Re: Open Business Models: How To Thrive In The New Innovation Landscape Books Pdf File
Ayman Hentz
The term was originally referred to as "a paradigm that assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as the firms look to advance their technology".[3] More recently, it is defined as "a distributed innovation process based on purposively managed knowledge flows across organizational boundaries, using pecuniary and non-pecuniary mechanisms in line with the organization's business model".[4] This more recent definition acknowledges that open innovation is not solely firm-centric: it also includes creative consumers[5] and communities of user innovators.[6] The boundaries between a firm and its environment have become more permeable; innovations can easily transfer inward and outward between firms and other firms and between firms and creative consumers, resulting in impacts at the level of the consumer, the firm, an industry, and society.[7]
Open Business Models: How to Thrive in the New Innovation Landscape books pdf file
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Because innovations tend to be produced by outsiders and founders in startups, rather than existing organizations, the central idea behind open innovation is that, in a world of widely distributed knowledge, companies cannot afford to rely entirely on their own research, but should instead buy or license processes or inventions (i.e. patents) from other companies. This is termed inbound open innovation.[8] In addition, internal inventions not being used in a firm's business should be taken outside the company (e.g. through licensing, joint ventures or spin-offs).[9] This is called outbound open innovation.
This type of open innovation is when a company freely shares its resources with other partners, without an instant financial reward. The source of profit has an indirect nature and is manifested as a new type of business model.
In 2014, Chesbrough and Bogers describe open innovation as a distributed innovation process that is based on purposefully managed knowledge flows across enterprise boundaries.[28] Open innovation is hardly aligned with the ecosystem theory and not a linear process. Fasnacht's adoption for the financial services uses open innovation as basis and includes alternative forms of mass collaboration, hence, this makes it complex, iterative, non-linear, and barely controllable.[29] The increasing interactions between business partners, competitors, suppliers, customers, and communities create a constant growth of data and cognitive tools. Open innovation ecosystems bring together the symbiotic forces of all supportive firms from various sectors and businesses that collectively seek to create differentiated offerings. Accordingly, the value captured from a network of multiple actors and the linear value chain of individual firms combined, creates the new delivery model that Fasnacht declares "value constellation".
Bogers, M., Zobel, A-K., Afuah, A., Almirall, E., Brunswicker, S., Dahlander, L., Frederiksen, L., Gawer, A., Gruber, M., Haefliger, S., Hagedoorn, J., Hilgers, D., Laursen, K., Magnusson, M.G., Majchrzak, A., McCarthy, I.P., Moeslein, K.M., Nambisan, S., Piller, F.T., Radziwon, A., Rossi-Lamastra, C., Sims, J. & Ter Wal, A.J. (2017). The open innovation research landscape: Established perspectives and emerging themes across different levels of analysis. Industry & Innovation, 24(1), 8-40.
Open innovation has become a popular topic in management literature since Chesbrough published his book with the same title in 2003 (Chesbrough, 2003). Consequently, no longer does it only exist in the realm of conceptualization; at numerous companies it has been applied. Chesbrough (2003) suggests that companies using the closed innovation paradigm are fundamentally inwardly focused when it comes to the development of new ideas, knowledge, and creativity; the notion of the closed innovation paradigm is not unlike that of a castle or silo. The underlying logic of this approach implies a need for vertical integration with the aim of centralized, internal research and development. But the logic underlying the closed innovation paradigm has been challenged in the transformative era of e-business and social media, due to the interdependence of various firms on other firms for critical technologies and other resources. In an information economy, firms are operating in a more open, fast-paced global environment, where firms can create ideas for external or internal use and can access ideas from outside as well as from within. The availability and quality of these external ideas have changed the logic that once led to the formation of internal, centralized R&D silos and that have now evolved with the open innovation paradigm that enables a firm to leverage and share distributed knowledge. Now firms must manage innovation in an uncertain world, and they must adopt an open innovation paradigm and become strategically agile and aligned by leveraging multiple paths to market their in-house technologies, by sharing ideas and intellectual property (IP), and by accessing and integrating external knowledge through strategic alliances and collaborative partnerships.
Innovation is becoming an increasingly open process thanks to a growing division of labor. One company develops a novel idea but does not bring it to market. Instead, the company decides to partner with or sell the idea to another party, which then commercializes it. To get the most out of this new system of innovation, companies must open their business models by actively searching for and exploiting outside ideas and by allowing unused internal technologies to flow to the outside, where other firms can unlock their latent economic potential.
To appreciate the potential of this new approach, consider the following names: Qualcomm Inc., the maker of cellular phone technology; Genzyme Corp., a biotechnology company; The Procter & Gamble Co., a consumer products corporation; and Chicago, the musical stage show and movie. This assortment might appear to be random, but they all have something in common: Each required an open business model in which an idea traveled from invention to commercialization through at least two different companies, with the different parties involved dividing the work of innovation. Through the process, ideas and technologies were bought, sold, licensed or otherwise transferred, changing hands at least once in their journey to market.
* Open Business Models: How to Thrive in the New Innovation Landscape by Henry Chesbrough has a heavier focus on technological innovation in the context of business models and also covers the important area of Intellectual Property in relation to open business models.
The first three rows of Table 1 capture the primary gist of open innovation as it has been embraced in practice and in the literature. Firms must import at least some of their knowledge and ideas from outside. That this is a nontrivial problem requiring effort and organization is expressed in rows four and five. The ability to make use of outside information is pervasive, affecting the firm even to its core business model.
One weakness of the open innovation literature is its engagement with theory, hence the parallel literature on alliances, vertical integration, and ecosystems that has arisen to address related questions. West and Bogers (2017) also called for greater engagement with theoretical work, including absorptive capacity, user innovation, business model theory, and theories of the firm, especially the resource-based view of the firm, but also transaction cost economics and the knowledge-based view of the firm.
Chesbrough excelled at identifying interesting cases that illustrate complex concepts. His description and explanation made the material accessible and memorable to a broad audience. Therefore, the relevant primary sources for understanding open innovation are the three books on the topic, Open Innovation (Chesbrough, 2003), Open Business Models (Chesbrough, 2006a), and Open Services Innovation (Chesbrough, 2011).
In his landmark book Open Innovation, Henry Chesbrough demonstrated that because useful knowledge is no longer concentrated in a few large organizations, business leaders must adopt a new, "open" model of innovation. Using this model, companies look outside their boundaries for ideas and intellectual property (IP) they can bring in, as well as license their unutilized home-grown IP to other organizations. In Open Business Models, Chesbrough explains how to make money in an open innovation landscape. He provides a diagnostic instrument enabling you to assess your company's current business model and explains how to overcome common barriers to creating a more open model. Chesbrough also describes a new set of players--"innovation intermediaries"--who facilitate companies' access to external technologies.
FinTech is one of the major forces of digital transformation for the financial industry. Emerging technologies and business model innovation have advanced Fintech development for the past decade at an unprecedented pace. On top of the continuously evolving business landscape and trends in digital transformation, the COVID-19 pandemic brought numerous challenges to the financial industry around the world. Just in time, FinTech advancements helped us to meet many of the challenges head-on, and are in turn driving further structural changes in the industry. Effects of these new technologies will likely persist beyond the current pandemic, and FinTech has established itself as a critical engine of financial innovation that enables financial firms not only to survive but also to thrive.
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