HEPTech Workshop on Open Innovation Introduction to the

HEPTech Workshop on Open Innovation Introduction to the Open Innovation Model: What, why and trend B. Denis – Bucharest 7 th October 2013

• The Open Innovation model • Trends and benefits • Open? Content B. Denis – EC DG JRC Unit A 4 / CERN KT group

The open innovation model B. Denis – EC DG JRC Unit A 4 / CERN KT group

Research Development Innovation B. Denis – EC DG JRC Unit A 4 / CERN KT group

License in Buy Cross-license Sell License out Open Innovation: The new imperative for creating and profiting from technology, H. Chesbrough 2003 Open innovation B. Denis – EC DG JRC Unit A 4 / CERN KT group

Increasing role of Intellectual Property Increasing role of Public Research Open Innovation B. Denis – EC DG JRC Unit A 4 / CERN KT group

Buy Industry PP institute CERN and HEP Community B. Denis – EC DG JRC Unit A 4 / CERN KT group

License out Collaborative R&D Knowledge transfer B. Denis – EC DG JRC Unit A 4 / CERN KT group

Trends and benefits B. Denis – EC DG JRC Unit A 4 / CERN KT group

Survey Report Executive survey on open innovation 2013 H. Chesbrough, US Berkerley S. Brunswicker, Fraunhofer Institute for Industrial Engineering Emailed survey on open innovation to senior executives at the headquarters of more than 2840 large and stock market listed firms, in Europe and US, with revenues annually in excess of US$250 million and more than 1000 employees Managing open innovation in large firms B. Denis – EC DG JRC Unit A 4 / CERN KT group

“… the purposive use of inflows and outflows of knowledge to accelerate innovation in one’s own market, and expand the use of internal knowledge in external market respectively. ” Definition B. Denis – EC DG JRC Unit A 4 / CERN KT group

Source: Managing Open Innovation in Large Firms, H. Chesbrough, S. Brunswicker, 2013 100 Average = 78 80 60 40 20 40 % 55 % 80 % 69 % 82 % 83 % 86 % 91 % Manufact. (mediumhigh tech) Whosales, trade & retail Manufact. (hightech) 0 Manufact. (low-tech) Finance, Insurance, Real Estate Services Transp. Communi. Electric, gas & sanitary Mining & constructi on Manufact. (mediumlow tech) Adoption of open innovation across different industries B. Denis – EC DG JRC Unit A 4 / CERN KT group

Source: Managing Open Innovation in Large Firms, H. Chesbrough, S. Brunswicker, 2013 IP in-licensing Customer & consumer Co-creation Contracted R&D services Specialized open Innovation intermediaries Inbound Crowdsourcing Publically funded R&D consortia Idea & start-up competitions Supplier innovation awards University research grants Informal networking Direction Participation in standardization (public standards) Joint-venture activities Spin-offs Outbound Corporate business incubation Selling market-ready products Donations to commons or nonprofits IP out-licensing Pecuniary Financial flows Non-pecuniary* Modes of open innovation B. Denis – EC DG JRC Unit A 4 / CERN KT group * Without full compensation

Source: Knowledge Networks and Markets, OCDE STI Policy Papers, No 7, 2013 Prospective knowledge Existing knowledge Disembodied IPR-based mechanisms: • IP licensing • IP rights pooling agreement • Sale of assignment • Franchise agreement • Know-how contract Sourcing solutions: • Service and consultancy purchase agreement • Consultancy services • Research service Embedded knowledge transactions: • Transfer of rights to IP and other knowledge-based capital through M&A • Acquisition of equipment • Material / data transfer agreements Co-development: • Co-development programmes • Research joint venture • Research alliances • Private-public partnerships • Secondments • Hiring of R&D personnel • Network membership agreement Type of knowledge B. Denis – EC DG JRC Unit A 4 / CERN KT group

Source: Managing Open Innovation in Large Firms, H. Chesbrough, S. Brunswicker, 2013 Customer and consumer co-creation 4. 43 Informal networking 4. 38 University research grants 4. 19 Publically funded R&D consortia 3. 82 Contracting of external R&D service providers 3. 73 1 2 not important Importance (inbound practices) B. Denis – EC DG JRC Unit A 4 / CERN KT group 3 4 5 6 7 highly important

Source: Managing Open Innovation in Large Firms, H. Chesbrough, S. Brunswicker, 2013 Idea and start-up competitions 3. 71 IP In-licensing 3. 37 Supplier innovation awards 2. 66 Crowdsourcing (unknown problem solvers) 2. 64 Specialized services open innovation intermediaries 2. 34 1 2 not important Importance (inbound practices) B. Denis – EC DG JRC Unit A 4 / CERN KT group 3 4 5 6 7 highly important

Source: Managing Open Innovation in Large Firms, H. Chesbrough, S. Brunswicker, 2013 Internal employees 5. 54 Customers 5. 17 Universities 4. 88 Suppliers 4. 51 Indirect customer or final customer 4. 30 Public research organizations 4. 22 1 2 3 4 5 6 Importance of open innovation partners not important B. Denis – EC DG JRC Unit A 4 / CERN KT group 7 highly important

