At the heart of open innovation is the belief that that in an environment with widely distributed knowledge, businesses will be more successful if they trade not only products and services in the traditional sense, but also their intellectual assets. This trade includes not only buying or licensing such assets from other businesses instead of relying entirely on their own research and development, but also trading their own innovations through licensing, sale, joint ventures or spin-offs.

As many businesses now operate in an environment where information can be transferred with ease, largely due to recent advances in technology and social mindsets, it often seems impossible to prevent such dissemination. For many companies the open innovation model may be the logical mechanism that will allow the business to take advantage of this phenomenon rather than trying to fight it. Companies such as Procter & Gamble and IBM are already actively promoting open innovation.

In order for Open Innovation to succeed it does require a totally different mindset and company culture than that of a traditional company.  A key step is the realisation that the business will need to rely on the expertise and skills of other businesses or individuals and that external research and development can create significant value, while internal research and development allows the company to claim some portion of that value. Essentially, these open innovation companies have recognised that their business can be more successful if it is based on a model that makes the best use of both internal and external ideas.

Intellectual property can be used as a form of currency for trading or licensing in the open innovation model. KeyIP is an example of an organisation that has been set up to assist in trading patents and provides a service akin to an estate agency or letting agency.

If you would like to know more about the open innovation model or if you think your invention could be exploited in countries that you don't have the time or resources to operate in, please contact Rupert Symons on +44 (0)845 270 4900 or by email at rjs@hepworthbrowne.com