it with $16 million to focus on its business model and marketing efforts. Company A saved $16 million. It is important to note that both Company A and B could change roles in the future. Creating an additional revenue stream for Company A and additional savings for Company B.
Contact Drayton Weissenfels to find out how open innovation can work for you.
*The needed $18 million could be raised by Drayton Weissenfels depending on the potential of the disruptive technology.
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