From the Author
On the value of Innovation and Business Models:
"Innovation is often expensive, but consider how expensive it would be to stop innovating. The key is to make innovation more effective by extending it to business models.... Business model innovation must be the job of every senior manager."
On unused ideas and technology:
"Unused ideas abound in many companies. When Procter and Gamble surveyed all the patents it owned, it determined that about 10 percent of them were in active use in at least on P&G business, that the remaining 90 percent of patents had no business value of any kind to P&G."
On the human cost of unused ideas and technology:
"....many of the ideas people work on are never deployed in the market. It is reportedly quite common for a pharmaceutical researcher to never see one of her projects ship to market, even over a thirty year career, because the attrition rate of compounds is so high. This is an enormous waste of human talent and must take a toll on any person's initiative."
On Closed Innovation models vs. Open Innovation models:
"In the Closed Innovation model, companies had to take their new discoveries to market themselves for two reasons: first, because they would obtain more money that way; and second, because there weren't many other companies that knew enough to use the technology successfully. Intermediate markets for innovation in the Closed Innovation system were sparse. In an Open Innovation world, where useful knowledge is widespread, there are many companies with many potential technologies that might be utilized in a company's business model. No company can hope to exploit all of the many ways a new technology might be used, so Open Innovation companies typically license technologies liberally to other companies. This creates a secondary market for innovations."
On Dell and Wal-Mart:
"...companies like Dell and Wal-Mart do not invest much of their own money in product innovation. Each company, however, is a leader within its industry on process innovation, which is at least as important to future success as product innovation."
From the Back Cover
Hank Chesbrough's writings on open innovation are some of the most important, insightful ideas about innovation and creating new growth that have ever been written. This book is another crucial cornerstone in this body of understanding, explaining how executives can operate successfully in the new, open innovation landscape. I strongly recommend it for anyone concerned with innovation and growth.
--Clayton M. Christensen, Harvard Business School, author, The Innovator’s Dilemma
To develop and sustain business excellence, a company must continuously innovate in the very way it creates business value in the marketplace—its business model. To create the most value, the business model must become more open. Open Business Models shows how to create a more open business model, explains the barriers that may arise, and describes how to overcome them.
-- Dr. Irving Wladawsky-Berger, Vice President of Technical Strategy and Innovation, IBM
Innovation in the business model is one of the most profound ways to differentiate a business and turn the tables on competition. In Open Business Models, Henry Chesbrough rethinks the traditional approach to business from the ground up. This book should be read by anybody who wants to understand how to innovate in the 21st century global economy.
--Nathan Myhrvold, founder and CEO, Intellectual Ventures