Open Innovation Model - MIT ID Innovation
                     Introduction To Open 
Innovation Model
MITID Innovation
The open innovation model first came into 
light in 2003 when Henry Chesbrough 
introduced it to the world. Chesbrough felt 
the need to diversify knowledge and 
perspectives within a firm and use this to 
help innovate new dynamics. This model 
brought a unique stir in firms and 
companies, and the vibrations of the stir 
still reside in the worldwide market.
What is an Open Innovation 
Model?
An open innovation model is a model for the 
company's business management that 
promotes innovation and collaboration with 
other companies and individuals. This 
collaboration helps to break the fixed 
mindset of the employees in that company 
and invites talented individuals there.
A company can implement open innovation 
practices through communication methods 
like collaborating with two or more 
companies, organizing research chairs in 
universities and colleges, exhibiting 
crowdsourcing competitions and innovation 
ecosystems. Companies like Samsung, Lego, 
Quirky, Mozilla, Facebook, and many more 
have already laid down amazing examples of 
open innovations that companies and firms 
can refer to for inspiration.
Types of Open Innovations
Globally, there are two types of open 
innovations:
Inbound Open Innovation:
Inbound open innovation is when a 
company uses external sources and 
expertise to create, select, acquire, and 
internalize ideas. The company analyzes 
ideas and perspectives from its external 
environment and modifies them as per their 
requirements.
Outbound Open Innovation:
Outbound open innovation is when a 
company uses joint ventures and spin-offs 
to publicize its internal ideas for external 
sources to analyze and use. When a 
company feels that its internal ideas may 
be of no use to them, it practices outbound 
open innovation.
Advantages of Open Innovation 
Models Over Closed Innovation 
Models
Before understanding the advantages of 
open innovation, you should know the 
structure of a closed innovation model and 
the issues they face.
A closed innovation model does not allow 
the interference of external ideology and 
perspectives while developing products and 
services. The companies that follow closed 
innovation models prioritize the number of 
projects they initiated, the volume of 
resources they own and have generated, 
and how much they have invested in 
innovation. Such companies own big 
research departments to generate more 
internal ideas.
Companies following the closed innovation 
models often face repetitive issues like 
incomplete internal technical knowledge, 
ideas not reaching the market, and not 
changing resources and budgets. The 
speed of innovation is quite low as the 
ideas need a lot of rework internally, 
which, in turn, creates a low productivity 
rate. All these factors lead to a low 
success rate of 20-30%.
Advantages
The basic advantage of open innovation is 
that the companies practicing this model 
get in touch with external sources, which 
help them understand the technical 
inventions and trends from a different 
perspective. Such companies may have 
smaller research departments, but the 
quality of ideas generated in them is far 
better.
Since companies following the 
open innovation model use both internal 
and external knowledge, the innovation 
and productivity rates increase 
exponentially, making the success rate 
soar. Stats show that 50.4% of companies 
have realized that technology disruption 
has a positive impact on them.
However, companies should ensure that 
they have control over what information to 
share and publicize. Revealing crucial 
information may lead to losses. Also, there 
should be a proper way to utilize external 
information, or else there may be 
problems with the internal perspectives.
About MIT ID Innovation
Find the best and most 
diverse innovation courses at MIT ID 
Innovation. Choose the perfect online 
course you need from a long list, starting 
from building digital brands to business 
model innovations. Boost your knowledge 
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Conclusion
MIT ID Innovation Programme curates 
knowledge and experiences that 
challenge the very paradigm of evolution. 
And that's why we have set out to define 
the future of industries, communities, 
cities and ecosystems. MIT ID Innovation 
offers the best Design Thinking and 
Innovation Courses in India. 
We’d love to 
hear
from you.
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