Our discussion the other day about the potential challenges and opportunities of open source innovation and collaboration made me think of a couple of Mckinsey Quarterly articles that came out last month: "Managing the Business Risks of Open Innovation" and "Wiring the Open Source Enterprise".
The key takeaway from these articles is the overwhelming trend towards open source innovation online and the fact that more traditional IP-oriented companies will either have to work harder to differentiate their 'core IP' or adapt to the model of more collaborative IP-free innovation. As we mentioned last session, the success of such efforts will depend on how users are motivated/incentivized and how strong the foundations are. The authors recommend a grassroots approach.
What I find most interesting is the analysis done on which industries will most likely adapt to and benefit from this new trend. The chart below provides some insight into a broad swath of different sectors possibly effected beyond just the obvious IT software development hub. I was actually surprised by what seem to me to be high-risk categories such as 'medical, precision and optical instruments' and 'coke, petroleum and nuclear fuel'. These beg the questions: how would one balance open innovation, quality control, and security in such categories? Bob Lewis, CEO of Communications Consulting in South Africa commented:
The key takeaway from these articles is the overwhelming trend towards open source innovation online and the fact that more traditional IP-oriented companies will either have to work harder to differentiate their 'core IP' or adapt to the model of more collaborative IP-free innovation. As we mentioned last session, the success of such efforts will depend on how users are motivated/incentivized and how strong the foundations are. The authors recommend a grassroots approach.
What I find most interesting is the analysis done on which industries will most likely adapt to and benefit from this new trend. The chart below provides some insight into a broad swath of different sectors possibly effected beyond just the obvious IT software development hub. I was actually surprised by what seem to me to be high-risk categories such as 'medical, precision and optical instruments' and 'coke, petroleum and nuclear fuel'. These beg the questions: how would one balance open innovation, quality control, and security in such categories? Bob Lewis, CEO of Communications Consulting in South Africa commented:
"...If something is “open,” who takes ultimate responsibility for its shortfalls, especially in a climate where even operational computers at power stations have been hacked?"Perhaps this calls for an even more innovative process or model of responsibility-sharing to allow open source innovation to flourish in a safe and collaborative environment.
The chart below shows analysis based on the following three questions posed to industry leaders:
- Do specialized firms offer proprietary solutions within certain layers of my industry’s value chain?
- Do integrated firms seek to cut development costs in my industry by drawing on open technologies to substitute for these proprietary solutions?
- Are the underlying technologies complex—consisting of so many bits and pieces that a significant number could inadvertently infringe on proprietary IP held by specialized firms?
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| Source: https://www.mckinseyquarterly.com/Managing_the_business_risks_of_open_innovation_2911 |
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