There s a fundamental change occurring in how companies innovate and create value. For most of the 20th century, innovation happened inside the business. Companies worked internally to turn the latest scientific and technological breakthroughs into products and services the market wanted. They rarely looked outside for new ideas or inventions?and they didn t need to. All innovations were fiercely protected through patents, trademarks, and copyrights. When anyone infringed on these rights, the lawyers came out swinging.
This classic model worked fine so long as innovators worked alone on discrete and entirely novel inventions. But it s no longer reality. Industrial-economy knowledge monopolies are breaking down. The means of creation are proliferating, and open, interoperable standards and infrastructures are beginning to replace proprietary systems and technologies. In turn, companies are rethinking how they create and manage intellectual property IP-. Some businesses are resisting the changes, but smart enterprises recognize that innovation increasingly begins at the fringes. Science and technology now evolve at great speed and delve into ever more complex domains. Even the largest companies can no longer research all the fundamental disciplines that contribute to their products. Nor can they control an end-to-end production process or seek to retain the most talented people inside their boundaries. In most industries, innovation increasingly depends on dense networks of public and private participants and large pools of IP that routinely combine to create end products. Firms can even tie into self-organizing networks of value creators like the open-source movement to co-create or peer-produce value. To realize this innovation potential, companies need an ecosystem that includes lots of partners, and people developing designs and putting them together as customer solutions. That s why vertically integrated R D is yielding to joint ventures, licensing, outsourcing, and peering. And it s the reason hierarchical enterprises must adopt business-web models, where innovation is collaborative, distributed, and open. Source and full article: www.optimizemag.coma>