11 06, 2013

[OIA Market Study 2013] Who Participates in Open Innovation: A Solver and Community Perspective on the Market for Open Innovation

By | 2018-06-14T06:47:09+00:00 Juni 11th, 2013|OI Market Study 2013, Open/User Innovation|


OIAS coverIn a series of postings, we introduce some key figures and results from
our 2013
OIA Study – A Market Report & Comparison
of more than 160 Open Innovation Accelerators (OIAs)
— intermediaries, brokers, platforms, and consultancies for open innovation
and customer co-creation.


OIAs build on the involvement of
a community.
OIAs connect clients through their communities with a
variety of external actors, most of them are new and unknown to the client
(this "looking out of the box" is exactly the value of open
innovation
).

OIA services differ
significantly regarding their community composition. In average, we find that OIAs have an existing pool of participants
(their "community") of 20,000 members. But OIAs specializing on
ideation or technical contests often have community of more than 100,000
members.

OIA graphic51
The general level of expertise of the community
significantly differs among the different services. OIAs offering technical
search services in form of technology scouting, for example, have access to
high level expert communities, while OIAs focusing on ideation and concept
generation often have a broad, very heterogeneous community of "average"
consumers.

From this pool, about
200 members finally join a
particular project
(in the case of contests, this number is 300). Again
methodological aspects of the services influence the total participant number.
Workshops have a natural limit for participants to be able to generate
meaningful output. 

OIA graphic52
To join the pool of
participants, prospective participants have to accept general terms and
conditions, but in general do sign not a formal contract. This is a core
difference of open innovation via OIAs compared to traditional forms of R&D
networks or alliances.

OIA graphic53
Our study clearly
shows that managers have to take large care when selecting an OIA.T the
composition in terms of expertise and heterogeneity of the community offered by
different OIAs is very heterogeneous and demands special attention – in the
end, the task have to fit the community.

We find a general
focus on applied sciences. Yet expertise background is influenced by project
targets. Services like technical search involve individuals with expertise
preferable in natural and applied sciences and less in social sciences or arts.
On the contrary community members for contests, e.g., design contests, or
market search are characterized by experience in the field of arts or social
sciences. Similar to the characteristic by background of expertise is the
characteristic by the level of expertise. Problem solving projects demand a
higher expert level than projects focusing on consumer insights.

 THIS IS THE LAST POST OF SELECTED FINDINGS FROM THE OIA 2013 STUDY.
Find all earlier postings here.

For the full picture, refer to The Market for Open Innovation: The 2013
RWTH Open Innovation Accelerator Survey
, with many more details, authored by Kathleen Diener & Frank Piller, 2nd
edition, May 2013. Lulu Publishing: Raleigh, USA

Check all options how
to get the study at study.open-innovation.com

6 06, 2013

[OIA Market Study 2013] Who purchases Open Innovation services? Non-profits and public agencies are coming up

By | 2018-06-14T06:47:12+00:00 Juni 6th, 2013|OI Market Study 2013, Open/User Innovation, Technologies & Enablers|

OIAS coverIn a series of postings, we introduce some key figures and results from
our 2013
OIA Study – A Market Report & Comparison
  of more than 160 Open Innovation Accelerators (OIAs)
— intermediaries, brokers, platforms, and consultancies for open innovation
and customer co-creation.

In our 2013 market study, we also investigated who is
using the services offered by the OIAs
. First, we find that clients are served
globally
, and at the same time, OIAs often have the opportunity to also search
and call globally for participation. The U.S., however, still is clearly
leading the OI field of applications.


OIA graphic41
 
 

Open innovation is not focused on special industries.
We were surprised by the breadth of industries covered by the OIA's client
lists. Especially the electronics industries are strong. Agriculture could
benefit from a larger attention for OI.

However, within all industries, clients from SMEs are still the
minority
. OI still is a game of global organizations with a dedicated
innovation management function.

Interestingly, we today find rather larger share of non-profit
organizations among the clients of the OIAs
. NGOs and clients from the public
sector are strongly increasing. This may be the outcome of recent "Open
government" trend.

 
OIA graphic42
OIA graphic43

For the full picture and many more details, including detailed profiles of 160 Open Innovation Service Providers, refer to The Market for Open Innovation: The 2013
RWTH Open Innovation Accelerator Survey
, co-authored by Kathleen Diener & Frank Piller, 2nd
edition, May 2013. Lulu Publishing: Raleigh, USA

Check all options how to get the study at study.open-innovation.com

28 05, 2013

[OIA Market Study 2013] Ideation contests dominate the Market for Open Innovation

By | 2018-06-14T06:47:15+00:00 Mai 28th, 2013|OI Market Study 2013, Open/User Innovation|


OIAS coverIn a series of postings, we introduce some key figures and results from
our 2013
OIA Study – A Market Report & Comparison
  of more than 160 Open Innovation Accelerators (OIAs)
— intermediaries, brokers, platforms, and consultancies for open innovation
and customer co-creation.

