Why Companies Should Have Open Business Models

摘要: Because of two trends ? rising R&D costs and decreased product revenues (due to shorter life cycles) companies are finding it increasingly difficult justify investments in innovation. Business models that embrace open innovation address both issues. The development reduced by the greater use external technology a firm?s own process. This saves time, as well money. And firm no longer restricts itself markets serves directly. Now participates other segments through licensing fees, joint ventures spinoffs, among means. These different streams income create more overall revenue from To partake fully benefits innovation, need develop ability experiment with their business models, ways them up. Building capability requires creation processes for conducting experiments assessing results. Although might seem obvious, many simply do not have such place. In most organizations, single person short CEO bears responsibility model. Instead, unit managers (who usually posted jobs just three years) tend take model granted. To understand how an organization can its model, author provides case examples IBM, P&G Air Products, operate industries vastly technologies products. Each used function very internally focused, closed each has since migrated is substantially open.