There is a multitude of factors that have eroded the traditional model of corporate innovation. These include the growing mobility of highly experienced and skilled people, the large amount of college and post-college studies that many people obtained, the growing presence of venture capital firms, the fast time to market for many products and services, and increasingly knowledgeable customers and suppliers.

Although the current open innovation being practiced still weeds out false positives, it also enables the recovery of false negatives, that is, projects that initially seem almost worthless, but turn out to be surprisingly valuable. Often these projects find value in a new market, rather than in the current market. These opportunities were frequently overlooked by the earlier Closed innovation processes.

A company’s internal pathways to market cannot necessarily be restricted to using the company’s internal knowledge.


For more information, see chapter 3 in Open Innovation (HBSP, 2003) by Henry Chesbrough.

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