Selected for the Global Economic Symposium 2011
Our world is full of unexploited knowledge and brilliant ideas that are never realized. Innovators often fail to take note of external innovations, and sometimes they are not even aware of the market for internal ideas. “Open innovation” is a promising step towards reducing this fundamental mismatch between the global supply and demand for knowledge. In open innovation projects, innovators from the private sector and academia voluntarily disclose innovation processes and results to other (potential) innovators. They make internal knowledge accessible for the outside world and attract external expertise in exchange. By doing so, innovators are able to improve their innovativeness.
The success of open innovation projects hinges on the incentives of innovators to share their knowledge and to interact with each other, as well as on the matching of knowledge supplied and demanded. Institutional environments of different quality, e.g., in terms of different intellectual property right (IPR) systems, may affect innovators’ incentives to share knowledge and thus the pool of knowledge available for follow-up innovations. To build an adequate and efficient institutional environment in the strongly globalized digital world, well-coordinated contributions from policy-makers, the private sector, academia and NGOs are essential.
