Open Innovation versus Open Source

Recently, I joined opensource.com for a webcast about open innovation.

Based on the positive feedback from this webcast, we followed up with a conversation with regular opensource.com contributor Chris Grams and myself on the ways open source and open innovation are different and the things they share.

Collaboration & Sharing

CHRIS: In the open source world, we always come back to collaboration and sharing as key principles. These days, many organizations would say they have collaborative cultures (or aspire to, at least), but where the open source way really shines is in its ability to inspire people to collaborate beyond the boundaries of their own organization.

It strikes me that the open innovation world also encourages people to reach beyond the walls of their organization as well, but if I were to point out one key difference, it would be that in the open innovation world, collaboration is clearly transactional or even contractual. You give on the promise of receiving in return.

STEFAN: You are right about this. Big companies engage with open innovation because the combination of their internal resources and the external resources provides more innovation opportunities that they can feed their corporate engines with. They want to increase revenues and profits, and they definitely put this focus first rather than “just” trying to do good things.

In order for this to work in the big corporate world, which has not had 20 or more years of experience with open source, it becomes transactional and in some cases even contractual. This is how these companies are wired to do business and changes will take time.

It should be noted, however, that several of the open innovation leaders pay much attention on how to make innovation happen with a stronger focus on relationships rather than transactions.

Company vs. Community

CHRIS: Perhaps for me, the biggest difference between open source and open innovation is that the best open innovation efforts are usually run by one company trying to innovate by reaching outside its walls. The problem to be solved or the opportunity to be addressed is “owned” by the company running the open innovation project and “all roads lead to Rome” with the company at the center of all collaboration.

In an open source innovation project, the problem or opportunity itself is the central point of focus, so people and organizations all connect to each other rather than working through one central organization.

There are of course upsides and downsides to each. Giving up centralized control, required under the open source model, can be both a benefit and a hindrance. It hinders your ability to get done things done your way—you can no longer dictate the terms of the project completely. This can also be a benefit—if you are willing to consider that your way might not be the best way.

Of course for businesses in many industries, there are other complications that make it easier to embrace open innovation than open source, including intellectual property considerations, competitive dynamics, high product development or market entry cost, etc. For many types of businesses, an open innovation model is ultimately more realistic and accessible in the short term than an open source model would be.

STEFAN: I agree with you on this. Going back to my previous comments, I think most companies – and again outside the software industry – are simply not wired to do business in the open source way.

It will also be harder to convince other industries that open source is a model that can actually work outside software. Innovation and business managers in other industries don’t know very much about open source and there is a good chance that they view open source as somewhat inefficient and as an approach that takes too long time to create results in their current setup. This kind of knowledge on open source might even scare away “traditional” innovation and business managers.

Perhaps we have to ask ourselves the tough question: Can open source really work outside the software industry? Having spent some time on the intersection of open innovation and open source, I have to be honest and say that I just do not think so at the moment.

CHRIS: I think open source can work outside the software industry. But I would agree that it is incredibly difficult to change entrenched cultures in companies that have been doing things the old way for 50-100 years or more. Which gives new companies that can build an open source culture from scratch a huge advantage (I wrote more on this subject a few weeks back here).

Which is better? Open innovation or open source innovation?

CHRIS: Comparing open innovation and open source is a bit like comparing a screwdriver to a hammer—they are both great tools… for different sorts of jobs.

Having said that, I do feel like open source can be a more efficient model for getting more innovation faster in a community that shares a common problem or sees a common opportunity.

And open innovation is a more efficient model for creating innovation faster for a company that is focused on its own problem or opportunity and is unable, for whatever reason, to cede control.

STEFAN: I also see them as tools for different jobs – and different context. In general, I am a strong advocate for anything that encourages a more open approach so I believe both approaches are good, but I also believe that we are moving towards communities in many different ways so perhaps open source has an advantage for this reason. On the other hand, I think open innovation is more effective in the short term.

Perhaps we should just let open source develop further in the software industry and let other industries define their own versions of open innovation and make sure that they learn from each other.

It would be great to hear some perspectives from both communities on this.

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Stefan Lindegaard is a speaker, network facilitator and strategic advisor who focus on the topics of open innovation, intrapreneurship and how to identify and develop the people who drive innovation.