Open innovation is a term coined by Professor Henry Chesbrough in his book, Open Innovation: The New Imperative for Creating and Profiting from Technology. Specifically, Chesbrough defines open innovation as “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.”
Essentially open innovation allows for the integration of multiple (oftentimes wholly external) voices into the research & development process. Chesbrough also suggested that there were at least four (potentially more) reasons that open innovation outperforms closed innovation: lower R&D costs, increased speed to market, viral marketing, and enhanced idea quality.
According to the White House, on his first day in Office, President Obama signed the Memorandum on Transparency and Open Government which issued an order for all government agencies to embrace the best practices of openness – that all government agencies should be transparent, collaborative and participatory.
When we think of innovation, we don’t often think of government. But in this case, this memorandum set a new standard for operating. It asked government organizations to be more public with their data, it asked for organizations to openly solicit and respond to feedback and incorporate citizen ideas into operations similar to open innovation in the private sector. Many programs grew out this initiative.
Not only did they find five winning start-ups, they also were able to reduce program costs by ~90% and achieve 17x the impact of their previous programs.
One such program was the Department of Energy Sunshot initiative which had a goal of making solar cost-competitive by the year 2020. To meet this goal the team launched the first Sunshot Catalyst challenge in 2014 and asked the crowd first for the most pressing problems, and then the most valuable solutions to those problems. The Department of Energy selected the top ideas for rapid prototyping that would be pitched as competitors in a demo day. At demo day, a panel of judges would award $500,000 in cash prizes to launch these revolutionary new solar solutions. Not only did they find five winning start-ups, they also were able to reduce program costs by ~90% and achieve 17x the impact of their previous programs.
Many of the advantages illustrated by the Sunshot open government initiative were the same as the advantages for private companies using open innovation: better ideas, lower costs, faster time to market, and a viral component. So maybe the purposive requests for feedback on public challenges is similar to the requests for collaborative open innovation.
To learn more about open government and how it’s making organizations of all sizes more innovative, download this infographic. What do you think? Is open government the public version of open innovation?
By Rob Hoehn
Rob Hoehn is the co-founder and CEO of IdeaScale: the largest open innovation software platform in the world. Hoehn launched crowdsourcing software as part of the open government initiative and IdeaScale’s robust portfolio now includes many other industry notables, such as EA Sports, NBC, NASA, Xerox and many others. Prior to IdeaScale, Hoehn was Vice President of Client Services at Survey Analytics.