It has been a while after my last blogpost here. But to my excuse: I was busy analyzing data and writing papers. So, today I’m able to present first results from the open innovation study of the WU Vienna. For this first paper I focused on giving an overview over the current state of open innovation adoption. In the following papers (and following blogposts) I will write more about the model of open innovation adoption and the influencing factors.
- 30% of the respondents already use open innovation to a large degree.
- Adoption of open innovation happens mainly on the inbound side. Outbound open innovation is less common. (85% use more inbound than outbound)
- With a higher degree of inbound open innovation, also the level of outbound open innovation rises.
- Inbound open innovation is already very common, which means that the Not-Invented-Here-Syndrome is already overcome. The challenge of the next years is to overcome the Not-Sold-Here-Sydrome.
- The type of open innovation strategy has visible effects on the R&D intensity of a company. Generally, open innovation is a complement to internal R&D. However, inbound open innovation activities can help to reduce the level of internal R&D while maintaing the current level of output (innovation output to own products or to outbound open innovation activities).
The study examines the current status of open innovation in Europe, independently from any industry, country or company size. Data collection took place between February and June 2009. In total 1018 companies (including Top 500 companies in Europe) in 24 European countries were contacted. The response rate was 23%. Key Informants were mostly C‐Level Executives or (in case of larger companies) usually Head of Innovation and R&D director. The sample is very diverse regarding industry and also company size: 30% have less than 100 employees, 32% between 101 and 5000, and 38% have more than 5000 employees. No biases were found in the sample.
The study finds that already 30.3% of the companies are already using open innovation to a large degree. These companies are called the “open innovators”. 38.7% of the sample is using the open innovation concept partly, for instance just the outside‐in process. These companies are called “semiopen innovators”. Only 31.0% are not using open innovation methods, or just to a minor degree.
Open innovators have already successfully implemented open innovation in the whole company. Whereas semiopen innovators often focus on single or few open innovation activities, open innovators have developed a real open innovation strategy. These companies are often characterized by a high level of structural focus on open innovation, e.g. through an own open innovation department, or a large internal and external network. But open innovation is not only integrated structurally. Additionally, these companies also have a strong culture with an intrapreneurial spirit. Open innovation is already reflected in the companies’ incentive system, which again lowers the barriers for the Not‐Invented‐Here‐Syndrome and the Not‐Sold‐Here‐Syndrome.
When grouping the responses with into a 2x2 matrix, 44% of the companies are found in the closed group. We see, that inbound open innovation methods (collaboration with external stakeholders or acquisition) are more used than outbound methods.
Three open innovation types: Inbound, outbound, mixed.
First, the more a company adopts inbound open innovation methods, the more a company will also adopt outbound open innovation methods. Second, companies adopt more inbound open innovation than they adopt outbound open innovation methods. 85.6% of the responses are located over the 45 degree line, which means that they are more engaged in inbound activities than outbound activities. According to our data, there are almost no companies using only the inside‐out process.
This can be explained by the inherent risk of open innovation. The risk of outbound methods (e.g. selling licenses or other know how) is perceived a lot higher than the risk of integrating external knowledge into the company. But, when companies start to use open innovation on the inbound side, they are also getting more open on the outbound side.
Barriers for open innovation like the Not‐Invented‐Here Syndrome are already lower, compared to early 2000’s. But the Not‐Sold‐Here Syndrome still seems to be prevalent. We assume that the percentage of companies using outbound open innovation will increase radically within the next years.
Is open innovation complementing or substituting internal R&D?
The R&D intensity of each adoption group is significantly different. Whereas companies in the inbound‐ or mixed group both have a R&D intensity of around 7.4%, the companies in the outbound group have a significantly higher R&D intensity of 9.5%. Hence we conclude that open innovation seems to be a complement to internal R&D when companies focus on outbound open innovation. Companies who externalize a lot of their internal knowledge, have to produce this knowledge through internal R&D. On the other hand, open innovation can be a substitute for internal R&D if companies use inbound open innovation methods. In this case companies often try to reduce the costs of internal R&D through integrating external knowledge (often for free). But companies who use open innovation extensively (mixed‐group), sell a lot of their internal knowledge but keep the cost of internal R&D low through inbound open innovation.