“Beyond Open Innovation: Leveraging Social Capital”

Transforming Lives & Services -Challenges of Living in a Digital World

Mark Dames - BT DesignDavid Robson - Scottish EnterpriseMadeline Smith - Scottish EnterpriseTom Tumilty - Scottish Government

Contents

• Open innovation • The role of technology in enabling open

innovation• Organising models for open innovation• Policy implications for government, business &

society• Conclusions

The World is Flat

“. . . innovation is no longer individuals toiling in a laboratory, coming up with some great invention.

It’s not an individual …

Sam Palmisano, Chairman and CEO, IBM

… It’s individuals

... It’s multidisciplinary

… It’s global

… It’s collaborative.”

Collaborate to Innovate

From Computer Networks to Social Networks

Transformation Built Around 3 Anchor Points

Technology Tools

Social bookmarks combine individual bookmarks, making it possible to identify common interests that drive recommendations or relevancy. Examples: Yahoo/del.icio.us, digg, connotea.org, BlinkList, Outfoxed.

Social tagging (folksonomies) lets users add metadata or labels to create more useful and natural classification schemes.

Examples: Flickr, LibraryThing, del.icio.us, Last.fm.

Content rating and reputation management lets participants rate other participants or content.Examples: Amazon, eBay, Epinions, Slashdot.

Likes/dislikes (taste sharing) aggregate opinions that can also drive recommendations, relevancy and quality.

Examples: StumbleUpon and Last.fm.

Prediction markets reward individuals who bet correctly on future outcomes.

Examples: consensuspoint, longbets.

Conversational interactions using blogs and wikis to encourage contribution, unplanned contact, feedback and continuous refinement.

Technological Organisation of Social Software

Communities as the Core Innovation Competency

“Citadels”

UncertaintyComplexity

Relative CertaintyPredictability

Command & ControlHierarchy

EmpoweredNetworks

Reference: Global Business NetworkReference: Global Business Network

Familiar and comfortable Experts, right answers, closure Clarity of structures/roles Advocacy; directives; power;

control Value chains; asset-oriented

Less familiar, less comfortable Strategic conversation, self-

organising Knowledge-creation, dilemmas,

openness Organic, fluid systems, porous

boundaries Value webs, relationship

oriented

“Webs”

Evolving Organisations – Building Capacity

Citadels Webs

Expertise triumphs Diversity trumps expertise

What you know matters Who you know matters

Take no risks - copyright, patent & protect

Judge the risk of releasing information against the return of gaining understanding

The goal is to agree The goal is to tap into those who agree and disagree

Improve ideas by applying more resources

Improve ideas by sharing them

Judge ideas by how they fit Judge ideas by how they differ

Relationship hierarchies Relationship networks

Innovation management Innovation cultivation

Expertise

Knowledge

Intellectual Property

Collaboration vs. competition

Development

Assessment

Relationships

Organising

Barriers are Cognitive rather than Intellectual

OpenInnov’n

Web 2.0

‘Long-tail’

Non R&D Innov’n

Wiki-nomics

You–tube

Usercontent

Leadusers

Un-usedTalents

WebCom’ities

Emerging technical and social trends

Effective support to ‘new’ innovation communities e.g.

‘excluded’ groups

‘Lead users’

Patients groups

Peer 2 Peer groups

‘Eco-concerned’

Social entrep’eurs

HiddenInnov’n

Democ-ratisation

Crowd-sourcing

Del.icio.us

Folk-sonomies

SemanticWeb

• What are effective business models?

• How to interface with networks and communities?

• How to monetise open relationships?

• How to harvest commercial value?

• How to harvest social value?• What new skills are needed?

Innovation

Innovation

Innovation

Innovation

Innovation

Innovation

Realising new value to customers and citizens – e.g.

. . . more opportunities

. . . better products

. . . better heath

. . . better information

. . . better communities

. . . better future

Policy ‘Gap’

Peer 2Peer

The Policy Challenge

Technical skills are a given. The challenge is to nurture behaviours and

business models that enable collective innovation.

- focus on cognitive barriers not just intellectual.

Innovation and growth require an ability to collaborate that must be deeply

embedded in the mindset, skillset and toolset of every organisation.

- firms that rise to the challenge will thrive. Those that ignore it, or fail to grasp its

implications, risk marginalisation and eventual extinction.

Accelerated by globalisation, innovation is increasingly an open,

collaborative process involving users, suppliers & organisations of all size.

- business and government need to develop new open innovation business models that

leverage emerging social and technological trends to harvest the resources of

competitors, suppliers, lead users, customers and citizens.

Conclusions

Thank You

mark.dames@bt.com