An increasing number of companies are practicing open innovation by relying on external sources of technology (note: in this Chapter the terms “Accessing External Technology” and “Open Innovation” or “OI” will be used interchangeably). The driver for this trend, as described in “The Reciprocity Advantage”, is the squeeze caused by ever-tightening margins and disruptive forces. Open Innovation offers the potential solution to these problems through nontraditional partnerships as a path to large-scale growth. This has been advocated and described by such authors as Henry Chesbrough in “Open Business Models”, Thomas Friedman in “The World is Flat”, and Govindarajan and Trimble in “Reverse Innovation”.

P&G’s Connect and Develop Heritage

The concept of Open Innovation is not new. For example, P&G proudly touts its “Connect & Develop Heritage”, shown in the figure, as being over 150 years old. As another example, IBM too has been on a decades old journey towards “Collaborative Innovation” as shown it the other figure.

IBM’s Collaborative Journey