We need to get smart on open innovation

at the time this blog was written, Dr Ben Reid was Head of Open Innovation at the Big Innovation Centre.

Some commentators  have placed the blame for pharmaceutical giant Pfizer’s decision to close its research and development site at Sandwich in Kent on the rise of ‘open innovation’.

It is certainly true that many large organisations in different industries are deploying open innovation; that is, they are making a genuine shift in strategy and practice by increasingly sourcing and involving external organisations and stakeholders in their innovation process, as well as ‘openly’ sharing their innovation outside the organisation. Pundits have concluded that it is this shift has presaged the closure of major employer sites in the UK – such as Sandwich – because it has rendered them obsolete. Couched like this, open innovation is a clear threat to the UK science-base, and its broader investment in innovation for the future.

But this is only one side of the story: open innovation is also an enormous opportunity for the UK, allowing UK businesses crucial access to new thinking, providing opportunities to bring together large and small organisations in innovation networks, and, potentially, as a key mechanism for cost-effective new product and service development.

Leading global practitioners such as Google, Unilever, or GlaxoSmithKline have developed highly-sophisticated strategies for open innovation. They do not approach open innovation as a one-size-fits-all solution, but develop open approaches through a careful consideration of where to be open and where to be closed, according to where they see themselves within their global innovation value chains and networks. Most global corporations are not under pressure – either from shareholders or other stakeholders – to be open for the sake of it, but rather are expected to manage an innovation strategy that deploys openness in a sophisticated and nuanced manner.

Academics and governments have started to develop public innovation policy drawing directly on the concept of open innovation – often adapted from the approach of leading global organisations. However, examining the deployment of open innovation as a policy term uncovers some worrying trends: compared to the nuanced strategies of major corporations, public policy seems stuck at a less mature phase of open innovation, collating some rather traditional lists of innovation policy areas and ranking countries and regions by ‘openness’.

If we are to have a national innovation ecosystem which truly supports the UK’s most innovative sectors, industries and organisations, public policy must learn to emulate those corporations’ successful approaches to shaping open innovation. We need to move beyond either panegyrics to all things ‘open’ in public policy, or knee-jerk reactions suggesting that ‘the Sandwich facility closure proves open innovation is a threat to the UK’. Instead we need to focus on developing smart industrial policies regarding when and where being open in our national innovation ecosystem is most beneficial to the UK. This will involve analysis of the UK’s role in different global value chains and networks – just as leading corporations do – and ensuring that areas where the UK is strong are invested in through policy, and where greater openness will benefit the UK if it is encouraged.

Working together with leading businesses through initiatives like the Big Innovation Centre, policy makers and public policy can catch up with the leading edge of open innovation.

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