MIT Sloan Management Review Article on Twenty Years of Open Innovation

Twenty years ago, I introduced the concept of open innovation in an MIT Sloan Management Review article. Where do we stand two decades later? We’ve seen some companies enjoy great success with this approach and witnessed the difficulties of others. One surprising insight 20 years on is that the biggest barriers to successful open innovation are inside, not outside, the organization.

Open innovation emphasizes drawing on external resources — such as customers, startups, crowdsourcing platforms, and universities — to develop ideas for new products and services. More formally, it can be defined as a distributed innovation process involving knowledge flows across organizational boundaries, for both pecuniary and non-pecuniary reasons. To innovate, we need to move knowledge from where it resides to where it is needed. Often, this means moving people so that knowledgeable workers can collaborate together to create something new. At other times, it might require new workflows and structures to create incentives and procedures to move that knowledge. To achieve success with open innovation, organizations need the ability to mobilize and access their knowledge across all of their silos — whether functional, departmental, or geographic — to design, develop, and deliver the innovations that their customers want.

About the Author

Henry Chesbrough is the Maire Tecnimont Professor of Open Innovation and Sustainability at Luiss Guido Carli University in Rome and faculty director of the Garwood Center for Corporate Innovation at the University of California, Berkeley’s Haas School of Business.

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