According to our research, service providers for open innovation
(OIAs), can be structred along two
fundamental principles:
(1) The kind of information required and (2) the
method to identify and initiate the collaboration with an external actor:

(1) The type of information searched by clients:

  • Market information is information about customer and market needs, i.e.
    information about preferences, needs, desires, satisfaction, motives, and etc.
    of the customers and users of a new (potential) product or service offering.
  • Technological information is information on (technological) solution
    possibilities, i.e. information about how to apply a technology to transform
    customer needs into new products and services best.

Our research revealed a significant difference between
OIAs and the methods applied for projects searching for market/need
information, compared to those searching for technological/solution
information. Solving of specific technological problems favors different
approaches than searching for need information. Also, both kinds demand very
different kinds of participant communities and incentive schemes.

(2) How to initiate the coordination with external participants:

  • An Open Call refers to a
    problem statement that is publicly announced, directed to a heterogeneous, and
    generally large, network of external actors. Potential solution providers
    ("solvers") decide via self-selection whether they want to
    participate in the process. The "seeker", i.e. the entity issuing the call, then
    selects the best submissions.
  • Open Search refers to a broad search for information and sources,
    conducted by the OIA with neither too concrete pre-assumptions about
    information aspects nor source details. A core idea is to actively seek for
    potential external contributors using advanced sampling methods, engaging in
    pre-screening specific characteristics (e.g., "lead user"
    characteristics), using social networks or network analysis to identify central
    actors from different domains.
  • In addition, our study revealed a third form of
    finding partners
    and initiating collaboration: a selective call. The
    selective call is a hybrid between call and search. OIAs applying this
    mechanism follow a two-step procedure. They pre-select a number of potential
    external actors who might hold the desired information and then call for
    participation within this sub-sample.

Combining these two general principles, we can
distinguish between different methods for open innovation. We call those "OIA services", as these are the
services and solutions offered by the OIA (look at this earlier post for a table):

  • Contests: Generating
    contributions to a technical and/or market related task with the objective to
    identify the "best" submission in response to an open call.
  • Workshops: Generating technical
    and/or market information by performing workshops.
  • Open market search: Searching and
    observing defined areas for market information (e.g., Netnography in online
    forums).
  • Technological search: Searching and observing defined areas for technical
    information (patents, technologies, user bases).

Among these categories, we find in our 2013 market
study that the majority of OIAs focus on providing ideation contests
or other
contest for technical problem solving.

 
OIA graphic3

For the full picture and many more details, including detailed profiles of 160 Open Innovation Service Providers, refer to The Market for Open Innovation: The 2013
RWTH Open Innovation Accelerator Survey
, co-authored by Kathleen Diener & Frank Piller, 2nd
edition, May 2013. Lulu Publishing: Raleigh, USA

Check all options how to get the study at study.open-innovation.com

23 05, 2013

[OIA Market Study 2013] Market for Open Innovation Services to Top $6bn in 2014

By | 2018-06-14T06:47:18+00:00 Mai 23rd, 2013|OI Market Study 2013, Open/User Innovation|


OIAS coverIn a series of postings, we introduce some key figures and results from
our 2013
OIA Study – A Market Report & Comparison
  of more than 160 Open Innovation Accelerators (OIAs)
— intermediaries, brokers, platforms, and consultancies for open innovation
and customer co-creation.


The market for open
innovation is still growing.
Almost monthly, new OIAs enter the market. They are attracted by the
growing market size for OI services. A self-assessment by the OIAs participating
in our study reveals an estimate of the recent
market volume of €2.7 billion
.

OIAs expect that this volume will double within the
next two years (until 2015) to €5.5
billion
.

 

OIA graphic22

When comparing our 2013 data with data from an earlier
study in 2010, we find that about 20 percent of the 2010 OIAs do not exist any
longer
or have been acquired by other players. We expect an even stronger wave of acquisitions and mergers
for the coming years.

At the same time, we realize that growing competition
also means lower prices
, especially when comparing reported project costs with
our 2010 study.

This is especially true for ideation contests (idea
contests for customer co-creation), where new web-service based offerings start
to take substantial business from established full-service players.

The average price
for an OI project for a client of an OIA is €43,000.
But project costs
differ widely
, ranging from €12 (for a basic monthly description of an OIA
web-service) to €164,000 EUR (for an OI consulting service).

The main project cost
driver
is personnel capacity. In
the end, OIAs are no IT services or "self-service internet
platforms", but knowledge-intensive service businesses. Recruiting
experienced project managers and analysts becomes a major challenge for many
OIAs.


For the full picture
and many more details, including detailed profiles of 160 Open Innovation Service Providers, refer to The Market for Open Innovation: The 2013
RWTH Open Innovation Accelerator Survey
, co-authored by Kathleen Diener & Frank Piller, 2nd
edition, May 2013. Lulu Publishing: Raleigh, USA

Check all options how to get the study at study.open-innovation.com


21 05, 2013

[OI Market Study 2013] Key Results – Global Market for Open Innovation Support

By | 2018-06-14T06:47:20+00:00 Mai 21st, 2013|OI Market Study 2013, Open/User Innovation, Technologies & Enablers|

OIAS coverWhen engaging in OI, organizations face the challenge of creating the internal ecosystem
that allows them to profit from external input in an efficient and effective
way. Professional assistance is offered by Open
Innovation Accelerators
(OIA)

OIAs are intermediaries,
consultancies, and agencies helping their clients to accelerate an open
innovation project by providing dedicated tools, methods, access to an
established community of solvers or participants, but also education and
process consulting.

