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Glossary
Open innovation
Open innovation is Henry Chesbrough’s model of innovation in which firms use external as well as internal ideas and paths to market — purposefully managing inflows and outflows of knowledge across organizational boundaries.
Why it matters
Closed R&D monopolies are rarer when useful knowledge is widely distributed. Open innovation reframes strategy around partnerships, licensing, corporate venturing, platforms, and ecosystems — not only internal labs.
Distinguish open innovation from open-source licensing. Open source is a specific approach to software rights and collaboration. Open innovation is broader: a firm may practice open innovation through acquisitions, joint ventures, or inbound IP without releasing open-source code — and open-source participation is only one possible mechanism.
Example (enterprise): A manufacturer runs an inbound challenge with startups for predictive maintenance, pilots two, and licenses one algorithm while keeping core control systems internal — inbound open innovation without converting the stack to open source.
Mechanisms
- Scan and ingest external knowledge and technologies that fit strategic problems (inbound).
- Route unused internal ideas outward through licensing, spinouts, or platforms when value is higher outside (outbound).
- Design governance for IP, incentives, and partners so boundary-crossing learning compounds rather than leaks aimlessly.
Boundaries
- Open innovation ≠ open-source licensing; open source is one possible mechanism, not the definition.
- Open innovation ≠ outsourcing R&D thoughtlessly; it requires deliberate knowledge and IP strategy.
- Running a single hackathon does not establish an open-innovation system.
Related topics
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