CloudOps Summit 2013, Frankfurt, 25.09.2013 Lightning Talk by Prof. Sabine Brunswicker, Purdue University, Research Center for Open Digital Innovation

1. INNOVATION IS NOT EVERYTHING, IT IS
THE ONLY THING
AND IT IS AN OPEN AND DIGITAL THING
LIGHTENING TALKS CLOUDOPS SUMMIT 2013
Prof. Sabine Brunswicker
Purdue University, Fraunhofer Society

2. INNOVATION IS ALMOST EVERYTHING
INNOVATION IS NOT JUST ABOUT A NEW TECHNOLOGY, IT IS A LOT MORE
www
ANY IDEA OR CHANGE
TO A SYSTEM
Business Model
New Product
New Service
New Process
Cloud On-
Demand
Service

3. …CAPTURING VALUE FROM IT
INNOVATION IS ABOUT CREATING
VALUE
INNOVATION IS THE ONLY THING

4. Innovation is often thought of as being
about R&D, special people, control, and lots
of time….
INNOVATION IS THE ONLY THING

5. THE INNOVATION GAME HAS
CHANGED¹
Source: 1) Chesbrough (2003)

6. INNOVATION HAS CHANGED
Success Stories Trend towards Open Innovation
SINCE 2003, FIRMS ENGAGE IN SO CALLED “OPEN INNOVATION PRACTICES”
Google Search Open Innovation :
10/2011 > 8 Mio Hits
05/2013 > 700 Mio Hits

7. INNOVATION IS AN OPEN THING
OPEN INNOVATION DESCRIBES A COGNITIVE FRAMEWORK FOR A FIRM’S STRATEGY TO PROFIT
FROM INNOVATION
Open Model
existing
market
new
market
other
firm’s
market
idea sourcing
running/successful innovation projectsdiscarded innovation projects
Closed Model
market
+
+
+
new
product/
service
internal
innovation
resources
internal
innovation
resources
external
innovation
resources
technology
sourcing
co-development
partnerships
spin-out
Source: Brunswicker (2011); see also Chesbrough (2003, 2006)

8. OPENNESS COMES IN DIFFERENT FORMS
LARGE FIRMS LIKE GE EXPERIMENT WITH START-UP COMPETITIONS AND IDEA CONTESTS TO
IMPLEMENT INBOUND OPEN INNOVATION AND CREATE NEW INNOVATION ECOSYSTEMS
Challenge
 Powering the
Grid
 Powering your
Home
B2B Entrants
 Opportunity to
develop
commercial
relationship with
GE
GE investment
 Nearly 4000 ideas
 75,013
entrepreneurs
 23 partnerships ($
200 USD investment)
Source: www.ge.com, Chesbrough (2012) California Management Review
Co- investment &
venture partners
 Emerald Capital
 Foundation Capital
 ….

9. OPENNESS IS NOT A FAD
IN OUR NEW EXECUTIVE SURVEY WE FOUND THAT OPEN INNOVATION IS ON THE RISE; IT
RECEIVES INCREASING MANAGEMENT SUPPORT AT THE TOP EXECUTIVE LEVEL
Executive study
UC Berkeley and
Fraunhofer
 Study among the largest firms
in Europe and US
 Firm criteria: >1000
employees and >250
million USD in sales
 Key informants: CEO,
COO, or CTO at
headquarter
 Data collection
October– December 2012
 125 datasets
Adoption of open
innovation
Abandonment
Open innovation
experience
Management
support
Intensity
78% practice open innovation
today
No firm has abandoned open
innovation
Median of 5 years
71 % have increased
management support
82 % have increased open
innovation activity

10. .---BUT IT IS HARD
THE CHANGE FROM CLOSED TO OPEN IS HARD; IT REQUIRES NEW CAPABILITIES, NEW ROLES
AND CULTURAL VALUES
3.69
4.55
4.53
4.53
4.89
5.26
3.61
4.28
4.49
4.6
4.97
5.6
1 2 3 4 5 6 7
Avoidance of external or already existing knowledge
Effectiveness of intellectual property protection
Identifying new innovation sources
Protecting internal critical know-how
Management of external relationship with innovation
sources
Managing the organizational change internally
Challenges of engaging in open innovation
(mean values, 1=not important to 7= highly important)
when firm's started
today
Not important
Highly
important
Source: Open Innovation Executive Survey Fraunhofer & UC Berkeley; n = 91

11. THE SHIFT CONTINUES
FINAL SLIDE WITH “WEB” AND NEW MODELS OF INNOVATION
The GRAVITY IS SHIFTING
EVEN MORE…
..people-centric & decentralized
innovation ecosystems

12. WE SHIFT TOWARDS ECOSYSTEMS
THE SHIFT TOWARDS OPENNESS IS CONTINUING; IT REQUIRES MORE EXPERIMENTATION
Shifttowardsopenness
Phase 1 Phase 2 Phase 3 Phase 4
Source: CAS 2010; Ehrenmann & Brunswicker (2012)
Closed System
Firm-centric
innovation networks
New infrastructures
New decentralized
innovation ecosystems
Interne
Technologie-
Basis
Aktueller
Markt
Aktueller
Markt
Gescheiterte Ideen/
abgebrochene Projekte
Erfolgreiche Ideen/ erfolgreiche
Projekte
Interne
Technologie-
Basis
Aktueller
Markt
Aktueller
Markt
Gescheiterte Ideen/
abgebrochene Projekte
Erfolgreiche Ideen/ erfolgreiche
Projekte
Gescheiterte Ideen/
abgebrochene Projekte
Erfolgreiche Ideen/ erfolgreiche
Projekte

13. TODAY INNOVATION REMAINS THE ONLY THING
BUT WE HAVE TO LEARN MORE
New facilitation skills and leadership capabilities
New infrastructures for innovation
Experimentation (rather than control)
Lifecycle-oriented innovation
ecosystems

14. INNOVATION IS AN OPEN AND DIGITAL THING
„If you’re not failing every
now and again, it’s a sign you’re
not doing anything very
innovative.“
Woody Allen
Contact: Prof. Sabine Brunswicker, sbrunswi@purdue.edu