Open innovation is a term used to promote an information age mindset toward innovation that runs counter to the secrecy and silo mentality of traditional corporate research labs. The benefits and driving forces behind increased openness have been noted and discussed as far back as the 1960s, especially as it pertains to inter-firm cooperation in R&D. Use of the term ‘open innovation’ in reference to the increasing embrace of external cooperation in a complex world has been promoted in particular by Henry Chesbrough, adjunct professor and faculty director of the Center for Open Innovation of the Haas School of Business at the University of California, who articulated a modern perspective in his book Open Innovation: The new imperative for creating and profiting from technology.
Open Innovation, also known as external or networked innovation, is focused on uncovering new ideas, reducing risk, increasing speed and leveraging scarce resources. With a better understanding of “what is out there”, a company is able to lower risk by combining external capabilities with internal innovation resources. The old question of “Why reinvent the wheel?” clearly applies, as Open Innovation enables a company to connect with someone who has already developed the technology in need or who is further along the development path.