Lecture on Open Innovation with Henry Chesborough

Introduction

• Session with Henry Chesborough, known as the father of open innovation.
• Discussion led by Sumitra, professor at NCI.

What is Open Innovation?

• Organizations should use external ideas and technologies in their innovation activities.
• Internal unused ideas and technologies should be allowed outside for others to use.

Benefits of Open Innovation

Outside-In Model

• Cost Reduction: Leverage external contributions, only pay for what is used.
• Time Savings: Start with partially developed ideas, avoid starting from scratch.

Inside-Out Model

• Value Chains: Sharing internal ideas can construct value chains and stimulate ecosystems.
• Economic Sustainability: Earn royalties from shared technologies, participate in diverse markets.

Impact on Industries

Pharmaceutical Industry

• Challenge: The blockbuster model is outdated and unsustainable.
• Open Innovation: Suggests not doing everything internally, likened to a relay race rather than a marathon.

Cultural and Leadership Challenges

• Transition to open innovation requires a cultural shift.
• Emphasis on collaboration and leveraging external smart people.
• Not outsourcing R&D but enhancing internal capabilities.

Talent Management

• Need for new reward systems that recognize both internal and external achievements.
• Cultural shift from celebrating only internal discoveries to appreciating external contributions.

Prevalence of Models

• Outside-In Model: More accepted and easier to implement.
• Inside-Out Model: Slower development due to potential internal embarrassment and risk aversion.

Cultural Elements

• Taking from others (outside-in) is often easier than giving (inside-out).
• Inside-out requires a mindset where external success is not seen as a threat.

Comparison with Open Source

• Similarities: Both rely on widespread useful knowledge.
• Differences: Open innovation is framed by a business model, whereas open source avoids a business model.

Evolving Thoughts on Innovation

Open Business Models

• Better business models can outperform better technology.
• Innovation in business models is crucial for creating additional value.

Influence of Global Trends

• Hyperconnectivity and emerging markets create space for innovative business models.
• Inside-out innovation provides genuine market research.

Future of Open Innovation

• Embrace the philosophic underpinning of abundance in knowledge.
• Explore public policies to enable and not hinder open innovation.
• Balance protection for inventors with opportunities for emerging business models.

Conclusion

• Henry Chesborough's vision for a more open world in terms of innovation and knowledge sharing.

Thank you remarks to Henry for contributing to a more open and better world.