Innovation and Open Innovation

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<p>3M Case Studies</p> <p> Damian GordonInnovation and Open Innovation</p> <p>Invention and InnovationIdea</p> <p>Invention and InnovationTechnology</p> <p>Idea</p> <p>Product</p> <p>Invention and InnovationTechnology</p> <p>Idea</p> <p>Business</p> <p>Product</p> <p>Invention and InnovationTechnology</p> <p>Idea</p> <p>Sustainable Business</p> <p>Business</p> <p>Product</p> <p>Invention and InnovationTechnology</p> <p>Idea</p> <p>Sustainable Business</p> <p>Business</p> <p>Product</p> <p>Invention and InnovationTechnology</p> <p>Idea</p> <p>Diffusion of Innovations Developed by Everett Rogers</p> <p>Diffusion is the process by which an innovation is communicated through certain channels over time among the members of a social system.</p> <p>2345RANKING MUNDIAL DE USURIOS DE INTERNET16 Adoption of Innovation Step Process</p> <p>Adoption of Innovation over time</p> <p>Adoption of Innovation over time</p> <p>Adoption of Innovation over time</p> <p>2345RANKING MUNDIAL DE USURIOS DE INTERNET16 5 Critical Factors Influencing Innovation Diffusion</p> <p>InnovationFollowing Joseph Schumpeters 1934 book The Theory of Economic Development: An Inquiry into Profits, Capital, Credit, Interest, and the Business Cycle innovation is distinguished from invention by the fact that innovation is usually applied successfully in practice.</p> <p>Innovation - DiffusionWhen innovation occurs, innovations may be spread from the innovator to other individuals and groups. This process has been proposed that the life cycle of innovations can be described using the 's-curve' or diffusion curve. The s-curve maps growth of revenue or productivity against time. </p> <p>Innovation - DiffusionIn the early stage of a particular innovation, growth is relatively slow as the new product establishes itself. At some point customers begin to demand and the product growth increases more rapidly. New incremental innovations or changes to the product allow growth to continue. Towards the end of its life cycle growth slows and may even begin to decline. In the later stages, no amount of new investment in that product will yield a normal rate of return.</p> <p>Innovation - DiffusionThe s-curve derives from an assumption that new products are likely to have "product Life". i.e. a start-up phase, a rapid increase in revenue and eventual decline. But in fact the great majority of innovations never get off the bottom of the curve, and never produce normal returns.</p> <p>Innovation - DiffusionInnovative companies will typically be working on new innovations that will eventually replace older ones. Successive s-curves will come along to replace older ones and continue to drive growth upwards. In the figure above the first curve shows a current technology. The second shows an emerging technology that current yields lower growth but will eventually overtake current technology and lead to even greater levels of growth. The length of life will depend on many factors.</p> <p>Open InnovationOpen innovation is a paradigm that assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as the firms look to advance their technology. The boundaries between a firm and its environment have become more permeable; innovations can easily transfer inward and outward. </p> <p>Open InnovationThe central idea behind open innovation is that in a world of widely distributed knowledge, companies cannot afford to rely entirely on their own research, but should instead buy or license processes or inventions (e.g. patents) from other companies. In addition, internal inventions not being used in a firm's business should be taken outside the company (e.g., through licensing, joint ventures, spin-offs)</p> <p>Open InnovationIdea GenerationSelectionExecutionCommercialization</p> <p>Open InnovationIdea GenerationSelectionExecutionCommercialization</p> <p>Open InnovationIdea GenerationSelectionExecutionCommercialization</p> <p>Open InnovationIdea GenerationSelectionExecutionCommercializationDevelopNew ideas</p> <p>Open InnovationIdea GenerationSelectionExecutionCommercializationIdeas and innovations from inside the organisationpatents and innovations from outside the organisationDevelopNew ideas</p> <p>Open InnovationIdea GenerationSelectionExecutionCommercializationIdeas