Navigating the Innovation Gap: Knowledge Sharing is the Future

April 21, 2017 Sara Audisho

Ever read “We Share EVERYTHING!” by Robert Munsch as a kid? Great read. What's greater is its timeless lesson. When it comes to innovation in business, it turns out that navigating the innovation gap has a lot to do with sharing.

We’ve roughly outlined innovation so far and we’ve given a 10/10 to open innovation. Let's talk about the latter.

Quick recap: Henry Chesbrough breaks open innovation down to a science (the man wrote an entire book about it). Still, the idea is quite simple: open innovation occurs when there’s a flow of knowledge between businesses in a market. When companies exchange ideas with one another – through partnerships and through the open marketplace – everyone wins.

When innovation is more participatory, decentralized and distributed, businesses reap huge benefits. They reduce costs, increase profits, produce faster and better, and create new sources of revenue for themselves.

What does that mean in more exciting terms? Your parents were onto something when they told you that sharing is caring.

It’s not as if companies haven’t been sharing useful information. Chesbrough insists that for the marketplace to be where it is today, companies have had to work together. That’s a no brainer.

Where the problem lies is in an outdated business model. The traditional model entrenched in our marketplace prioritizes in-house R&D. Knowledge is gathered at the bottom, refined each time it’s sent upstairs, and then gets the thumbs up at the top, making it to the market. 

Open innovation is a lot messier. Knowledge isn’t a single stream, flowing in one direction, in the same house. In a market of open innovation, knowledge flows in and out, internally and externally, all the time.

Sounds daunting. How do you know what to look for externally? What knowledge of yours do you let go to the outside? This is where changing the business model comes in. If companies change their business model to facilitate open innovation, then they will reap all of its benefits.

Chesbrough says that once companies’ business models are adapted (once they let go of the old assembly line model and embrace knowledge sharing as a way of doing business), then they need to look outward for ideas and technologies that fit their needs. Any ideas and technologies developed in-house that they don’t need, they send out into the marketplace. 

Think about all of the knowledge that is being produced internally at each company. Over 2% of the world’s GDP is dedicated solely to research and development. Now think about all of the excess information that is being discarded by companies because it just doesn’t apply to them. But what if it applied to another business? Another industry?

There’s a colossal opportunity here for a robust knowledge market: Let me help you solve your problem and you can help me solve mine. Firstly, doing so is just a much more efficient use of time and money. But secondly, and cue the big picture here, it's collaboration at its finest. Open innovation is mutually beneficial collaboration that leads to faster problem solving.

Take Samsung and Google, and the Google Play Music example. Two competitors that decided it was probably smarter to collaborate. Samsung often creates software that parallels that which Google builds into Android devices. Prime example? Samsung’s Bixby AI working alongside Google Assistant. However, and cue the moment of greatness here, for Samsung's new Galaxy S8 phones, it will be adopting Google Play Music as its default music experience. No need to compete if both can solve a shared problem in a way that’s mutually beneficial, right?

So no big deal, but open innovation is already happening. It’s been budding for years amongst hundreds of companies. But there’s still a heck of a lot more to do.

So who’s next? Let's roll up our sleeves and get to it.


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