Closed innovation

Before being open, innovation happened in closed environments often performed by individuals, scientists or employees. However, the expression closed innovation was coined later and not before the paradigm of open innovation became popular by works of Henry Chesbrough[1] and Don Tapscott et Anthony D. Williams [2]

Closed Innovation was described in March 2003 by Henry Chesbrough, a professor and executive director at the Center for Open Innovation at UC Berkeley, in his book Open Innovation: The new imperative for creating and profiting from technology[1]. The concept is related to user innovation, Know-How Trading and mass innovation and subject of recent research projects [3]


Origin of Closed Innovation

The paradigm of closed innovation says that successful innovation requires control and ownership of the Intellectual property (IP). A company should control the creation and management of ideas. Roots of closed innovation go back to the beginning of the twentieth century when universities and governments were not involved in the commercial application of science. Some companies therefore decided to run their own research and development units. The entire new product development (NPD) cycle was then integrated within the company where innovation was performed in a "closed" and self-sufficient way.

The period between the end of World War II and the mid 1980s was the area of closed innovation and internal R&D. Many R&D departments of private companies were at the leading edge of scientific research. The setup of internal R&D was perceived as a strong barrier for potential new competitors, as large investments had to be done to be able to compete[4]

Often, closed innovation paradigms are set equal to the “Not Invented Here” syndrome sometimes referred to by decision makers: everything coming from outside is suspicious and not reliable. However, there are ongoing research projects [5] and emerging companies [6] that investigate the pros and cons of closed innovation versus open innovation.

Comparison between Open and Closed Innovation

Closed Innovation Principles Open Innovation Principles
The smart people in the field work for us. Not all the smart people in the field work for us. We need to work with smart people inside and outside the company.
To profit from R&D, we must discover it, develop it, and ship it ourselves. External R&D can create significant value: internal R&D is needed to claim some portion of that value.
If we discover it ourselves, we will get it to the market first. We don't have to originate the research to profit from it.
If we create the most and the best ideas in the industry, we will win. If we make the best use of internal and external ideas, we will win.
We should control our IP, so that our competitors don't profit from our ideas. We should profit from others' use of our IP, and we should buy others' IP whenever it advances our business model.

adapted from[7]

From Closed innovation to open innovation

In the 29th Information Systems Research Conference in Scandinavia[8] in 2006 the transition path from closed innovation to open innovation was formally described. As a result it was found that when seeking to increase customer loyalty and attracting new customers, companies needed to increase customer involvement in research and design (R&D) operation. Brokering and social networking processes lie at the heart of the open innovation paradigm. The technology brokering process model by Hargadon and Sutton (1997)[9] describes the shift towards open innovation.


  1. ^ a b Chesbrough, H.W. (2003). Open Innovation: The new imperative for creating and profiting from technology. Boston: Harvard Business School Press
  2. ^ Wikinomics: How Mass Collaboration Changes Everything.
  3. ^ Strategic management and open innovation at ETH Zurich
  4. ^ adapted from
  5. ^ Strategic management and open innovation at ETH Zurich
  6. ^ Innocentive, ninesigma, Starmind
  7. ^ adapted from -
  8. ^ 29th Information Systems Research Conference in Scandinavia
  9. ^ Hargadon, Andrew; Sutton, Robert I. "Technology brokering and innovation in a product development firm." Administrative Science Quarterly, 1997

Wikimedia Foundation. 2010.

Look at other dictionaries:

  • Innovation — heißt wörtlich „Neuerung“ oder „Erneuerung“. Das Wort ist vom lateinischen Verb innovare (erneuern) abgeleitet. Im allgemeinen Sprachgebrauch wird der Begriff unspezifisch im Sinne von neuen Ideen und Erfindungen und für deren wirtschaftliche… …   Deutsch Wikipedia

  • Innovation Publishing — Infobox Company company name = Innovation Publishing company company type = Comic publisher company slogan = foundation = 1988 founder = David Campiti key people = location = Wheeling, West Virginia industry = Comics homepage = Innovation… …   Wikipedia

  • Closed world assumption — The closed world assumption (CWA) is the presumption that what is not currently known to be true, is false. The same name also refers to a logical formalization of this assumption by Raymond Reiter. The opposite of the closed world assumption is… …   Wikipedia

  • Open innovation — Although the idea and discussion about some consequences (especially the interfirm cooperation in R D) date back at least to the 60s, open innovation is a term promoted by Henry Chesbrough, a professor and executive director at the Center for… …   Wikipedia

  • Open Innovation — is a term promoted by Henry Chesbrough, a professor and executive director at the Center for Open Innovation at Berkeley. The concept is related to (but distinct from) user innovation, cumulative innovation and distributed innovation.The central… …   Wikipedia

  • Open Innovation — Der Begriff Open Innovation bzw. offene Innovation bezeichnet die Öffnung des Innovationsprozesses von Organisationen und damit die aktive strategische Nutzung der Außenwelt zur Vergrößerung des Innovationspotenzials. Das Open Innovation Konzept… …   Deutsch Wikipedia

  • Open innovation in financial services — Broadly we can divide between two sectors in an economy. Where wealth producing sectors are related to manufacturing, the service sector tends to be wealth consuming. Both sectors depend on innovation. Innovation capability and its management are …   Wikipedia

  • Comparison of open source and closed source — Open source the source availability model used by free and open source software (FOSS) and closed source are two approaches to the distribution of software. Contents 1 Background 2 Commercialization 2.1 Proprietary software …   Wikipedia

  • Greater Manchester Transport Innovation Fund (TiF) — The Greater Manchester Transport Innovation Fund (TiF) is a bid by the Greater Manchester Passenger Transport Authority (GMPTA) to secure funds from the UK Government s Transport Innovation Fund (TIF). GMPTA seeks funds of up to £3 bn which will… …   Wikipedia

  • Software Innovation — can be understood in (at least) two ways:1. Software Product Innovation the creation of novel and useful software programs.2. Software Process Innovation the introduction of novel and useful ways of developing software.Innovation should be… …   Wikipedia

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.