Discussion Question- Open Market Innovation

FratBro23
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Business & Finance
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Question description

What is “open-market” innovation? How does it differ from other types of innovation? Melymuka (2002) explains the concept as originated by Darryl Rigby. Basically, it is a comprehensive system for increasing the flow of new ideas into and out of a business. It's like developing free-trade policies for a country. It can be differentiated from a other types of innovation tools. Joint ventures are just one of many tools for implementing open market innovations. Others include strategic alliances, in-licensing, out-licensing, mergers and acquisitions, etc. In-licensing is when you are licensing into your company an innovation from somebody else's business, and out-licensing is when you own the intellectual property but are giving other companies the right to use it. We're convinced that companies need to increase the flow of ideas into and out of their organizations.

Melymuka says that letting ideas flow out of the organization helps the organization. She uses the example of Bell South. She says:"Four years ago, BellSouth took a look at a billing system it had developed and found that even though it had been expensive to develop, it was not a major source of competitive advantage. They calculated that competitors would create similar systems and decided it would be better to license the system to competitors to maximize return on investment and create industry standards that would favor BellSouth development programs going forward."

Reference:Melymuka, K. (2002). Free Trade in Ideas. Computerworld36(42), 44.


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