What Is Open Innovation?

July 15, 2022 2 minute read

Lightbulbs with open innovation concepts inside

In the 20th century, innovation took place behind closed doors. 

Large organizations dedicated massive budgets to internal research and development, reaping the return on investment when their innovative products hit the shelves. 

Today, technology has leveled the playing field. Innovation is no longer the purview of large companies alone.  

Around the world, innovation is driving human advancement across countless verticals and platforms. Small entities, academia, and individuals can leverage media and open source platforms to share and iterate on ideas ranging from new font types to rapid genetic sequencing solutions. 

In short: the next innovation could come from almost anywhere.

As the sources of innovation multiply, organizations can no longer expect to produce all their best ideas in-house. Instead, they’ve embraced open innovation. The benefits are as unique as the innovations themselves, but often produce greater impact, sustainability, or profitability—three tenants that increasingly go hand-in-hand.

What is Open Innovation?

Open innovation occurs when organizations tap into external resources and sources of knowledge to deploy innovation. Organizations use open innovation to arrive at better solutions to the challenges they face, by inviting a wider range of different perspectives, assets, and skills.

As the world becomes more complex and interdependent, organizations are using open innovation to develop markets, build resilience, and improve outcomes.

Many are developing open innovation ecosystems that look beyond immediate problems to explore how to bring forth solutions that are more inclusive and effective.

How Do Companies Benefit from Open Innovation?

USAID. IKEA. Samsung. The Gates Foundation. What do these and scores of other organizations have in common? They use open innovation to address 21st-century challenges arising from global issues like climate change, resource scarcity, and geopolitical turmoil. 

Organizations that deploy open innovation strategies successfully can expect these four outcomes.

  • Sustainability. Unilever organizes open innovation within the framework of its sustainable development goals. Its open innovation challenges aim to drive progress on everything from climate action to the future of work.
  • Impact. USAID’s Catalyst project oversees a lengthy list of open innovation challenges and competitions to advance gender equality, improve food security, address the root causes of regional migration, and more.
  • Cost efficiency and productivity. A request on PepsiCo’s Open Innovation Submission Portal invites innovators to propose solutions for detecting acrylamide, which is highly regulated, more accurately and less labor intensively.
  • Resilience. During the first year of the COVID-19 pandemic, a collaboration between Ford, United Auto Workers, GE Healthcare, and 3M generated much-needed ventilators from 3D printed parts, battery packs, and F150 seat fans.

Learn 3 Ways Companies Partner with USAID

Get Started with Open Innovation

There is tremendous untapped opportunity for organizations to bring about sustainable impact through open innovation. But it can be tricky to determine which open innovation model(s) will best suit your unique needs.

There are many factors to consider, including the relevant enabling environment, social and environmental considerations, and the universe of innovators that might be interested in (and capable of) solving your challenge.

The best way to get started is to confirm that you’re focused on the right problem. Identifying and addressing its root cause will lay the groundwork for a successful endeavor. It will also help determine whether open innovation is the right approach. Resonance can help. For more on how to initiate an open innovation framework at your organization, contact Jay Chikobe, Senior Design and Innovation Analyst.

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If you are a corporate leader and would like to be a part of a discussion about these and other issues in the presidential transition, contact Resonance Strategic Partnerships Manager, Seth Olson.