Open the door to open innovation

The concept of open innovation—first put forward by theorist Henry Chesbrough in 2003—asserts that sharing ideas and collaborating, both internally and externally, delivers better outcomes. In practice, open innovation has rapidly become an engine of revenue growth and business performance. Organizations that embrace open innovation had a 59% higher rate of revenue growth compared to those that don’t.

But successful open innovation doesn’t happen in a vacuum. It requires deep engagement with broad ecosystems that enable open innovation. The results are telling. In our new survey of almost 2,400 executives around the world, open innovators with strong ecosystem engagement had a 58% revenue growth rate premium over organizations that pursue open innovation alone.

Organizations that embrace open innovation had a 59% higher rate of revenue growth.

An open operating model

Open innovation is not just another way of doing innovation. It constitutes a new operating model for organizations—one that harnesses the collective intelligence of employees, partners, vendors, and customers across the value chain in the pursuit of innovation and growth.

With open innovation, outcomes are achieved not by a single organization but through dynamic ecosystems. Ecosystems aren’t just a part of the innovation operating model—they define it. Openness allows organizations to tap into capabilities and resources from virtually anywhere inside and outside the organization, then orchestrate them into dynamic pairings and combinations to achieve and scale specific tasks or objectives. This orchestration is more effectively done through platforms.

56% of executives plan to increase their investments in innovation in the next 2 years.

Indeed, the most successful open innovators build and participate in platforms that enable them to work more effectively across their ecosystems, often encouraging others to participate as well. And platform participation is increasing exponentially as more and more enterprises recognize the importance of extending their organizations outward.

Successfully realizing value from platforms and ecosystems will require a change in how you view both risks and rewards. To encourage collaboration and co-creation with partners, your organization needs to accept less direct control over how it captures rewards within your ecosystems. You also have to accept a greater willingness to absorb risks. Today, 55% of organizations say they absorb most or all of their risks within their innovation ecosystems, compared to just 13% in 2019.

Perils and prizes: In innovation ecosystems, organizations are open to taking more risks—and realizing more rewards.

Download the report to learn how businesses can reshape their operations to make the most of open innovation.