and innovations from inside the organisationpatents and innovations from outside the organisationDevelopNew ideas</p> <p>Open InnovationIdea GenerationSelectionExecutionCommercializationIdeas and innovations from inside the organisationpatents and innovations from outside the organisationSelectSuccessfulIdeasDevelopNew ideas</p> <p>Open InnovationIdea GenerationSelectionExecutionCommercializationIdeas and innovations from inside the organisationpatents and innovations from outside the organisationSelectSuccessfulIdeasDevelopNew ideasTechnology LicensingIN</p> <p>Open InnovationIdea GenerationSelectionExecutionCommercializationIdeas and innovations from inside the organisationpatents and innovations from outside the organisationSelectSuccessfulIdeasDevelopNew ideasTechnology LicensingIN</p> <p>Open InnovationIdea GenerationSelectionExecutionCommercializationIdeas and innovations from inside the organisationpatents and innovations from outside the organisationSelectSuccessfulIdeasPrototypes andProductionDevelopNew ideasTechnology LicensingIN</p> <p>Open InnovationIdea GenerationSelectionExecutionCommercializationIdeas and innovations from inside the organisationpatents and innovations from outside the organisationSelectSuccessfulIdeasPrototypes andProductionIP LicensingINIPLicensingOUTDevelopNew ideasTechnology LicensingIN</p> <p>Open InnovationIdea GenerationSelectionExecutionCommercializationIdeas and innovations from inside the organisationpatents and innovations from outside the organisationSelectSuccessfulIdeasPrototypes andProductionIP LicensingINIPLicensingOUTDevelopNew ideasTechnology LicensingIN</p> <p>Open InnovationIdea GenerationSelectionExecutionCommercializationIdeas and innovations from inside the organisationpatents and innovations from outside the organisationSelectSuccessfulIdeasPrototypes andProductionIP LicensingINIPLicensingOUTProduct broughtto marketDevelopNew ideasTechnology LicensingIN</p> <p>Open InnovationIdea GenerationSelectionExecutionCommercializationIdeas and innovations from inside the organisationpatents and innovations from outside the organisationSelectSuccessfulIdeasPrototypes andProductionIP LicensingINIPLicensingOUTProduct broughtto marketTechnologySpin-offsDevelopNew ideasTechnology LicensingIN</p> <p>Crowdfunding</p> <p>The Status QuoVenture capital difficult to find for smaller requirementsDebt finance hard to come byBusiness angels limited investmentsTypically a syndicate each investing 10k - 100kWhat if there was a way to have say 5000 angels each investing 10?What if anyone could become a business angel?</p> <p>Crowdfunding is an approach to raising the capital required for a new project or enterprise by appealing to large numbers of people for small donations</p> <p>Crowdfunding examplesKiva.org - $325m funding raised, &gt;777,000 lenders, ~800,000 entrepreneursKickstarter.com &gt;24,000 projects funded, &gt; $250m pledged to-date, 2m people have pledged</p> <p>Crowdfunding</p> <p>Three Types of CrowdfundingDonations, Philanthropy and Sponsorship where there is no expected financial returnKickstarter, IndieGoGo, RocketHub, Faithfunder, CharitySub, ChipIn, CatchafireLending/BorrowingKIVA, RateSetter, Funding CircleInvestment in exchange for equity, profit or revenue sharingProfounder, AppBackr, PeerBackers, Quirky, GrowVC</p> <p>Fast Growing Retail BusinessFunding Circle is a UK clearinghouse for semi-anonymous lenders and borrowers (bank)Primarily for expanding existing small businessesVariable loan rates/term Average return 8.3%Funding Circle does the credit check, rates risk Lender amounts small $40 million in transactions to date</p> <p>Common Crowdfunding MistakesAsking for Too Much or Too LittleA Bad Promo Video: too long, not clear on the benefits, no humour, no excitementNo Clear Itemized BudgetPoor or Overpriced PerksFailing to Promote Your Project to Your Social Media NetworkFailing to Inspire - No Good Story or HookGiving Up Too Early</p> <p>*************************************Kiva - Despite being only 39 months old it has raised over $87m, funding over 213,000entrepreneurs. They have over 500,000 lenders worldwide.Ebbsfleet United Football Club was bought by approximately 26,000people each paying 35 - 910,000Zopa - have over 300,000 members and total disbursals have reached 50m.</p> <p>*****</p>