Source: Managing Open Innovation in Large Firms, H. Chesbrough, S. Brunswicker, 2013 Entrepreneurs and start-ups 3. 82 Contracted R&D service providers 3. 82 External consultants 3. 67 Competitors 2. 54 Restricted communities 2. 47 Open (unrestricted) communities 2. 13 1 2 3 4 5 6 Importance of open innovation partners not important B. Denis – EC DG JRC Unit A 4 / CERN KT group 7 highly important

Source: Managing Open Innovation in Large Firms, H. Chesbrough, S. Brunswicker, 2013 Establishing new partnerships 5. 42 Exploring new technological trends 5. 35 Identifying new business opportunities 4. 84 Accelerating time to complete R&D 4. 67 Mitigating risks of innovation projects 4. 24 Identifying new business opportunities 3. 96 Reducing R&D costs per project Strategic objectives B. Denis – EC DG JRC Unit A 4 / CERN KT group 3. 65 1 2 not important 3 4 5 6 7 highly important

Source: Managing Open Innovation in Large Firms, H. Chesbrough, S. Brunswicker, 2013 On balance, firms take more “freely revealed” information from others than they provide to others. Firms are “nettakers”. Pecuniary aspects B. Denis – EC DG JRC Unit A 4 / CERN KT group

Source: Managing Open Innovation in Large Firms, H. Chesbrough, S. Brunswicker, 2013 Share of external innovation contributions for R&D projects 4. 39 Cost/benefit of innovation partners 4. 38 Number of innovation partners 4. 10 Revenue from results of open innovation launched within a time period 3. 82 Budget invested in open innovation projects 3. 59 Number of new technology areas identified each year 3. 59 1 Measuring open innovation B. Denis – EC DG JRC Unit A 4 / CERN KT group 2 highly dissatisfied 3 4 5 6 7 highly satisfied

Source: Managing Open Innovation in Large Firms, H. Chesbrough, S. Brunswicker, 2013 Number of patent filed and granted 4. 39 Cost for inward licenses 4. 38 Patent utilization ratio 4. 10 Percentage of ideas funded 3. 82 Revenue from outwards licenses 3. 59 1 Measuring open innovation B. Denis – EC DG JRC Unit A 4 / CERN KT group 2 highly dissatisfied 3 4 5 6 7 highly satisfied

Source: Managing Open Innovation in Large Firms, H. Chesbrough, S. Brunswicker, 2013 50 40 30 20 44. 7 % 10 15. 4 % 0 18. 5 % 3 4 9. 23 % 4. 62 1 2 highly dissatisfied 5 7. 69 % 6 7 highly satisfied Satisfaction with open innovation B. Denis – EC DG JRC Unit A 4 / CERN KT group

Open? B. Denis – EC DG JRC Unit A 4 / CERN KT group

Open Innovation Open Source Open Science Open Access B. Denis – EC DG JRC Unit A 4 / CERN KT group

o. pen |ˈōpən| adjective 1 allowing access, passage; not closed or blocked up open 2 exposed to the air or to view; not covered 3 officially admitting customers or visitors; available for business 4 frank and communicative; not given to deception or concealment 5 freely available or accessible; offered without restriction 6 with no restrictions on those allowed to attend or participate Definition B. Denis – EC DG JRC Unit A 4 / CERN KT group

• Innovation jointly developed by different contributors available royalty free to anyone and without significant restrictions on how they are to be used. • Possible restriction is that derivative work also has to be provided on the same basis. • Examples: Open source software, Open source hardware Open = 5. freely available or (source code) accessible; 6. with no (significant? ) restrictions on those allowed to attend or participate. Open source B. Denis – EC DG JRC Unit A 4 / CERN KT group

The Sociology of Science, R. Merton, 1973 Priority system Norms: - Originality Communalism Universalism Disinterestedness Skepticism Incentives Sharing results Cumulativeness Quality of research Open = 4. frank and communicative; 5. freely available or accessible; 6. with no restrictions on those allowed to attend or participate. Open Science B. Denis – EC DG JRC Unit A 4 / CERN KT group

• The practice of providing unrestricted access via the Internet to peer-reviewed scholarly research. It is most commonly applied to scholarly journal articles, but it is also increasingly being provided to theses, book chapters and scholarly monographs (Wikipedia) Open = 5. freely available or accessible; Open Access

? ? o. pen |ˈōpən| adjective 1 allowing access, passage; not closed or blocked up open 2 exposed to the air or to view; not covered 3 officially admitting customers or visitors; available for business 4 frank and communicative; not given to deception or concealment 5 freely available or accessible; offered without restriction 6 with no restrictions on those allowed to attend or participate Open innovation B. Denis – EC DG JRC Unit A 4 / CERN KT group

Thank you… B. Denis – EC DG JRC Unit A 4 / CERN KT group