More and more firms are taking the route towards Open Innovation, i.e. applying more rigor to find relevant but yet-unknown innovation partners and co-innovating with them. To achieve this, they define where they want to be open and where not and apply one or the other approach to find new partners (e.g. technology scouts, proprietary innovation networks and entering a R&D cluster). Additionally, In order to increase the absorptive capacity of their organizations, they re-align structures and processes and embark on culture change programs that develop a “Not Invented Here” mind-set into a “Proudly found And Commercialized Here” one.
However, many firms discover along in their search for unknown co-innovators that in different countries potential innovation partners react differently when they are approached by an Open Innovator. There seem to be some cultural differences at work. A recent study provides three key insights.
StrategyOne recently conducted an international study for General Electric to produce what GE calls the “GE Global Innovation Barometer”. In the last years, GE has opened up its innovation management and integrated quite a number of collaborative approaches. A prominent example is GE’s ecomagination challenge. In fact, in a number of dimensions GE can be seen as a global benchmark as I pointed out in a recent publication.
GE issued the study to better understand how innovation is changing and how social expectations regarding innovation are shifting. In the study, 1,000 senior executives from 12 countries were interviewed in order to analyze perceptions around innovation challenges, to gain insights on current drivers and barriers to innovate and to identify best practices from innovation champions. The countries covered included (in alphabetical order) Australia, Brazil, China, Germany, India, Israel, Japan / South Korea, Saudi-Arabia / UAE, Sweden and USA. All of the executives interviewed were directly involved in their company’s innovation processes and at VP-level or above. The study touched quite a number of aspects. In this article, I will focus on Open Innovation issues.
To summarize the three key findings regarding attitudes towards Open Innovation: A vast majority of the executives interviewed (approval rates ranging from 66 to 86 per cent) believe that
- the way firms are innovating will be totally different from the past,
- innovation is about partnerships more than the success of an organization alone and that
- innovation will be driven by SMEs and a combination of players,
but there are some significant country-specific variations to be found. To be more precise, the country-specific drill-down is as follows:
1. Three out of four executives believe that the way firms are innovating in the 21st century will be totally different than the way they have innovated in the past. Almost every Indian executive (94%) agreed to this thesis. The lowest support for this statement was found in Sweden (still a remarkable 54%) and Germany (60%).
2. 86% of the executives interviewed think that 21st century innovation is about partnerships between several players more than the success of an organization alone. The highest approval rate was found in Saudi-Arabia and Germany (92% and 90%), the lowest one in Israel (76%).
3. Only 19% of the executives believe that innovation in the next 10 years will be driven by large companies. On an international scale, two out of three executives assume that innovation will be driven by SMEs or a combination of different players. Large-company driven innovation is mainly seen in countries that have a state-directed development strategy such as China or Saudi-Arabia / UAE. Speaking about Open Innovation, meaning innovation driven by SMEs or a combination of players, the most bullish countries are Germany (81% of interviewees) and Australia (80%). This assessment is to a large extent based on the assumption that more than ever before, SMEs and individuals can be as innovative as large companies. On average, three out of four executives support this statement with a maximum of 94% in Brazil and a minimum of 53% in japan / South Korea. Germany is in this respect par with the international average.