Question

discuss the advantages and risks of open innovation?

Answer 1

First let us understand the open innovation. It is opposite of closed innovation. Closed innovation is done on a laboratory, firm’s R&D center or any other places privately. The innovation is truly property of the researcher. Open innovation is just opposite of that.

Open innovation means when the companies use external sources of innovation to enhance the quality of their product line and minimize the time which is required to bring their product into the market. Further releasing the innovation done by the company to the market which is not suitable for them because it may help the others.

Here are the benefits of open innovation.

• It will reduce cost. Other’s can adopt ht he innovation given y the company hence they do not have to spend on R&D.
• Because of many innovation there will be much differentiations in the products into the market..
• It will create a revenue stream for any organization which is following the open innovation.
• Te risk involved in innovation will be reduced because there will be spread of ideas and thinking involved in the innovation.

Open i9nnovation does not give a good result always. Here is the risk associated with the same-

• It has been seen that sharing ideas has created disputes between the organizations, The case of Apple and Samsung is here. It was result of open innovation. In which Apple won the case.
• Open innovation is all about the sharing innovation with other across the supply chain. Some companies which are investing huge in new technology and innovation may not share their ideas with any one due to risk of theft, copy, this may damage their strategy.
• Open innovation gives many ideas about the product development. If the company has to choose from many innovative ideas then the company may choose wrong decision, chances of failure is increased. High number of potential leads to high number of failures.
• Open innovation reduce the creative thinking of the organizations as they are more depend on the other organizations for the innovation.