The Uses and Risks of Open Innovation
OVERVIEW: Current approaches to open innovation can be characterized in two general categories: open-boundary innovation and open-source innovation. Open-boundary innovation is designed to source new technology and concepts broadly without surrendering control of the innovation process, while open-source innovation is a more radical model that challenges fundamental assumptions about the nature of the corporation. The appropriate corporate response to open-source innovation is difficult to define, as the risks are unknown. However, as open-source movements gather steam, corporate innovators will need to consider whether and how to approach open-source innovation.
Lead-User Research for Breakthrough Innovation
OVERVIEW: The best companies often work closely with their customers to uncover needs and wants that can be translated into new or improved product or service offerings. The lead-user research method goes a step further, looking not only to the typical customer, but to those users whose needs and preferences lead the market. These lead users, as they are called, will modify products or use them in unforeseen ways to meet their needs. The lead-user research method was developed as a systematic way to mine the insights and innovations of these lead users. Since it was pioneered in the late 1990s, the lead-user method has evolved and grown. This paper offers an update on the use of the method and on adaptations to increase its efficiency using online search and communities as well as an overview of lessons learned from experiences on more than 20 lead-user projects.
Complexity, Network-Decisions And Alternative Risk Premia: Some New Theories Of Structural Change And Portfolio Decisions.
Structural Change is the basis for many decisions such as government fiscal and monetary policies, government interventions, corporate-expenditure decisions, corporate strategic decisions, portfolio management decisions in finance; household allocation decisions, etc.. Structural change in industries and national economies is increasingly more difficult to detect partly because of the growth and dominance of Complex Systems and “Networks” in modern industries and economies – such Networks and Complex Systems include GVCs (global value chains), retail store networks; franchising networks; internet networks; services networks; credit-chains in industries; online social networks; etc.. The relationship between Complexity and Structural Change is well established in the physics, applied math and economic dynamics literatures. Traditional definitions and modeling of structural change have erroneously focused on changes in labor, technological progress, market share, and or capital – which are grossly inadequate in the new economy and post- global financial crisis (as confirmed by changes in the global retailing and housing industries and other industries). Also the modeling of structural change seems to be constrained by the availability of data, and often omits the relationship between structural change on one hand, and globalization, financial stability and international financial contagion. This article: i) introduces the Operations Strategy Model of structural change, explains how it differs from the Lewis Model of Structural Change; and explains the often omitted relationship between operations strategy (of companies and government agencies) and structural change; ii) introduces other new Complexity-based models/theories of Structural Change in industries; iii) reviews the relationships among Operations Research, Complexity and Structural Change; iv) explains the symbiotic relationship between structural change on one hand, and economic growth, financial stability, financial contagion and globalization; v) discusses the significant gap between academic research and practice and explains some issues and factors that should be considered in the development and testing of structural change models; vi) explains how alternative risk premia can be generated from new models of Structural Change.