How to Capture All the Advantages of Open Innovation

In this HBR IdeaCast, Alison Beard interviews Henry Chesbrough, the originator of the term "open innovation," about its current state and challenges. Chesbrough defines open innovation as a collaborative process of sharing knowledge across organizational boundaries, contrasting it with vertical integration. While open innovation has become widespread, Chesbrough points out the "exponential paradox" where technological advancement hasn't translated into broader economic productivity and wage growth. He attributes this to underinvestment in innovation infrastructure, particularly in disseminating and absorbing new ideas. The discussion covers issues such as companies focusing more on bringing outside ideas in rather than sharing their own unused ideas, the difficulties in commercializing university research, and the bottlenecks in crowdsourcing. Chesbrough also touches on the role of government in enabling innovation and provides advice for business leaders on how to effectively implement open innovation to achieve more with fewer resources by sharing costs and risks.