Critically discuss what is meant with open innovation With reference Essay - 1

Critically discuss what is meant with open innovation With reference to a specific firm, discuss the extent to which open innovation plays a role in this firms innovation process - Essay Example ges, entrepreneurs and investors are seeking to restructure and adopt new strategies that can overcome barriers to entrance into a marketplace for their products/services. Prior to acceptance of open innovation, companies were focused on self-reliance and methods of internalized research and development (R&D), which characterize the idea of closed innovation. This centralized approach in the current era has proved challenging for most businesses who need to meet consumers need and thrive in the market. It is the current strategy that SMEs and LSC/MC have adopted to stay abreast and competitive in the market. According to Chesbrough, Vanhaverbeke and West, open innovation is â€Å"the use of purposive inflows and outflows of knowledge to accelerate internal innovation, and expand the markets for external use of innovation, respectively† (2014, p. 4). It emphasizes that useful ideas and knowledge are not limited within an organization, but distributed across other organization as well as in the market labour force. Clearly, it’s true there exist smarter people who are not the organization’s employees, but with innovative ideas that give a firm its competitive advantage. Similarly, a company’s internal R&D expertise may be insufficient and may require to be harnessed through external knowledge if the organization needs to be successful. The concept stresses on the need for individuals firms to appreciate and leverage external knowledge and incorporate it w ith their internal capability. Open innovation (OI) is concerned with creation of knowledge through pooling of ideas and information that create value and give superiority to organizations. One, an organization’s R&D discoveries is fundamental to each organizations, hence cannot be disregarded. It is part of the knowledge/idea that an organization own. Second, other sources of knowledge/idea are in the labour force (some of who are sole proprietors or in partnership) or external firms with smart employees.