A brief history of Open Innovation
For starters, what is Open Innovation? The simplest definition is innovating with partners by sharing the risks and rewards.
And the Wikipedia definition of Open Innovation goes something like this — ‘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 interfirm cooperation in R&D.’ But I think we can go further beyond the 1960s.
Henry Chesbrough is widely credited to have popularized the term ‘Open Innovation’. Corporate Open Innovation & VC strategy is rapidly gaining mainstream adoption as a key part of the overall strategic growth plan, it is a good time to go back and understand the history of open innovation.
As, history can help us understand the present, predict the future I have four stories from the past to share which might help you understand the transformational role Open Innovation can play.
The First Story:
One of the earliest Open Innovation Challenges in modern history is ‘The Longitude Act 1714’ launched by the Parliament of the United Kingdom to offer monetary rewards to any innovator who could find a simple and practical method for the precise determination of a ship’s longitude with 0.5-degree accuracy.
Early ocean navigators had to rely on dead reckoning, based on calculations of the vessel’s heading and speed for a given time (based on intuition) to determine longitude which was inaccurate on long voyages and some of these voyages ended in tragedy.
The European nations needed navigational accuracy for increasing their oceanic voyages. John Harrison, a clockmaker, was one of the very first winners of this open challenge to be rewarded with £23,065. Leonhard Euler the influential physician and mathematician was also the later recipient of the award under this challenge.
The way to interpret this story is that the — fundamental thinking from the first principles of entrepreneurship and innovation, looking at challenges from the very basics of analysing and identifying the innovation challenge statements is the key to solve them.
The Second Story:
Seeking a better way to feed his troops, in 1795 Napoleon launched an innovation challenge that changed the way people eat to this day.
During that era, food was preserved by drying, smoking, or pickling. But those options weren’t practical for feeding a large army a variety of food, not to mention that those preservation practices made the food taste bad. Napoleon offered 12,000 French francs to anyone who could devise a new method to preserve food for transport.
A confectioner and chef in Paris named Nicolas Appert began experimenting inspired by the wine in corked bottles, Appert placed food inside glass jars reinforced with wire and then corked and sealed the jar with wax. The jars were wrapped in canvas and boiled until Appert deemed the food sufficiently cooked. Appert successfully canned fruit, vegetables, soups, marmalades, dairy products and juices. He had developed the same basic technology still used to can foods — the method involving heating, boiling and sealing food in airtight glass jars.
Throughout our human history, competition has spurred artists, athletes, scientists and engineers to strive for new heights. Incentivised Open Innovation Challenges have proved to spur technological innovation.
The Third Story:
The first modern air conditioner was invented in 1902 by Willis Carrier through an Innovation Challenge.
It all started when Willis, then a consulting engineer at Buffalo Forge Co tried to solve a challenge at Sackett & Wilhelms multicolour printing plant. The problem was that the ink misaligned with the expansion and contraction of the paper stock due to humidity which created a serious quality issue, waste, and productivity loss within the company.
On behalf of his employer the Buffalo Forge Co, Carrier started to experiment with cold water flowing through heating coils and airflow to cool the air down to the desired dew point temperature. The compressor was introduced later in 1903 to meet the demands of the first full summer of operation. And thus, modern air conditioning was born.
Carrier’s invention not only helped the printing industry but Rubber, Confectionary, Textile, Bakery etc industries as well. He later went on found Carrier Corporation the American giant.
Open Innovation has led to the birth of an empire here.
The Fourth Story:
The now omnipresent Scotch tape was invented as a result of an internal innovation challenge by Richard Drew who then worked for a small sandpaper company called Minnesota Mining and Manufacturing (3M).
Today 3M sells enough tapes to circle Earth 165 times.
In the 1920s, the popular two-tone paint job was a headache for automotive painters. The two-tone look was created by painting the car one colour, applying a barrier of some sort to the painted portion, and then painting the next section. Automotive shops would glue newspapers over the already painted sections or taping, to prevent paint transfer. This technique often left a sticky residue on the paint that was difficult to remove and at times, the entire paint job was redone.
Richard often overheard painters complain about this and took this as a challenge to create a new kind of tape that would create a seal that wouldn’t let paint get through and also come off clean without leaving any sticky residue that ruined paint finish.
Thus Scotch tape was born. Later 3M encouraged its engineers to spend 15 % of their work hours on passion projects.
Today, startups have proven to outperform the incumbents when it comes to commercializing novel technologies or innovative solutions, creating new product categories and unlocking the growth potential in markets that were ignored. I do believe that this is the age of Open Innovation to unlock its full potential where multibillion-dollar companies will partner with startups to co-create.
Co-creation through Open Innovation will be the new superpower.
