Open innovation is beneficial because it provides the opportunity to reduce internal research costs and allow for faster innovation as it allows for more diversity and talent. It is a collaboration between businesses and individuals so both the risks and the rewards can be shared. It is believed that when knowledge is shared, companies can benefit from innovating with partners, because they can’t solely rely on internal research (Chachoua, Elie. 2015).
One disadvantage of open innovation is the risk of revealing information that wasn’t intended to be shared. Another disadvantage is that companies that practice open innovation could potentially lose their competitive advantage (Wikipedia, n.d.). It can be difficult to execute and companies need to be open to rethinking current operation as needs change. An effective process is necessary, which can also be challenging due to unclear coals, poor communication and lack of support from stakeholders or management (Kylliainen, Julia. 2018).
Other forms of innovation include process innovation, product or service innovation, and research and development or product & product performance innovation (Talin, Benjamin. 2021).
Loos Machine & Automation kind of exercises open innovation. We partner with our customers to produce their product. They are typically contributing to the innovation. The company is also a part of networking groups, which helps. Open innovation could work in an organization like Loos Machine & Automation. Open innovation allows manufacturers to build relationships throughout their supply chain which can reduce waste and downtime, while increasing profits.
References:
Obradovic, Tena. Open innovation in the manufacturing industry: a review and research agenda. Sciencedirect.com (n.d.). Retrieved on December 6, 2021 from https://www.sciencedirect.com/science/article/pii/S016649722100002X
Open Innovation. Wikipedia.com (n.d.). Retrieved on December 6, 2021 from https://en.wikipedia.org/wiki/Open_innovation
Talin, Benjamin. Innovation – Definition, Innovation Types and Meaning. Morethandigital.info (2021, October 6). Retrieved on December 6, 2021 from https://morethandigital.info/en/innovation-definition-innovation-types-and-meaning/
Kylliainen, Julia. Open Innovation challenges – how to overcome the most common ones? Viima.com (2018, October 19). Retrieved on December 6, 2021 from https://www.viima.com/blog/open-innovation-challenges#risks
Chicahoua, Elie. The benefits of open innovation. Weforum.org (2015). Retrieved on December 6, 2021 from https://www.weforum.org/agenda/2015/02/the-benefits-of-open-innovation/