This document discusses the potential benefits of establishing an open innovation center in Northern Ireland. It finds that NI lags behind other UK regions in open innovation activities, particularly among smaller firms. An open innovation center could help address this by raising awareness of open innovation, building firms' capabilities to engage in it, and facilitating partnerships between firms and other organizations. The center would likely target smaller companies and help them move from closed to open models of innovation. It could take the form of an independent innovation intermediary and draw on existing resources while operating independently. The goal would be to increase open innovation and its benefits for firms and the wider Northern Ireland economy.

1. Building an open innovation
capability
Stephen.roper@wbs.ac.uk

2. ERC overview
• The Enterprise Research Centre (ERC) is an independent research centre which conducts
policy relevant research on SME growth and development. The ERC is being led by Professor
Stephen Roper (Warwick) and Professor Mark Hart (Aston).
• The ERC is a partnership between Warwick Business School, Aston Business School, Imperial
College Business School, Strathclyde Business School, Birmingham Business School and De
Montfort University.
• Funding is being provided by the Economic and Social Research Council, the UK government
Department for Business, Innovation and Skills, the British Bankers’ Association and the
Technology Strategy Board.
• Research within ERC focuses on entrepreneurial ambition and inclination, leadership
capabilities in the management teams of SMEs, the impact of diversity on SME start-up and
growth, the financing of growth companies, innovation and exporting in SMEs and the role of
SMEs in UK jobs growth.
• Alongside its research activities the ERC aims to act as a focal point for SMEs and the SME
research and policy communities in the UK, facilitating knowledge exchange.

3. Developing an open innovation centre
for Northern Ireland
Professor Stephen Roper (Warwick)
Professor Nola Hewitt-Dundas
(Queens)

4. Study addresses three key
questions
1. Does NI need an open innovation centre?
– What is open innovation?
– What are the benefits – firm and regional level?
– Where does NI stand relative to other areas?
– So what should we do?
2. What would an open innovation centre look like?
3. What would be the benefits of an open
innovation centre?

5. Question 1:
Does NI need an open innovation
centre?

6. Open innovation (OI) is ….
• Innovation can be thought of as firms’ introduction of
new products, services or ways of doing business
• And open innovation is ‘… the use of purposive inflows
and outflows of knowledge to accelerate internal
innovation, and expand the markets for external use of
innovation, respectively’.
• Typically, open innovation involves innovation
partnerships between firms and/or between firms and
other organisations such as customers, suppliers,
universities or consultants.

7. Firm level benefits of OI
• Evidence suggests that OI
benefits firms by:
– Stimulating creativity
– Reducing risk
– Accelerating innovation
– Improving innovation quality
– Helping increase sales from
innovation
– Helping access new
skills/technology
• But the benefits differ for
smaller and larger firms
05
10152025
Share(%)ofinnovativesales
0 1 2 3 4 5 6 7 8
Breadth of linkages (0-8)
Small Medium and large

8. OI also has other wider
benefits …
• Increased innovation externalities - openness may increase levels of
innovative activity in the region which may themselves generate
spillover benefits
– For example, under-priced quality improvements -> productivity gains
– Demonstration effects
– Sustainability or clustering effects
• Externalities of openness – regardless of the impact on firms’
innovation, openness itself may generate positive externalities by
increasing levels of organisational interaction and knowledge
diffusion.
• These wider social benefits (and the associated market and system
failures) provide a clear rationale for public intervention to support
OI

9. Benchmarking OI in NI compared to
other regions
• Source: UK Innovation Survey
NI lags all other UK regions –
i.e. levels of open innovation
are lowest here
Two implications:
1. NI firms are not
benefitting from OI and its
potential contribution to
innovation
2. More broadly NI is missing
out on potential regional
benefits

10. Benchmarking OI in NI compared to
other regions
• Source: UK Innovation Survey
And most of NI’s problem is with
smaller firms – larger firms lag but not
by too much
Openness appears particularly limited
among smaller firms in Northern
Ireland and those in services.
Comparing firms’ connectivity to
individual types of external partner –
suggests that connectivity to each type
of partner is lower in NI than other UK
regions.
This suggests the generality of the
openness deficit in Northern Ireland
rather than this deficit being due to
any particular type of innovation
partner

11. So does NI need an OI
centre?
• Northern Ireland certainly needs more OI which would
benefit innovation, productivity etc.
• The evidence suggests that existing organisations have not
delivered on OI in Northern Ireland – the region lags other
UK regions
• Something else needs to be done to support OI (and
innovation) across sectors but perhaps particularly
targeting smaller firms
• So we think the answer to the question is “Yes”. And that
there is a strong case for intervention in this area.

