Open Innovation: The New Imperative for Creating and Profiting from Technology

by Henry Chesbrough

In today’s information-rich environment, companies can no longer afford to rely entirely on their own ideas to advance their business, nor can they restrict their innovations to a single path to market. As a result, says Harvard Business School professor Henry W. Chesbrough, the traditional model for innovation--which has been largely internally focused, closed off from outside ideas and technologies--is becoming obsolete. Emerging in its place is a new paradigm, “open innovation,” which strategically leverages internal and external sources of ideas and takes them to market through multiple paths. This path-breaking analysis is based on extensive field research, academic study, and the author’s own longtime experience working in Silicon Valley. Through rich descriptions of the innovation processes of Xerox, IBM, Lucent, Intel, Merck, and Millennium, and the many spin-offs that have emerged from these firms, Open Innovation shows how companies can use their business model to identify a more enlightened role for R&D in a world of abundant information, better manage and access intellectual property, advance their current business, and grow their future business.Arguing that companies in all industries must transform the way they commercialize knowledge, Chesbrough convincingly shows how open innovation can unlock the latent economic value in a company’s ideas and technologies.

Genres: Business, Management, Nonfiction, Technology, Read For School

227 pages, Hardcover

First published March 1, 2003

Reviews

[Lester · Rating 3 out of 5]

Quite a long book to state the obvious!

[Firecooked · Rating 3 out of 5]

This book successfully provided a succinct history of big R&D (think Bell Labs, IBM, Xerox, Intel), what worked and why. It goes on to describe the changes to the environment, and what seems to be working and not working today for innovation of new technology. Although the book was first published in 2006, the statistics date from 2001 or 2002 at best, and the bulk of data seems to be based in the 90’s. For better or worse, it seems to date the book. The other negative I took away was the Intel analysis, dated by use of the “Wintel” jargon and with inaccurate assumptions that protocols from the 80’s with in place in the late 90’s.

Key Concepts:
• Closed Innovation: Innovation from inside, supported by large R&D teams and “NIH” attitudes. The best tended to be victims of their success: only understanding technology which fit the existing successful business.
• Open Innovation: Innovation pulling from many sources: other companies, universities, internal, combined with development of new marketing models which best fit new innovation. Also includes pushing innovation out where it makes business sense.

Key’s to success: R&D needs to define an “architecture to organize the many parts of a new system", understand the value chain, be smart about outside agreements. Build a innovation (technology) roadmap with discuss beyond immediate team.

[Garrett Mccutcheon · Rating 2 out of 5]

Open Innovation propounds the thesis that corporations should take a broader approach to innovation and IP (assuming that doing so fits within the company's business model). This book is essentially a series of case studies that the author uses to support his thesis. The first half of the book focuses primarily on Xerox and its PARC R&D facility; then the author moves on to Intel, IBM, Lucent, and a handful of others.

While interesting and well presented, the book is clearly aimed at senior managers at medium and large businesses, particularly those with large internal R&D organizations and a closed innovation strategy. Small businesses and 21st-century tech firms won't get much from this book, as most of those organizations either already espouse most of the qualities of open innovation or don't have the traditional R&D mindset and IP portfolio to need to worry about this "open innovation" strategy.

Finally, this book is starting to show its age. Most of the case studies date to pre-2001, so they are reviewing companies at the very tail-end of the dotcom bubble. A lot of things have happened, especially regarding the internet, since these cases were presented.

[Greg Fay · Rating 5 out of 5]

Incredible case study of some of the great closed innovation failures, and why open innovation is the way of the future.

[Kunal Gehlot · Rating 5 out of 5]

The Book Open Innovation is a truly fascinating read that challenges conventional wisdom about innovation. Chesbrough makes a compelling case for rethinking how we approach innovation by arguing that it should be seen as distinct from traditional R&D. This book resonates especially with non-tech companies where innovation teams often focus on delivering impactful, strategic change rather than simply engaging in R&D. In these organizations, the goal is to drive Horizon 1 and 2 improvements, but Chesbrough shows that open innovation offers a pathway to tackle disruptive, Horizon 3 challenges without the need to build giant R&D labs.

One of the standout aspects of the book is its emphasis on the business model and the concept of business model innovation as integral parts of the overall innovation process. In many companies, product innovation and business model innovation are treated as separate entities, a disconnect that often leads to missed opportunities. Chesbrough’s insights help bridge this gap, illustrating how the two are deeply interconnected, a perspective that is sometimes blurred by approaches like Lean Startup Methodology.

