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What open innovation brings across Africa and Europe...And how to systematise it

What open innovation brings across Africa and Europe... And how to systematise it

In the framework of the Africa Europe Innovation Partnership, case studies were undertaken into various modes of innovation, showcasing practical applications in the field of cooperation in and between the two continents. Below we present an introduction regarding the concept of open innovation as well as illustrations of its application. 

  • Three types of open innovation

The term open innovation has been coined by Henry W. Chesbrough in 2003 to describe a new paradigm of innovating. It details the “shift from a closed paradigm to an open paradigm […] as the main element that fosters organizational performance”.  According to H.W. Chesbrough (Chesbrough H. , 2003) it means that “valuable ideas can come from inside or outside the company and can go to market from inside or outside the company as well.” It contrasts starkly with the traditional way of innovating, where all knowledge is kept inside the company and moves in a linear way from the laboratory to the market. Similarly, co-creation relates to bringing stakeholders into an organisation or company to think about (shared) challenges.

With an abundance of knowledge available, in the form of “public scientific databases and online journals and articles, combined with low-cost Internet access and high transmission rates”, knowledge is much more available than in the past.  This larger spread of knowledge has increased substantially the innovation development speed and logically also induced a change on how organisations organise their innovation development processes. In the ‘traditional’ setup companies organised innovation internally in order to develop and strengthen their competitive position. A strategy that proofed to be too lengthy and expensive in a world where knowledge develops quickly, and as a consequence products and services based on that knowledge may proof to be outdated quickly. In order to increase speed companies started to tap into knowledge outside their ‘firm boundaries’, either to improve the R&D for products and services in the current market or to develop products and services together with partners for new markets.  

Chesbrough’s innovation model describes sequential innovation processes and distinguishes activities related to Research and Development, which are characterised by a different scope. Research projects within the innovation model tend to have a broad scope which in the Development phase can be narrowed down to activities addressing the current market or a new market. The biggest difference between open and closed innovation, which Chesbrough described as two extremes on a spectrum, is the openness of the firm boundaries. 

Chesbrough together with other researchers has elaborated the innovation model through the years. Different process stages have been added where openness of innovation is relevant, and in 2014 (Chesbrough H. &., 2014)  the interactions along firm boundaries have been typified as [1] Outside in, [2] Coupled and [3] Inside out (fig. 1). 

Figure 1 Open innovation approaches: Outside-in, Coupled and Inside-out

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Source: Chesbrough H. et al. (2014).

  • Organise for open innovation

The co-creation variables as described by Lee et al (2018) have formed the basis for the research questions in order to be able to compare how co-creation was organised in the three open innovation paradigms as defined by Chesbrough et al. To compare open innovation and co-creation projects the research questions were structured across four elements (related to Project, Context, Process and Result) as shown in the figure below. 

Figure 2 Comparison of open innovation & co-creation projects 

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Source: Technopolis Group. (2020).

  • Case studies

Outside in 

Researchers at universities have become more focussed on the needs ofindustry, in part to seek additional funding for their research. Ways to access external knowledge are for example hiring staff from universities or alternatively funding research at universities. An organisation could also look out for interesting activities at start-up companies (Chesbrough H. , 2003).According to Chesbrough, the concept of open innovation alters the research function in organisations, expanding the role of internal researchers to include not just knowledge generation, but also knowledge brokering and thereby changing the career paths of researchers (Chesbrough H. , 2003)

Example outside in: digital platform Saira

Launched in 2019, SAIRA was born out of WAITRO to foster international collaboration in research and development and to tackle the United Nations’ Sustainable Development Goals. By enabling promising partnerships, SAIRA bridges the gap between impact investors and investment opportunities. Since the launch, the user bases have grown and based on their experiences some features of the SAIRA platform were extended. Based on the principle that good matchmaking is essential for running fruitful open innovation projects the extended features are oriented towards increasing the likelihood of a good match.

Coupled 
Trott and Hartmann argue that reasons for strategic collaboration, involving for example customers, suppliers or competitors, have long existedand that the closed innovation model is misleading in representing companies undertaking all R&D by themselves. They see the following ways of entering strategic collaboration: licensing, supplier relations, outsourcing, joint venture, collaboration (non-joint ventures), R&D consortia, industry clusters, and innovation networks (Trott & Hartmann, 2009). Furthermore, Trott and Hartmann argue that the open innovation model disregards literature on technology transfer and absorptive capacity, which highlights the importance of R&D capacity in benefiting from outside technology. 

