Article written by: Dr. Liban Varetti
Open Innovation has been around for a very long time, but in Italy it has been recently discovered. This is the ability of companies to integrate through production synergies or skills, the innovation produced by small companies and start-ups, in the processes of SMEs and large companies. Today, as well as being a fashion term, Open Innovation has become a necessity for all companies that want to emerge in their markets, or compete with others on an equal basis.
The innovation of start-ups, the suggestions of collaborators and employees, the productive flexibility of small companies can be instruments of competitive advantage for those SMEs that manage to acquire them and integrate them synergistically in their business models.
As is known to businessmen, companies grow for processes defined as “internal” or “external”. The first definition “growth by internal lines” commonly means a growth that takes place exclusively using resources internal to the company; in the second case, “growth by external lines”, we refer, instead, to the possibility of being able to incorporate resources external to the company and use them for growth (usually other companies that can be acquired).
In the classic meaning, this terminology refers to a dimensional growth expressed in terms of structure (additional plants or factories) or the acquisition of different markets through the acquisition of another company; the classical concept takes into consideration mainly physical elements.
With the start of the digitalization of industrial processes and the entry into the c.d. Economy 4.0, the concepts of growth for internal or external lines have expanded to include in this case also intangible assets such as know-how, skills and of course patents.
Today when we talk about growth by external lines, we are not exclusively referring to acquisitions of other companies to become owners of plants or factories, but also to the acquisition of new technological solutions and / or skills; or the creation of new business lines using internal assets, which previously were not known how to enhance, thanks to the contribution of external expertise.
In Anglo-Saxon terminology this process is known as “open innovation” a neologisimo created by Henry Chesbrough, who exhibited it for the first time in a book whose title was “Open Innovation: The New Imperative for Creating and Profitting from Technology”.
We start talking about Open Innovation and then overseas over a quarter of a century ago, thanks to the matured awareness of companies’ growing difficulty in finding new solutions internally for problems related to: (i) high research costs; (ii) the randomness of the research with the consequent failures; (iii) the difficulties in particular in larger companies to think in an innovative way with respect to now sclerotic schemes (“it has always been done this way”, etc).
The acquisition of such an awareness has led to a growing willingness of companies to approach the Open Innovation processes that do not imply the exclusive possession of technical skills and know-how, and to accept the fact of using inventions and solutions of which they are not the only exclusive owners. To bring this kind of awareness to maturity was partly also the affirmation of “open” solutions and software that proved to be a valid business model for both developers and software producers, as well as end users of these products.
Open Innovation today does not mean exclusively, or only, the acquisition of a proprietary start-up of an innovative know-how or product. This is undoubtedly one of the forms of Open Innovation, but it is also taking advantage of productive synergies with start-ups (or smaller, but more flexible companies), sharing knowledge from research institutes and universities, developing ideas of employees and collaborators. Up to the point of creating ad hoc company departments to be separated from the parent company to allow it to develop innovation independently so as not to be tied to the processes and the operational and mental patterns of the company.
Open Innovation has become a necessity for companies also induced by the “speed of business”, especially in Anglo-Saxon worlds, where people (especially the most gifted) often move from company to company during their growth path making their long-term permanence within a single company impossible.
Therefore, in the Open Innovation model there is space for both small businesses, start-ups and SMEs or large companies. The former represent the engine of innovation and a flexible production capacity that is easily achieved