Overall, Open Innovation is a thought-provoking and essential read for anyone looking to understand or drive meaningful innovation in today’s dynamic business environment. It’s a call to arms for industries to embrace a more open, collaborative approach to innovation, one that harnesses both internal and external ideas to create real value.

[Luis González]

In Open Innovation Chesbrough contrasts two industrial innovation paradigms: Closed Innovation and Open Innovation. Closed Innovation was the paradigm most companies practiced in the 20th century, and it worked well, but due to the changing landscape of knowledge of the 21st century, this will no longer be the case. In this book the author compiles the new set of principles companies must follow to profit from innovation in the 21st century.





It's important to mention that the book was published in 2003. At that time this book might have been relevant in the sense of changing ingrained beliefs about R&D practices, however, I believe, nowadays, open innovation principles are the norm in most industries.

Management and Strategy Making course*

[mavromou · Rating 4 out of 5]

Es un libro interesante porque cuenta la historia de distintas empresas de tecnología como Xerox, Intel, IBM, Alcatel y otros por el estilo, en relación a los distintos modelos de innovación relacionados con sus formas de investigar y desarrollar tecnologías.

Lo más interesante es el último capítulo en donde muestra como realizar la transición del modelo de innovación cerrada a la innovación abierta.

[Bob Gao · Rating 5 out of 5]

It is a great book summarizing closed innovation to open innovation.

Meanwhile I am impressed that ever since 1944, the US government already started to focus on "Science" in the nation level.

The reality proved that the focus was the right decison and there was right execution. This is the reason why US domained the world in the last centry.

With all the new research on science as well as the methodology to innovate, for sure US will futher advance in science and technology.

[Chuck Smith · Rating 4 out of 5]

This book provided interesting insights into business models and innovation processes used by various companies. I particularly liked chapter 6 which discussed Open Innovation @ Intel, where I used to work in the Intel Architecture Lab and worked with managers in Intel Capital on identifying business trends and strategy development.

[Zed · Rating 5 out of 5]

An insightful introduction to an important product of the digital revolution. Examples included.

A pdf version of this text can be found online.

[Bee · Rating 2 out of 5]

This whole book could be summarised to one chapter... It is very repetitive, even though the concepts within are not wrong.

[Amir Elion · Rating 4 out of 5]

Before I read this book I thought I knew a lot about innovation in business and organizations. This book opened a whole new direction of possibilities for understanding and doing innovation. It challenges the paradigm of recent decades of Closed Innovation, and shows why every company which is serious regarding innovation in these fast changing times, must carefully consider the way it leverages not only its internal sources of innovation but the myriad of external opportunities to innovate.
The book lays down clear principles for Open Innovation, and investigates them in depth through the analysis of leading firms such as Xerox, IBM, Intel, Lucent and others. It does not "glorify" one paradigm over the other, but rather presents the chances and dangers of both.

[Leader Summaries · Rating 5 out of 5]

Desde Leader Summaries recomendamos la lectura del libro Innovación abierta, de Henry W. Chesbrough.
Las personas interesadas en las siguientes temáticas lo encontrarán práctico y útil: innovación, innovación, desarrollo y cambio.
En el siguiente enlace tienes el resumen del libro Innovación abierta, Por qué la I+D centralizada se ha vuelto obsoleta y cómo la innovación abierta puede dar un nuevo impulso a las empresas: Innovación abierta

[Tac Anderson · Rating 4 out of 5]

I just re-read this great book. I think this book was written several years ahead of it's time. Even today most companies will struggle with the level of transparency and collaboration required to adopt the principles in Open Innovation but they hold the keys to surviving in the new economy.

[BlackForex · Rating 5 out of 5]

Great start to step into the Innovation Era with this book. You've to listen when the real guru speak it out then creat your own idea on top and make it happen!

[Peter Conradie · Rating 4 out of 5]

Worth the read, if only of the interesting history about some of the tech gigants of today such as Intel and IBM.

[Jodie Hong · Rating 3 out of 5]

I wish he talks about how we can fix NIH.

[Vanda · Rating 3 out of 5]

A good book, even though it's dated, but it really needs a goo conclusion section. It just sort of ends...

[Victor Melgarejo Zurutuza · Rating 5 out of 5]

Muy buen libro para demostrar como la innovación no solo tiente que ser interna. Abriendo esto la puerta al Networking.

[John De Leon]

Interesting insight into how big companies can innovate like they're small companies

[Rodrigo Trujillo · Rating 4 out of 5]

A milestone at Innovation in this century. Don't miss it.