The pandemic has prevented companies and start-ups from interacting as they once did within the beneficial framework of open innovation. With an optimistic outlook, we delve into how organisations can and must reinvent themselves to ensure that their relationships with third parties remain fruitful.
Photo: The new, post-coronavirus open innovation. Credit: Unsplash
Open innovation has been one of the biggest themes of the last decade as for years it has meant that large, collaborative companies have discovered and leveraged start-ups and entrepreneurs who have bright ideas in a mutually beneficial relationship, creating and launching new products and lines of business. Start-ups' agility and new ideas combined with the economic power and experience of established companies is one of the most profitable partnerships ever demonstrated in the private sector.
Despite being a relatively modern term (it was coined in the early 2000s), open innovation has changed the business paradigm in an environment that was previously very closed, with little interest in change or collaboration with external agents. Instead of the traditional model which was based on internal innovation as a way of standing out from the competition, a new approach was adopted in which collaboration with open doors proved that innovation could be easier and more collaborative between companies, thus benefiting everyone.
Henry Chesbrough, University of Berkeley professor and one of the founders of this concept, summarised that open innovation is nothing more than "the use of internal and external knowledge flows in order to accelerate internal innovation and expand markets for the external use of that same innovation". In other words, the very opposite of the traditional model, where internal innovation activity resulted in products and services developed in-house and then exploited by the company itself, without the participation of third parties.
At the start of the decade, IBM, Microsoft, AT&T and Xerox were examples that served to confirm that open innovation could be of use in a globalised world where ideas had increasing value and opportunities to succeed. Business lines became more flexible for taking advantage of these synergies between entrepreneurs, start-ups and companies. There are several examples of this in Spain, such as BBVA or Mapfre, for example.
Photo: The future is open. Credit: Unsplash
The future is open
Although companies in 2020 had already demonstrated that they had grasped the idea, coronavirus disrupted plans for collaborations and cooperation between companies around the world. For some, it meant the end of this open and potentially fruitful relationship, and for others it brought nothing more than confirmation that without open innovation there was no possible future for their business.
Throughout the pandemic, some companies have continued to work hard and oil their open innovation machinery, while others have decided to save effort and money because it is in times of uncertainty that supply is usually cut off," explains Elena Rodriguez, director of Open Innovation & Market Intelligence at Opinno, who adds: "The fact is that when all this is over, it will be the former who will be in a privileged position with respect to the competition.
Raúl Sánchez, Director of Strategy and Alliance at Las Rozas Innova and member of the board of the Centre for Technology and Innovation for Development at the Polytechnic University of Madrid, is of the same opinion. He argues that, how management teams view open innovation will determine whether or not it is worth working with them.
The question to ask yourself is 'where do you place open innovation in your company? It can be a transversal concept or just an additional element. If you consider it an expense, it will be the first thing you cut in a time of crisis, but if you believe in it, you will invest in it," explains Sánchez.
For both experts, 2020 has given companies a clear message that the future will be open and collective, otherwise no company is guaranteed to survive.
Photo: Working from home, a challenging opportunity. Credit: Unsplash
Working from home, a challenging opportunity
In terms of the use of telework in the framework of open innovation after the pandemic, Elena Rodríguez postulates that it could be a window of opportunity when it comes to uniting several generations in the same work and collaboration environment.
This will not be a problem for the young millennials and below, because their generation has lived under the protection of technology and are used to this model, but I think it will affect older generations, because the way they trust each other is based, to a large extent, on seeing each other in person. I think it's an opportunity for both generations to nurture each other," she says.
In addition to this window of opportunity, Rodriguez believes that remote working has already begun to demonstrate that it breaks down the geographical barriers of open innovation while also revealing that it is not all advantages, the latter being the hurdle to overcome for the immediate future.
Something very positive about teleworking is that it broadens the range of business offerings available to certain open collaborative actions related to business, but when it comes to creativity, it is clear that remote working can affect the magic that comes from the contact between people and professionals," he says.
Photo: Learning from today to succeed in tomorrow. Credit: Unsplash
Learning from today to succeed in tomorrow
Despite the current pessimistic outlook, it is clear to experts that we must take notes and study the present in order to be able to navigate the difficulties that will arise in the future, and the spontaneous crisis that coronavirus caused is a rarely seen model, perfect for observing new scenarios and opportunities.
One thing the pandemic has taught us is that open innovation shouldn't only happen between private companies, but that the private and public sectors are obliged to work together for the good of everyone, and the health crisis represents the best example of this", says Sánchez.
While private companies and start-ups have been the main beneficiaries of these collaborative relationships for years, public institutions can and should play the necessary role of a big player from which all stakeholders can benefit, both on the private and public side, as the Director of Strategy and Alliance at Las Rozas Innova sees it when he considers the immediate future of open innovation.
We must learn from today's problems in order to face tomorrow's challenges with perspective. This is something that the experts are clear about, since, as Elena Rodríguez argues, "in the very nature of open innovation we find that learning is an indispensable tool, in which mistakes and problems are ironed out during the collaborative process".
Talent must have the freedom to collaborate, to create and to take advantage of the resources available, because in this process many can benefit, and without open innovation this process is barely possible in the business world. The only way to deal with this pandemic and prepare for future problems is to face the present and to focus on collaboration, because collaboration is the key to success.