What Are Open and Closed Innovation?

In today’s technology age, competition and informatics conditions are in a transformation. Businesses are also keeping up with this transformation by changing and improving their business methods. The concepts of R&D and innovation emerged in this direction. Starting from the concept of innovation, the concept of open and closed innovation has taken place in companies.

In this article:

– What is open innovation?

– What is closed innovation?

We will answer your questions together.

What is Closed Innovation?

Closed Innovation is based on the belief that solutions can emerge from existing internal sources. Ideas often come from project managers and leaders. Because of these characteristics, it is necessary to ensure that the best talent (researchers, technicians, experts, etc.) is recruited and retained, which is often very expensive.

There is a prevailing belief that it is necessary to present the best ideas to lead the competition. The winner is the person who first brings the innovation to the market. The process from generating ideas to development and marketing takes place exclusively within the company.

Innovation place = in-house

Therefore, it is impossible to go outside. Innovations are improved only within clearly defined company boundaries. Know-how, technology, processes, and intellectual property are under the control of the innovative company.

Advantages of Closed Innovation

• It offers an open, internally designed structure.
• Legal compliance and intellectual property issues are less.
• “First to market” ideas have a higher chance.
• A tighter focus is possible.

Disadvantages of Closed Innovation

• It may lose the focus of others in the industry.
• The process is slow in incorporating external research and approaches.
• It can increase the working hours of others.
• Limited by internal budgets, payment required for all work.

What is Open Innovation?

Open innovation is a structure that uses both internal and external resources to develop new products and approaches. This ranges from promising academic researchers to employees at other companies.

Innovation place = inside and outside the company

Advantages of Open Innovation

• Its scope is wide.
• Offers greater access to research.
• It follows other approaches in the industry more closely.
• Can reduce costs by finding other people’s research.

Disadvantages of Open Innovation

• It is more difficult to control and be the first to enter the market.
• More complex legal and intellectual property issues arise.
• As the committee expands and new research is incorporated, too many problems are faced.

Open Innovation seeks the best wherever it may be. It provides knowledge-based imports and exports to improve and accelerate their own innovations. It encourages the exchange of ideas and experiences beyond company boundaries. Organizations leverage their best talents and look for reinforcements in the market (universities, consultants, business partners, etc.).  They make maximum use of internal and external ideas. The leadership of the competition isn’t about presenting the best ideas, it’s about making the most of the ideas that come up.