What is Open Innovation? Crowdsourcing? User innovation? Co-Creation?

Many people ask what open innovation is. I suggest that you should view open innovation as a philosophy or a mindset that you should embrace within your organization. In a more practical definition, open innovation is about bridging internal and external resources and act on those opportunities. The value proposition this gives companies that get it right is simply too good to miss out on.

I also like this quote from Henry Chesbrough; “Open innovation is a paradigm that assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as the firms look to advance their technology”

This still leaves three other questions:

What is crowdsourcing? Wikipedia states that “crowdsourcing is the act of outsourcing tasks, traditionally performed by an employee or contractor, to a large group of people or community (a crowd), through an open call.” I view crowdsourcing as a tool that can be used to bring external input into your organizations.

What is user-driven innovation? I view this as a technique in which companies gain insights from users, which can then be used in the innovation process. I think that a key element in user-driven innovation is the observation of users rather than the use of questionnaires and focus groups. Erick von Hippel is an important influencer with his contributions on lead-user innovation.

What is co-creation? Here Wikipedia states that co-creation views markets as forums for firms and active customers to share, combine and renew each other’s resources and capabilities to create value through new forms of interaction, service and learning mechanisms. It differs from the traditional active firm – passive consumer market construct of the past. I like how C.K. Prahalad and Venkat Ramaswamy argue that “value will be increasingly co-created by the firm and the customer, they argued, rather than being created entirely inside the firm.”

These terms overlap which leaves plenty of room for confusion, but I hope this short overview helps.

  • http://www.discoverycast.com Cesar Castro

    Stefan – I like your explanation of open innovation. For me the hierarchy works best with open innovation at the top (since it is very broadly defined) with several innovation strategies below (including crowdsourcing). Therefore I see crowdsoucing as one type of open innovation strategy. And within crowdsourcing there are three general ways it can be used:

    1. Creation / Invention (such as MyStarbucksIdea or Threadless)
    2. Organize / Filtering (such as UK Gov’t Spending Challenge)
    3. Predicting / Forecasting (such as Iowa Electronic Markets)

    I came across these three concepts recently and they made a lot of sense to me.

    - Cesar

  • http://www.15inno.com Stefan Lindegaard

    Hi Cesar, nice addition, thanks!


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