 With more than 160 players, the market for OIAs however is getting
complex and difficult to navigate. Hence, we reached out to 160 providers of (inbound) open innovation
services
to join a 90 min survey investigating the OIA’s business model and
environment, productivity, services offered, project specifics, and
characteristics of their participant pool. In addition, we asked about
estimates for the development of the open innovation market.

59 (37 percent) of
the OIAs contacted provided us with a complete data set. For the remaining
companies, we used secondary data sources.

In total, our study
is the largest inquiry of the global market of open innovation services. In the
following, we will provide some high-level results.

OIA
Market Structure

OIAS graphic 1We find that the
market for open innovation is getting mature
. On average, OIAs have already
conducted a high number of client
projects
, many of them 200 and more. Still, the market for OIAs shows continuous growth

Ideation contests are seen as the most promising open innovation format. They cover
almost 80 percent of the entire open
innovation market. Secondary services like software support, consultancy, or
executive education enhance the offerings of many OIAs.

But we find that OIAs also
increasingly reach out to functions
beyond new product development
. The core idea pattern of open innovation to
engage an open, undefined network of people in form of an open call or open
search activity seems to be transferrable to a variety of tasks, including
marketing, customer service, recruitment, knowledge management, and HR.

When comparing our 2013 data with data from an earlier
study in 2010, we find that about 20 percent of the 2010 OIAs do not exist any
longer or have been acquired by other players. We expect an even stronger wave of acquisitions and mergers
for the coming years.

The average
cost
for an OI project with an OIA is €43,000. But project costs differ
widely, ranging from €12 (for a basic monthly description of an OIA
web-service) to €164,000 (for an OI consulting service). The main project cost driver is personnel capacity. In the end, OIAs are no IT services or
"self-service internet platforms", but knowledge-intensive service
businesses. Recruiting experienced project managers and analysts becomes a
major challenge for many OIAs.

OIA
Services & Methods

In general, OIAs differ, first of all, regarding their
approaches how to tap into an external knowledge space. These approaches can be
differentiated according to the way how
contributors for a specific project are selected
and the collaborative
process is being initiated. We find three options:

  • Open Call: Calling for individuals to identify themselves by
    contributing to a given task;
  • Open Search. Searching for relevant information or individuals
    according to a given task
  • Selective Open Call: Calling for individuals, but within a pre-defined set
    of potential participants (a hybrid between the previous two options)

These three options also help to structure the service
types that OIAs offer when we add the type of information requested by the
client: information about market needs or information about technical solutions:

 

OIAS chart 1

Table: Open Innovation Approaches and practical examples

 

Working
with an OIA

Picking the right intermediary depends, first of all, on the type of task and the nature of
the innovation problem. Not all OIAs are suited for every open innovation
challenge. OIAs further differ with regard to the breadth, scope, and structure
of their pool of potential participants, and the options for clients to control
access to this pool and the interaction within a given project. Furthermore,
outcomes of an OIA project can range from raw ideas to sophisticated concepts –
and selecting an OIA very much depends on the expected outcome and preferred degree of outsourcing the OI
function to the OIA.

From a client perspective, the OIA business has two major characteristics, distinguishing it from
conventional innovation consultants. These two characteristics also should be
key decision criteria when selecting an
OIA
:

First, software plays an essential part of any open innovation venture. Web 2.0 and social software technologies allow OIAs
to operate globally and integrate large numbers of participants without high
transaction cost. In 90 percent of all cases, OIAs offer a distinct software
solution. Hence, selecting an OIA also means deciding whether the software
solution should be implemented in-house (following a traditional license model) or using it as a web-service or via a hosted service of the OIA.

Secondly, OIAs build on the involvement of a community. OIAs connect clients through their communities with a
variety of external actors, most of them are new and unknown to the client
(this "looking out of the box" is exactly the value of open
innovation). OIA services differ significantly regarding their community
composition. In average, we find that OIAs have an existing pool of
participants (their "community") of 20,000 members. But OIAs
specializing on ideation or technical contests often have communities of more
than 100,000 members. To join the pool of participants, prospective
participants have to accept general terms and conditions, but in general do
sign not a formal contract. This is a core difference of open innovation via OIAs
compared to traditional forms of R&D networks or alliances.

Between communities, the general level of expertise of its members differs significantly among the
different services. OIAs offering technical search services in form of
technology scouting, for example, have access to high level expert communities,
while OIAs focusing on ideation and concept generation often have a broad, very
heterogeneous community of "average" consumers.

For the full picture, refer to The Market for Open Innovation: The 2013 RWTH Open Innovation
Accelerator Survey
. authored by Kathleen Diener & Frank Piller, 2nd
edition, May 2013. Lulu Publishing: Raleigh, USA
(available via study.open-innovation.com).

Check back from more updates and key results from the OIA 2013 market study!