Example coupled: collaborative research funding platform

In the second case study we analysed strategic collaborations in more detail by analysing a collaboration within a research consortium formed for a Horizon 2020 call. It concerns a consortium of partners in Europe as well as partners from Africa, America and Asia, that has engaged in a partnership to deliver the Horizon2020 “SOILGUARD” proposal (project duration would be roughly 3 years). The aim of the research project is to study the dynamic of degradation of different types of soil and effect of fertilizers and pesticides. 

The immediate output of the collaboration so far has been a research proposal for Horizon2020, as well as contacts gained through the formulation of the consortium, led by a Spanish R&D firm. The researcher from Cameroon was content with the possibility of gaining practical and useful data through its role in the research consortium. In Cameroon, no thematic funding opportunities exist, according to the Cameroonian interviewee, and funding through the university is only sporadic. The involvement of the researcher from Cameroon had been quite limited in the development stage of the project and rather (narrowly) focussed on implementation. Therefore, although the project did offer the opportunity to engage in research, some opportunities, such as a mutual formulation of the research proposal, seem to have been missed. 

Inside out 

In the first versions of Chesbrough’s closed innovation model spillovers were deemed a cost and judged to be essentially unmanageable. In the evolved conceptualisations the spillovers were transformed into inflows and outflows of knowledge that can be purposively managed. “Firms can also create channels to move unutilized internal knowledge from inside the firm to outside the firm or other organisations in the surrounding environment” (Chesbrough H. &., 2014). Chesbrough has argued that the important step is to develop and implement the open innovation approach which will deal with “opening up the business model” in order to enable companies to be “effective in creating and capturing value” (Hossain, Islam, Sayeed, & Kauranen, 2016).These processes tend to occur more often downstream in the innovation processes, building on knowledge already tested in order to (fully) capitalise on its value, in current and new markets.

Example inside out: physical platform - startup hub

Bongohive started as a collaboration platform based in Zambia. The co-founders, all enthusiastic programmers, sought to address the gaps they experienced working within the local technology industry leading to a lack of coordination, difficulty in tapping into available skills and hampered productivity. BongoHive has evolved to assist scalable start-ups of any background by enhancing skills, accelerating growth, strengthening networks, increasing collaboration, providing a forum for ideas exchange and reducing the barriers to entrepreneurship. 

The aim of the project was to provide matchmaking (service) between organisations to foster collaboration and enhance innovative capacity. Bongohive developed a programme for a Zimbabwean corporate that wished to tap into ‘fresh’ business solutions from outside for their freshly build trendy & inviting office space. But actually they needed -although they were not fully aware- a programme to accelerate internal innovation processes, on which Bongohive advised them. Interestingly enough, an extensive budget was available for refurbishing a floor, significantly less buy in was at hand for a process that required investment and commitment of time.

  • Recommendations

Much of what is done within innovation processes is trial and error. In the framework of international/intercontinental collaboration, as well as in the context of more virtual collaboration during the pandemic, the concept of open innovation deserves further study and development.

As the theoretical framework used in this analysis shows there are four elements (project, context, process, result) that every open innovation project shares to some extent. This makes it also easy to share experiences and learn from them.

Outside in

Open innovation processes start with the right match between demand and supply. Ideally profiles would be easily available with the desired level of information describing each actor. Building that from scratch is likely to be too expensive. However, a lot of data is already available, although not always easily accessible. For policy makers working on stimulating policies, to foster innovation collaborations between actors and across sectors, an important step is to evolve open data platforms, as has been done with Horizon2020 participants. 

Coupled

Coupled open innovation processes tend to bring greater benefits at large if the partners involved can ‘level’ fairly easily. If the difference is too big, it will hamper ease of communication and hence the ease of sharing knowledge. In their programmes, policy makers could encourage for the collaboration to occur within the formulation of the research aim and approach, in order to ensure that all relevant knowledge and expertise is combined. Furthermore, deliverables could be formulated to invite actors to evaluate not only their results but also the collaboration process, which will lead to stronger partnerships (SDG 17).

Inside out

Corporates prove to have a catalyst function when it comes down to scaling knowledge. In order to incentivise this tax benefits could be designed to lower the costs for initiating open innovation projects.

 

The AEIP case studies have been presented during the WAITRO 50 year anniversary innovation summit. To learn more about the event please go here: https://africaeurope-innovationpartnership.net/waitro50-virtual-innovation-summit