Big Firms Eye 'Open Innovation' for Ideas "Open innovation" is becoming a business buzzword as big companies look beyond their ranks to seize good ideas wherever they can be found. But for some major firms, including U.S. automakers, the concept is harder to put into play.
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Big Firms Eye 'Open Innovation' for Ideas

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Big Firms Eye 'Open Innovation' for Ideas

Big Firms Eye 'Open Innovation' for Ideas

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The researchers and inventors who develop new drugs and other products may have found one more way to collaborate. In the same way that open source and wikis changed the way many people exchange ideas online through an open give-and-take, some companies are changing the way they do business.

Open innovation lets companies share ideas with the world and get new suggestions from scientists and almost anyone else outside of the corporate structure. It's a simple idea, but as NPR's Adam Davidson discovered, in some cases, it can be surprisingly radical.

ADAM DAVIDSON: The third fastest computer in the world is called Blue Gene -that's G-E-N-E. It takes up a good-sized room in IBM's research center an hour north of Manhattan.

Mr. PAUL KOTEAS (Chief Engineer, Blue Gene, IBM): This is all air-cooled in here so you hear the roar of the air going through the machine.

DAVIDSON: Paul Koteas is chief engineer. He says there are 20 racks, each containing more than a thousand computer processors. IBM has figured out how to create an efficient, superfast network connecting all those processors. So they must make a fortune off of Blue Gene, right?

Koteas says no.

Mr. KOTEAS: This is a non-profit center. We open it up essentially to the world for people to submit things that they'd like to do with Blue Gene, and we pick the hardest topics.

DAVIDSON: Researchers from outside IBM use this supercomputer to create absurdly complex computer models. One group studies how the influenza virus mutates. Another looks at everything that happens to a gas turbine as it heats up.

So why would IBM let all these people use this valuable asset for free?

Professor YOCHAI BENKLER (Law, Yale University; Author, "The Wealth of Networks"): Because they don't see it as a choice. They understand that the world is becoming too fast, too complex and too networked for any single company to have all the answers in sight.

DAVIDSON: Yale University's Yochai Benkler wrote "The Wealth of Networks," about how the best innovation doesn't come from inside corporations but from broad, diffuse networks. For instance, with Blue Gene, IBM sees the real value not in hoarding the supercomputer and renting out time; the value comes in letting a community of scientists use the computer to see what they come up with. If something valuable emerges, well, IBM is perfectly positioned to share in the profits.

Benkler says this open-network, open-source approach to business has come, first, to the computer world. Think of Wikipedia or Linux. But those basic ideas will soon move to older, steel-and-glass companies.

Prof. BENKLER: Will there be a better brake, a better windshield that could be developed on an open-source model? Absolutely.

DAVIDSON: Imagine a network of car fanatics discussing the ideal brake on some Web site. Eventually, they come to a consensus - the collaboratively built perfect brake - and then GM, or, more likely, Toyota offers to build it and put it in their cars. An open-source car might seem unlikely, but as recently as the early '90s, IBM was still pretty closed up. It didn't think good ideas could come from the outside.

Inventor Todd Basche learned that the combination-lock business is still hard to break into. He invented something called the wordlock, simply a lock that uses letters instead of numbers. That way, you can remember a word as your combination, not some random string of digits.

Mr. TODD BASCHE (CEO, Wordlock): So we took it to several of the likely suspects, and nobody got it. They looked at it and said, I don't get it.

DAVIDSON: Why should they get it? Two companies make almost all combination locks sold in the U.S. They don't need new ideas from outside. Of course, that's what IBM thought until the personal computer revolution almost killed it, and it had to reinvent itself. Basche says most U.S. companies have not embraced open innovation. They are suspicious of outsiders. If an inventor wants to pitch a new idea to a big company, they first have to sign this form.

Mr. BASCHE: You would be appalled at what that form looks like.

DAVIDSON: The form says that any idea an independent inventor pitches can instantly be used by the big company if it wants to, for no money. That's not open innovation, Basche says, that's theft. He says most independent inventors are terrified of big companies, and the companies are suspicious of inventors.

Mr. BASCHE: And so the dynamic is really set up of distrust on both sides instead of openness on both sides.

DAVIDSON: Basche gave up trying to sell his wordlock to any company. He started his own, and he's now making and distributing them himself. Adam Davidson, NPR News.

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