Open Innovation: Where R&D is Just a Tiny Spec

The R&D concept as a department in a company seems to be working well. In the theory. In a matter of  fact, in the world where ideas and knowledge are widely spread, the R&D department seems to be a tiny spec compared to what’s “the externals” is capable of. Forinstance, take a look at Google, who bought facebook.

Facebook, was not Google’s idea. Google might even have any idea of social networking until Friendster, myspace, and facebook appears. But looking at the opportunity, Google took the idea and implement it (by buying it) into its IT empires. The benefits of this acquisition is even bigger compared to the benefits generated by facebook itself, or google without facebook. And the founder, Zuckerberg, becomes an “accidental billionaire”. This is one of the examples of “Leverage” created by open innovation.

Adobe, the well-known software manufacturer, did not come to their success by internal ideas only. They have the feature called “Ideaspace” for customers to freely write down their ideas of what should be repaired and developed. The background is, sometimes the customers know better than the producer. The concept seems to be very simple, taking customers feedback. But for that big scale of a company, implementing it might be very complicated. And Adobe successfully did it.

Open innovation which leads to open business model, which has been done by youtube and ebay. Although they look like a simple online movies and store, not so many people can generate that kind of idea and successfully run it. The biggest stakeholder is not themselves (Youtube and ebay) anymore. It’s the users that counts. On ebay, it’s the uploaders and viewers. The success of YouTube is up to them. On ebay, it’s the sellers and buyers. The existence of ebay is depending on their transactions. There are many copycats duplicating the ideas, but none of them come close to their success.

To sum up, open innovation and open business model is the modern way. If R&D is the theoretical concept, Open Innovation is the practical concept. It looks through the reality, to the bigger picture of ideas and knowledge generation. It completes the lack of ideas in internal department. However, this doesn’t mean that R&D is useless by now. An end product is successfully created by a collaboration of internal capabilities and external ideas. It took both to work. R&D and Open Innovation is a complimentary, not a substitute.



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