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Open Innovation Roland July 25, 2023
Open Innovation
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Open Innovation

Open innovation comprises a range of strategies that aim to enable bidirectional knowledge flows through access to intellectual property (IP). Openness, in this context, does not refer to the absence of IP rights; rather, it emphasises the importance of making an active use of such rights, whether by exploiting IP assets in a company’s products, licensing IP rights to third parties on commercial terms, committing to fair, reasonable and non-discriminatory licensing terms, or providing royalty-free access. By combining these different strategies, each business can develop an open innovation journey that is specifically tailored to its needs and objectives.

Our research has identified potential barriers to open innovation, which include concerns over competitiveness, risk of infringement, lack of IP expertise within SMEs, and legal costs for the drafting, conclusion and enforcement of IP licensing agreements. However, we have found that, within a circular economy context, the existence of long-term relationships, characterised by mutual trust and close collaboration, and the need for technological innovation provide the perfect environment for the reciprocal licensing of proprietary IP assets and the co-development of innovation, without many of the concerns that normally affect open innovation commitments. Thus, it appears that circularity and open innovation enable and strengthen each other.

In the Open Innovation report, we advanced suggestions to help businesses develop suitable open innovation strategies, starting by focusing on building IP awareness within the company, before identifying suitable assets for open innovation and the corresponding strategies to transform them into outflows. These outflows need, in order to support a commitment to open innovation, matching inflows, capable of generating strong incentives for businesses to increase their level of openness. Overall, balanced open innovation flows strengthen the businesses’ capacity to innovate, while providing routes to commercialise and exploit their IP – a win-win situation that reduces internal R&D costs while boosting innovation for all the businesses concerned.

Even where commitments to open innovation exist, a key barrier to their success is the lack of easy discoverability. Our Whitepaper on open innovation dissemination examined this particular issue, focusing on knowledge dissemination platforms, which provide the means for third parties to identify existing open innovation assets and access them. While most knowledge dissemination platforms currently focus on collaboration, catering for open innovation strategies that rely on royalty-free licensing or public domain, we suggested that an ideal knowledge dissemination platform should instead focus on discoverability and access, providing suitable IP management tools, including standardised licensing templates that support a wide range of open innovation strategies. It is only by making open innovation assets discoverable and accessible that we can fully enable balanced knowledge flows.

Knowledge flows

Supporting Welsh business

Throughout the project, we have had opportunities to discuss our research with Welsh businesses, supporting them in identifying new ways to manage their IP and engineer suitable open innovation journeys. These discussions highlighted the importance for companies to develop a knowledge-based view of their business, and allowed us to explore how little interventions, such as the use of IP registers or the development of internal IP policies, can truly transform a company’s attitude towards open innovation. In this sense, we found that any form of IP support is generally beneficial for companies, as it allows a more realistic understanding of risks and rewards, and encourages more proactive and positive attitudes towards IP.

Future Research

Future research is still needed to understand how businesses can effectively develop open innovation journeys in the absence of specific support, such as the one provided by our work package in Circular Revolution. Academic research has generally focused on more theoretical views on the matter, disregarding the necessity of developing actual tools and instruments for businesses to start their journey into open innovation. The role of this approach in the circular economy also deserves greater attention, as this project has provided the first comprehensive look at the relationship between open innovation and circularity. In particular, it would be important to collect data on existing open innovation commitments in circular economy contexts – some of which may certainly come, in the future, from Riversimple and its supply chain, as well as from the many businesses supported by Circular Revolution during the project.

Wales appears to be the perfect environment for further research into these themes, both for the close-knit nature of its business community and for the support to circular economy provided by Welsh Government and local and national stakeholders. From an open innovation perspective, the ingenuity of Welsh businesses is well-known – breaking the barriers that generally prevent Welsh businesses from engaging in open innovation could yield great opportunities to enhance and strengthen their competitiveness worldwide. In this sense, Wales is in an ideal position to support further research, and be a leader in, circularity in the knowledge economy.