A Classification of Open Innovation and Open Business Models

Abstract

Open innovation and open business models have received a lot of attention during the last decade both from practitioners and academia since Henry Chesbrough launched the two concepts respectively in 2003 and 2006 (Chesbrough, 2003a and 2006a). Careful observation of publications about these two concepts reveals that most researchers as well as practitioners do not make a proper distinction between them. In this chapter, we intend to clarify the distinction between the two concepts and, more importantly, to extend the range of potential innovation strategies by combining open innovation and open business models in different ways. This should lead to a comprehensive classification of possible innovation strategies in which open/closed innovations are combined with open/closed business models. The classification starts with simple combinations of open or closed innovations and traditional vs. open business models in their new product development. Combinations of open innovation and open business models generate interesting models to create and capture value, which to our knowledge are not specified before in the open innovation literature. The classification will also illustrate that (open) innovation targeting new product or new business development is just one possible strategy how firms can create a competitive advantage. Product innovation may not be an option for companies producing commodities (e.g. crude oil) but the competitive drivers in these industries (e.g. finding the best oil wells) may be affected by the product innovations of their (technology) partners (e.g. new technologies to explore oil wells more effectively). Reframing open innovation in this way allows us to shed light on innovation networks in which the instigators of the network are not the innovators themselves, but they nevertheless form the hubs in a broader innovation ecosystem in which they benefit from the innovations of their technology partners. OUP UNCORRECTED PROOF – FIRSTPROOFS, Fri May 3