For a while we have witnessed several innovation initiatives that work under the assumption that innovation is the engine that powers the present and the future of economic and corporate development. This is partly true, given the creation of solutions to the greatest problems that humanity faces provides an opportunity to develop innovative organizations. Despite this, the application of the traditional conception of innovation is not giving us the expected results at the scale that we need them to.  

Innovation consists in the creation of something new, valuable (meaning that somebody wants and uses it) through the systematic application of science and technology. Innovation depends on context, it creates motion and action.  

So what is going on with traditional innovation? 

Mexico, as an example, is a county with many specialized initiatives, projects and programs that seek to boost innovation and entrepreneurship. Despite the effort and resources invested in these initiatives, it is still only 52nd in the Global Innovation Index and the prognosis does not indicate that this will change in the following years. Why is that? 

Innovation requires knowledge, science, technology, follow-up, tools; that is a lot of resources, many of which are expensive. Not every organization has access to these resources in large enough quantities to ensure the innovation cycle is complete. In fact, traditional innovation is out of reach of most organizations in developing economies which are small scale. 

In the Latin American context, over 93% of businesses are micro or small scale operations which only have resources to operate, survive, and only grow in limited cases. Innovation processes are, more often than not, out of reach. These businesses employ over 85% of the workforce and generate over 73% of GDP. When we look at these numbers, it’s easy to see that while traditional innovation can work and it is necessary, its impact in the economy and in social wellbeing is marginal at best because it is based only on what the biggest enterprises can develop and deliver. We need a new model to innovate. 

What is Open Innovation? 

In response to the need for a different model of innovation, Henry Chesbrough, an American academic, proposed a model at the beginning of this century in which companies and organizations collaborate to innovate together, sharing resources, co-creating solutions, and reaping the benefits of this process. This model is known as Open Innovation. 

In open innovation, organizations partner by sharing resources, meeting needs, jointly assuming risks, and collectively benefiting from the results. 

Open innovation requires organizations to collaborate within value creation networks, where they share the resources they have to generate value, similar to what occurs in ecosystems. This significantly reduces costs and makes the benefits of innovation, growth, and competition accessible to micro and small organizations. Open innovation has an impact on the most important productive and social sectors in the world. 

What Comes Next? 

Open innovation necessitates changes in thinking paradigms and business practices. It requires a collaborative mindset focused on common welfare, a mindset that is proving successful in economies such as those of Kenya, Nicaragua, Colombia, and Mexico. This type of innovation impacts the 93% of organizations that have historically been left out of the innovation game. 

However, for this to work, it is essential for the main actors in the ecosystems to activate in a coordinated manner to trigger what we refer to as ecosystems (which we will address in a subsequent article): we are talking about the government, universities, and business chambers. All of them are crucial for these initiatives to take off and be sustainable in the long term. 

Open innovation presents itself as a viable solution in the current environment: it is inclusive, seeks equity, and distributes benefits among the various actors in society: businesses, organizations, students, and citizens. Let us work to ensure that this idea continues to flourish.