12. QUESTION 2
What would an OI centre look like?

13. Possible roles of an OI
Centre
• Building Awareness - an OI centre could play a valuable role in increasing the awareness of the benefits of
collaborative and open-innovation. Such activities could be events or network based, involve broadcast and other
media and the compilation and publication of case-study evidence.
• Advocacy – an OI centre could work as a champion or advocate for OI within a regional innovation system,
supporting and encouraging the development of policy measures which strengthen collaboration.
• Capability building – an OI centre might be to help firms develop OI capabilities for managing external
relationships or collaborative innovation. This is essentially a staff or management training activity which is likely
to be particularly important for smaller firms.
• Inbound provision of partner information – an OI centre might help local firms to identify potential innovation
partners either locally or externally.
• Outbound promotion of partner information– an OI centre might promote the capabilities of firms as potential
partners to organisations elsewhere. This is primarily a marketing and/or promotional activity.
• Facilitation or brokering of partnerships and collaboration – this type of brokering activity aims to work with
individual firms to establish innovation partnerships. The credibility of individual brokers is likely to be key to
success in this activity.
• Structuring of partnerships and collaboration – each individual innovation partnership is likely to raise different
issues relating to contracting, IP etc. This activity is aimed at assisting firms with the structuring of open
innovation relationships and is likely to require detailed work with the partners.

14. Linking activities and client groups
• Different OI centre
activities are going to be
relevant to different target
groups
• Perhaps the greatest gains
in terms of innovation are
to be made in moving from
non-innovators to closed
innovators to open
innovators
• Capacity building, inbound
partnering and facilitation
may be particularly
important for smaller firms

15. OI organisations come in
four main types:
• Research organisations – which use OI as a commercialisation methodology. Examples are IMEC,
the Collective Research Centres in Belgium and the Holst Centre.
•
• Networked Incubators - closely related to the business incubator model. The emphasis here is on
technology-based start-up businesses and applying the principles of OI to commercialisation. Three
examples are Chalmers Innovation, Sweden, Normandie Incubation (France) and the Innovation
Centre (UK).
• Company based centres – larger companies have led the move to an OI model for innovation. Early
examples of OI were Proctor & Gamble (P&G) with their ‘Connect and Develop’ programme,
Unilever and IBM’s Collaborative Innovation Initiatives.
•
• Independent innovation Intermediaries – independent organisations formed to provide support to
broad groups of businesses to become more innovative through raising awareness of the need to
innovate alongside the development of collaborative networks. Examples of innovation
intermediaries include InnovationXchange and the Innovation University Enterprise Network

16. Question 3:
what would be the benefits of an
open innovation centre?

17. Developing a logic model for
an OI Centre…
To increase the level of effective open innovation in NI export oriented businessesVision
Goals
Activities
Input
indicators
Output
indicators
Outcome
Indicators
1. To increase the level of awareness of
open innovation and its potential benefits
among firms in the target groups
2. To ensure future policy development
supports extended open innovation
To increase the capacity
for operationalising
effective open innovation
among firms in the target
groups
1. To encourage non-innovating firms to move to become open innovators
2. To encourage ‘closed’ innovators to move to become open innovators
3. To encourage ‘limited’ open innovators to extend their open innovation activity
Awareness
Promotional
events/
workshops, on-
line promotion,
case studies/
newsletters
Advocacy
Input to policy
consultations or
reviews, visitors to
reference site
1. Number of attendees from target firms
at events
2. Website hits/page statistics, media
coverage
3. No. of inputs to consultations/reviews
4. Local and international visitors
1. Awareness of OI among each of three
target groups
2. Perceived role of OI Centre as regional
‘Champion for OI’
3. Perceived changes in policy environment
for OI among target groups
Capacity Development
Needs analyses, materials
development, training
courses or events
1. No. of training needs
analyses
2. Number of course
participants and firms
from each of target
groups
1. Improvements in
managing inward OI by
participants
2. Improvements in
managing outward OI by
participants
Partner information
provision
External media and on-
line promotion of NI
innovation,
local and international
partner search activities
Facilitation activities
Brokering of new
innovation partner
relationships, network or
consortium building
activities/events
Structuring activities
Support for individual
partnerships, facilitation
of access to external
professional support
services (IP, legal etc.)
1. No. of external/internal partner searches
2. Number/investment value of instances of brokering new relationships, events etc.
3. Number/contract value of referrals to service providers for facilitation etc.
1. Proportion of each target group seeking to develop new innovation partnerships
2. Proportion of each target group which has developed new innovation partnerships
3. Proportion of each target group engaging with professional services to facilitate
innovation partnerships.
1. Share of limited/intensive open innovators in NI
2. Proportions of non-innovators which have become open innovators
3. Proportions of closed innovators which have become open innovators
4. Proportion of limited open innovators which have become extensive open innovators

18. A Northern Ireland OI
Centre
• A broadly-based innovation intermediary targeting smaller non-innovators
or closed innovators. Perhaps 10-12 people.
• Navigate not duplicate - a ‘sat-nav’ organisation helping smaller firms find
and work with appropriate innovation partners (both in NI and outside)
• An opportunity for policy innovation – NI is leading the way in considering
the policy challenges of OI. An OI centre of this type would be a innovative
step
• Is this part of Invest NI? Probably not:
– Many of target groups outside INI’s existing clients
– Issues of independence and ‘honest broker’ seem important
• But would draw significantly on INI expertise, support and schemes and be
a long-term project

19. Contact us:
If you would like any more information about the ERC and any of its activities
please contact the Director, Stephen Roper at stephen.roper@wbs.ac.uk or
the Deputy Director, Mark Hart at mark.hart@aston.ac.uk.
More details about the activities of the ERC and our latest events can be
found at:
www.enterpriseresearch.ac.uk