Global trends in

OPEN INNOVATION

José Cláudio C. Terra

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Battle of Concepts
Challenges to undergraduate students

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TerraForum Consulting
Our Mission

“ Help our clients

to learn, collaborate and innovate
in more effective ways

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More than 300 projects with leading companies within the last 7 years

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Publishing Portfolio – TerraForum Consulting

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TerraForum Consulting
Innovation Center Portal

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What is Open Innovation?

“ Innovation
distinguishes a leader
from his followers.
Steve Jobs

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“ 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."

Henry Chesbrough, 2003

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Open Innovation Model – The Innovation Funnel
Through the open innovation model organizations keep strong relationships with
external parties at different stages of the innovation development process

Research Development Comercialization

Joint Venuture

Licensing
External Technology
Insourcing
Spin-in
Merge and Aquisitions

INTERNAL MARKET
R&D

Divest
Spin-off
Licencing
R&D Services

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Through Open Innovation businesses are increasingly open to insights,
ideas and collaboration from multiple sources...

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For most companies innovation is a proprietary activity but for
others...

Closed Innovation Open Innovation

Not all of the smart people work for us, so we must
Most of the smart people in our field work for us find and tap into the knowledge and expertise of
bright individuals outside our company

To profit from R&D, we must discover, develop External R&D can create significant value; internal
and ship ourselves R&D is needed to claim some portion of that value

We don´t have to originate the research in order to

If we discover it, we will get it to market first profit from it

Building a better business model is better than

If we are the first to commercialize we will win getting to market first

If we create the most and the best ideas in the If we make the best use of internal and external
industry, we will win ideas we will win

We should profit from others´ use of our IP, and

We should control our intellectual property (IP) so we should buy others´ IP whenever it advances
that our competitors don´t profit from our ideas our own business model 11
Open Innovation creates new revenues opportunities

Closed Model Closed Model Open Model

Past Present Future
Revenues
New Businesses

Spin-Offs New
Revenues
Royalties

Revenue
Revenue Revenue

Internal Internal
Development Development
Cost Internal Cost
Development
Cost

Costs

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How companies will organize themselves to
support open innovation approaches?

“ The best manner to predict

the future is inventing it.

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Companies are creating their own Open Innovation Systems,
that are composed by...

Processes Partners´
and Governance Network
relationship

Open
Innovation
System

Organizational
Infrastructure structure

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Key Factors for Open Innovation Success

Clearly Defined
Support and IP policies Organizational
Services for Structure and
Partners Governance

Strong
Relation Infrastructure
Network and location

Adequate
Partners Funding

Collaborative Stakeholders
Culture Support

Open Processes
Strategic Innovation and KPIs for
Alignment Innovation
System Mgmt

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Benchmark Study: “Best Practices in Open Innovation Systems”
Participating Companies

Brazil

Global

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Best Practices in Open Innovation Systems (OIS)

“ Philips established partnerships all over the

innovation stages, from basic research to
commercialization.
Besides, developed a technology park in Eindhoven
that became worldwide renowned that was capable to
attract the strategic competencies to the company.
Philips High Tech Campus offers infrastructure for
their partners, e.g.: suppliers, consultants, patents
office, venture capitalists, governmental research
organizations, research specialists.

It also offers paid services, such: offices for rental,

incubation and laboratories.

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High Tech Campus, a new concept on Open Innovation
System

 Modern technology park

 More than €500M in investments;
 Technology-based startups incubation
 The design stimulates and forces collaboration
between partners
 Close to universities
 “Research Hotel” concept

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Best Practices in Open Innovation Systems (OIS)
Philips High Tech Campus (Eindhoven)

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Best Practices in Open Innovation Systems (OIS)

“ Telefónica has established a network that

involves more than 1,000 partners. The
company structured 7 research centers, most in
Spain and close to technology parks.

“ Nokia promotes “Day Dreams” with

their partners, where they discuss
about the technology and products
trends and forecast.

“ Syngenta keeps a full time

partnership manager to manage
collaboration and the network
relationship, stimulating new
business and solving conflicts.

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Using web2.0 tools to improve open
innovation in organizations

“ The best manner to predict

the future is inventing it.

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What facilitates this NEW approach to innovation is the rise of
Web 2.0 – as an open and participatory platform...

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Procter & Gamble Tremor
Competitive Intelligence

• Capture impressions and trends

from teenagers
• Establish relationships and
understand specific publics

• Benefits:
• Improve the relationship of P&G
products with strategic customers.

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Dell IdeaStorm
Ideas and Insights

Users can:
• Submit ideas;
• Comment ideas posted;
• Vote on ideas

• More than 12.000 ideas

• 84 comments and votes
• 347 ideas implemented

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Innocentive
R&D

Companies propose challenges to

researchers and universities and
give prizes up to US$1M.

Benefits:
• Increase the network
• Improve the quality and speed on
development of new solutions
• Reduce the R&D investments

More than 70.000 researchers

50 universities

Companies such Basf, Syngenta e

DuPont participate.

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Kraft First Taste
Testing

Community to discuss new

products where users can:

• Provide feedback to new

products
• Share opinions
• The most participative users
have a “first taste” new
products first than others

Benefit:
Kraft improves products by using
costumers experiences.

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Yet2.com
Commercialization and Scaling up

Companies buy and sell licenses

for the usage of technologies and
patents.

Benefits:
• Profits from non-strategic and
not used technologies
• Companies can innovate
without internal R&D
Partnerships with DuPont, P&G
and Honeywell.

Participation of 90% of Fortune

500.

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Fiat Mio:
Open source design

Any company can use the ideas (more than 10.000) submitted by users
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Peugeot Design Contest
Open Design

• More than 4 million

page views

• 5 demonstration
models exhibited at
automotive
marketing events

• Designers of around
100 nationalities

• € 10.000 prizes

• 5th year of the

contest

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Threadless
Co-creation made by users

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Lego
Open source community

Accelerating product innovation and turning Lego MindStorms into a

highly profitable product for Lego 31
 Global trends in
OPEN INNOVATION

Jose Cláudio Terra

jcterra@terraforum.com.br
www.slideshare.net/jcterra

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