Pushing the Boundaries – Part 2: Making Open Innovation Relevant to More Economic Players

Open innovation is not just applicable to new product development - it can be valuable to other business activities. One should examine which strategic drivers of a (focal) firm’s business can be leveraged to gain competitive advantage. For example, assume you run a crude oil business. The product sold is a commodity, so new product development is not an option. Instead, competitiveness comes from early detection of large oil wells and effective drilling. Therefore, to gain a competitive advantage in this industry, companies have to find the richest oil wells before their competitors do and drill more effectively through new technologies that extract oil more productively at greater depths. By partnering with oil services companies such as Schlumberger, companies can develop new technologies for oil exploration and extraction, and thereby gain a competitive advantage.